"Let's Jump In Now": 59% Surge Right After Listing... Why Individual Investors Flocked to This ETF

Eight Asset Managers List Products Simultaneously on May 27

Differences in Total Fees, Spot and Futures Strategies

Be Aware of "Negative Compounding Effect" Risks

On May 27, a total of 16 single-stock leveraged and inverse products targeting Samsung Electronics and SK hynix were simultaneously listed. Each asset management company has differences in details such as management fees and total assets under management.

On this day, Samsung Asset Management, Mirae Asset, Korea Investment Management, KB Asset Management, Kiwoom Asset Management, and Hana Asset Management each listed one leveraged ETF on the Korea Exchange that delivers twice the return when the stock price of Samsung Electronics or SK hynix rises. Hanwha Asset Management listed leveraged ETFs for Samsung Electronics, and Shinhan Asset Management listed both a leveraged ETF and a "geoppverse" (2x inverse) ETF for SK hynix. Unlike leveraged ETFs, the geoppverse structure provides double the return when the stock price declines.

Investor enthusiasm was high from the start of trading. As of around 9:05 AM, shortly after the market opened, the total trading volume for all 16 products reached 15.86 million shares, with a total transaction value of approximately 395.1 billion won. The SK hynix leveraged product recorded a maximum increase rate of 59%. Since the price limit for Korean stocks is ±30%, leveraged products can rise or fall up to 60%, meaning the product reached its upper limit.

Of the 16 products listed on this day, 10 are "spot-type" products utilizing both spot and futures, while the remaining six products, including the geoppverse ETFs, are "futures-type" products using only futures. Spot-type leveraged ETFs have the advantage of providing dividends from the underlying stocks. Futures-type products are considered to offer greater flexibility in overall fund management. Seungjin Park, a researcher at Hana Securities, explained, "Futures trading allows you to establish a position with a margin of only 10–20% of the total contract amount, so there is surplus capital left, and the asset manager can invest that surplus in safe assets to generate additional returns."

Regarding total fees, five asset management companies—Mirae Asset, Korea Investment Management, KB Asset Management, Hanwha Asset Management, and Hana Asset Management—set the lowest fee for leveraged products at 0.901%. Shinhan Asset Management charges 0.1%, Kiwoom Asset Management 0.25%, and Samsung Asset Management 0.29%. Hanwha Asset Management’s fee for its geoppverse product is 0.49%. In terms of initial fund size, Samsung Asset Management leads with 1.0665 trillion won and 1.3655 trillion won for Samsung Electronics and SK hynix products, respectively. Mirae Asset Management set its fund sizes at 597 billion won and 747 billion won for each product. The other six asset management companies set the initial fund sizes for each product between 9.5 billion and 71.2 billion won.

Given the characteristics of single-stock leveraged and inverse products, which are suitable for "short-term trading," it is important to consider both total fees and fund size. An official at an asset management company stated, "Leveraged ETFs are often held for only a day or, at most, a few days, so fees are not a major concern. What matters is liquidity, meaning the fund size must be large enough to ensure immediate order execution at the desired price."

It is also important to note the high investment risk. Single-stock leveraged products may result in losses even if the underlying asset remains flat due to the "negative compounding effect." Moreover, unlike traditional funds and ETFs, which are based on diversification, these products concentrate investment in a single stock, resulting in a high risk of significant losses in a short period of time.

This content was produced with the assistance of AI translation services.