South Korea's Covered Call ETF Posts 27% Loss Despite High Yields; Investors Shift to Traditional Dividend ETFs

According to News1 and Coscom Check, South Korea's covered call exchange-traded funds (ETFs), once popular for their high monthly distributions, are losing favor as investors migrate to traditional high-dividend ETFs aligned with increased corporate shareholder payouts.

PLUS High Dividend Weekly Covered Call, the top-yielding product with a 24.51% annual distribution rate, posted a one-year loss of 27%, while RISE 200 High Dividend Covered Call fell 22.10%. By contrast, PLUS High Dividend ETF, with 2.32 trillion Korean won in assets under management, delivered 26.38% returns over one year with a 3.99% dividend yield, declining only 3.45% during a 23% market pullback in the past month. Covered call ETFs generate distributions through option premiums but cap upside gains, while high-dividend ETFs offer full participation in stock price appreciation alongside corporate dividends.