Korean retail investors are turning to US high-leverage ETFs

Comparative news, according to the First Financial Report, after the South Korean government tightened investment regulations on single-share leveraged exchange-traded funds (ETFs), South Korean investors' funds are rapidly shifting to US leveraged ETFs. According to the Korea Exchange (KRX) Information Data System on the 5th, the scale of related transactions shrank drastically after the financial supervisory authorities implemented an increase in basic margin requirements and investment limit limits for single-share leveraged ETFs. The transaction amount of 16 single-share leveraged and reverse ETFs listed in Korea dropped by 89.8% from 13.0361 trillion won on July 15 before regulations were implemented to 1.3329 trillion won on August 4. However, Korean individual investors are unabated in their enthusiasm for leveraged ETFs and are switching to overseas leveraged ETFs such as the US.

In the same period from July 15 to August 4, the US fund SOXL (Direxion Daily Semiconductor Bull 3X) ranked first in net purchases of overseas stocks, with a net purchase amount of US$2,487.9 billion. Tesla's double leveraged ETF (TSLL) had a net purchase amount of $2143.6 million, ranking sixth. The Korean stock market triple-leveraged ETF (KORU) also received $130.95 million in capital inflows, ranking 11th.