Samjonnix Leverage ETFs Soar on Debut... How Are U.S. Single Stock Leveraged ETFs Performing? [Investment Trends]

16 Single-Stock Leveraged ETFs for Samsung Electronics and SK hynix Listed on the 27th

U.S. Single-Stock Leveraged ETF Returns Show
Clear 'Negative Compounding Effect'... Delisting Possible Within a Year

The first-ever single stock leveraged Exchange Traded Funds (ETFs) introduced in South Korea experienced sharp increases on their debut day. On May 27, the SK hynix single stock leveraged ETF surged by around 18%, while the Samsung Electronics single stock leveraged ETF recorded an increase of about 5%. With the simultaneous listing of 16 single stock leveraged ETFs, both the total market capitalization and net asset value of ETFs exceeded the 500 trillion won mark for the first time ever.

Samsung Electronics and Nix Single Stock Leveraged ETFs Showed a Sharp Rise from the First Day of Listing. Screen of Samsung Electronics Single Stock Leveraged ETF Traded on the 27th. Photo by Yonhap News

According to ETFCheck on May 28, the 1Q SK hynix Futures Single Stock Leveraged ETF rose by 19.46% the previous day, marking the largest gain among the 16 single stock leveraged products listed that day. The KIWOOM SK hynix Futures Single Stock Leveraged ETF followed with a 19.23% increase, while the SOL SK hynix Single Stock Leveraged ETF gained 18.78%, the ACE SK hynix Single Stock Leveraged ETF rose 18.63%, the TIGER SK hynix Single Stock Leveraged ETF climbed 18.56%, the RISE SK hynix Single Stock Leveraged ETF increased 18.47%, and the KODEX SK hynix Single Stock Leveraged ETF rose 18.44%. Among the Samsung Electronics single stock leveraged ETFs, the 1Q Samsung Electronics Futures Single Stock Leveraged ETF recorded the highest return, up 5.97%. This was followed by the RISE Samsung Electronics Single Stock Leveraged ETF at 5.61%, the TIGER Samsung Electronics Single Stock Leveraged ETF at 5.53%, the KODEX Samsung Electronics Single Stock Leveraged ETF at 5.52%, the KIWOOM Samsung Electronics Futures Single Stock Leveraged ETF at 5.43%, the ACE Samsung Electronics Single Stock Leveraged ETF at 5.30%, and the PLUS Samsung Electronics Single Stock Leveraged ETF at 4.79%, with returns hovering around 5%.

In contrast, inverse products such as the PLUS Samsung Electronics Futures Single Stock Inverse 2X ETF and the SOL SK hynix Futures Single Stock Inverse 2X ETF fell by 5.98% and 18.70%, respectively.

On the first day of listing, Mirae Asset Global Investments outperformed Samsung Asset Management in the competition between the top two ETF managers in Korea. For both the SK hynix single stock leveraged ETF and the Samsung Electronics single stock leveraged ETF, the TIGER ETFs delivered higher returns. In addition, individual investors made net purchases of 690.9 billion won in TIGER SK hynix Single Stock Leveraged ETF, the largest among all ETFs on that day. The KODEX SK hynix Single Stock Leveraged ETF followed with net purchases of 667.3 billion won. Other notable net purchases by individuals included 315.5 billion won in KODEX Samsung Electronics Single Stock Leveraged ETF, 278.4 billion won in TIGER Samsung Electronics Single Stock Leveraged ETF, and 35.2 billion won in SOL SK hynix Futures Single Stock Inverse 2X ETF. The KODEX SK hynix Single Stock Leveraged ETF recorded the highest trading value at 4.388 trillion won.

With the listing of 16 single stock leveraged ETFs, the total net assets of ETFs surpassed 500 trillion won for the first time ever. According to the Korea Exchange, as of the previous day, the total net assets of ETFs stood at 501.823 trillion won, reaching the 500 trillion won milestone just 42 days after surpassing 400 trillion won.

Despite the significant gains on the first day and the heightened attention from investors, leveraged ETFs are high-risk products and require particular caution from investors. Especially in the case of single stock leveraged ETFs, since they focus investment on a single stock, diversification benefits cannot be expected, and assets are directly exposed to the unique risks of the underlying company. Single stock leveraged products can experience rapid losses over a short period, and losses can occur even in a sideways market, making them suitable for short-term investment. Leveraged ETFs are also subject to both positive and negative compounding effects. The positive compounding effect occurs when the underlying asset consistently rises over a certain period, with the daily leverage (2x) accumulating each day, resulting in returns greater than the simple multiple (underlying return x leverage). In contrast, the negative compounding effect appears in a volatile or sideways market, where the price fluctuates or remains flat. Due to this negative compounding effect, even if the stock price returns to its original level, accumulated losses can leave an account in the negative. The greater the volatility, the more adverse the compounding effect, meaning that long-term holding may significantly worsen performance compared to expectations.

The characteristics of leveraged and inverse ETFs become clear when looking at the U.S. market, which introduced single stock leveraged ETFs before South Korea. The U.S. launched single stock leveraged ETFs in 2022.

One of the most popular stocks among Korean investors trading U.S. equities, Tesla, has a 2x leveraged ETF called 'TSLL (Direxion Daily TSLA Bull 2X Shares),' which has fallen 11.62% so far this year. During the same period, the underlying Tesla stock declined 2.08%. When the underlying stock fell by 2%, the leveraged ETF did not merely fall by exactly 4% (twice the decline) but dropped even further. This was due to the negative compounding effect, accumulated as Tesla's stock price plunged to the $350 level early this year and then rebounded, creating a pronounced U-shaped rollercoaster pattern.

The negative compounding effect was even more pronounced last year. In 2025, Tesla stock rose 11.36%, but TSLL plunged 26.9%. Even though the underlying stock ended higher after repeated ups and downs, the negative compounding effect during the volatility led to significant losses for the 2x leveraged ETF.

In the case of NVIDIA, the underlying stock has risen 13.91% so far this year, while the 2x leveraged ETF 'NVDL (GraniteShares 2x Long NVDA Daily ETF)' has returned 17.80%. Since NVIDIA’s share price did not rise in a straight line but fluctuated with corrections, the leveraged ETF did not reach the stage of perfect positive compounding (i.e., more than double the underlying return), instead delivering about 1.3 times the return of the underlying stock.

Additionally, the 2x leveraged ETFs for Pfizer (PFEL) and Nike (NKEL) were liquidated just over a year after listing. Both products were launched in 2022, when single stock leveraged ETFs were first introduced to the U.S. market, at a time when Pfizer and Nike shares were at historical highs and then began declining. As the underlying stocks dropped, the 2x leveraged ETFs fell at an even faster rate, and with their value plummeting to near zero, they were delisted after just over a year.

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