A leveraged SK Hynix ETF has crashed 70% from its peak, and Korean retail investors want their money back

Single-stock leveraged ETFs became the vehicle of choice for South Korean small savers betting on the country’s AI champions, and the recent chip selloff has turned that bet into heavy losses concentrated almost entirely in domestic retail hands.

Now they want their money back, or so they say, badly burned by the losses that have swept over them: South Korea’s retail investors, the country’s small savers, are paying a steep price for the bet they placed at the height of the euphoria on the Seoul market’s artificial intelligence champions, SK Hynix and Samsung Electronics. It has turned out to be the wrong bet for many, thanks to the heavy wave of selling that has hit, above all in recent weeks, the shares of the companies seen as the main beneficiaries of the AI boom.

The hardest hit have been savers who bought leveraged exchange-traded funds tracking individual stocks, so-called single-stock leveraged ETFs - instruments designed to amplify the daily move of one specific stock rather than of an equity index, through the use of financial leverage.

To take an example, if an ETF offers 2x leverage on SK Hynix, that means that if SK Hynix shares rise 5% over a session, the ETF posts a gain of 10%, and if the stock instead falls 5%, the ETF’s loss is roughly 10%.

These are precisely the products that have become the favorite vehicle of many South Korean retail investors, ever since this category of fund made its debut on the Seoul exchange on May 27.

Consider that, according to a report by CNBC, since that date net purchases by small savers have amounted to 14 trillion won, the equivalent of $9.4 billion.

For comparison, data collected by KB Financial Group shows that foreign investors put only 2 trillion won into these same ETFs.

The result is that the ones paying the price for the euphoria that erupted around the two titans of the Kospi index - Samsung and SK Hynix - have overwhelmingly been small savers, who are now, to put it mildly, frustrated, and are asking for their money back.

The fund at the center of the losses

The investors who have watched their money evaporate are above all those who took exposure to one specific product, the KODEX SK Hynix Single Stock Leverage ETF: a leveraged fund designed, exactly as in the example above, to deliver twice the daily performance of the shares of the AI chipmaker, itself a fixture of the financial headlines over its Nasdaq listing.

Data compiled by LSEG shows that the ETF has collapsed roughly 70% from the record it set in June, and around 50% from the day of its debut.

The scale of the drop has been enough to send some investors to complain on online investing forums. «I wish I could go back to before I started investing in the stock market. Give me my money back», one wrote. «It feels like you’re trying to finish me off», commented another.

The warnings that went unheeded

And yet the warnings had been there. The Bank of Korea itself sounded an alert in a report released last month, writing that leveraged bets placed by retail investors had jumped to record levels, fueled above all by the use of margin financing and by increasingly concentrated exposure to the semiconductor sector.

While judging it unlikely that the rush into leveraged ETFs amounted to a systemic threat to the financial system, the central bank stressed that the use of leverage could amplify volatility during market corrections, particularly in the presence of FOMO - the fear of missing out, which by its nature pushes investors to chase rallies using borrowed money.

The institution’s words fell on deaf ears, to the point that, as Jung In Yun, founder of Fibonacci Asset Management, observed, «almost all of the losses are concentrated in the hands of domestic retail investors».

All of this as the weight of leveraged ETFs within the universe of Korea-focused funds has grown rapidly in recent weeks: according to Oxford Economics, assets held in the 25 largest leveraged ETFs on South Korea accounted for roughly 30% of the total in June, against about 15% at the start of 2026.

The buyers of these products have not only been first-time investors. As Jung pointed out, many are in their forties and fifties, carried away by enthusiasm for leveraged ETF bets and for sectors with a heavy weighting of high-tech stocks. They now bitterly regret not having listened to the market veterans who had been warning for some time that, on the Seoul exchange, investors were - to borrow Warren Buffett’s framing - speculating rather than thinking in terms of the long run.

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on July 20, 2026 as «L’ETF sulle azioni SK Hynix affonda del 70% dai massimi, gli investitori rivogliono indietro i loro soldi». It has been translated and adapted for an international audience by the Money.it International desk.