PLUS 200 Covered Call Active to Pay 152 Won per Share in September; Entire Distribution Tax-Exempt

[Financial News] Hanwha Asset Management's PLUS 200 Covered Call Active exchange-traded fund (ETF) will pay a distribution of 152 won per share in September. A key feature is that investors can receive the entire distribution tax-free by using a dividend-avoidance strategy.
Hanwha Asset Management announced on the 30th that the PLUS 200 Covered Call Active ETF will pay a September distribution of 152 won per share. Based on the closing price on the 28th, the day before the ex-distribution date, the distribution rate was 2.05%. The taxable amount per share was zero, making the distribution fully tax-exempt.
The product is a monthly-distribution covered call ETF that invests in stocks included in the KOSPI 200 Index while selling call options to generate monthly cash flow. It employs an active strategy that adjusts the proportion of options sold, strike prices and expirations according to market conditions.
It also applies a dividend-avoidance strategy to reduce the tax burden on distributions. The strategy involves selling stocks held before the ex-dividend date instead of receiving the dividends directly, then buying back the shares at lower prices after the ex-dividend date to secure trading gains.
Stock dividends are subject to taxation when distributed by an ETF, whereas gains from trading domestic stocks are not taxed upon distribution. The PLUS 200 Covered Call Active ETF focuses on reducing volatility in after-tax distributions by using premiums from selling call options and trading gains as its primary sources of distributions.
Last September, the strategy was applied to Lotte Chemical, LG, Samsung Electronics, Hankuk Carbon and Hyundai Department Store.
Geum Jeong-seop, head of Hanwha Asset Management's ETF Business Division, said, "Investors who use covered call ETF distributions to cover living expenses may receive different amounts depending on whether the distributions are taxable each month. The PLUS 200 Covered Call Active ETF is designed to pursue consistent after-tax cash flow by keeping open the possibility of market gains while paying most of its distributions tax-free."   

[email protected] Bae Han-geul Reporter