Headquarters of two chipmakers, Samsung Electronics, left, and SK hynix / Yonhap
Ahead of the highly anticipated debut of leveraged exchange-traded funds (ETFs) tied to Korea’s two memory chip titans — Samsung Electronics and SK hynix — the country's financial watchdog is drawing complaints from asset managers by tightening restrictions on promotional campaigns, according to industry officials Tuesday.
The products, set to launch Wednesday, will be the country’s first leveraged ETFs linked to individual stocks. Conventional leveraged ETFs track broader market benchmarks such as the KOSPI 200 or the S&P 500, allowing investors to place amplified bets on the direction of the overall market.
The new funds apply that same structure to single stocks. A total of 16 ETFs will launch, allowing investors to double the daily gains or losses of Korea’s two biggest chipmakers.
That structure makes the products inherently high-risk, as losses can pile up just as quickly as gains. Financial authorities have already introduced safeguards, including mandatory pretrading education.
