More products, more risks? South Korea’s leveraged ETF crisis has lessons for S’pore’s retail fund push
MAS in July had proposed a more flexible framework that could allow retail investors to access new fund types
Singapore’s move to expand the variety of investment products available to retail investors may bring greater market depth, but South Korea’s recent issues with leveraged ETFs serve as a cautionary tale, experts have warned. The Republic has proven less susceptible to the concentrated retail speculation witnessed in South Korea, where extreme market fluctuations left retail investors shouldering the burden of losses.
However, introducing more sophisticated products necessitates stronger investor education and safeguards, they argued. David Gerald, founder, president, and CEO of the Securities Investors Association (Singapore), cautioned that merely having products listed on the Singapore Exchange (SGX) does not guarantee their suitability for retail investors; the two concerns are distinct.
Jardine C&C recently sold its Singapore and Malaysia dealer operations to Indonesia’s Chandra Asri for US$221 million, highlighting Singapore’s growing AI sector and its impact on various industries.
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