Samsung Active Asset Management said on the 23rd that the KoAct Dividend Growth Active exchange-traded fund (ETF) will pay a 2.5% special dividend.
To receive this special dividend, investors must purchase the product by the 28th of this month, the day before the ex-dividend date. The scheduled payment date for the actual distribution is Feb. 3.
Samsung Active Management explained that the special dividends were possible thanks to strong performance following the rise in the domestic index. The ETF is currently up about 16.6% year to date and about 84.3% over one year, as of Jan. 22.
Previously, the KoAct Dividend Growth Active ETF paid a 2.5% special dividend in July last year and has maintained quarterly dividends in the 1.5% to 2.5% range.
The ETF invests in dividend growth stocks where dividends are steadily increasing. Specifically, it is heavily weighted toward semiconductors, centered on Samsung Electronics (22.9%) and SK hynix (14.1%), and it selectively holds 78 high-quality corporations with strong shareholder return policies, including Hyundai Motor (5.4%), Hankuk Carbon (2.3%), HD Hyundai Heavy Industries (2.3%), and Samsung C&T (2.2%).
Samsung Active Management said the strategy proved effective by focusing not on a simple "high-dividend" approach that just holds stocks with high dividend yields, but on dividend growth corporations with improving cash flows and rising future earnings that can lead to actual share buybacks and dividend increases.
Ji Seong-jin, a manager at Samsung Active Asset Management, said, "For typical high-dividend stocks, profits and payout ratios are already high, so even if the dividend income separate taxation bill passes, dividend increases may not be significant compared with before," and added, "Investing in dividend growth stocks, where dividends can grow compared with typical high-dividend stocks, could lead to good results."