Retail enthusiasm in South Korea's $4.3 trillion stock market has intensified around leveraged ETFs tied to Samsung Electronics (SSNLF), a South Korean chipmaker and electronics giant, and SK Hynix (HXSCL), a South Korean chipmaker, as investors look for amplified exposure to the country's AI-driven semiconductor rally. The two chip stocks and the exchange-traded funds tracking twice their daily returns now account for more than 70% of trading value in the local market, according to CLSA Securities Korea data cited in the source.
The products were launched in late May and quickly attracted retail demand after both Samsung and SK Hynix had more than tripled at their peaks this year. However, investors may view the structure as a source of added risk, because leveraged ETFs can require more buying when the underlying stocks rise and more selling when they fall, potentially deepening volatility at a time when questions around heavy AI investment are already causing sharp moves across the semiconductor supply chain.
The Kospi Index closed down 5.4% on Wednesday, extending its decline from a June peak to 20% and pushing the market into technical bear-market territory. Samsung and SK Hynix already make up 54% of the benchmark Kospi's weighting, and CLSA analyst Jongmin Shim said the concentration in the two chip stocks and related leveraged products has weighed on market breadth and sentiment, while still viewing the pullback as part of a bull market rather than the start of a systemic downturn.