KODEX News & Analysis

KODEX SK Hynix ETF Falls Over 80% Amid South Korea Chip Stock Rout

South Korea's Finance Minister Koo Yun-cheol apologized as retail investors suffered heavy losses from leveraged Exchange Traded Funds (ETFs) linked to chip stocks. Since the May 27 introduction of single-stock leveraged ETFs, Korean investors made net purchases of 14 trillion won ($9.7 billion), while foreign investors purchased about 2 trillion won. The KODEX SK Hynix Single Stock Leverage ETF has dropped more than 80% from its peak on June 23, and a similar product for Samsung has declined almost 75% since June 3. This downturn follows a nearly 35% decline in the Kospi index over the last month, largely driven by investor concerns over chip stocks. This situation highlights risks for ordinary investors in leveraged products.