Analysis: South Korean politicians use 2x leveraged ETFs to criticize the government

Odaily News, Bloomberg ETF analyst Eric Balchunas posted on X platform, stating that during a hearing, Lee Jongwook, a lawmaker from the People Power Party, said to Koo, "This country has turned into a casino. These products should never have been allowed into the market. I believe this is a policy failure."

Eric Balchunas noted that South Korean politicians are using 2x leveraged ETFs to criticize the government. However, the bubble and correction were caused by the AI boom, which spurred significant market interest in memory chip manufacturers. The 2x leveraged ETF is merely a tool to gain such exposure. He also suggested that South Korea may not be the best market for 2x single-stock ETFs, as the underlying stocks lack sufficient liquidity, making it easier for derivative products to negatively impact the underlying assets.