[DigitalToday reporter Sang-yeop Oh (오상엽)] Concerns are rising over losses among investors in single-stock leveraged exchange-traded funds (ETFs) linked to Samsung Electronics and SK Hynix. Individual money poured in alongside a semiconductor rally on the first day of listing, but many investors have since moved into loss territory as volatility in chip shares has widened.

As of June 10, investors at major brokerages are posting negative returns on single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix, according to the financial investment industry. Some products were tallied as having 99 to 100 percent of investors in loss territory.

As of June 8, Samsung Securities counted 8,882 investors in the KODEX Samsung Electronics Single-Stock Leveraged ETF. The average purchase price was 28,033 won and the average return was minus 26.73 percent.

On the same basis, the KODEX SK Hynix Single-Stock Leveraged ETF had 11,358 investors, an average purchase price of 29,233 won and an average return of minus 32.85 percent.

In the profit-and-loss distribution, the share of loss-making investors was effectively 100 percent for both the Samsung Electronics and SK Hynix products.

At Korea Investment & Securities, the share of investors with losses was also large. As of June 8, there were 6,430 investors in the KODEX Samsung Electronics Single-Stock Leveraged ETF, with an average purchase price of 26,327 won and an average return of minus 23.01 percent.

The KODEX SK Hynix Single-Stock Leveraged ETF had 7,944 investors, with an average purchase price of 26,788 won and an average return of minus 26.81 percent.

At NH Investment & Securities' Namuh Securities, as of June 5 there were 10,266 investors in the Samsung Electronics single-stock leveraged ETF, with an average return of minus 6.35 percent. The SK Hynix single-stock leveraged ETF had 14,153 investors, with an average return of minus 18.43 percent.

Single-stock leveraged ETFs are designed to track about twice the daily return of an individual stock such as Samsung Electronics or SK Hynix. Gains can be amplified when the underlying asset rises, but losses also grow when the share price falls.

Because the structure tracks daily returns, actual investment performance can diverge from the underlying asset's cumulative move when markets are volatile and the product is held long term.

In the early days after listing, expectations for a semiconductor rally lifted investor sentiment. Single-stock leveraged ETFs for Samsung Electronics and SK Hynix, listed on May 27, attracted heavy trading from the first day.

As of June 8, individual investors net bought 2.08 trillion won of TIGER SK Hynix Single-Stock Leveraged and 1.46 trillion won of TIGER Samsung Electronics Single-Stock Leveraged, according to Mirae Asset Global Investments. Since listing, cumulative net buying by individuals in the two products has exceeded 3 trillion won.

The mood later changed as a pullback in global semiconductor heavyweights, foreign selling and a surge in the exchange rate combined. With concerns spreading over a Broadcom-led semiconductor correction, domestic chip heavyweights also slid sharply, widening losses in leveraged products.

During intraday trade on the day, single-stock leveraged ETFs also rose sharply as semiconductor shares rebounded, but many investors with high average purchase prices due to the recent plunge are still believed to be in loss territory. That means the burden remains for individual investors who entered around earlier peaks despite the short-term rebound.

As investor concentration grew, financial authorities began checks. The Financial Services Commission on June 5 conducted an emergency review of market trends in single-stock leveraged ETFs with asset managers, brokerages and related institutions.

With individual money having flowed in quickly in the early days of listing and the possibility of expanding losses rising, the purpose is to examine investor protection and market stability.

An official in the financial investment industry said, "Single-stock leveraged ETFs can see returns widen quickly when the direction is right, but losses also grow as much when it moves the other way." The official added, "In volatile sectors like semiconductors, investors need to look not only at the underlying asset price but also the exchange rate, foreign supply and demand, and the broader trend in global semiconductor shares."