South Korean lawmaker warns KOSPI index "has become a casino," calls for leveraged ETFs to be delisted

Odaily Odaily News: Growing concerns over the risks of single-stock leveraged ETFs among South Korean lawmakers have led an opposition party lawmaker to call for the delisting of such products. On Monday, Ahn Cheol-soo, a lawmaker from the conservative People Power Party and former presidential candidate, posted on social media calling for strong corrective measures, including delisting, against leveraged ETFs tracking Samsung Electronics and SK Hynix in South Korea.

He wrote that the Korea Composite Stock Price Index (KOSPI) "has become a casino," describing such products as "a complete policy failure, eating away trillions of won in corporate value and national wealth every day." His remarks have intensified concerns among policymakers and investors over the risks of these ETFs. Designed to deliver twice the return of their underlying stocks, these products' mechanical rebalancing process forces them to buy more when prices rise and sell more when they fall, potentially amplifying market volatility. (Jinshi Data)