Kiwoom Asset Management said on the 19th that it will newly list the "KIWOOM U.S. High Dividend & AI Tech ETF," which combines U.S. high-dividend stocks and artificial intelligence (AI) tech stocks, on the 23rd.
By focusing investments on U.S. high-dividend stocks to maximize dividend yields while also pursuing the growth potential of AI tech stocks, it seeks dividend growth without FOMO (fear of missing out). It is also a monthly dividend ETF that pays distributions based on the last day of every month.
The product invests by combining the U.S. High Dividend TOP20 Index (70%) and the U.S. AI Tech TOP10 Index (30%) at fixed weights.
The U.S. High Dividend TOP20 Index consists of the top 20 stocks by dividend yield after removing the bottom 25% of stocks in three-year average return on equity (ROE), operating cash flow to liability, and 12-month momentum among corporations with free-float market capitalization of $1 billion or more, dividends paid for five consecutive years, and profits for the past two consecutive years. ▲
The U.S. AI Tech TOP10 Index selects tech stocks with high AI relevance by using natural language and keyword analysis among stocks with market capitalization of $10 billion or more and a three-month average transaction value of $1 million or more. ▲
The strategy that combines the two indexes rebalances every month at a fixed 7:3 ratio and uses gains from AI tech stocks to buy additional high-dividend stocks. This increases the number of high-dividend stocks held, which in turn expands the size of dividends and produces a dividend growth effect.
Conversely, if AI tech stocks fall, it sells high-dividend stocks to buy AI tech stocks. Kiwoom Asset Management says this is a new form of dividend growth strategy that overcomes the limitations of existing dividend growth ETFs, which had to rely on corporations' business performance or dividend policies.
A Kiwoom Asset Management official said, "The stronger dividend growth rate achieved through structural dividend growth will be a meaningful solution in that it can offset the problem of reduced dividends due to foreign tax credits."