KB Asset Management announced on the 2nd that it will introduce two types of weekly covered call exchange-traded funds (ETFs) that invest in domestic value stocks and Chinese growth stocks.
The products newly listed that day are the "RISE China Tech TOP 10 Weekly Target Covered Call ETF" and the "RISE Korea Value Up Weekly Fixed Covered Call ETF." The two ETFs are designed to pursue volatility buffering, stable revenue, and growth potential simultaneously, based on representative Chinese growth stocks and undervalued domestic value stocks.
First, the "RISE China Tech TOP 10 Weekly Target Covered Call ETF" focuses on investing in 10 tech-related stocks within three sectors: communication, technology, and consumer discretionary, actively participating in the momentum of Chinese tech stocks. As the rise of the artificial intelligence (AI) startup "DeepSeek" and the government's "AI+ Initiative" policy draw renewed attention to the growth trend of Chinese big tech corporations, it will concentrate on investments in stocks such as Tencent (18.1%), Xiaomi (15.4%), and Alibaba (14.8%).
In contrast to the existing Hang Seng Tech Index, which has restrictive weight limits that hinder leading stock investments, this product's tracking index is characterized by bolder allocations to representative corporations. Additionally, it has adopted a "Weekly Target Covered Call Strategy" aimed at achieving an annual monthly dividend payout of around 12%, selling at-the-money (ATM) call options on the Hang Seng Tech Index weekly. This allows investors to simultaneously pursue growth and stable income from Chinese tech stocks.
The "RISE Korea Value Up Weekly Fixed Covered Call ETF" is designed in response to the recent amendments to the commercial law and expectations for alleviating the Korea discount, as corporations strengthen their shareholder return policies. The underlying index, "Korea Value Up Index," reflects indicators for selecting value stocks, such as market representation, shareholder return performance, price-to-book ratio (PBR), and return on equity (ROE).
According to KB Asset Management, unlike the existing covered call structure that had a 100% option sell-off, this product utilizes a "Fixed Covered Call Strategy" that fixes the option selling proportion at 30% and secures an upward participation rate of up to 70%. This describes a balanced portfolio that allows for stable income as well as opportunities for stock price gains in long-term investments.