South Korea's Kosdaq Plunges 35.4% Since Single-Stock Leverage ETF Launch on May 27

According to Digital Daily, South Korea's Kosdaq index has experienced severe volatility since the launch of single-stock leveraged exchange-traded funds (ETFs) on May 27. The index fell from 1,205.12 on May 26 to 778.17 on July 9, marking a 426.95-point decline of 35.4%. Among 2,768 listed stocks on Kospi and Kosdaq this year, approximately 63.6% have hit 52-week lows. The index rebounded 5.47% to close at 837.43 on July 10.

Financial Supervisory Service chief Lee Chan-jin acknowledged the unintended consequences in a June press briefing, stating the product was introduced to prevent capital outflows but has instead created adverse effects. The government and financial authorities are monitoring the situation, with discussions ongoing through an inter-agency market review group involving the Ministry of Finance, Financial Services Commission, Bank of Korea, and FSS.