[Edaily Reporter Kwon Oh Seok ] The 2x leveraged ETFs (Exchange-Traded Funds) and ETNs (Exchange-Traded Notes) tracking individual stocks listed on SamsungElectronics(005930)and SK hynix(000660)are struggling, with their share prices falling by as much as half just four months after listing. Although the decline in the underlying stock was limited to single digits, the losses on these single-stock leveraged products have grown exponentially due to the “negative compounding effect” resulting from the accumulation of daily volatility.

According to MP Doctor on the 27th, an analysis of the returns of major single-stock leverage products from May 27—when these products first debuted on the stock market—through September 23, the last trading day before the Chuseok holiday, revealed that the “KODEX SamsungElectronics Single-Stock Leverage” fund—which saw the highest trading volume and value—fell from 21,635 won to 13,950 won, a decline of approximately 35.52%. Other SamsungElectronics leverage products, including △TIGER (-36.52%) and △ACE (-35.91%) △RISE (-35.23%) △PLUS (-34.84%) also posted similar declines. The 1Q and KIWOOM products, which track stock futures, also fell by 36.74% and 35.75%, respectively.
The decline in SK hynix leverage products was even steeper. The “KODEX SK hynix Single-Stock Leverage” saw its share price plummet by 49.40%, and △TIGER (-49.49%) △SOL (-50.54%) △ACE (-49.46%) △RISE (-48.78%) all fell sharply, effectively cutting their share prices in half. The futures-based products, 1Q and KIWOOM, fell 53.23% and 50.90%, respectively, with loss rates exceeding 50%.
In contrast, the decline in the underlying stocks during the same period was relatively modest. SamsungElectronics’ stock price fell by only 4.52%, from 299,000 won to 285,500 won, and SK hynix also dropped by 9.26%, from 2,052,000 won to 1,862,000 won; both stocks posted single-digit decline rates during this period.
Previously, financial authorities had permitted the listing of single-stock leveraged ETFs and ETNs starting May 27. The aim was to provide retail investors with diverse investment options and to stem the outflow of funds to overseas stock markets, such as the U.S. However, concerns about retail investors’ excessive concentration on high-risk products have been raised consistently since the product’s introduction.
Nevertheless, retail investors seeking high returns flocked to these products in droves, leading to investment overheating. When single-stock leveraged products were identified as the primary culprit behind increased market volatility, financial authorities took decisive action. Consequently, starting July 31, the investment threshold was significantly raised—including an increase in the margin requirement for single-stock leveraged products from 10 million won to 30 million won in cash.
Lee Hyo-seop, a senior research fellow at the Korea Capital Market Institute, stated, “Retail investors who invest in leveraged products may incur massive losses if the underlying asset moves in the opposite direction of their investment strategy, and these losses can be exacerbated by high interest costs, management fees, and the negative compounding effect.” “Since the expansion of leveraged investing is closely linked to trading practices centered on short-term trading, a fundamental solution can only be achieved by establishing an institutional framework that encourages long-term, diversified investing,” he advised.