Mirae Asset Securities to List Two New Single-Stock Leveraged ETNs for Samsung Electronics and SK hynix

Exchange-Traded Notes (ETNs) Tracking Twice the Daily Returns

Mirae Asset Securities announced on May 27 that it will newly list two single-stock leveraged ETNs (Exchange Traded Notes) that track twice the daily returns of Samsung Electronics and SK hynix, respectively.

The products to be listed are the "Mirae Asset Leverage Samsung Electronics Single-Stock ETN" (stock code 520100) and the "Mirae Asset Leverage SK hynix Single-Stock ETN" (stock code 520101).

The value of each ETN will fluctuate according to the daily return changes of the "KRX Samsung Electronics TR Leverage Index" and the "KRX Hynix TR Leverage Index," both calculated by the Korea Exchange.

An ETN is an exchange-traded note in which the issuing securities company guarantees payment of the pre-agreed underlying index returns, backed by its own credit. This means that, unlike funds that are subject to tracking error risk where asset management results may fall short of the underlying index returns, ETNs allow investors to enjoy the underlying index returns, minus fees, without such risk. This is why ETNs can more precisely follow the returns of the underlying asset.

The TR (Total Return Index) reflects the total return by assuming that pre-tax cash dividends received from constituent stocks are reinvested back into the index. Therefore, investors can expect the effect of dividend reinvestment without needing to receive dividends separately.

These products can be traded just like regular stocks after listing. A representative from Mirae Asset Securities commented, "These products are designed to meet the demand for leveraged investments in Samsung Electronics and SK hynix through the ETN structure," and added, "While the total fees for ETNs may appear higher than those of some similar ETFs, investors should not only consider the simple fee rate but also examine the overall cost structure as reflected in the actual performance."

Meanwhile, leveraged products track a multiple of the underlying asset's daily returns, and if the price of the underlying asset fluctuates up and down repeatedly, a so-called 'negative compounding effect' may occur, causing the cumulative return to differ from the multiple of the underlying asset's return. Therefore, these products are more suitable for short-term rather than long-term investment.

In addition, if the price of the underlying asset moves in the opposite direction of the investor's expectations, significant losses could occur in a short period of time, and there are also risks associated with individual company events due to single-stock investing. Investors should thoroughly understand the product structure and investment risks before investing.

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