South Korean Finance Minister Apologizes for Heavy Losses Among Retail Investors in Leveraged ETFs
South Korea's finance minister apologized after retail investors suffered heavy losses due to leveraged bets on stocks, particularly chip companies like Samsung Electronics and SK Hynix. The introduction of single-stock leveraged Exchange Traded Funds (ETFs) earlier this year led to a speculative trading boom among local investors who poured 14 trillion won ($9.7 billion) into the products compared to just 2 trillion won by foreign investors. The Kospi index has seen a sharp correction, with chip stocks leading the downturn. Leveraged ETFs tracking SK Hynix and Samsung have fallen over 80% and nearly 75%, respectively, from their peaks in June. The finance minister acknowledged that these products were introduced without careful consideration, prompting calls for regulatory action to restrict access primarily to professional investors. Regulators are considering measures such as raising investment requirements or lowering the leverage multiple of single-stock ETFs if legislation is passed by lawmakers.
Tickers: $SKHYV
Topics: Kospi index leveraged ETFs retail investors Samsung Electronics SK Hynix