Goldman Sachs is warning that South Korea's planned launch of single-stock leveraged ETFs could intensify market volatility. The products, set to debut in late May 2026, target Samsung Electronics and SK Hynix-two stocks that together make up nearly half of the Kospi index.
These ETFs are designed to deliver 2x daily returns, requiring daily rebalancing. That means buying when prices rise and selling when they fall-a mechanism that can amplify swings. During a market decline in March 2026, rebalancing flows accounted for 60% of trading volume in SK Hynix within a single hour.
Mirae Asset Securities estimates the new ETFs could attract net inflows of up to $3.5 billion at launch. The Kospi has already experienced frequent 5% intraday swings, and retail investor exuberance remains a key concern. Over $13 billion in foreign outflows from South Korean equities were recorded in May 2026.
Regulators have announced mandatory investor education requirements, but the broader impact may extend beyond Seoul. Samsung and SK Hynix are pillars of the global semiconductor supply chain. Artificial volatility in their stock prices could ripple through markets in the US, Japan, and Taiwan.