Svmuu News: A new type of leveraged product that tracks major South Korean chip stocks is plummeting, putting South Korean retail investors—who prefer to use such instruments to amplify returns—at risk of massive losses. According to data compiled by foreign media, the prices of more than a dozen leveraged ETFs tracking Samsung Electronics and SK Hynix have nearly halved since their launch in late May. Among them, the largest—the KODEX SK Hynix Single Stock Leveraged ETF, with $3.4 billion in assets under management—has fallen by about 45% since its launch and is down more than 60% from its June high.
Jung In Yun, CEO of Fibonacci Asset Management, said: “ ‘The sharp decline in these leveraged ETFs has hit retail investors particularly hard, as many appear to have viewed them as long-term investments rather than short-term trading instruments. The massive losses from such ETFs may undermine retail investors’ willingness and ability to buy semiconductor stocks, making the market’s future recovery even more dependent on inflows of foreign institutional capital.’” (Jin Shi)