Global X ETFs announced that against the backdrop of increasing global market volatility, Hong Kong investors will welcome an innovative ETF product—the Global X S&P 500 Covered Call Active ETF (03415). The product is set to list in Hong Kong on August 29, 2025. This ETF not only allows investors to participate in the growth of US stocks but also generates stable cash flow through an options strategy, alongside significant tax advantages.

For Hong Kong investors, Hong Kong-listed ETFs offer significant tax advantages regarding dividend tax compared to similar US-listed products. As non-US tax residents, Hong Kong investors are subject to a 30% withholding tax (WHT) on cash dividends distributed by US stocks and ETFs. Although it's possible to apply for a partial tax refund through specific procedures, the process is typically cumbersome and complex. Furthermore, Hong Kong investors are not required to pay capital gains tax, regardless of whether they hold US or Hong Kong-listed ETFs. Consequently, the post-dividend tax yield for Hong Kong-listed ETFs can reach 100%, while US-listed ETFs can only retain 70% of the income after standard withholding tax.

The Global X S&P 500 Covered Call Active ETF employs a covered call strategy, generating premium income by investing in the constituent stocks of the S&P 500 index and selling corresponding call options.

It is understood that the "covered call strategy" is an investment approach that generates regular potential cash flow by selling options to earn premiums. The principle involves investors holding the underlying shares or index constituents while selling call options on those shares or the index (which gives the option buyer the right to purchase a certain quantity of the underlying asset from the seller at an agreed price and time), thereby collecting premiums as additional income.

This strategy performs particularly well in volatile market conditions: when the market falls, the premium income can offset some losses, causing it to outperform the underlying asset; when the market is choppy, increased premiums due to higher volatility can create excess returns. However, when the market rises, the primary income source remains the premium income from selling call options, and investors cannot enjoy the gains from the appreciation of the underlying asset.

The covered call strategy itself involves complex options trading operations, which are both time-consuming and costly for ordinary investors. Through the ETF format, investors can participate in this strategy with low costs and high transparency, easily accessing professional-level risk management tools. By launching the S&P 500 Covered Call ETF in Hong Kong, Global X provides local Hong Kong investors with an innovative investment tool that allows participation in US stock growth, generates regular income, and offers tax advantages, helping investors better preserve and increase their asset value in volatile markets.