Korea Investment Management CEO Bae Jae-kyu Calls for Gradual Reduction of Leveraged ETFs

RegulationIndustry
โดย Bloomberg·Read original
Summary · why it matters

Korea Investment Management CEO Bae Jae-kyu has urged investors to refrain from trading leveraged and double inverse exchange-traded funds, expressing the view that such products should be gradually scaled back. Bae pointed out that during periods of severe market volatility, leveraged products can rapidly lose value due to daily rebalancing and compounding effects, and said they are unsuitable for long-term wealth building and are best avoided. In South Korea this month, new listings of single-stock leveraged ETFs for Samsung Electronics and SK Hynix were temporarily suspended, and the 16 leveraged ETFs approved in May at one point accounted for more than 70% of the total trading value on the Korean stock market, including the underlying shares. Bae indicated that rather than delisting, the best approach is to gradually reduce market balances through cooperation among asset managers and liquidity providers, supported by regulatory measures.

Impact on stocks 2

Semiconductors▼ · 1 stocks
SK Hynix Inc
000660
▼ NegativeRegulationrelevance

New listings of single-stock leveraged ETFs for SK Hynix were temporarily suspended, and regulatory measures to reduce leveraged ETFs could dampen trading and investor interest in the stock.

Artificial Intelligence▼ · 1 stocks
Samsung Electronics Co Ltd
005930
▼ NegativeRegulationrelevance

New listings of single-stock leveraged ETFs for Samsung Electronics were temporarily suspended, and regulatory measures to reduce leveraged ETFs could dampen trading and investor interest in the stock.

Off-coverage companies 1

Korea Investment Trust ManagementPrivate▼ Negative
Regulationrelevance

CEO Bae Jae-kyu calls for gradual reduction of leveraged ETFs, which could reduce demand for the company's leveraged ETF products and impact fee income.

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