Assets under management 500billion dollars, leveraged ETFs shook memory stocks
Single-stock leveraged ETFs launched in Korea have been identified as a factor behind the sharp swings in memory semiconductor stocks. The global assets under management of single-stock leveraged ETFs exceeded 6at the end of 500billion dollars (about 68trillion won).
Single-stock leveraged ETFs launched in Korea have been cited as a factor behind the sharp swings in memory semiconductor stocks around the world. Questions are being raised about increased investment volatility.
Assets under management in single-stock leveraged ETFs exceeded 6at the end of 500billion dollars (about 68trillion won), and grew 1times in 2.3years.
In particular, single-stock leveraged products using memory semiconductors as the underlying asset have been launched one after another this year.
SK Hynix10listed American depositary receipts (ADRs) on the U.S. Nasdaq on the first day. The stock price has fallen about 25 percent from its peak, but 2025times higher than at the end of 3 remains.
The ADR offering drew subscriptions of 7times the amount on offer.
According to QUICK, SK Hynix's recent 20-day annualized stock-price volatility exceeds 110 percent. Over the same period, the volatility of the U.S. benchmark index S&P500 was about 15 percent.
Typical leveraged ETFs are designed to track the daily return of the underlying asset at 2 times or 3 times. When prices rise, additional buying occurs, and when they fall, additional selling is repeated through rebalancing, volatility can increase.
Because of this structure, it has been pointed out that a single-stock leveraged ETF amplified the sharp rises and falls of large memory semiconductor stocks.
Sources: 뉴시스 경제
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