Investors Pour 5 Trillion Won into Leveraged ETFs Despite 48% Plunge

Despite a plunge of up to 48% in the returns of leveraged ETF products tracking Samsung Electronics and SK Hynix, retail investors are continuing to increase their buying spree.

Over the past month, from June 16 to July 15, individual investors net purchased 5.8505 trillion won worth of 14 single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix.

Including two inverse ETFs that bet on stock price declines, the total net inflow of funds exceeds 7.3 trillion won.

The market capitalization of the 16 single-stock leveraged products grew from 4.4 trillion won on May 27, their first day of listing, to 11.9 trillion won as of July 15.

The product that attracted the most capital is "KODEX SK Hynix Single Stock Leveraged ETF."

With a net inflow of 3.4472 trillion won, it recorded the highest amount among all ETFs listed in Korea.

Meanwhile, 1.5083 trillion won flowed into "KODEX Samsung Electronics Single Stock Leveraged ETF."

The issue is that during this period, the stock prices of Samsung Electronics and SK Hynix plummeted by 24% and 19%, respectively, causing the losses on these leveraged products to snowball.

Representative leveraged products have plunged by 45% to over 48%, resulting in losses that have nearly halved their value.

As funds have become excessively concentrated in the semiconductor leverage market, leading to extreme volatility in the stock market, financial authorities have finally stepped in to apply the brakes.

Financial authorities announced supplementary measures, including a significant increase in the basic deposit requirement for leveraged products from the current 10 million won to 30 million won starting next month, and an increase in the minimum trading unit from 1 share to 20 shares starting this November.

The measures are intended to cool down overheated trading by strengthening basic deposit requirements and mandatory pre-investment education, as well as by raising the minimum trading unit.

However, it remains a separate question whether the funds already invested in these leveraged products will be withdrawn.

Attention is now focused on whether the supplementary measures introduced by the authorities will be able to calm the overheated investment in leveraged products—which continues despite record losses of 48%—and stabilize market volatility.

Reported by Lee Hyeon-yeong | Video by Kim Na-on | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.