As the stock prices of Samsung Electronics and SK Hynix continue to weaken, single-stock leveraged exchange-traded funds (ETFs) have plummeted by more than 10 percent for the second consecutive day. Individual investors who aggressively entered these single-stock leveraged products, aiming for double the returns during market rallies, are now facing mounting losses. According to the Korea Exchange on July 8, all 14 single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix closed with declines in the 11 percent range today. Following a 12 to 13 percent drop the previous day, these products fell by approximately 11 percent again today, pushing all 14 items below their initial listing price of 20,000 won. KODEX SK Hynix Single-Stock Leverage, which was the only product to remain above 20,000 won yesterday, closed at 19,635 won today, July 8, down 11.27 percent from the previous trading session. In particular, TIGER Samsung Electronics Single-Stock Leverage (14,850 won), ACE Samsung Electronics Single-Stock Leverage (14,805 won), RISE Samsung Electronics Single-Stock Leverage (14,900 won), and KIWOOM Samsung Electronics Futures Single-Stock Leverage (14,615 won) have fallen into the 14,000 won range, recording losses of up to 27 percent from their listing prices. These products also ranked at the bottom in terms of performance for this month. From July 1 to July 8, SK Hynix single-stock leveraged ETFs occupied the bottom 1st to 2nd and 4th to 8th places in performance among all listed ETFs. KIWOOM SK Hynix Futures Single-Stock Leverage recorded the largest decline at -43.53 percent, followed by 1Q SK Hynix Futures Single-Stock Leverage at -43.49 percent. Despite this situation, individual investors continue to remain net buyers of these single-stock leveraged products. From July 1 to July 8, individual investors net purchased 563.8 billion won of KODEX Samsung Electronics Single-Stock Leverage and 208.6 billion won of TIGER Samsung Electronics Single-Stock Leverage. They also net purchased 1.1092 trillion won of KODEX SK Hynix Single-Stock Leverage and 469.3 billion won of TIGER SK Hynix Single-Stock Leverage. As single-stock leveraged ETFs are being identified as a primary factor increasing market volatility, financial authorities are considering implementing supplementary measures. Financial Supervisory Service Governor Lee Chan-jin expressed concern at the 3rd Consumer Risk Response Council meeting on July 6, stating, "If household financial assets are overly concentrated in specific asset classes or if investments are made using leverage beyond what can be tolerated, it not only exposes investors to high risks of loss but can also seriously damage the financial soundness of households." The following day, Deputy Prime Minister and Minister of Economy and Finance Gu Yun-cheol stated, "Although we have provided education and established certain guidelines (for leveraged investments), as various concerns are being raised at this point, we are discussing ways to stabilize the situation."
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