The Korean market will welcome individual stock leverage ETFs, and retail investor enthusiasm may intensify index volatility

Deep Tide TechFlow News, May 24 — Next week, South Korea will launch its first batch of individual stock leverage ETFs. These products are linked to chip manufacturers Samsung Electronics and SK Hynix, aiming to achieve daily returns that are twice the positive or negative movement of the underlying stocks. Analysts expect these ETFs to attract strong demand from over 14 million retail investors in South Korea.

However, in the context where intraday fluctuations of the KOSPI index reaching 5% are becoming increasingly common, this enthusiasm could further amplify market volatility. CEO of Fibonacci Asset Management in Singapore stated, “These ETFs will exacerbate existing concentration risk, posing a structural challenge for long-term investors because index volatility will remain high, making it difficult for the Korean market to stabilize.”

DaYu Future Asset analyst Yoon Jaehong predicts that the net inflow of funds into 14 leveraged ETFs betting on Samsung Electronics or SK Hynix, expected to be listed by the end of May, could reach as high as 5.3 trillion Korean won. He said that in the first two months of this year, the number of investors who completed mandatory online training before investing in leveraged products has already reached 300k, surpassing the total for all of 2025.