Korea’s exchange-traded fund market has been dominated by semiconductor leveraged products, posting outsized gains as expectations for an industry upturn lifted related indexes. Because these ETFs are designed to track twice the daily move of their benchmarks, a sustained rally amplified returns through compounding.
According to the Korea Exchange on May 3, semiconductor leveraged ETFs led the performance rankings over the past year (April 30, 2025, to April 30, 2026). The top gainer was TIGER 200IT Leverage, which mainly holds shares such as Samsung Electronics, SK hynix and SK Square. It rose to 328,880 won from 20,865 won, a 1,476.23% return. By simple calculation, a 100 million won investment would now be worth about 1.5 billion won. Its one-month return was also about 130%.
TIGER Semiconductor TOP10 Leverage climbed 1,307.10% over the same period, to 59,450 won from 4,225 won. KODEX Semiconductor Leverage jumped 1,222.17%, to 100,485 won from 7,600 won. All three rose more than tenfold, highlighting the explosive payoff structure of leveraged ETFs in a strong uptrend.
The gains reflect a broader rise in semiconductor shares, as global big tech companies expanded AI investment and demand for data-center buildouts continued, pushing up earnings expectations. As related indexes moved steadily higher, returns for leveraged ETFs tied to them expanded sharply.
The same structure can also magnify losses. Because leveraged ETFs target twice the benchmark’s daily return, choppy markets can produce a “negative compounding” effect that erodes value. If an index repeatedly rises and falls within a range, the ETF can gradually lose principal.
Investor caution is also being urged as single-stock leveraged ETFs tied to Samsung Electronics and SK hynix are expected to be launched. With volatility in individual shares directly reflected, the potential for gains increases, but so does the risk of losses.
Brokerages have raised target prices on the back of positive results from Samsung Electronics and SK hynix, while also flagging risks. Hana Securities raised its target price for Samsung Electronics to 330,000 won, but said, “Uncertainty over operating profit estimates has increased due to a strike issue related to bonuses, and the stock’s recent price movement has been relatively weak.”
Some reports have also downgraded SK hynix. BNK Investment & Securities researcher Lee Min-hee lowered the stock to hold, saying, “Despite the steep increase in earnings, it has entered the late stage of the cycle, and considering a slowdown in momentum in the second half, it is now expected to shift into a low price-to-earnings ratio (PER) stock.”
* This article has been translated by AI.
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