Leveraged ETFs tied to South Korea’s two biggest chipmakers shed close to $1 billion in August, marking the first monthly outflow since the products launched in late May. SK Hynix-linked funds lost $601 million while Samsung products shed $381 million, with these products designed to deliver twice the daily move of underlying stocks. The reversal follows a brutal July for Korean equities, with the KOSPI sinking 22%, Samsung falling 21.5% and SK Hynix dropping 35.5%. Regulators responded by raising the minimum deposit for new investors and mandating a five-day mock trading session. Retail traders rotated into equity-linked securities offering annualized coupons of 40% to 50%, with approximately 3.5 trillion won, or $2.5 billion, of ELS products sold in July.
Source: Read the original article
