Leveraged ETFs Leave South Korean Investors with USD1.7bn Losses

South Korean retail investors have lost an estimated KRW2.3tr (USD1.7bn) through leveraged ETFs and other single-stock exchange-traded products linked to Samsung Electronics and SK Hynix, Financial Supervisory Service data showed.

The cumulative losses were recorded across 10 major brokerages, including Mirae Asset Securities, Kiwoom Securities, Samsung Securities and NH Investment & Securities, between 27 May and 14 August, according to data released by opposition lawmaker Choi Eun-seok.

Introduced in May, the leveraged products initially attracted retail capital and increased market volatility.

Sharp reversals in semiconductor shares subsequently amplified losses.

Regulators responded in July by suspending new listings, raising minimum cash deposit requirements and requiring specialised training for retail investors.