South Korea’s Kospi index is having a moment. For two consecutive years, it is on track to be the best-performing major equity market on the planet, powered almost entirely by global demand for artificial intelligence chips made by Samsung Electronics and SK Hynix.
Since May 2026, more than a dozen single-stock leveraged ETFs have launched in South Korea, most of them tied to Samsung Electronics and SK Hynix. These are 2x daily return products, meaning if Samsung rises 3% in a day, the ETF is supposed to deliver 6%. Retail investors have piled in.
Here is the thing about leveraged ETFs: they require daily rebalancing to maintain their target exposure. That means the funds must mechanically buy more of the underlying stock when it rises and sell when it falls, at the end of every single trading day, regardless of market conditions. When you multiply that dynamic across a dozen products all linked to the same two stocks, the rebalancing flows start to move markets on their own.
Samsung Electronics and SK Hynix together account for nearly 60% of the Kospi’s total market capitalization. In 2025, the Kospi recorded just two trading days where the index moved more than 5% in either direction. In 2026, that count has already reached at least 20 such days.
