Covered-call ETFs show 23% payouts but a -24% return

  • Domestic covered-call ETFs recorded returns below their annual payout rates in most leading funds.
  • 14 of 19 funds underperformed their payout rates, including one with a -23.88% total return.
  • Net assets reached 28.058 trillion won, up 86.6% from 15.037 trillion won last year.

Domestic covered-call exchange-traded funds (ETFs that sell call options for income) are showing a wide gap between advertised payout rates and investor returns. Among 19 funds with the highest annual payout rates, 14 recorded one-year total returns below those rates. PLUS High Dividend Weekly Covered Call offered a 23.34% payout rate but posted a -23.88% total return after its price fell 36.94%. The gap reflects the structure of covered-call funds: option premiums generate distributions, but may not offset losses when the underlying assets decline. Net assets in domestic covered-call ETFs nevertheless rose 86.6% to 28.058 trillion won as of the 10th of this month, from 15.037 trillion won at the end of last year. The briefing also highlights a $123.66 oil price surge that pressured refiners, airlines and chemical stocks; TSMC’s planned expansion of advanced-chip and CoWoS capacity; record ICT exports; supply-chain risks around the Red Sea and Strait of Hormuz; and proposed U.S. election-outcome ETFs. The election products would use event contracts (contracts settled according to a specified outcome), though many remain under review because ETF and derivatives regulation overlap.

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