"Third Amendment to Commercial Act and Stronger Shareholder Returns..." Dividend ETFs Enjoy Big Gains

According to The Financial News, the South Korean government has recently pushed through notable institutional changes, including the Third Amendment Bill to the Commercial Act, which in principle mandates the cancellation of treasury shares acquired by companies, as well as tax reforms. Companies have also been announcing stronger shareholder return policies one after another, which has become a key driver of the stock market rally. As a result, investors are increasingly looking beyond individual stocks and turning their attention to ETFs that invest in dividend-paying shares.
In particular, as rotational trading spreads into sectors beyond market leaders such as Samsung Electronics and SK Hynix, more investors are seeking to participate in the stock market’s uptrend while also pursuing stable dividend income.
According to the asset management industry on the 1st, the flagship dividend-focused ETF investing in the domestic stock market is Samsung Asset Management’s KODEX Korea Dividend Growth ETF.
As of the closing price on the 26th of last month, this product has delivered a year-to-date return of 45.91%. It invests in 50 listed stocks that have provided stable dividends over a long period and are expected to increase their dividend payouts going forward. Over the same period, Shinhan SOL Korea High Dividend ETF (38.42%), Samsung KODEX Financials High Dividend TOP 10 ETF (38.33%), and Mirae Asset TIGER KOSPI High Dividend ETF (34.21%) have also posted strong performance.
Recently, new products that adjust their portfolios in line with changes in dividend stocks have also been launched, giving investors a wider range of choices.
KODEX Shareholder Return High Dividend invests in high-dividend stocks that reflect the core elements of domestic shareholder return policies, such as high dividend payouts, mandatory cancellation of treasury shares, and reduced dividends. Since its listing on January 20 this year, the product has delivered a return of nearly 25%.
Samsung Asset Management fund manager Moon Hyun-wook stated, "As companies continue to strengthen their shareholder return policies and the domestic stock market surpasses 6,000 points on the Korea Composite Stock Price Index (KOSPI Index), we expect corporate shareholder returns to accelerate further." He added, "With the government’s stock market revitalization measures, including the separation of dividend income taxation and the passage of the Third Amendment Bill to the Commercial Act centered on treasury share cancellation, this is becoming a more critical time than ever to selectively invest in high-dividend stocks that can benefit from the money-move effect into dividend plays."
Park Su-min, Director of ETF Management Office at Shinhan Asset Management, also noted, "The Korean stock market is now entering an early stage in which the long-standing issue of insufficient shareholder returns, a key factor behind its undervaluation, is gradually improving thanks to policy support and voluntary changes by companies." Park added, "If this structural shift continues, the re-rating of companies that prioritize shareholder value is likely to broaden."
kakim@fnnews.com Kim Kyung-ah Reporter