Hanwha Asset Management Raises Payouts and Adopts TSR-Based Policy for Buyback High Dividend ETF
Hanwha Asset Management has announced a shift in the distribution policy of its ‘PLUS Buyback High Dividend ETF’ to focus on Total Shareholder Return (TSR) and will increase monthly distributions from 40 to 70 KRW. This decision follows the enactment of a new commercial law mandating treasury share cancellations, prompting a structural response in the ETF's investment strategy. Portfolio adjustments will include special allocations to firms that have repurchased over 3% of their market cap in treasury shares.
The new TSR-based policy incorporates capital gains resulting from treasury share cancellations—such as EPS growth and stock price appreciation—into investor distributions. Importantly, capital gains stemming from share cancellations are categorized as capital gains, making them exempt from dividend income tax and thereby increasing investors’ net returns. As of the ex-dividend date, the ETF’s monthly payout rate stands at 0.54%, focusing on the top 30 stocks by TSR.
Mandatory share cancellations significantly influence ETF management strategy. The TSR-based approach enables investors to directly benefit from enhanced shareholder return policies, incorporating not only dividends but also realized share price gains into the regular income stream.
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