Samsung and SK Hynix Single-Stock Leveraged ETFs Plunge 25-36% in One Week Amid Market Volatility

According to Korea Exchange data on July 8, single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix experienced sharp losses amid extreme market volatility. KODEX Samsung single-stock leveraged ETF fell 25.10% while TIGER SK Hynix leveraged ETF dropped 35.66% over one week, far exceeding the 11-17% declines in the underlying stocks. Of 14 Samsung and SK Hynix leveraged ETF products, 13 fell below the 20,000 won offering price.

Analysts attributed losses to volatility drag—a phenomenon where daily rebalancing to maintain target leverage ratios erodes returns as markets fluctuate. From May 27 to July 6, Samsung stock gained 6.4% but a 2x leveraged Samsung ETF returned only 1.3% instead of the theoretical 12.8%. Meritz Securities estimated losses at approximately 400 billion won for Samsung and 600 billion won for SK Hynix leveraged products combined.