Single-stock leveraged exchange-traded funds (ETFs) tracking Samsung Electronics and SK Hynix recorded losses exceeding 40% since their May 27 domestic launch through July 10, according to Korea Exchange data released July 13. The losses stem from the structural characteristics of leveraged ETFs, which track double the daily return of underlying assets and accumulate compounding losses during volatile periods. Individual investors poured over 13 trillion won into 16 related products despite double-digit percentage declines across most offerings, intensifying volatility concerns in a domestic stock market already heavily weighted toward semiconductor stocks.
SOL SK Hynix Inverse Product Records Largest Loss at -43.38%
According to Korea Exchange data covering May 27 (listing day) through July 10 (closing price basis), most of the 16 single-stock leveraged and inverse ETF products showed declines exceeding 20%. SOL SK Hynix Futures Single Stock Inverse 2X posted the steepest loss at -43.38%, with its closing price falling from 16,265 won on listing day to 9,210 won as of July 10.
TIGER Samsung Electronics Single Stock Leverage recorded -25.83%, while KODEX Samsung Electronics Single Stock Leverage posted -25.54%. SK Hynix leveraged products showed TIGER at -22.14% and KODEX at -21.66%, with most products exceeding -20% losses.
Leverage Structure Causes Compounding Losses During Price Fluctuations
The expanding losses originate from the structural characteristics of leveraged ETFs. These products track double the daily return of underlying assets, causing losses to compound when prices fluctuate rather than move consistently in one direction. During the period from the 22nd to the 25th of last month, SK Hynix stock showed minimal net change of -0.068% after dropping 12.47% on the 23rd and surging 13.06% on the 25th. However, KODEX SK Hynix Single Stock Leverage declined 5.03% over the same period.
KODEX SK Hynix Leveraged ETF Leads All ETFs in Trading Volume
KODEX SK Hynix Single Stock Leverage ranked first in trading volume among all ETFs from listing through July 10, with average daily trading value reaching approximately 4.2014 trillion won. TIGER SK Hynix Single Stock Leverage ranked fourth at approximately 2.2092 trillion won, followed by KODEX Samsung Electronics Single Stock Leverage at approximately 2.0726 trillion won and SOL SK Hynix Futures Single Stock Inverse 2X at approximately 1.4669 trillion won.
Individual Investors Pour 13.8 Trillion Won into 16 Leveraged Products
Individual investor concentration proved more pronounced. Individual investors' net purchases across the 16 single-stock leveraged ETF products totaled approximately 13.8163 trillion won since listing. This represents 17.98% of total individual net purchases of 76.8211 trillion won across the entire KOSPI market (including ETFs, ETNs, and ELWs) during the same period. The KOSDAQ market saw net selling of 2.4383 trillion won over the same period, suggesting individual funds shifted from KOSDAQ into single-stock leveraged products.
Samsung Electronics and SK Hynix Market Cap Weight Expands to 55.17%
The influence of Samsung Electronics and SK Hynix on the domestic stock market increased following the single-stock leveraged ETF launch. As of May 26 (immediately before listing), Samsung Electronics (including preferred shares) and SK Hynix accounted for 51.06% of KOSPI market capitalization. This proportion expanded to 55.17% as of July 10. The share of Samsung Electronics and SK Hynix trading value in the domestic stock market rose from approximately 30% to 44% as of the 8th.
Park Woo-yeol, researcher at Shinhan Investment & Securities, stated: "Even in the United States where the single-stock leveraged ETF market is developed, hundreds of leveraged products are traded, but when Nvidia's leveraged ETF launched, its index weight was only 2-3% and currently remains around 8%. In contrast, Samsung Electronics and SK Hynix account for approximately 65% of the KOSPI200 index and approach half of the MSCI Korea ETF listed in the United States, so the impact of single-stock volatility expansion on the index becomes proportionally greater."
FAQ
What losses did Samsung Electronics and SK Hynix leveraged ETFs record since their May 27 launch?
According to Korea Exchange data covering May 27 through July 10, losses ranged from -21.66% to -43.38% across the 16 single-stock leveraged and inverse ETF products. SOL SK Hynix Futures Single Stock Inverse 2X posted the largest decline at -43.38%, falling from 16,265 won to 9,210 won. TIGER Samsung Electronics Single Stock Leverage recorded -25.83%, KODEX Samsung Electronics Single Stock Leverage posted -25.54%, and SK Hynix leveraged products showed declines of -22.14% (TIGER) and -21.66% (KODEX).
How much did individual investors invest in Samsung Electronics and SK Hynix leveraged ETFs?
Individual investors' net purchases across the 16 single-stock leveraged ETF products totaled approximately 13.8163 trillion won from listing through July 10. This amount represents 17.98% of total individual net purchases of 76.8211 trillion won across the entire KOSPI market (including ETFs, ETNs, and ELWs) during the same period. KODEX SK Hynix Single Stock Leverage ranked first among all ETFs in trading volume with average daily trading value of approximately 4.2014 trillion won.
Why did Samsung Electronics and SK Hynix's market influence increase after the leveraged ETF launch?
Samsung Electronics (including preferred shares) and SK Hynix's share of KOSPI market capitalization expanded from 51.06% on May 26 (before listing) to 55.17% as of July 10. Their trading volume share in the domestic stock market rose from approximately 30% to 44% as of the 8th. Park Woo-yeol of Shinhan Investment & Securities noted that Samsung Electronics and SK Hynix account for approximately 65% of the KOSPI200 index, far exceeding Nvidia's 8% weight in US indices, making single-stock volatility expansion more impactful on the overall index.
