Single-stock leveraged ETFs in South Korea recorded a net asset value of 7.44 trillion won on August 4, according to Korea Exchange data, as investor funds continued to exit following regulatory changes. The 16 leveraged and inverse products tracking Samsung Electronics and SK Hynix saw NAV fluctuations tied to underlying stock price movements and net redemptions during the July 30 to August 4 period. South Korean regulations permit ETF delisting if NAV remains below 5 billion won for one month after one year of listing, raising questions about the long-term viability of smaller products in this category.
Single-Stock Leveraged ETFs Record NAV Fluctuations from July 30 to August 4
The 16 single-stock leveraged and inverse ETFs held a combined NAV of 5.85 trillion won on July 30, when Samsung Electronics and SK Hynix stock prices fell sharply. NAV increased to 9.14 trillion won on July 31 as the two stocks rallied, despite new margin requirements taking effect that day. NAV declined to 7.98 trillion won on August 3 when the underlying stocks fell, then dropped further to 7.44 trillion won on August 4 even as Samsung Electronics and SK Hynix prices rose slightly.
KODEX SK Hynix Product Reports 285 Billion Won Net Outflow on August 4
KODEX SK Hynix Single Stock Leverage, managed by Samsung Asset Management and representing 38.6% of total single-stock leveraged ETF NAV, recorded net fund outflows of 285 billion won on August 4. Other major products also reported outflows that day: KODEX Samsung Electronics Single Stock Leverage (-140.2 billion won), TIGER SK Hynix Single Stock Leverage (-106.2 billion won), TIGER Samsung Electronics Single Stock Leverage (-40.8 billion won), and SOL SK Hynix Single Stock Leverage (-1.4 billion won).
Fourteen Products Show NAV Decline Between July 31 and August 4
Of the 14 leveraged products excluding two inverse products, all recorded NAV decreases from July 31 to August 4. Three products showed declines exceeding 20%, while nine products declined between 10% and 20%. Three products currently hold NAV below 20 billion won: KIWOOM Samsung Electronics Futures Single Stock Leverage (9.1 billion won), KIWOOM SK Hynix Futures Single Stock Leverage (13.5 billion won), and PLUS Samsung Electronics Single Stock Leverage (15.9 billion won).
Asset Managers Hold Emergency Meeting on July 29
Eight asset management companies operating single-stock leveraged products held an emergency meeting at the Korea Financial Investment Association on July 29. Multiple participants reportedly agreed to a natural phase-out approach through weakened product appeal. Bae Jae-gyu, CEO of Korea Investment Trust Management, stated in a July 30 Facebook post that the optimal approach appears to be gradual reduction through support from asset managers, liquidity providers, and institutional measures, rather than immediate delisting.
FAQ
What was the net asset value of single-stock leveraged ETFs on August 4?
The 16 single-stock leveraged and inverse ETFs in South Korea recorded a combined net asset value of 7.44 trillion won on August 4, according to Korea Exchange data.
Which products recorded the largest net outflows on August 4?
KODEX SK Hynix Single Stock Leverage reported the largest net outflow at 285 billion won on August 4, followed by KODEX Samsung Electronics Single Stock Leverage at 140.2 billion won and TIGER SK Hynix Single Stock Leverage at 106.2 billion won.
When can single-stock leveraged ETFs be delisted in South Korea?
ETFs can be delisted if their net asset value remains below 5 billion won for one month or longer after one year of listing, with asset management companies authorized to make the delisting decision under these conditions.
