Dividend-focused exchange-traded funds (ETFs) have continued a streak of fast growth since the beginning of this year as investors show growing interest in dividend stocks with lower volatility in the stock market where expectations and concerns are mixed.

According to the Korea Exchange on Wednesday, return on the KBSTAR Large Dividend 10TR ETF reached 14 percent this year, nearly double the return on the broader Kospi market. Dividend-related ETFs such as KOSEF High Dividend Yield, KODEX Dividend Value and ARIRANG High Dividend Yield Stock recorded a return of 8 percent or higher this year.

Korean dividend stock ETFs mostly track large-cap stocks such as Samsung Electronics Co. and SK hynix Inc. as well as financial holding companies such as KB Financial Group and Shinhan Financial Group.

Since last year, ETFs that track U.S. dividend stocks, including monthly dividend ETFs, have come to market one after another, and perception that dividends are usually earned at the end of the year is gradually changing. Currently, ETFs for monthly dividend payment such as SOL US S&P 500, TIGER US S&P 500 Dividend Aristocrat and KODEX US High Dividend Premium Active are listed on the market.

Individual investors have so far brought in about 30 billion won ($24.3 million) to buy SOL US Dividend Dow Jones listed in November last year.

According to the Korea Securities Depository, Korean investors’ net purchase of U.S. ETFs that invest in U.S. dividend growth stocks this year came to $19.1 million for Schwab US Dividend Equity (SCHD) and $34.35 million for JP Morgan Equity Premium Dividend (JEPI). These ETFs have a return of 1 percent so far this year.

By Won Ho-sup and Minu Kim

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