Korean lawmaker warns KOSPI index has "turned into a casino", calls for delisting of leveraged ETFs

Odaily Planet Daily News A South Korean lawmaker has raised concerns about the risks of single-stock leveraged ETFs, with an opposition party member calling for their delisting. 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, for leveraged ETFs tracking Samsung Electronics and SK Hynix in South Korea.

He wrote that the Korea Composite Stock Price Index (KOSPI) has "turned into a casino" and that such products represent "a complete policy failure, daily eroding trillions of won in corporate value and national wealth." His remarks have heightened concerns among policymakers and investors over the risks of these ETFs. Designed to deliver twice the returns of the 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)