South Korea’s leveraged ETFs tied to chipmakers see $1B in outflows as regulatory hammer drops

South Korean investors pulled nearly $1 billion from leveraged ETFs linked to the country’s biggest chipmakers this month, capping one of the most dramatic boom-and-bust cycles in recent ETF history. The funds, which offered 2x leveraged exposure to Samsung Electronics and SK Hynix, launched at the end of May 2026 to feverish demand. Within roughly two months, retail investors had poured approximately 14 trillion won, around $9.7 billion, into the products. Combined assets under management ballooned to approximately $28 billion. From record inflows to 80% drawdowns The KODEX SK Hynix Single Stock Leverage ETF cratered more than 80% from its peak on June 23. Its Samsung equivalent dropped about 75% from a June 3 high. South Korea’s finance minister publicly apologized in late July for insufficient safeguards around the products. Regulators tripled the minimum cash requirement for investors to 30 million won, halted new product listings, and restricted retail access to the funds. Daily trading turnover for these leveraged ETFs plunged more than 90%. On July 30, combined turnover sat at 12.45 trillion won. Shortly after the new rules took effect, that figure dropped below 1 trillion w...