[DigitalToday reporter Oh Sang-yup (오상엽)] Mirae Asset Securities will newly list 2 leveraged single-stock exchange-traded notes (ETNs) that track twice the daily returns of Samsung Electronics and SK hynix, the first such listing in the securities industry.

Mirae Asset Securities said it will list the "Mirae Asset Leverage Samsung Electronics Single Stock ETN" and the "Mirae Asset Leverage SK hynix Single Stock ETN" on May 27.

The two products are structured to track 2 times the daily returns of Samsung Electronics and SK hynix. Their ETN indicative values change in line with daily return fluctuations of the "KRX Samsung Electronics TR Leverage Index" and the "KRX SK hynix TR Leverage Index" calculated by Korea Exchange.

An ETN is an exchange-traded note in which the issuer promises to pay the return of a pre-agreed underlying index based on the credit of the issuing securities company.

Mirae Asset Securities explained that using an ETN structure can track underlying index returns more precisely, excluding expenses, without the risk of tracking error that can occur in funds.

The total return index (TR) followed by the two products is calculated on the assumption that pre-tax cash dividends from constituent stocks are reinvested in the index. Investors can therefore expect the effect of reinvesting dividends without separately receiving dividend payments.

Still, because leveraged single-stock products are high-risk products that track 2 times a stock's daily returns, investors need to exercise caution. Losses can also be magnified if the underlying asset price moves against expectations, and a negative compounding effect can occur in volatile markets.

A Mirae Asset Securities official said, "ETN expenses may appear higher than the total fee of some similar ETFs, but it is necessary to comprehensively review not only the simple fee rate but also the cost structure reflected in actual performance."