South Korea approved 16 single-stock leveraged ETFs at the end of May. Within weeks, regulators were already calling the decision “hasty.”
The products, which offer 2x daily exposure to Samsung Electronics and SK Hynix, launched on May 27 with roughly $3 billion in assets. By June, that figure had ballooned to approximately 14 trillion won ($9.1 billion). Retail investors hold 92% of those combined assets.
A market correction with leverage on top
On June 23, the KOSPI index dropped nearly 10%, triggering a trading halt.
Hong Kong-listed 2x leveraged products tied to SK Hynix saw declines exceeding 23% following the KOSPI drop.
