South Korean asset management companies earned approximately 3.7 billion won in management fees from 16 single-stock leveraged exchange-traded funds (ETFs) during a two-month period from May 27 to July 28, according to regulatory data. The fee revenue came as these ETF products recorded significant losses, with some declining over 60% since listing. The Financial Supervisory Service submitted the data to the National Assembly's Political Affairs Committee in response to a parliamentary inquiry regarding the performance and fee structure of single-stock leveraged products.
Samsung Asset Management Captures 83% of Total Fee Revenue
The 16 single-stock leveraged ETFs generated a combined 3.665 billion won in provisional management fees during the period, according to data reported by Newsis on August 6. Samsung Asset Management collected 3.029 billion won, representing approximately 83% of total fee revenue, through its KODEX Samsung Electronics Single-Stock Leverage and KODEX SK Hynix Single-Stock Leverage products. The company, which holds the largest market share in the industry, set its management fee rate at 0.27% annually, higher than the 0.07-0.20% range charged by other asset managers.
Mirae Asset Asset Management, which set the industry's lowest management fee rate at 0.07% annually, collected 485 million won in fees through its TIGER Samsung Electronics Single-Stock Leverage and TIGER SK Hynix Single-Stock Leverage products. Hanwha Asset Management (PLUS) and Shinhan Asset Management (SOL) recorded 49 million won and 35 million won respectively from two products each. Korea Investment Trust Management (ACE) collected 26 million won, KB Asset Management (RISE) earned 21 million won, Kiwoom Asset Management collected 13 million won, and Hana Asset Management (1Q) recorded 7 million won in management fees.
Single-Stock Leveraged ETFs Record 50-60% Losses
KODEX Samsung Electronics Single-Stock Leverage and KODEX SK Hynix Single-Stock Leverage recorded returns of -53.94% and -62.72% respectively since listing. TIGER Samsung Electronics Single-Stock Leverage showed a -52.48% return, while TIGER SK Hynix Single-Stock Leverage posted a -62.97% return since listing. Management fees are automatically deducted from investors' held assets as compensation for asset managers operating and managing the ETFs.
Hanwha Asset Management and Shinhan Asset Management are the only companies in the industry operating inverse 2x ETFs for both Samsung Electronics and SK Hynix.
Financial Authority Raises Minimum Deposit Requirement to 30 Million Won
Financial authorities implemented supplementary measures related to single-stock leveraged products effective July 31, raising the investor minimum deposit requirement from 10 million won to 30 million won. Following the regulatory changes, daily average trading volume decreased to approximately one-tenth of previous levels, indicating a partial cooling of investment overheating.
FAQ
How much did Samsung Asset Management earn from single-stock leveraged ETFs between May 27 and July 28?
Samsung Asset Management collected 3.029 billion won in management fees from its KODEX Samsung Electronics Single-Stock Leverage and KODEX SK Hynix Single-Stock Leverage products during the May 27 to July 28 period, representing 83% of the total 3.665 billion won earned by all 16 single-stock leveraged ETFs.
What returns did the KODEX single-stock leveraged ETFs record since listing?
KODEX Samsung Electronics Single-Stock Leverage recorded a -53.94% return since listing, while KODEX SK Hynix Single-Stock Leverage showed a -62.72% return since listing.
What regulatory changes did financial authorities implement for single-stock leveraged products on July 31?
Financial authorities raised the investor minimum deposit requirement from 10 million won to 30 million won effective July 31, resulting in daily average trading volume decreasing to approximately one-tenth of previous levels.
