Samsung Electronics and SK Hynix single-stock leveraged exchange-traded funds (ETFs) recorded losses of up to 43% from their May 27 launch through July 10, according to Korea Exchange data released July 13. Individual investors poured over 13 trillion won into the 16 related products during this period, representing 17.98% of total individual net buying on KOSPI. The losses stem from the structural characteristics of leveraged ETFs, which amplify daily returns twofold and compound losses when underlying stocks move sideways with high volatility. The concentration of these products has increased Korea's already heavy reliance on semiconductor stocks, with Samsung Electronics and SK Hynix's combined KOSPI market capitalization weight rising from 51.06% on May 26 to 55.17% by July 10.
SOL SK Hynix Inverse 2X Posts Largest Decline at 43.38%
SOL SK Hynix Inverse 2X recorded the steepest loss among the 16 single-stock leveraged and inverse ETFs, falling 43.38% from May 27 to July 10. The ETF's closing price dropped from 16,265 won on its first trading day to 9,210 won on July 10.
TIGER Samsung Electronics Leveraged fell 25.83%, while KODEX Samsung Electronics Leveraged declined 25.54%. SK Hynix leveraged products showed similar patterns, with TIGER down 22.14% and KODEX down 21.66%. Most products in the category posted losses exceeding 20%.
KODEX SK Hynix Leveraged ETF Records Highest Trading Volume Among All ETFs
KODEX SK Hynix Leveraged ranked first in trading volume among all ETFs from its May 27 listing through July 10, with average daily trading volume of approximately 4.2 trillion won. TIGER SK Hynix Leveraged ranked fourth with approximately 2.2 trillion won in average daily trading, followed by KODEX Samsung Electronics Leveraged at approximately 2.07 trillion won and SOL SK Hynix Inverse 2X at approximately 1.47 trillion won.
Individual Investors Net Buy 13.8 Trillion Won Across 16 Products
Individual investors' net purchases of the 16 single-stock leveraged ETFs totaled approximately 13.8 trillion won from listing through July 10. This amount represented 17.98% of total individual net buying of 76.8 trillion won on KOSPI (including ETFs, ETNs, and ELWs) during the same period. Individual investors net sold 2.4 trillion won on KOSDAQ over the same timeframe.
Samsung Electronics and SK Hynix Market Cap Weight Rises to 55.17%
The combined market capitalization weight of Samsung Electronics (including preferred shares) and SK Hynix in KOSPI increased from 51.06% on May 26 to 55.17% on July 10. The two companies' share of total domestic stock market trading volume rose from approximately 30% to 44% as of July 8.
Leveraged ETF Structure Compounds Losses During Volatile Sideways Trading
The losses stem from leveraged ETFs' structural design of tracking double the daily returns of underlying assets. When stock prices fluctuate without sustained directional movement, losses compound. SK Hynix stock fell 12.47% on June 23, then rose 13.06% on June 25, resulting in a net change of negative 0.068% from June 22-25. During the same period, KODEX SK Hynix Leveraged fell 5.03%.
Park Woo-yeol, researcher at Shinhan Investment Securities, stated: "Even in the US market where single-stock leveraged ETFs are well-developed, NVIDIA's index weight was only 2-3% when its leveraged ETFs launched and remains around 8% currently. In contrast, Samsung Electronics and SK Hynix account for approximately 65% of KOSPI200 and approach 50% of the MSCI Korea ETF, so the impact of single-stock volatility amplification on the index becomes proportionally larger."
FAQ
What losses did Samsung Electronics and SK Hynix leveraged ETFs record from May 27 to July 10?
The 16 single-stock leveraged and inverse ETFs for Samsung Electronics and SK Hynix posted losses ranging from over 20% to 43.38% from their May 27 launch through July 10. SOL SK Hynix Inverse 2X recorded the largest decline at 43.38%, falling from 16,265 won to 9,210 won. TIGER Samsung Electronics Leveraged fell 25.83%, KODEX Samsung Electronics Leveraged declined 25.54%, and SK Hynix leveraged products from TIGER and KODEX dropped 22.14% and 21.66% respectively.
How much did individual investors invest in Samsung Electronics and SK Hynix leveraged ETFs?
Individual investors' net purchases of the 16 single-stock leveraged ETFs totaled approximately 13.8 trillion won from May 27 through July 10, representing 17.98% of total individual net buying of 76.8 trillion won on KOSPI during the same period. KODEX SK Hynix Leveraged recorded the highest average daily trading volume at approximately 4.2 trillion won, ranking first among all ETFs.
Why did KODEX SK Hynix Leveraged fall 5.03% when SK Hynix stock was nearly flat from June 22-25?
Leveraged ETFs track double the daily returns of underlying assets, causing losses to compound when stocks fluctuate without sustained directional movement. SK Hynix stock fell 12.47% on June 23, then rose 13.06% on June 25, resulting in a net change of negative 0.068% from June 22-25. During the same period, KODEX SK Hynix Leveraged fell 5.03% due to the compounding effect of daily 2x amplification applied to volatile price swings.
