President Lee on Leveraged ETF Criticism: "No One Can Predict Investment Profits"

On September 18, President Lee Jaemyung commented on single-stock leveraged ETFs, which have been identified as a main driver of increased stock market volatility, saying, "I wonder if there was some degree of incompleteness in government policy."

During a press conference held at the presidential office that day, President Lee stated, "I have not yet grasped the detailed procedure of how the decision on the single-stock leveraged ETFs was made," expressing the above view.

However, President Lee confirmed that he was directly briefed at the time on the necessity of introducing leveraged ETFs, explaining, "Leveraged ETF products for stocks like Samsung Electronics and SK hynix are already available in overseas markets such as Hong Kong."

Yonhap News Agency

President Lee further explained, "It seems quite a few people suffered greater losses as the losses were doubled. I understand that a variety of complementary measures have since been applied. So now, it has almost ceased to be an issue, but at the time, the grievances grew as people who had purchased leveraged products suffered significant losses."

Additionally, he remarked, "No one, not even a fortune-teller, can predict whether stock prices will rise, or whether one will gain or lose through investment," but admitted, "It is fair to criticize that things would have turned out better if we had included all the extra safeguards in advance. I do acknowledge that there were shortcomings."

President Lee also expressed regret regarding the timing of their introduction, saying, "Looking back now, it seems this was almost at the very last stage of the stock market’s upswing. Large-scale purchases occurred as these products were introduced at nearly the last moment of the trend, so it's possible they may have contributed to the market’s rise."

Regarding the appointment of a successor to former policy chief Kim Yongbeom, who led the introduction of leveraged ETFs, President Lee said, "I am still deliberating," and noted, "There are opinions that the policy focus should shift slightly to strengthening social policy, which many perceive as insufficient."

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