Presidential Office Says Market Measures Trump Blame Over Single-Stock Leveraged ETFs

South Korea’s presidential office said it is more important to closely monitor markets and prepare countermeasures than to assign blame to policy chief Kim Yong-beom over the introduction of single-stock leveraged exchange-traded funds.

Sung Ki-hong, senior secretary for public communication at the presidential office, made the remarks in an interview on CBS Radio’s “Park Sung-tae’s News Show” on August 6. Asked whether Kim should be held responsible, Sung said the office recognizes that single-stock leveraged ETFs were one factor behind increased stock-market volatility.

He added that the volatility stemmed from a mix of factors, including bigger swings in global semiconductor shares, heavy concentration in major chip stocks such as Samsung Electronics and SK Hynix, and profit-taking and portfolio rebalancing by foreign investors. The concentration of funds into leveraged ETFs worsened that volatility, he said.

Sung said Kim, along with other presidential office officials, is closely reviewing the situation, including the causes of the market moves and what steps should be taken. He added that additional follow-up measures are also being considered if needed.

Choi Su-jin, Hankyung.com reporter naive@hankyung.com