ETF Set to Fall Below 400 Trillion Won...128 Trillion Lost in Just 37 Days

From 532 Trillion Won on June 22 to 405 Trillion Won on July 29

Sharp Drop in Single-Stock Leveraged ETF Net Assets

KODEX 200’s Top Spot Also "At Risk"

Credit Balances Surge for Some Semiconductor ETFs

Amid a bullish market, the total net asset value (NAV) of domestic exchange-traded funds (ETFs) is now at risk of falling below 400 trillion won, just 37 days after it surpassed the 530 trillion won mark. This downturn has been driven by extreme volatility, which has led to a sharp decline in the NAV of leveraged products in particular.

According to the Korea Exchange on July 30, the total NAV of 1,155 domestically listed ETFs stood at 405.4232 trillion won as of the previous day. During the trading session, it briefly dropped below 400 trillion won, but a minor rebound in the afternoon allowed the market to close with the NAV maintaining the 400 trillion won threshold.

The NAV of ETFs has been soaring since the beginning of this year. After surpassing 300 trillion won on January 5, it quickly climbed to 400 trillion won by April 15 and then to 500 trillion won by May 27, with the pace of each 100 trillion won increase accelerating. Amid a rally in semiconductor stocks, the ETF NAV reached as high as 532.9747 trillion won on June 22, but within just 37 days, 128 trillion won has evaporated.

May 27—the day when ETF NAV exceeded 500 trillion won—also marked the listing of 16 single-stock leveraged products. An influx of investors into these products boosted the NAV, but the recent volatile market conditions caused these leveraged ETFs to drop sharply, leading to a steep decline in total assets. According to ETFCheck, over the past month, the NAV of KODEX SK hynix Single Stock Leverage fell by 4.3613 trillion won, while TIGER SK hynix Single Stock Leverage dropped by 2.0019 trillion won. During this period, the returns for the two ETFs were -76.46% and -76.66%, respectively.

In addition, as the returns of ETFs based on domestic indices and assets have significantly fallen, the gap in NAV between the top two ETFs—which once exceeded 10 trillion won—has narrowed. The KODEX 200, ranked first in asset size, currently has an NAV of 20.1453 trillion won, while the second-ranked TIGER US S&P500 ETF has 19.8098 trillion won, with a difference of 335.5 billion won between the two. Due to a sharp rise in the domestic equity market earlier this year, the rankings of these two ETFs were reversed, but amid the recent sharp decline, a new competition for the top rank has emerged.

Against this backdrop, credit balances—especially for semiconductor ETFs—are increasing, raising concerns about potential forced liquidations. According to Koscom Check, as of the previous day, the SOL Semiconductor Front-End Process ETF had a credit balance of 10.5 billion won, up by 8.7 billion won since May 27. The SOL AI Semiconductor TOP2 Plus ETF's credit balance stood at 11.8 billion won, up by 8 billion won. The increases relative to existing balances are 83.5% and 68.1%, respectively. While the absolute scale of the credit balances is not large, in terms of the net increase over the period, they ranked 21st and 23rd among all products. According to the Korea Financial Investment Association, the total volume of forced sales this month amounts to 705.8 billion won.

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