New leveraged exchange-traded products tied to SK Hynix’s U.S.-listed ADR are being prepared for launch on Wall Street, following what the report described as a record U.S. listing for the company. According to Odaily, issuers including ProShares, Leverage Shares, and Rex Shares are planning products that provide 2x long exposure to SK Hynix ADRs, with some also preparing inverse products.
Information on issuers’ websites indicates at least six products are scheduled to launch next week. The report said leveraged SK Hynix ETFs have been popular in South Korea.
In South Korea, SK Hynix, Samsung Electronics, and related leveraged products together account for more than 70% of stock market trading volume, contributing to increased volatility in the KOSPI index. JPMorgan Asset Management Korea equity fund manager John Cho said some elements of retail activity appear increasingly momentum-driven, and that the growth of single-stock ETFs has amplified trading volume and volatility in large-cap stocks.
Cho added that the emergence of leveraged ETFs is not a healthy signal and may indicate late-cycle retail behavior. Analysts cited in the report said concentration in single-stock leveraged products has begun to affect the stocks they are designed to track. The new U.S.-listed leveraged ETPs are expected to expand daily rebalancing flows, which the report said could further increase already elevated volatility.
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