South Korea Weighs Curbs on $9.1 Billion of Single-Stock Leveraged ETFs Tracking Samsung and SK Hynix
South Korean authorities are weighing measures to curb risks from leveraged single-stock exchange-traded funds tracking shares of Samsung and chipmaker SK Hynix. The country’s top financial regulator regretted not blocking the products, which have grown to $9.1 billion from $3 billion at launch in late May across 16 funds, with retail investors holding about 92%.
Goldman estimates a 5% swing in Korean stocks could trigger $4.7 billion of option-dealer rebalancing flows, about one-eighth of normal daily share turnover. Fund manager CSOP is lifting a ceiling on options use in a $14.4 billion leveraged ETF linked to SK Hynix, while Korea Exchange CEO expects leveraged ETF rules to be refined if needed and said initiatives to introduce similar products in Hong Kong and London are advancing.
From the sources (5 posts)
@businessCSOP is lifting a ceiling on the use of options in a $14.4 billion leveraged exchange-traded fund linked to South Korean chipmaker SK Hynix, giving the fund manager more flexibility after a wild rally in the company’s shares
@firstsquawkKorea Exchange CEO says overseas initiatives are advancing to introduce leveraged ETFs tracking South Korean chipmakers, notably in Hong Kong and London.
@firstsquawkKorea Exchange CEO expects authorities to refine leveraged ETF regulations should the need arise.
@businessSouth Korean authorities are weighing measures to curb risks from leveraged single-stock ETFs tracking Samsung and SK Hynix
@wallstengineSouth Korea’s top financial regulator says he regrets not blocking single-stock leveraged ETFs tracking Samsung and SK Hynix. The 16 ETFs have grown from $3B at launch in late May to $9.1B, with retail investors holding about 92%. Officia