South Korean chip stocks leveraged products suffered a backlash, with the largest ETF dropping 45% since its launch.

The value of a new leveraged product tracking South Korea's major chip stocks has plunged, posing a serious risk of losses for Korean retail investors who like to pursue amplified returns through these tools. Data shows that prices of more than a dozen leveraged exchange-traded funds tracking Samsung Electronics and SK Hynix have dropped by almost half since they were launched in late May. The largest of these products, SAMSUNG KODEX SK Hynix Single Stock Leverage, with assets under management of about $3.4 billion, has fallen by around 45% since its inception, with a decline of over 60% from its peak in June. The decline of these products highlights the risks of leveraged investments in the two South Korean chip giants. While these products may offer excess returns, they could also exacerbate market volatility as issuers typically need to buy high and sell low to maintain the fund's leverage ratio in line with their commitments.