South Korea's Single-Stock Leverage ETFs Crash 57-58% from IPO Price on July 28

According to the Korea Exchange, single-stock leverage ETF products tracking SK Hynix and Samsung Electronics plummeted on July 28, with prices dropping to roughly half their issue prices. The KODEX SK Hynix leverage ETF fell 28.43% to close at 9,930 Korean won, and the TIGER variant declined 28.92% to 8,345 won, representing a 57.65% and 58.24% collapse, respectively, from their IPO prices of 23,450 and 19,985 won. Samsung Electronics leverage products similarly dropped 56.48% and 56.65% from their respective IPO levels. The decline mirrored steep losses in the underlying stocks, with SK Hynix and Samsung down 14% and 13%.

Despite the rout, retail investors continued net buying, purchasing 419.9 billion won and 152.3 billion won of the SK Hynix products. South Korea's Financial Services Commission is preparing additional safeguards if current measures fail to curb demand, including per-investor position limits capping leverage ETF holdings at 20% of total investment portfolios, set to take effect July 31.