South Korean Retail Investors Flock to Single-Stock Leveraged ETFs, Brokers and Exchange Rake in Over 100 Billion Won in Fees in Two Months

Deep News
08/17

Since the listing of single-stock leveraged and inverse ETFs tracking Samsung Electronics and SK Hynix, the Korea Exchange and various securities firms have collectively earned over 117 billion won in fees over a period exceeding two months.

Observers point out that as individual investors rush into these high-risk products, the exchange responsible for market operations and the brokers providing trading intermediary services have amassed substantial fee income.

Data obtained and submitted from the Financial Supervisory Service and the Korea Exchange on the 17th shows that from the listing date of May 27 to the end of last month, the exchange and brokers together collected a total of 117.26 billion won in fees related to these 16 products, which are linked to Samsung Electronics and SK Hynix.

Of this total, brokers earned 89.35 billion won through their trading agency business, accounting for 76% of the sum. The Korea Exchange's fee income reached 27.91 billion won, comprising 24.139 billion won in trading fees and 3.771 billion won in clearing and settlement fees.

Over the 45 trading days in the statistical period, an average of 620 million won in fees was generated daily. On particularly active trading days, the exchange's single-day fee income could exceed 1 billion won. For example, fee income reached 1.051 billion won on June 24 and 1.011 billion won on the 14th of last month.

Single-stock leveraged ETFs are high-risk products. They track individual stocks like Samsung Electronics and SK Hynix, amplifying the daily price movement of the underlying stock by two times. While gains can be significantly enhanced when the stock market rises, losses also expand proportionally when the stock price falls.

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