Mars Finance reported that on July 14, in South Korea, more than a dozen single-stock leveraged ETFs that were listed at the end of May saw a sharp decline. Several products tracking Samsung Electronics and SK Hynix nearly halved in price. Among them, the “SAMSUNG KODEX SK Hynix Single Stock Leveraged ETF,” with assets of $3.4 billion, has fallen by about 45% cumulatively since its listing, pulling back more than 60% from the June peak. The related products’ combined assets are about $3.0 billion. On Monday, SK Hynix plunged a record 15%; on Tuesday, it fell by more than 8% again during the trading session. The KOSPI index at one point dropped 5% and fell below 6,500 points. Jung In Yun, CEO of Fibonacci Asset Management, said that many retail investors view leveraged ETFs as long-term investment tools, and the products’ sudden rout has caused them to suffer substantial losses, potentially weakening their willingness and ability to continue buying semiconductor stocks. South Korea’s top financial regulator last month expressed regret about approving the listing of such products, but retail trading enthusiasm has not noticeably cooled. In the past month, leveraged and inverse exchange-traded products in South Korea together attracted $3.8 billion in capital inflows, mainly flowing into single-stock products tracking SK Hynix and Samsung Electronics. Jung In Yun expects that regulators may strengthen suitability requirements, risk disclosures, and investor education rather than completely stopping the products. On the same day, the South Korean government raised its economic growth forecast for this year from 2% to 3%, saying that demand for AI chips will continue to offset some of the drag caused by conflicts in the Middle East, and expects this year’s current account surplus to reach a record $290 billion.

Samsung Electronics3.33%

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Korean leveraged chip ETF plunges 45%, dealing a heavy blow to retail investors

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