South Korean investors suffer US$1.7 billion losses from leveraged ETFs
The sum has been incurred from products tied to Samsung Electronics and SK Hynix
South Korean investors have incurred an estimated 2.3 trillion won (US$1.7 billion) in losses from leveraged single-stock exchange-traded products tied to Samsung Electronics and SK Hynix, according to data released by opposition lawmaker Choi Eun-seok. These losses occurred between May 27 and August 14, primarily affecting clients across 10 major brokerages in South Korea.
Despite initial contributions to the market's global performance, the sharp reversal in the semiconductor sector amplified downside losses for retail investors. In response, financial authorities implemented cooling measures, including a temporary moratorium on new listings, increased deposit requirements, and specialized training for retail investors.
The regulatory intervention marked a shift from May, when the approval of single-stock leveraged instruments aimed at preventing capital flight to foreign high-risk products. The losses underscore the significant risks of leveraging companies heavily dependent on the volatile global artificial intelligence supply chain, where both Samsung Electronics and SK Hynix play crucial roles.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
