South Korea's V-KOSPI Volatility Index Hits 18-Year High as Single-Stock Leverage ETFs Drive Market Concentration

According to Democratic Party policy chair Han Jung-ae on July 7, concentrated investment in single-stock leverage ETFs is heightening volatility in South Korea's stock market and sparking investor concerns. The V-KOSPI volatility index, which measures future price swings of the KOSPI 200, reached its highest level since the 2008 financial crisis, as Samsung Electronics and SK Hynix—which comprise over half of the KOSPI's total market value—experienced sharp price swings.

Since May, the combined market capitalization of Samsung and SK Hynix-focused stock ETFs surged to 73% of all domestic equity ETFs, while other ETF allocations declined, according to Han. South Korea's central bank has previously warned that concentrated single-stock leverage ETF investments could intensify market concentration and amplify losses for retail investors during price correction phases.