14th July 2026 – (Seoul) A new wave of leveraged products tied to South Korea’s chip champions is sliding sharply, putting retail investors at risk of heavy losses after a rush into tools promising amplified returns.
More than a dozen single‑stock leveraged exchange‑traded funds tracking Samsung Electronics Co. and SK Hynix Inc. have lost close to half their value since launching in late May, according to market data. The largest, SAMSUNG KODEX SK Hynix Single Stock Leverage, has dropped about 45% since its debut and is now more than 60% below its peak in June.
The setbacks underline the hazards of leveraged exposure to the two semiconductor giants at the heart of the global AI supply chain. While such funds can magnify gains, they also intensify swings as issuers rebalance frequently—buying into rallies and selling into declines—to maintain target leverage.
“The sharp decline in these leveraged ETFs has been particularly painful for retail investors because many appear to have treated them as long‑term investments rather than short‑term trading tools,” said Jung In Yun, chief executive of Fibonacci Asset Management. “Heavy losses in these ETFs may reduce retail investors’ willingness and capacity to buy semiconductor stocks, making any market recovery more dependent on foreign institutional inflows.”
Korean equities were volatile on Tuesday following a steep sell‑off on Monday, when SK Hynix tumbled a record 15% in Seoul amid concerns that the global AI rally had run too far.
Seoul’s single‑stock leveraged ETFs—collectively launched in late May with roughly $3 billion in assets—followed the popularity of similar Hong Kong instruments. Since October, Hong Kong’s CSOP SK Hynix Daily 2x Leveraged Product has rapidly grown into the world’s largest of its type.
The products’ sharp moves have prompted criticism of Korea’s decision to permit them. After years of restrictions, regulators loosened rules during a market upswing to attract domestic capital and support the currency. With the funds now accused of fuelling volatility, the top financial watchdog last month expressed regret over approving the listings.
Even so, retail appetite remains resilient. Leveraged and inverse exchange‑traded products in Korea drew about $3.8 billion in net inflows over the past month, led by funds tracking SK Hynix and Samsung, according to industry estimates.
