Rising Interest in High-Dividend ETFs Amid Tax Reform and Inflow
Recently, a decision by the government and the Democratic Party to reduce the maximum tax rate on segregated dividend income from 35% to 25% has significantly increased investor interest in high-dividend Exchange Traded Funds (ETFs). Consequently, the net asset value of leading high-dividend ETFs has surged, and investors are anticipating substantial benefits for these dividend-focused ETFs due to the recent tax reforms.
In contrast, individual investors are withdrawing funds from the U.S. Dividend Dow Jones ETFs due to poor performance this year. Sectors such as traditional energy, consumer goods, and healthcare have been hit hard, and the exclusion of big tech from these ETFs has led to their sidelining in the AI rally. Yet, in South Korea, domestic high-dividend ETFs are gaining traction thanks to their appealing shareholder return policies.
Funds have notably flowed into domestic ETFs such as 'PLUS High Dividend', 'TIGER Bank High Dividend Plus TOP10', 'KODEX High Dividend', and 'SOL Financial Holding Plus High Dividend'. These ETFs have maintained high one-month returns, reflecting domestic investors' efforts to balance between the new tax benefits and existing dividend strategies.
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'Korean Version of SCHD' Overlooked Due to Poor ReturnsThe Korean version of SCHD is being overlooked due to poor returns. The four American Dow Jones dividend products are among the top in net sales for a month while domestic high-dividend products attract funds.
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News of 'Eased Separate Taxation on Dividend Income'... High-Dividend ETFs Heating Up - Cookie NewsRecently, news of a push to ease the highest tax rate on separate taxation of dividend income has focused investor interest on high-dividend exchange-traded funds (ETFs). Already, leading examples listed on the domestic stock market are