Korean Chip Stock Leveraged ETFs Crash, Largest ETF Down Over 60% from Peak

Odaily Odaily News A new class of leveraged products tracking major South Korean chip stocks is experiencing a sharp decline, exposing retail investors who favor these tools for magnified returns to huge potential losses. According to compiled data, the prices of over a dozen leveraged ETFs tracking Samsung Electronics and SK Hynix have nearly halved since their listing at the end of May. Among them, the KODEX SK Hynix Single Stock Leveraged ETF, the largest with $3.4 billion in assets under management, has fallen approximately 45% since its listing and is down over 60% from its June high.

Jung In Yun, CEO of Fibonacci Asset Management, said, "The sharp decline in these leveraged ETFs is particularly heavy on retail investors, as many seem to view them as long-term investments rather than short-term trading tools. The huge losses from these ETFs could weaken retail investors' willingness and ability to buy semiconductor stocks, making the market's future recovery more reliant on foreign institutional capital inflows." (Jin Shi)