Samsung, SK Hynix Single-Stock Leveraged ETFs Gain as Much as 43% in Debut Week; KODEX Leads on Assets

One-week scorecard for single-stock leveraged ETFs

TIGER Samsung Electronics Leverage returns 42.6%

SOL SK Hynix Leverage posts 29.2%

KODEX leads in net assets, trading value and tracking gaps

South Korea’s first single-stock leveraged exchange-traded funds have been trading for just one week, and Samsung Asset Management’s KODEX has already secured an early lead in the market. It topped rivals in key indicators including net assets, trading value and tracking gaps during the first week after listing.

According to the financial investment industry on June 3, the 16 single-stock leveraged ETFs listed on May 27 had combined net assets of 6.7543 trillion won ($4.89 billion). Cumulative trading value over the first five trading days reached 48.6753 trillion won ($35.27 billion). Among them, Samsung Asset Management’s KODEX SK Hynix Single Stock Leverage had the largest net assets at 2.2274 trillion won ($1.61 billion), more than 850 billion won ($616 million) ahead of Mirae Asset Global Investments’ TIGER SK Hynix Single Stock Leverage at 1.3703 trillion won ($993 million). KODEX also led in trading value at 16.707 trillion won ($12.11 billion), nearly double TIGER’s 8.9566 trillion won ($6.49 billion). One exception was retail net buying: TIGER drew 1.595 trillion won ($1.16 billion), slightly more than KODEX’s 1.5675 trillion won ($1.14 billion).

KODEX also ranked first among products tied to Samsung Electronics. KODEX Samsung Electronics Single Stock Leverage had net assets of 1.6766 trillion won ($1.22 billion), compared with 845.3 billion won ($612 million) for TIGER Samsung Electronics Single Stock Leverage. ACE Samsung Electronics Single Stock Leverage stood at 103.4 billion won ($75 million), while RISE Samsung Electronics Single Stock Leverage and PLUS Samsung Electronics Single Stock Leverage had 62.3 billion won ($45 million) and 32.2 billion won ($23 million), respectively.

Later entrants including Shinhan Asset Management, Korea Investment Management and Hana Asset Management held up better on returns. Among Samsung Electronics single-stock leveraged ETFs, TIGER posted the highest return versus net asset value over the first week at 42.63%, followed by ACE at 42.52%, KODEX at 42.40%, 1Q at 41.94% and RISE at 41.81%. For SK Hynix products, SOL ranked first at 29.21%, followed by KODEX at 29.13%, TIGER at 29.06%, ACE at 29.05% and RISE at 28.70%.

In trading scale, Samsung Asset Management — already a dominant player in leveraged ETFs — outpaced competitors by a wide margin. KODEX SK Hynix Single Stock Leverage recorded cumulative trading value of 16.707 trillion won ($12.11 billion), about twice that of the TIGER product at 8.9566 trillion won ($6.49 billion). KODEX Samsung Electronics Single Stock Leverage also beat TIGER, with cumulative trading value of 10.7749 trillion won ($7.81 billion) versus 7.0267 trillion won ($5.09 billion). “KODEX products charge an annual fee of 0.29%, higher than rivals’ 0.09%, and there were allegations that first-day trading volume was inflated, but retail investors appear to have chosen Samsung Asset Management for the brand,” an asset-management industry official said.

KODEX also showed an edge in tracking-gap management, a key measure of ETF management quality. A tracking gap is the difference between an ETF’s market price and its actual net asset value. The lower the gap, the better for investors, because the product is trading closer to the value of its underlying holdings. For volatile products such as single-stock leveraged ETFs, the ability to control that gap is considered a core competitive strength for asset managers.

KODEX SK Hynix Single Stock Leverage posted the lowest average intraday tracking gap at minus 0.02%, while its average absolute tracking gap was 0.11%. KODEX Samsung Electronics Single Stock Leverage also had an average absolute tracking gap of just 0.14%. By contrast, some later entrants saw average absolute tracking gaps widen to 0.4% to 0.5%.

Market participants say the usual pattern in leveraged ETFs — with liquidity and trading concentrated in a small number of products — has reappeared from the outset. More active products are easier to manage for tracking gaps and tend to attract more investor inflows, reinforcing a virtuous cycle. “KODEX succeeded in taking the early lead, but complaints are also rising quickly whenever intraday gaps emerge between ETF prices and the underlying shares as retail interest intensifies,” a brokerage official said. “With market volatility also increasing, investors are watching whether the rankings shift over time.”

Jeon Ye-jin, Hankyung.com reporter, ace@hankyung.com