SK Hynix leveraged ETF raked in $1.6 billion in the first quarter, becoming the world's most attractive single stock leveraged ETF.

According to reports, the leveraged ETF tracking South Korean storage chip giant SK Hynix performed amazingly in the first quarter of 2026, with its global fund inflow historically surpassing traditional tech leaders Tesla, Inc. (TSLA.US) and Microsoft Corporation (MSFT.US). Specific data shows that the Southbound SK Hynix Daily 2x Leveraged ETF is a single-stock exchange-traded fund listed in Hong Kong, aiming to achieve twice the daily performance of the underlying stock. In the first three months of 2026, this fund attracted nearly $1.6 billion in new funds, a scale sufficient to make it overshadow long-standing leveraged tools in the US stock market. Investor frenzy for SK Hynix is mainly driven by its absolute dominance in the high-performance high-bandwidth memory (HBM) field. As an indispensable part of NVIDIA Corporation's core industry chain, SK Hynix's current price-to-earnings ratio compared to US peers like Micron Technology, Inc. (MU.US) still has a significant valuation advantage. This "high growth, relatively low premium" attribute makes it a preferred target for bulk fund allocation in the AI race. At the same time, recent price fluctuations caused by the political situation at GEO Group Inc did not lead to fund outflows, but instead sparked enthusiasm among retail investors to use leveraged tools for high-frequency trading in an attempt to earn higher returns in volatile markets. This aggressive speculative behavior, combined with institutional passive allocations, has collectively boosted the activity of such financial products. "Investors' enthusiasm for SK Hynix seems to stem from its valuation advantage, with a lower forward P/E ratio making it appear more cost-effective than US memory peers," said Gary Tan, portfolio manager at Allspring Global Investments. "Being a global leader in the memory sector, this relative positioning has driven strong fund inflows into these leveraged ETFs even in the midst of the tense political situation at GEO Group Inc. SK Hynix, which produces advanced high-bandwidth memory chips for AI processors, currently has a forward P/E ratio of 4.4, compared to 18 for the Philadelphia Semiconductor Index. It is worth mentioning that recent turbulent trading of chipmaker stocks has faced severe fluctuations in the past few months, initially plagued by concerns of overspending plans and high valuations, followed by the outbreak of the Middle Eastern conflict, which led to concerns about soaring energy costs and rising interest rates, causing market volatility. Meanwhile, Alphabet Inc. Class C's TurboQuant technology has added further pressure to the market, as advancements in this technology may reduce the demand for certain types of storage devices. Since its launch in October last year, the asset size of this ETF has swollen to $2.5 billion. Driven by this overseas investment craze, South Korea's domestic regulatory environment has also seen a significant breakthrough. The South Korean financial regulatory agency recently announced plans to lift the long-standing ban on single-stock leverage ETFs in order to prevent excessive domestic capital from flowing into overseas derivative markets. The first 2x leveraged ETFs based on Samsung Electronics and SK Hynix's underlying assets are expected to be listed on the Seoul Stock Exchange as early as May 2026. This policy relaxation is seen by the market as an important step in the institutional reform of South Korea's capital markets, aiming to keep this massive trading liquidity within the domestic market and enhance the global pricing power of local tech giants. It is worth mentioning that, according to data from the Korea Securities Depository, the Southbound SK Hynix 2x Leveraged ETF became one of the most popular products in March. Bloomberg industry research analyst Rebecca Sin said, "The two extra hours of trading provided by HKEX after the closing of the Korean exchange may increase arbitrage opportunities between the two markets." She added that differences in currency exposure and hedging strategies may further drive demand. On the capacity and capital operation level, SK Hynix is consolidating its leading position through multiple means. In order to further narrow the valuation gap with US semiconductor companies, it is rumored that the company is planning to list on the US market through the issuance of American Depositary Receipts (ADR), with a potential fundraising size of up to $10 billion, which will help it gain direct access to the world's largest pool of funds. Meanwhile, the company has decided to invest about $8 billion in purchasing ASML's most advanced extreme ultraviolet lithography (EUV) equipment to ensure technological leadership in mass producing next-generation HBM products. However, some analysis firms have issued warnings, suggesting that the current storage industry may have a valuation bubble, as the rapid accumulation of high leverage funds, while boosting stock prices in the short term, also carries the risk of triggering a chain collapse in the market during a market downturn.