High-dividend exchange-traded funds (ETFs) have seen a capital outflow recently, despite recording returns of around 30% this year. Analysts attribute this trend to investors shifting their focus to growth stocks, particularly in artificial intelligence (AI) and semiconductors.
According to ETF Check on June 16, the year-to-date returns for leading domestic high-dividend ETFs, including SOL Korea High Dividend, PLUS High Dividend, TIGER Korea Dividend Dow Jones, and ACE High Dividend, are 35.85%, 30.27%, 29.92%, and 36.29%, respectively.
While these figures indicate solid performance for dividend investment products, they fall short of matching the overall rise in the domestic stock market. The KOSPI index surged from 4,309.63 at the beginning of the year to 8,545.98 as of the previous day, marking a 98.3% increase. The rise has been largely driven by stocks related to AI, semiconductors, and power infrastructure, which has diminished the appeal of dividend stocks that typically offer more stable returns.
The high-dividend ETF market is steadily growing. PLUS High Dividend boasts the largest net assets among domestic high-dividend ETFs at 2.5129 trillion won. It is followed by SOL Korea High Dividend at 594.4 billion won, TIGER Korea Dividend Dow Jones at 394.7 billion won, and ACE High Dividend at 56.9 billion won. The total net asset size of these four major high-dividend ETFs amounts to 3.5589 trillion won.
However, recent capital flows tell a different story. In the past month, the four major high-dividend ETFs experienced a total net outflow of 283.9 billion won. PLUS High Dividend saw 141.3 billion won exit, while SOL Korea High Dividend and TIGER Korea Dividend Dow Jones recorded outflows of 69.2 billion won and 67.3 billion won, respectively. ACE High Dividend also faced a capital outflow of 6.1 billion won.
The trend of outflows has continued over the past three months. TIGER Korea Dividend Dow Jones reported a net outflow of 112.0 billion won, while SOL Korea High Dividend (-29.2 billion won), PLUS High Dividend (-12.2 billion won), and ACE High Dividend (-7.8 billion won) also showed net outflows.
The composition of stocks within high-dividend ETFs has also diverged from the current market leaders, contributing to the capital outflow. Major high-dividend ETFs have significant holdings in automotive stocks like Hyundai and Kia, as well as financial stocks such as KB Financial, Shinhan Financial Group, and Hana Financial Group, along with insurance stocks like Samsung Fire & Marine and DB Insurance. In contrast, this year's stock market has been led by AI and semiconductor-related stocks, leaving dividend stocks relatively neglected.
Despite these trends, the overall flow in the first half of the year was not negative. Over the past six months, SOL Korea High Dividend attracted a net inflow of 250.1 billion won, PLUS High Dividend 246.4 billion won, and ACE High Dividend 36.3 billion won. This influx was likely driven by expectations surrounding the implementation of separate taxation on dividend income and corporate value-up policies, although recent trends suggest some investors are now realizing profits.
The appeal of dividends remains strong. SOL Korea High Dividend has a distribution rate of 3.61%, PLUS High Dividend 3.56%, and TIGER Korea Dividend Dow Jones 3.71%. ACE High Dividend has a distribution rate of 1.69%. Industry experts believe that if the growth stock-focused market stabilizes or if market volatility increases, interest in high-dividend ETFs, which provide stable cash flow, may rise again.
An asset management industry official stated, "At the beginning of the year, high-dividend ETFs saw capital inflows due to expectations surrounding separate taxation on dividend income and value-up policies. However, with the ongoing focus on AI, some funds are shifting toward growth stocks. If market volatility increases, demand for dividend stock investments may expand again."
* This article has been translated by AI.
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