Samsung and SK Hynix shareholder returns drive leverage ETF interest

Investment interest in single-stock leverage Exchange Traded Funds (ETFs) for Samsung Electronics and SK Hynix is rebounding following massive shareholder return announcements from both companies. SK Hynix recently announced a plan to acquire and cancel approximately 40 trillion won worth of treasury shares, while Samsung Electronics resolved to expand its shareholder return scale to between 90 trillion and 110 trillion won by 2026.

Despite these renewed interests, recent regulatory changes have significantly impacted market participation. The Financial Supervisory Service increased the mandatory deposit for single-stock leverage ETPs from 10 million won to 30 million won. This hike led to a sharp decline in holdings among younger investors, with holdings for those in their 30s dropping by nearly 50% and those in their 20s by over 44% within a week.

While overall trading volume for these products saw a significant contraction following the regulation, the 40s age group remains the most active in trading these high-risk products. Analysts warn that the influx of leverage funds targeting short-term gains could increase market volatility for the underlying semiconductor stocks.