Korean retail investors are pivoting to high-leverage US ETFs

Odaily News According to the Korea Exchange (KRX) information data system on the 5th, after South Korean financial regulators tightened investment oversight on single-stock leveraged ETFs, related trading volumes have shrunk significantly. The trading value of the 16 single-stock leveraged/inverse ETFs listed in South Korea plummeted 89.8%, from 13.0361 trillion Korean won on July 15, before the regulatory measures—which included higher base margin requirements and investment limits—came into effect, to 1.3329 trillion Korean won by August 4. However, South Korean retail investors' enthusiasm for leveraged ETFs remains undiminished, with funds rotating into overseas leveraged ETFs such as those listed in the US.

During the same period from July 15 to August 4, the top net buy among overseas stocks by South Korean investors was the US fund SOXL (Direxion Daily Semiconductor Bull 3X), with net purchases reaching $2.48789 billion. Tesla 2x leveraged ETF (TSLL) ranked sixth with net buys of $214.36 million. The Korea 3x leveraged ETF (KORU) also saw inflows of $130.95 million, ranking eleventh. (Yicai)