Retail investors who bet on a KOSPI decline are in trouble as double inverse leveraged ETNs are delisted one after another

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[The Financial News] As the domestic stock market continues to hit record highs, double inverse leveraged exchange-traded notes (ETNs) that bet on a fall in the KOSPI Composite Index have been delisted one after another. The delistings came after their per-share value fell below 1,000 won, triggering liquidation conditions.
According to the financial investment industry on the 1st, the 'Samsung Inverse 2X KOSPI200 Futures ETN,' which tracks the KOSPI 200 Futures Index at minus two times leverage, was delisted on the 29th of last month.
Samsung Securities announced, "A condition for early liquidation arose because the real-time indicative value per security was below 1,000 won at the close of trading on the 27th of last month."
The ETN closed at 985 won on the 27th of last month, falling below 1,000 won for the first time since its listing in October 2022. It had plunged 70.2% from 3,300 won on Jan. 2, the first trading day of this year. The product had originally been set to mature in October 2027, but trading ended about a year and a half early. Samsung Securities plans to redeem investors at 973.73 won per share on the 6th.
Other KOSPI double inverse leveraged ETNs with the same structure, including the 'Mirae Asset Inverse 2X KOSPI 200 Futures ETN,' 'KB Inverse 2X KOSPI 200 Futures ETN,' and 'Shinhan Inverse 2X KOSPI 200 Futures ETN,' were all delisted at the same time on the 29th of last month.
KOSPI double inverse leveraged ETFs are also in a precarious position as their net assets have shrunk sharply. Of the 11 inverse and double inverse ETFs that track the KOSPI 200 Futures Index in reverse, seven have net assets below 5 billion won. For ETFs that have been listed for more than a year, those with trust principal and net assets below 5 billion won at the end of a half-year period are designated as administrative issues. If they remain below 5 billion won at the end of the next half-year after designation, they are delisted.
By product, the net assets of 'NH-Amundi HANARO 200 Futures Inverse ETF' stand at just 1.1 billion won. 'Kiwoom KOSEF 200 Futures Inverse ETF' has net assets of only 1.8 billion won. 'PLUS KOSPI 200 Futures Inverse 2X ETF' (2.0 billion won), 'Kiwoom KOSEF 200 Futures Inverse 2X ETF' (2.6 billion won), 'RISE 200 Futures Inverse ETF' (3.3 billion won), 'ACE Inverse' (3.7 billion won), and 'RISE 200 Futures Inverse 2X ETF' (4.9 billion won) also have net assets below 5 billion won.
Prices of double inverse ETFs that track the KOSPI in the opposite direction have fallen to the 100-won range per share. 'KODEX 200 Futures Inverse 2X' closed at 169 won on the 30th of last month.
nodelay@fnnews.com Park Ji-yeon Reporter