[비즈한국] If you save consistently every day, how much could you accumulate by the time you retire? According to the Korea Federation of Banks, the annual interest rates (1-year maturity) for representative time deposit products at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—are in the 3.35–3.40% range. While special offer products with rates higher than the base rate are sometimes launched for new sign-ups during specific periods, most of these have terms ranging from six months to one year. This is why more investors are turning their attention to investment products that offer the potential for "plus alpha" returns.
Of course, investment products that yield returns higher than bank deposits carry the risk of principal loss. However, those with some investment experience know that medium-risk, medium-return products are appropriate. Individual investment products can be selected based on the investor's risk appetite and target rate of return. It is also a good idea to carefully examine the characteristics and profit strategies of each product.
Experts advise that during times of high volatility like today, long-term diversified investment is essential. If you are focused on stock investing, it is worth looking into ETFs (Exchange Traded Funds). ETFs can be bought and sold in real-time just like stocks, allowing for flexible trading, and they have the advantage of lower management fees compared to general funds.
The first ETF introduced in Korea was listed in 2002, tracking the KOSPI 200 index. The ETF market, which started at 30 billion won at the time, has now grown to 160 trillion won. Since then, ETFs with various underlying assets and investment strategies have been listed. Recently, amidst a stagnant market, covered call ETFs have been garnering attention.
When the direction of the index is uncertain, experts recommend a "covered call" strategy. This method involves holding underlying stocks while selling call options (the right to buy stocks at a predetermined price) at a price slightly higher than the current stock price, aiming for additional profit when the index declines. Through the combination of gains from the underlying stocks and the premium earned from selling call options, investors can potentially outperform the index when stock prices rise moderately or remain sideways. Conversely, it can also provide a certain level of protection against losses when stock prices fall.
However, if the stock price surges above the option strike price, the potential for returns may be capped. While the return on the underlying stocks would improve, the gains in the overall fund return would be diminished by the losses incurred from the call option sales. Therefore, covered call ETFs are more suitable for investors who expect the index to rise gradually rather than surge, rather than those seeking large short-term profits.
As the stock market has been moving sideways recently, asset management companies have been launching a series of covered call ETFs with enhanced dividend yields. However, concerns have been raised that as some firms launch these ETFs with labels like "Distribution Rate % Premium," investors might mistakenly believe the target return is guaranteed. In response, the Financial Supervisory Service has issued a warning that caution is required. Since the structure and composition of covered call ETFs vary by product, they must be examined carefully. Investors should choose products based on their own capacity to bear investment risks.
ETFs can be delisted just like stocks. Of course, unlike a stock delisting, capital recovery is possible with an ETF. However, if an ETF is delisted, the underlying stocks and bonds are all sold and liquidated to be paid out to investors, which means funds may be temporarily tied up.
Nevertheless, with stock market issues such as the U.S. FOMC meeting in September and the U.S. presidential election in November expected to continue, diversified investment is essential to navigate a volatile market. Even if it is not specifically a covered call ETF, it is necessary to take an interest in a variety of ETFs. Seol Tae-hyun, a researcher at DB Financial Investment 016610, explained, "When market uncertainty increases, low-volatility factors often outperform the market," adding, "Domestically listed low-volatility thematic ETFs include new consumption and platforms, while in the U.S., there are ETFs related to healthcare innovation, longevity, and maritime investment."