Leveraged ETFs Attract 10 Trillion Won; Kim Yong-beom Says Delisting Is Unlikely

The Blue House has stepped in to address the controversy surrounding the potential delisting of single-stock leveraged exchange-traded funds (ETFs).

On July 19, Kim Yong-beom, the Blue House Policy Chief, appeared on KBS's "Sunday Diagnosis Live" and stated that it is difficult to imagine the delisting of single-stock leveraged ETFs.

His remarks reflect the concern that since over 10 trillion won has already flowed into these products, a delisting would cause a massive shock to the market if it were to materialize.

Kim mentioned recent supplementary measures, such as raising the basic deposit requirement to 30 million won in cash, and predicted that these steps would significantly mitigate potential side effects.

However, he pointed out that because the impact of leveraged products is doubled during market downturns, further discussions are necessary to minimize market shocks.

He added that they would discuss ways to appropriately manage selling pressure to reduce the tracking error, which refers to the difference between the actual value and the market price.

Regarding the so-called triple-strong phenomenon, where housing purchase, jeonse (lump-sum deposit rental), and monthly rent prices are all rising simultaneously, he bowed his head and apologized, saying he feels very sorry to many citizens.

Explaining the background of his comment last month that housing must be built urgently, he stated that it was an expression of his desperate sentiment that all possible methods, such as purchasing non-apartment buildings for rental, must be mobilized to produce short-term results.

On the other hand, he drew a line regarding redevelopment and reconstruction, noting that they take at least three to five years and are not a master key to solving immediate supply issues.

Regarding the housing supply plan utilizing semi-industrial areas in Seoul, he mentioned that he has scheduled a separate meeting with Seoul Mayor Oh Se-hoon to achieve significant results through collaboration with the central government.

Concerning the principles of real estate tax reform, which is drawing much attention, he emphasized that they would distinguish between multi-home owners and single-home owners, and apply differences based on whether the property is used for actual residence.

He responded cautiously to the argument from some that raising holding taxes while lowering capital gains taxes would bring more properties to the market, stating that it is difficult to speak in uniform terms.

He clarified his intention to consider tax equity, suggesting that the system could be designed to allow people to sell at an appropriate time when they wish to do so, while increasing the burden if that period is exceeded.

He actively denied allegations that investment projects in the U.S. are being delayed, stating that they are proceeding according to an appropriate schedule.

He also revealed that preparations are underway without setbacks so that the first U.S. investment project could become visible as early as August or September.

Finally, regarding the introduction of the K-New Deal Academy to help young people enter the labor market, he set a goal of enabling them to use the Republic of Korea's opportunity instead of the so-called mom-and-dad chance, which relies on parental influence.


(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.