South Korea's Stock Market Sees Record Leveraged ETF Growth

Leveraged finance in South Korea’s equity market has surged to unprecedented levels. The assets under management (AUM) of leveraged exchange‑traded funds (ETFs) have risen to roughly $45 billion, an increase of about 800 % since the start of 2026. As a result, leveraged exposure as a percentage of free‑float market capitalization reached a record of 2.9 %, more than three times the level seen in January.

The SK Hynix double‑leveraged ETF, traded on the Hong Kong Stock Exchange, peaked at an AUM of $15 billion, becoming the largest single‑stock leveraged ETF worldwide. In contrast, double‑leveraged ETFs tracking Micron, Nvidia, SanDisk and Tesla have yet to surpass $10 billion in assets.

Overall, the use of leveraged instruments in the South Korean market has reached extreme levels, raising concerns among market participants about potential volatility and systemic risk.