The KBOs have been using the AI chip boom to leverage local technology-related products. With the return of SK Hercules and Samsung electronics prices, the single-share leverage ETF losses linked to these two stocks have increased rapidly, and the market has begun to focus on whether deleveraging pressures will continue to be released.
The one-man product is about 70% lower.
According to LSEG, the KODEX SK Hercules single leverage ETF has fallen by about 70 per cent since the height of June, and by about half since the first day of the market. CNBC reported that after the one-day collapse of SK Hercules last week, there was considerable discussion of losses in the Korean Internet investment community.
KB Financial Group data show that since May 27, when Korea launched a single-share leverage ETF, the net buy-in by the Korean diaspora has been 14 trillion won, or $9.4 billion; and foreign investment has been bought about 2 trillion won over the same period. This means that the main losses in the current round of retreat are largely borne by domestic investors in Korea.
Buys are mainly from local private investors.
Jung In Yun, founder of Fibonaci Asset Management, stated that the investors currently suffering losses were “overwhelmed” by the domestic diaspora. He also noted that the buyers were not all new, many of them middle-aged investors between the ages of 40 and 50, and that they were no stranger to leverage trading and centralized warehouse technology.
Some marketers remain cautious about the follow-up. Thomas J. Hayes, Chairman and Managing Partner of the Great Hill Capital, argued that semiconductor and storage plates had become a congested transaction between institutions and the diaspora, and that if cloud computing giants were expected to lower their capital expenditures, it might be as fast as possible to evacuate the related plates.
Korea up the trade bond threshold
Leverage ETF expands fast in the Korean market. The Oxford Institute of Economics data show that Korea ' s largest 25-plus ETF assets, the share of local thematic funds, rose from about 15 per cent at the beginning of 2026 to about 30 per cent in June.
The Central Bank of Korea warned last month that the size of the bulky leverage stock had risen to an all-time high, driven mainly by financing borrowing, and that the silos were heavily concentrated in semiconductor plates. Central banks believe that these risks are not likely to evolve into systemic financial risks for the time being, but that, once the market adjusts, the leverage will significantly increase volatility.
In the face of recent shocks, South Korean regulators have announced tightening the ETF trading rules to raise the minimum cash guarantee from about 30,000 won in real terms to 300,000 won. According to Peter Kim, director of the global investment strategy of the KB Financial Group, this loss once again shows that single-share leverage ETFs are more like speculative instruments than long-term investment products.