Korea Investment Management said on the 18th that the 1-year total return of the "ACE U.S. Semiconductor Daily Target Covered Call (synthetic) exchange-traded fund (ETF)" exceeded 148%.
According to the Korea Exchange (KRX) that day, as of the previous day the 1-year price return (PR) of the ACE U.S. Semiconductor Daily Target Covered Call (synthetic) ETF was tallied at 112.94%. The total return (TR), including distributions, was found to be 148.07%.
This is the highest among 37 overseas covered-call ETFs listed in Korea. During the same period, the ACE U.S. Semiconductor Daily Target Covered Call (synthetic) ETF was the only one whose PR and TR both topped 100%.
Its 6-month return also ranks near the top. Over the past six months, the ACE U.S. Semiconductor Daily Target Covered Call (synthetic) ETF posted a PR of 59.34% and a TR of 73.35%, taking first place in its category for both PR and TR.
The ACE U.S. Semiconductor Daily Target Covered Call (synthetic) ETF is a covered-call product that Korea Investment Management rolled out in Apr. 2024. It holds the top 30 U.S. semiconductor stocks by market capitalization while selling call options on QQQ (Nasdaq-100 ETF), seeking gains from semiconductor shares and capturing call-option selling premiums.
The top 30 U.S. semiconductor stocks by market cap, the fund's main investment targets, span five areas of the semiconductor value chain that are central to the artificial intelligence (AI) infrastructure investment cycle. The five areas are ▲ graphics processing units (GPUs) and AI accelerators ▲ memory ▲ foundry ▲ semiconductor equipment ▲ fabless and application-specific integrated circuits (ASICs).
Using daily options is also one of its strategies. The ETF sells daily options expiring each day at 1% out-of-the-money (OTM). By using daily options, it can adapt more quickly to market changes than with weekly or monthly options and aim to monetize short-term volatility, a Korea Investment Management official said.
Nam Yong-su, head of ETFs at Korea Investment Management, said, "The ACE U.S. Semiconductor Daily Target Covered Call (synthetic) ETF uses a strategy that diversifies across five areas of the semiconductor value chain, so it is not swayed by memory-cycle volatility and can benefit at any stage of the semiconductor supercycle."