KB Asset Management to launch U.S. Treasury 30-year covered call ETF

[Courtesy of KB Asset Management]

KB Asset Management will launch the industry’s first U.S. Treasury 30-year covered call exchange-traded fund (ETF), the KBSTAR U.S. Treasury 30-year Covered Call (Synthetic) ETF, on Thursday, the company said on Tuesday.

Similar to the U.S. iShares 20+ Year Treasury Bond ETF (TLT), this new ETF aims to invest in long-term U.S. bonds to pursue stable monthly returns. The underlying index is the Bloomberg U.S. Treasury 20+ Year (TLT) 2 percent OTM Covered Call Index.

The new ETF provides monthly dividends to investors through coupon interest generated from the underlying assets of the U.S. 30-year Treasury and the monthly premium from covered call options. The total expense ratio is 0.25 percent annually, and it can also be included in retirement pension accounts. Exchange rate gains and losses are reflected in the ETF’s performance.