Single-stock leveraged ETFs focused on Samsung Electronics and SK Hynix are expected to launch in May

To enhance the attractiveness of the domestic stock market, South Korea is expected to launch its first single-stock leveraged ETF around May this year. These products will mainly focus on key targets Samsung Electronics and SK Hynix, and are expected to become important investment options for high-yield investors.

Currently, South Korean financial authorities plan to temporarily refrain from fully opening multiple leveraged ETFs to address stock market volatility. Instead, they will first introduce products based on Samsung Electronics and SK Hynix. Meanwhile, fully active ETFs and ETFs linked to the KOSDAQ Premium Index are also awaiting launch. Fully active ETFs are products not constrained by specific index correlation coefficients, operated by fund managers based on judgment to determine returns, and can be seen as listed versions of existing public funds.

Additionally, the government plans to incorporate KOSDAQ market structure reforms by introducing the KOSDAQ Premium Index. This move aims to divide KOSDAQ into a “Premium Alliance” for large companies and a “Standard Alliance” for growth-stage companies, and to compile high-quality targets within the Premium Alliance into an index, launching ETFs that track this index. This initiative intends to transform KOSDAQ into a “Korean version of NASDAQ” by setting requirements similar to NASDAQ’s structure to enhance its competitiveness.

Future growth of the domestic ETF market is also expected to accelerate. This year, South Korea’s total net assets of ETFs have surged, and the launch of new ETFs may further intensify capital market volatility. Coupled with reforms in the KOSDAQ market, these developments are likely to become key turning points in future capital market changes.