South Korea’s 16 Leveraged ETFs on Samsung, SK Hynix Draw $2.8 Billion on Debut
South Korean issuers this week launched 16 single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix, drawing about $2.8 billion on their first day of trading and opening a new channel for leveraged bets in a market dominated by the two chipmakers. The risk showed up quickly on Thursday, when the KOSPI fell 4.7%, Samsung dropped 6.4%, SK Hynix lost 4.1% and one Samsung leveraged ETF fell nearly 10%.
The new funds add to a buildup in borrowing after brokerage margin loans climbed to a record 34 trillion won to 36 trillion won as the KOSPI moved above 8,000. Previously banned in South Korea, the ETFs require daily rebalancing that can force buying into rallies and selling into declines; with Samsung and SK Hynix accounting for more than half of the KOSPI, that structure could amplify swings if the semiconductor-led rally reverses.
From the sources (4 posts)
@rtodiWas in Korea this week for business and learned from colleagues about this wild trend: young Koreans in their 20s and 30s are aggressively taking out loans, especially margin loans from brokerages and credit loans from banks to invest in th
@rtodi@jukan05 This upcycle has its branches where I cannot even fathom. Also, Resonates with what I heard this week.
@globalmktobserv🔴Leveraged trading in South Korean semiconductor stocks is SKYROCKETING: 16 single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix launched this week, attracting combined assets of ~$2.8 billion on their first day of trading
@globalmktobserv‼️South Korea is the world's hottest stock market, but WARNING signs are building: The KOSPI has surged more than +250% over the last 18 months, driven almost entirely by Samsung and SK Hynix, which together account for more than 50% of th