Korean Lawmaker Warns KOSPI Index Has Become a Casino, Calls for Delisting Leveraged ETFs

07/06 05:05

On July 6, concerns over the risks of single-stock leveraged ETFs in South Korea have intensified, with an opposition lawmaker calling for the delisting of such products. On Monday, Ahn Cheol-soo, a member of the conservative People Power Party and former presidential candidate, posted on social media urging strong corrective measures, including delisting, for the Korean leveraged ETFs tracking Samsung Electronics and SK Hynix. He stated that the KOSPI index 'has become a casino,' and these products represent 'a complete policy failure, eroding trillions of won in corporate value and national wealth every day.' His remarks have heightened concerns among policymakers and investors regarding the risks associated with these ETFs. These products aim to achieve double returns on the underlying stocks, and their mechanical rebalancing process forces them to buy more when prices rise and sell more when they fall—potentially amplifying market volatility.

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