Retail investors poured in 7 trillion won, but returns on Samsung Electronics and SK hynix leveraged ETFs have been cut in half

[Financial News] Even as the main shares of Samsung Electronics and SK hynix weakened, retail investors continued to buy single-stock leveraged exchange-traded funds (ETFs) tied to the two companies. However, both leveraged ETFs are now trading below their 20,000 won listing price, effectively cutting returns in half.

According to the Korea Exchange and ETF CHECK on the 20th, a total of 7.3364 trillion won flowed into 16 single-stock leveraged and inverse products between the 16th of last month and the 15th of this month.

By product, net inflows into the KODEX SK Hynix Single Stock Leverage ETF reached 3.4472 trillion won, the largest among all ETFs. The Samsung Electronics Single-Stock Leveraged ETF drew 1.5083 trillion won, while the MiraeAsset TIGER SK Hynix Single Stock Leverage ETF attracted 1.4271 trillion won. Net inflows into the TIGER Samsung Electronics Single-Stock Leveraged ETF came to 693.8 billion won.

Retail investors focused on single-stock leveraged ETFs even as the underlying shares fell. Over the same period, SK hynix fell 19.49%, while Samsung Electronics dropped 24.33%.

Retail investors were at the center of the net inflows. Over the month, they bought a net 4.2386 trillion won worth of the seven SK hynix single-stock leveraged products, and a net 1.6119 trillion won worth of the seven Samsung Electronics single-stock leveraged products.

Foreign investors also bought 859.5 billion won and 724.2 billion won worth of the two product groups, respectively, but the amounts were smaller than those of retail investors. Institutions, meanwhile, were net sellers by 5.1713 trillion won and 2.2671 trillion won, respectively.
As the underlying shares fell, all single-stock leveraged ETFs were trading below their listing prices as of the 8th. Because leveraged products track twice the daily gain or loss, repeated swings in share prices can create a negative compounding effect that reduces cumulative returns.
The KODEX SK Hynix Single Stock Leverage ETF, which saw the largest net inflow, plunged to as low as 14,585 won during the period. The Samsung Electronics Single-Stock Leveraged ETF also fell to 13,300 won.

Inverse products also struggled. Returns on the SOL SK hynix Futures Single Stock Inverse 2X and the PLUS Samsung Electronics Futures Single-Stock Inverse 2X ETF also trended lower.


[email protected] Han Seung-gon Reporter