Direct investment in Samsung Electronics and SK hynix declines as leveraged ETFs emerge
Since the listing of single-stock leveraged ETFs, individual investors’ direct holdings of Samsung Electronics and SK hynix have declined, while trading in leveraged ETFs has increased. As individuals’ demand for short-term trading shifts to ETFs, the supply-and-demand structure of the two stocks is changing.
Since the listing of single-stock leveraged ETFs, individual investors’ direct holdings of Samsung Electronics and SK hynix have declined, while trading through leveraged ETFs has increased. This change is reported to have resulted from individuals’ demand for aggressive short-term trading shifting from spot stocks to ETFs.
Immediately after listing, trading value and buying interest in the leveraged ETFs increased. Order flows at securities firms showed that the proportion of net purchases by individual investors had shifted toward leveraged ETFs.
Direct purchases of Samsung Electronics and SK hynix in the spot market declined relatively. An asset manager representative explained that individual investors are using leveraged ETFs to realize short-term profits and losses.
Leveraged ETFs are products designed to deliver returns that move by a set multiple of changes in the underlying stock price. Experts explained that, due to their structure, a gap may arise between the underlying stock price and returns when held for the long term.
Changes in trading patterns since listing are reshaping the supply-and-demand landscape for the two large-cap stocks. Investors need to check the trading value and management structure of leveraged ETFs.
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