FSS Governor Wanted to Lie on the Floor: SK Hynix 2x ETF Down 45% Since Launch 🇰🇷

South Korea's largest single-stock leveraged exchange-traded fund has shed about 45% of its value since its late-May debut, turning a red-hot semiconductor rally into one of the sharpest reversals on Seoul's bourse. The Samsung KODEX SK Hynix Single Stock Leverage fund, the biggest of more than a dozen similar products, has fallen from its launch price as SK Hynix shares tumbled roughly 14% on Monday, July 13, compounding a KOSPI slide that has taken the benchmark down about 25% from its record high, according to Bloomberg-compiled data.

More than a dozen 2x leveraged ETFs tracking Samsung Electronics and SK Hynix began trading in Seoul in late May, pooling $3 billion in combined assets and following a wave of comparable products that had already taken off in Hong Kong. Jung In Yun, chief executive of Fibonacci Asset Management, said individual traders have absorbed most of the damage. "The sharp decline in these leveraged ETFs has been particularly painful for retail investors because many appear to have treated them as long-term investments rather than short-term trading tools."

The rout has prompted a rare public admission from the country's top financial regulator. Lee Chan-jin, governor of the Financial Supervisory Service, said on June 22 that officials had approved the leveraged ETFs too hastily, conceding the move was partly intended to lure retail capital back from US markets and steady the won, though the currency impact proved limited. "Maybe I should have lain down on the floor to block it. I personally regret (I didn't)." The acknowledgment followed a watchdog warning issued days earlier on the products, which by the end of May had helped drive Korean retail investors' borrowed stock purchases to a record 60 trillion won ($39 billion).

The leveraged ETFs launched into one of the strongest equity surges in Asia, with the KOSPI up more than 110% year to date on top of a 76% gain in 2025, propelled largely by Samsung Electronics and SK Hynix, which together account for more than half the index. Retail traders who drove that rally, including some who deployed savings and insurance payouts, have continued buying, with leveraged and inverse Korean ETFs pulling in $3.8 billion over the past month according to Bloomberg Intelligence data, even as tighter oversight of leveraged products looks increasingly likely.