Leverage ETF trends show divergence in U.S. and South Korean markets

Retail investors in the United States and South Korea are showing divergent trends in leverage Exchange Traded Funds (ETFs). In the U.S., index-based leverage ETFs have generated approximately $50 billion in wealth this year, despite recent market volatility and AI-related fluctuations. However, single-stock leverage ETFs have faced significant losses, totaling about $4 billion.

In South Korea, trading volume for single-stock leverage and inverse ETFs has seen recent fluctuations. Following a sharp decline due to regulatory changes, trading volume for 16 types of these products rebounded to the 800 billion won range. Despite this, recent trends show heavy selling by individual investors in Samsung Electronics and SK Hynix leverage products to realize profits.

South Korean authorities are tightening regulations on these financial products. Starting on the 19th, new measures will include stricter management of tracking error rates and a mandatory mock trading requirement for investors engaging in single-stock leverage or inverse ETFs.