Bae Jae-kyu, CEO of Korea Investment Management (Korea Investment Management) Bae Jae-kyu, CEO of Korea Investment Management and widely regarded as the father of Korea's ETF market, urged investors to avoid single-stock leveraged ETFs despite his firm managing the products.The warning is highly unusual, marking a rare case of an asset manager publicly discouraging investment in products it offers.In a Facebook post Monday, Bae wrote, "People may criticize me for saying this, but I hope investors stop investing even now.""As the head of an asset manager that operates single-stock leveraged ETFs, I apologize for saying this. But my conclusion is simple: Do not invest in single-stock leveraged or 2x inverse ETFs," he wrote.Bae warned that daily compounding can cause leveraged ETFs to suffer losses far greater than the underlying stock's decline, meaning investors may not recover their principal even if the stock eventually returns to its previous price."The greater the volatility in the underlying stock, the more losses accumulate over time," he wrote, adding that "no one expected volatility to become this high."To illustrate the risk, Bae shared data showing that SK hynix shares fell 17.9 percent between May 27 and July 16, while a 2x leveraged ETF tracking the stock plunged 47.5 percent. A simple twofold return would have implied a 35.8 percent loss, but the product underperformed by an additional 11.7 percentage points because of compounding.The 2x inverse SK hynix ETF also failed to deliver its theoretical return. Although the stock's decline would normally translate into a 35.8 percent gain, the product instead lost 31.1 percent as repeated price swings eroded its value.Korea Investment Management operates the ACE Samsung Electronics Single Stock Leveraged ETF and the ACE SK hynix Single Stock Leveraged ETF.Bae later deleted the Facebook post.