The South Korean central bank warns that leveraged ETFs from Samsung and SK Hynix may exacerbate market volatility

By: rootdata|2026/07/05 07:42:08
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According to South Korean media reports, the Bank of Korea has warned that single-stock leveraged ETFs linked to Samsung Electronics and SK Hynix may further exacerbate market concentration, amplify market volatility, and strengthen one-sided trading fund flows. In a written response submitted to the People Power Party member Park Sung-hoon, the Bank of Korea stated: "Given that Samsung Electronics and SK Hynix account for more than half of the total market capitalization and trading volume of the Korean stock market, expanding the investment scale of single-stock leveraged ETFs may further intensify market concentration."

The Bank of Korea indicated that as corporate operating conditions or market expectations change, increased inflows and outflows of funds may amplify one-sided trading for such products. Furthermore, once the market experiences a correction, retail investors' losses may further widen, and increased ETF redemptions or portfolio rebalancing may also exacerbate price volatility of the related stocks. According to Yonhap News Agency, the Bank of Korea plans to strengthen monitoring of the impact of single-stock leveraged ETFs on the stock market and the financial system.

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