The South Korean market will usher in individual stock leveraged ETF retail enthusiasm or intensify index volatility

On May 24, South Korea will launch its first individual stock leveraged ETFs next week. These products are linked to chip makers Samsung Electronics and SK Hynix and aim to achieve a daily yield of plus or minus twice the underlying stocks. Analysts expect the ETFs to attract strong demand from more than 14 million retail investors in South Korea. However, in a context where intraday volatility of 5% in the KOSPI index is becoming increasingly common, this enthusiasm may further exacerbate market volatility. CEO of Fibonacci Asset Management in Singapore said,"These ETFs will exacerbate existing concentration risks, which pose a structural problem for long-term investors as index volatility will continue to be high, making it difficult for the Korean market to grasp." Yoon Jaehong, an analyst at Daewoo Future Assets, predicts that the net inflow of 14 leveraged ETFs that bet on Samsung Electronics or SK Hynix and are expected to be listed at the end of May will reach up to 5.3 trillion won. He said that in the first two months of this year, the number of investors who completed mandatory online training before investing in leveraged products has reached 300,000, exceeding the total for the whole of 2025.