Korean individual investors are channeling funds into covered call exchange-traded funds (ETFs) as domestic stock market volatility intensifies, according to data from KOSCOM ETF CHECK. During the recent one-month period when the KOSPI index fell more than 21%, covered call ETFs delivered returns exceeding 20%, with RISE 200고배당커버드콜ATM recording 23.17% and PLUS 고배당주위클리커버드콜 achieving 17.14%. The surge in demand follows 11 circuit breaker activations in the KOSPI market during this period, prompting investors to seek products offering relatively stable cash flows and defensive characteristics. Covered call ETFs, which had lost investor attention during bull markets due to their capped upside structure, are regaining prominence as the market experiences sharp swings between gains and losses.
Covered Call ETFs Deliver Double-Digit Returns During KOSPI 21% Decline
According to KOSCOM ETF CHECK, a compilation of recent one-month ETF returns (excluding inverse and leveraged products) placed RISE 200고배당커버드콜ATM in first place with 23.17%, PLUS 고배당주위클리커버드콜 in second place with 17.14%, PLUS 고배당주위클리커버드콜고정 in seventh place with 10.54%, and KODEX 금융고배당TOP10타겟위클리커버드콜 in eighth place with 10.34%. These results contrast sharply with the KOSPI index, which fell more than 21% during the same period. The KOSPI market experienced 11 circuit breaker activations in the recent one month, creating a volatile trading environment that boosted covered call ETF appeal.
Covered call ETFs hold underlying assets while simultaneously selling call options on those assets, using the option premiums received as a source of distribution payments. This structure enables the products to deliver relatively stable performance compared to standard index ETFs during sideways or moderately declining markets, due to the option premium income.
High-Dividend Stocks Form Core Holdings in Top-Performing Covered Call ETFs
All three covered call ETFs ranking in the top performance tier share a common characteristic: their underlying assets consist of high-dividend stocks. As recent volatility in Korean stocks has shifted investor sentiment toward defensive high-dividend stocks classified as defensive plays, share prices of major cyclically defensive stocks in finance, insurance, and telecommunications have risen. All three products hold DB Insurance and Industrial Bank of Korea at high weightings, with Samsung Card, Samsung Fire & Marine Insurance, and LG Uplus included in their respective portfolios.
Individual Investors Net Purchase 5,659 Billion Won in TIGER 배당커버드콜액티브
Individual investor capital is flowing into these products. During the same period, ETF individual net purchase rankings placed TIGER 배당커버드콜액티브 in 13th place with 5,659 billion won, KODEX 200타겟위클리커버드콜 in 22nd place with 4,368 billion won, and TIGER 미국나스닥100타겟데일리커버드콜 in 27th place with 3,262 billion won. Excluding single-stock leveraged products and semiconductor products, covered call ETFs represent the largest category by net purchases.
KODEX Launches Partial-Coverage Covered Call ETFs in May and July
Evolved products addressing covered call ETF weaknesses have emerged recently. Traditional covered call ETFs sell call options on most of their underlying assets, limiting returns in bull markets. Recent products sell options on only a portion of underlying assets, maintaining exposure to the remaining upside potential.
KODEX 반도체타겟위클리커버드콜 ETF, listed in May, exemplifies this approach. The product holds Samsung Electronics and SK Hynix at weightings exceeding 50% while selling KOSPI 200 weekly options on only approximately 30% of assets. By not selling call options on the entire underlying asset base, the structure allows the product to capture a significant portion of share price gains during bull markets while supplementing returns through option premiums during sideways or weak market conditions.
KODEX 200커버드콜액티브, listed on the 14th, surpassed 200 billion won in individual investor net purchases within one week of listing. KODEX 200커버드콜액티브 pursues excess returns and represents an evolved version of KODEX 200타겟위클리커버드콜, the representative product in the domestic covered call market. The product maintains the tax benefits of domestic option premiums and the annual dividend rate of 17.1% (recent one year) recorded by KODEX 200타겟위클리커버드콜 while generating excess returns through active strategies.
FAQ
What returns did covered call ETFs deliver during the recent KOSPI decline?
During the recent one-month period when the KOSPI index fell more than 21%, RISE 200고배당커버드콜ATM recorded 23.17% returns, PLUS 고배당주위클리커버드콜 achieved 17.14%, PLUS 고배당주위클리커버드콜고정 delivered 10.54%, and KODEX 금융고배당TOP10타겟위클리커버드콜 returned 10.34%, according to KOSCOM ETF CHECK data.
How much did individual investors net purchase in TIGER 배당커버드콜액티브 during the recent period?
Individual investors net purchased 5,659 billion won in TIGER 배당커버드콜액티브 during the recent one-month period, placing it 13th in ETF individual net purchase rankings, according to the source data.
What structural innovation does KODEX 반도체타겟위클리커버드콜 ETF introduce?
KODEX 반도체타겟위클리커버드콜 ETF, listed in May, holds Samsung Electronics and SK Hynix at weightings exceeding 50% while selling KOSPI 200 weekly options on only approximately 30% of assets, allowing exposure to remaining upside potential while generating option premium income.
