Covered-call ETFs gain traction amid demand for monthly distributions... Shinhan Asset Management’s two funds top 550 billion won in net assets

[Financial News] As volatility in South Korea’s stock market has increased, funds have been flowing into KOSPI 200-based covered-call exchange-traded funds (ETFs) that seek to provide monthly distributions. The combined net assets of two related ETFs managed by Shinhan Asset Management have exceeded 550 billion won.
Shinhan Asset Management said on the 11th that, as of the 10th, the combined net assets of its “SOL 200 Covered Call Series” had surpassed 550 billion won.
The series consists of two funds: the “SOL 200 Target Weekly Covered Call ETF,” listed in March, and the newly listed “SOL 200 Covered Call Active ETF,” which began trading on the 10th. Both invest in domestic stocks, with a focus on the KOSPI 200, and secure funds for distributions by selling call options, but their management approaches differ.
The SOL 200 Target Weekly Covered Call aims to secure option premiums equivalent to around 15% annually. Since making its first distribution in April, it has maintained a monthly distribution rate of around 1.3–1.4%.
The SOL 200 Covered Call Active adjusts its weights in market-leading stocks based on factors including the earnings and valuations of KOSPI 200 constituents and supply and demand. It also manages its option-selling strategy flexibly in response to the market outlook and volatility. The fund seeks to boost total returns, including both capital gains and distributions, and to outperform its benchmark index.
The two funds also have different distribution schedules. The SOL 200 Target Weekly Covered Call pays distributions at the beginning of the month, while the SOL 200 Covered Call Active pays its mid-month distribution based on the 15th of each month. Investors can create two cash-flow events per month by using both funds together.
Kim Jeong-hyeon, head of the ETF Business Group at Shinhan Asset Management, said, “We have broadened investors’ choices with a target-type fund that seeks regular cash flow and an active-type fund that seeks to boost total returns through active management of stocks and options.” He added, “We have also differentiated the distribution schedules, setting them for the beginning and middle of the month, to make cash flow more useful.”
The first monthly distribution from the SOL 200 Covered Call Active is scheduled to be paid on the 16th of next month. Both funds can be invested in through pension savings and retirement pension (DC and IRP) accounts.
[email protected] Bae Han-geul Reporter