Svmuu News: According to Yonhap News Agency, the Financial Services Commission (FSC) of South Korea stated that single-stock leveraged ETFs have played a significant role in preventing capital outflows to overseas stock markets. The FSC also noted that volatility in U.S. and Japanese semiconductor stocks has similarly increased recently, and addressed the controversy surrounding the perception that single-stock leveraged ETFs are the “culprit” behind the recent heightened volatility in the South Korean stock market.
Byun Je-ho, Director General of the FSC’s Capital Markets Bureau, said, “Some of the investment demand that had originally flowed into overseas markets has returned to the domestic market, and these ETFs have indeed helped prevent new capital from continuing to flow overseas.” He added: “ "I believe that the increased volatility in the South Korean stock market since the product’s launch cannot be explained solely by single-stock leveraged ETFs. Against the backdrop of capital in the South Korean market being highly concentrated in Samsung Electronics and SK Hynix, the constant shifts between optimism and concern regarding the global semiconductor industry’s outlook have led to increased volatility in these products.” (Jin Shi)