The number of instances where exchange-traded funds (ETFs) traded at prices significantly deviating from their net asset values (NAV) has increased 2.5 times compared to last year.
According to data submitted to the National Assembly by Kim Hyung-yeon, a member of the Justice Innovation Party, there were 219 cases of ETFs exceeding the price discrepancy threshold from January to August this year.
This figure surpasses last year's total of 86 cases and also exceeds the 196 cases recorded in 2024, which was the highest during the reporting period.
The price discrepancy indicates how much an ETF's market price deviates from its NAV per share. Trading during periods of significant discrepancy can result in purchasing assets at inflated prices or selling them at undervalued rates.
From 2021 to August of this year, there were a total of 581 instances where the price discrepancy management criteria were exceeded, with approximately 38% of these cases occurring in leverage and inverse products.
On June 8, the price discrepancy for the 'ACE SK Hynix Single Stock Leverage' reached 90.2%, marking the highest level recorded since 2021.
Of the 306 ETFs that have exceeded the criteria, about one-third, or 109, have done so more than once. Sixteen products exceeded the management criteria five times or more.
The 'TIGER US Philadelphia Semiconductor Leverage (Synthetic)' from Mirae Asset Management recorded the highest number of instances, exceeding the criteria 21 times during the reporting period. This product also surpassed the management criteria in July of this year. Following closely was the same firm's 'TIGER Copper Physical,' which exceeded the criteria 15 times.
Among the 168 ETFs that were delisted during the same period, 19 had previously exceeded the management criteria. The 'KOSEF China A50 Connect Leverage MSCI (Synthetic H)' exceeded the criteria a total of 14 times before its delisting.
Exceeding the price discrepancy threshold is not, in itself, a reason for delisting. Among the delisted products with a history of repeated violations, four were delisted at the request of the management company due to insufficient or reduced trust principal, according to the lawmaker's office.
As a result, there are calls to review the management system for products that repeatedly exceed the price discrepancy management criteria.
The total trading volume for products that exceeded the price discrepancy criteria was 64.9 trillion won, with individual investors accounting for 24.7 trillion won (38.1%).
Kim Hyung-yeon emphasized, "There should be automatic sanctions for liquidity providers that repeatedly violate the price discrepancy management obligations based on cumulative violations."
* This article has been translated by AI.
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