South Korea's Single-Stock Leveraged ETFs Surge to 5.1 Trillion Won in One Month, but Investors Face Double-Digit Losses

According to Samsung Securities Research Center, single-stock leveraged ETFs in South Korea have become market movers just one month after launch, with the flagship KODEX SK Hynix product reaching a market cap of 5.1 trillion won. The combined market cap of all 14 domestic leverage products totals approximately 9 trillion won, surpassing the U.S. NVDL (Nvidia leveraged ETF) at 6 trillion won, despite Nvidia's market cap being over four times larger than SK Hynix.

However, investors holding these products face significant losses due to negative compounding effects. As of July 3, SK Hynix gained 8.11% but the KODEX SK Hynix leveraged product fell 1.35%; Samsung Electronics rose 0.81% while its leveraged counterpart dropped 10.75%. Data from Korea Investment & Securities shows small retail investors with less than 30 million won in assets allocate 21% of their portfolio to these products, compared to 9% for investors with over 1 billion won.