Tongyang Securities’ new investment product is gaining popularity as it ensures stable profitability despite low interest rates and ongoing volatility in the market.

In June, the brokerage house launched the “My W New Dividend Plus Wrap” account, which is designed to seek dual returns ― stock gains and dividend earnings ― via direct investment in equities on the Korea Exchange.

The noteworthy point is that the wrap account is mostly being invested in “stocks guaranteeing high dividend payouts” to shareholders. A wrap account refers to a product in which a brokerage firm manages an investor’s financial portfolio.

While the Korea Composite Stock Price Index fell by 0.7 percent for about a month around last June and July, its profitability came to 0.8 percent over the corresponding period.

This indicates that the W New Dividend Plus Wrap account outperformed the benchmark KOSPI by 1.5 percentage points in terms of earnings.

Earlier, Tongyang’s My W ETF Research Solution No. 2 reported an 8 percent earnings rate for less than two months between June and August 2012.

The ETF Wrap product was first run as a mixture of equity and bond-type ETFs best assorted by professionals, but is 100 percent transferred to bond-type ETFs when it reaches the aimed earnings rate (8 percent).

Professionals in Tongyang Securities’ research center and asset management team cooperated to decide on the movements of the market and find out the most appropriate asset allocations and equity and bond-type ETF ratios through index upside potentials and macro models.

The product was considered to be a smart choice for customers who find it difficult to keep a consistent eye on the market, and wish to entrust professionals.

A Tongyang Securities asset manager said that it was an inspiring success. “We ultimately attained aimed earnings rate in such a short time though the market was fluctuating due to then negative factors involving the eurozone fiscal crisis.”

By Kim Yon-se (kys@heraldcorp.com)