Hanwha Asset Management spotlights two PLUS covered-call ETFs targeting Tesla, KOSPI 200 gains

Two covered-call ETFs from Hanwha Asset Management are posting monthly distribution rates of around 2%. The products invest in different underlying assets — Tesla and the KOSPI 200 — while using options strategies to generate distribution income, drawing sustained interest from investors seeking regular cash flow amid heightened market volatility.

According to Hanwha Asset Management on Tuesday, the PLUS Tesla Weekly Covered Call Bond Mixed ETF has maintained a monthly distribution rate of around 2% in recent months. After recording 2.07% in February, the rate came in at 2.06% in March and 2.01% in June. Annualizing the recent distribution figures puts the rate at roughly 25%.

The ETF invests in Tesla shares and bonds while using Tesla weekly options to pursue option premium income. The structure allows investors to participate in some of Tesla’s potential share price gains while targeting a high monthly cash flow.

The PLUS 200 Covered Call Active ETF, which listed in June, paid its first monthly distribution of 139 won per share. Based on the closing price on the last trading day before the ex-distribution date, the July distribution rate was approximately 2%, which annualizes to around 25% on a simple basis. The fund adjusts its option-selling ratio depending on market conditions, pursuing a strategy that captures KOSPI 200 upside while securing option premiums. A notable feature is its use of a “dividend avoidance strategy” — selling shares before the ex-dividend date and repurchasing them afterward — to increase the proportion of tax-exempt distribution income.

Retail investor interest in covered-call ETFs has also remained strong. The three ACE Daily Target Covered Call ETFs from Korea Investment Management have seen net inflows of 106.7 billion won ($77.7 million) from retail investors since the start of the year.

“Investor interest in covered-call ETFs is shifting away from simply chasing high distribution rates toward how efficiently they can secure income while also capturing the growth potential of a given underlying asset,” said Kim Jeong-seop, head of the ETF business division at Hanwha Asset Management. “Investors with demand for high-income exposure to overseas growth stocks can consider the Tesla weekly product, while those looking to participate in domestic market gains alongside after-tax distribution efficiency may find the 200 covered-call active ETF a better fit — the choice depends on the investor’s objective.”

hajun825@heraldcorp.com