Assembly audit must reveal those responsible for leveraged ETF fiasco
Seoul stocks have been tanking since mid-June, when the bullish market took a sharp turn as investors rushed to dump shares of Samsung Electronics and SK hynix amid growing concerns over the sustainability of Big Tech companies’ unprecedented investments in artificial intelligence (AI). After surging to as high as 9,385.59 points on June 19, the benchmark KOSPI tumbled to as low as 5,262.77…
The leveraged ETF fiasco has raised questions in Seoul, where the KOSPI index has plummeted from a peak of 9,385.59 points to a low of 5,262.77 points in just a few months. Investors rushed to sell shares of Samsung Electronics and SK hynix as worries grew about their AI-focused investments. While some market correction was expected after the unprecedented rally, single-stock leveraged ETFs tied to the two chip giants have been criticized for exacerbating the volatility.
Unlike traditional leveraged ETFs that track broader indices, these controversial products provide amplified exposure to individual stocks, doubling the daily return of the underlying shares. Launched on May 27, they have become popular among investors seeking leverage on AI-driven chip rallies. However, the audit must uncover who is responsible for the fallout from these products.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
