Finance minister says gov't seeks complementary measures against single-stock leveraged ETFs
Finance Minister Koo Yun-cheol speaks during a parliamentary session held at National Assembly in Seoul, Tuesday. Yonhap
Finance Minister Koo Yun-cheol said Tuesday the government is considering measures to address problems arising from newly introduced single-stock leveraged exchange-traded funds (ETFs), which have been blamed for heightened volatility in the stock market.
"I am well aware that leveraged ETFs have brought significant volatility to the stock market," Koo said during a parliamentary session.
"When introducing the policy, we assessed its potential impact on the foreign exchange and capital markets, but some problems have since emerged," he said. "We are discussing ways to address and minimize those problems."
In May, the Korea Exchange introduced single-stock leveraged ETFs tracking the daily performance of two market heavyweights — Samsung Electronics or SK hynix Inc.
As the two companies account for roughly half of the Korea Composite Stock Price Index (KOSPI)'s total market capitalization, the products have been cited as one of the factors contributing to heightened volatility in the benchmark index.
Despite a strong rally since the start of the year, the KOSPI has experienced sharp swings in recent months.
The Korea Exchange has triggered market-wide circuit breakers six times this year after the KOSPI fell more than 8 percent from the previous session's close. Before 2026, circuit breakers had been activated only six times in total.
In addition, 32 sidecars have been triggered this year, the highest annual tally on record, surpassing the previous high of 26 in 2008.