Mirae Asset TIGER Semiconductor Covered Call ETF, post-listing return rate of 40.9%

Mirae Asset Management’s “TIGER Semiconductor Top10 Covered Call Active ETF” has recorded a return of over 40% since its listing. It is assessed that this was driven by an active management strategy that preserved the defensive advantages of covered calls in a down market while still capturing stock price gains stemming from an improvement in the semiconductor industry outlook.

According to Mirae Asset Management on the 7th, the ETF achieved a return of 40.9% based on its adjusted reference price from its listing on April 21 through the 6th of this month. This is the highest figure among 55 covered call ETFs listed on the domestic market during the same period. This result was achieved by investing in key domestic semiconductor companies such as Samsung Electronics and SK hynix, while securing distribution resources by using individual stock options.

Behind the strong performance is an active management strategy that responded nimbly to market conditions. The ETF flexibly adjusted its stock composition within the semiconductor value chain, including newly adding SK Square and Samsung Electro-Mechanics to its portfolio in May.

Another characteristic is that it does not fix the option selling ratio, but adjusts it depending on the market phase. Typical covered call products have a limitation in that, due to a high proportion of call options sold, profits from a rise in the stock price are capped at a certain level. In contrast, this product, in rising markets, reduces the option selling ratio or raises the strike price to increase participation in upside gains, and in periods when volatility increases, increases the selling ratio to capture premium income.

Yet another factor attracting investors is the distribution paid every month and the tax-savings benefit. The ETF makes distributions on the 15th of every month, and domestic stock option premium income is classified as non-taxable under the tax law. As a result, a large portion of the distribution is not included in the comprehensive taxation of financial income, which is based on an annual threshold of 20 million won, making it popular even among high-net-worth individuals.

In practice, fund inflows from individual investors are also accelerating. The cumulative net buying amount by individuals since listing has already exceeded 500 billion won. It is analyzed that demand has converged simultaneously from the retirement generation seeking stable cash flow and from younger investors expecting growth in the semiconductor industry.

Lee Jeong-hwan, Head of the Strategic ETF Management Division at Mirae Asset Management, said, “Actively and flexibly managing the portfolio composition and option strategy in line with market conditions led to good performance,” adding, “Going forward, we will continue operating it as a product that pursues both growth and stable distributions.”

Business Korea reporter Yoon Young-sil (pr@businesskorea.co.kr)