KB Asset Management's RISE daily fixed covered call ETF series tops W1.5tr in net assets

KB Asset Management announced Monday that the combined net assets of its four RISE daily fixed covered call ETF products have surpassed 1.5 trillion won ($1.08 billion).

The series is designed to sell call options at a fixed daily ratio, securing option premiums while still allowing investors to participate in gains from the underlying assets.

The ETFs apply what KB calls a "third-generation covered call" strategy, which addresses the limitations of conventional covered call approaches. Under the structure, call options equivalent to 10 percent of the underlying asset are sold each day to capture option premiums, while the remaining roughly 90 percent retains exposure to index gains. This allows investors to pursue both monthly distribution income and capital appreciation from the underlying assets at the same time.

KB Asset Management launched three products in September 2024 — the RISE US Tech 100, RISE US AI Value Chain and RISE US Dividend 100 daily fixed covered call ETFs. It completed the four-product lineup last December by adding the RISE US S&P500 Daily Fixed Covered Call ETF, rounding out coverage of major US investment themes.

The RISE US Tech 100 Daily Fixed Covered Call ETF invests across 100 US-listed technology companies and sells NASDAQ 100 call options at 10 percent daily to pay monthly distributions. Since its launch, the product has paid distributions 22 times, with a cumulative distribution rate of 38.27 percent.

The RISE US AI Value Chain Daily Fixed Covered Call ETF invests in 15 companies representing the US AI value chain. It posted returns of 26.15 percent over the past six months and 45.70 percent over the past year.

The RISE US Dividend 100 Daily Fixed Covered Call ETF invests in 100 US dividend-growth stocks with at least 10 consecutive years of dividend payments and employs a strategy of selling S&P500 call options. The product pursues both dividend growth and income, with a monthly average distribution rate of 1.36 percent over the past year.

The RISE US S&P500 Daily Fixed Covered Call ETF invests in the S&P500 index while targeting roughly 90 percent of the index's upside, and sells call options daily to pay monthly distributions.

Yuk Dong-hwi, head of ETF product marketing at KB Asset Management, said the series crossing 1.5 trillion won in net assets reflects growing investor interest in products that pursue both monthly distribution income and growth. "As these products are also available through defined-contribution and individual retirement pension accounts, we expect their appeal as long-term investment vehicles to grow further," he added.

KB Asset Management has seen its product assets expand rapidly in recent months. On Aug. 13, the combined net assets of its flagship US index ETFs — the RISE US S&P500 and RISE US NASDAQ 100 — surpassed 3 trillion won.