The U.S. stock market is seeing popularity in weekly dividends ETFs (exchange-traded funds). There are advantages to receiving dividends weekly, allowing for fast cash acquisition and maximizing compounding effects through reinvestment.
Currently, there are only monthly dividends ETFs available domestically. However, it is expected that using a mid-month dividend ETF with a distribution reference date of the 15th may shorten the dividend cycle.
On the 18th of this month, the U.S. asset management company Roundhill launched five weekly dividend ETFs tracking individual securities. Each follows the price fluctuation rates of popular U.S. tech stocks including Palantir, Coinbase, Apple, Tesla, and NVIDIA at a rate of 1.2 times. The size of the distributed dividends changes weekly, taking into account revenue and volatility.
U.S. weekly dividend ETFs are popular by utilizing covered call options, which can offer relatively high dividends. The Roundhill Innov-100 0DTE Covered Call Strat ETF (QDTE) and the Roundhill S&P 500 0DTE Covered Call Strat ETF (XDTE), launched last year by Roundhill, are representative examples.
Both products are based on the NASDAQ 100 and S&P 500, respectively. They earn premiums by selling 0DTE options, which are call options expiring the same day, with dividend yields of 38.36% and 24.91%, respectively. As of that day, their net worth (AUM) reached $786.2 million and $430.4 million, respectively.
U.S. weekly dividend ETFs also hold great investment appeal for domestic investors. This is due to their high dividend yields alongside the ability to generate smooth cash flow in uncertain economic conditions. According to Korea Securities Depository, the average daily trading volume for QDTE and XDTE domestically over 60 days was 37 billion won ($25.8 million) and 17.6 billion won ($12.27 million), respectively, with yields reaching 17.77% and 18.23%.
Currently, there are no weekly dividend ETFs launched domestically. Only monthly dividend ETFs are available. A financial investment industry official noted, "There is certainly demand for weekly dividend ETFs in the industry," adding, "However, creating a new product requires consideration of many factors, including relevant regulations of the Korea Exchange." It is said that changing the product structure from monthly dividends to weekly dividends would require more attention to operational conditions. The Korea Exchange explained that "there are no regulations related to dividend cycles, and the design of related products is at the discretion of the operating company."
However, in Korea, it is possible to achieve the effect of bi-weekly dividends, receiving dividends up to twice a month. Investors can buy two ETFs with different dividend dates. By purchasing a month-end dividend ETF that pays dividends at the end of each month (31st) and a mid-month dividend ETF that pays dividends on the 15th, it is possible to receive distributions twice a month. Representative mid-month dividend ETFs include Mirae Asset Global Investments' "KODEX U.S. Dividend Dow Jones," "KODEX Korea Real Estate REITs Infrastructure," and "TOGER U.S. Dividend +3% Premium Dow Jones.” It is prohibited for an asset management company to list the same ETF multiple times, so investors must include two different products.
Monthly dividend ETFs are designed to allow investors to receive distribution income such as interest and dividends from investments in stocks or bonds on a monthly basis. They are particularly noted as a retirement solution for many, as the monthly distributions can be utilized as part of personal pension planning after retirement.