South Korea’s leveraged ETFs tied to Samsung Electronics and SK Hynix have recorded their first monthly outflows since launching in late May, signaling a sharp reversal in one of the country’
South Korea’s leveraged ETFs tied to Samsung Electronics and SK Hynix have recorded their first monthly outflows since launching in late May, signaling a sharp reversal in one of the country’s most aggressive retail trades.
About $601 million left products linked to SK Hynix in August, while Samsung-related funds lost another $381 million. Combined withdrawals reached roughly $982 million.
The products are designed to deliver about twice the daily move of their underlying stocks, magnifying both gains and losses. Their popularity surged alongside enthusiasm for AI and memory-chip stocks before July’s severe correction exposed the risks of daily leverage.
July Selloff Changes the Leveraged TradeThe reversal follows an unusually volatile period for Korean equities. The KOSPI fell about 22% in July, while Samsung dropped 21.5% and SK Hynix lost 35.5%, according to the source article. Coinpaper’s earlier look at the same leveraged ETFs showed how the daily-reset structure amplified losses for retail investors during the semiconductor decline.
Chip stocks have since stabilized. A recent Kospi rebound was supported by lower US yields and SK Hynix’s record share-buyback plan, while Samsung shares later fell 8.7% after its shareholder-return package failed to meet market expectations. The Samsung selloff highlighted how demanding valuations and elevated expectations continue to drive large swings across Korean AI stocks.
Regulators Tighten Access to Single-Stock LeverageSouth Korean regulators have also made the products harder to trade.
The Financial Services Commission now requires new investors in single-stock leveraged products to maintain at least 30 million won in cash, complete expanded education and participate in simulated trading before gaining access. The minimum deposit was raised from 10 million won, while tighter premium and discount controls took effect in August.
The measures have already affected activity. The FSC said trading volume in single-stock leveraged products dropped from 12.4 trillion won on July 30 to 700 billion won on Aug. 11, while the products recorded 1.4 trillion won of net redemptions during Aug. 4–10.
[GRAPHIC — PLACE HERE] How Korea tightened leveraged ETF rules: Show the move to a 30M won cash deposit, mandatory education and five days of mock trading, alongside the decline in trading volume from 12.4T won to 0.7T won.
Retail risk appetite has not disappeared. Investors instead bought roughly 3.5 trillion won ($2.5 billion) of equity-linked securities in July, the highest monthly amount since April 2023, with Samsung and SK Hynix among the main underlying stocks.
The shift suggests Korea’s speculative trade is changing form rather than ending. For leveraged chip ETFs, however, August marks the clearest evidence yet that the explosive demand seen after their May launch has cooled.
