A leveraged exchange-traded fund (ETF) tracking twice the daily return of an ETF that invests in memory semiconductor companies such as SK hynix (000660.KS) and Samsung Electronics (005930.KS) is being prepared for launch in the U.S. market. With single-stock leveraged ETFs based on Samsung Electronics and SK hynix also set to launch in Korea, the global semiconductor leveraged ETF market is rapidly expanding on the back of an artificial intelligence (AI)-driven rally.
According to the U.S. Securities and Exchange Commission (SEC) on Thursday, Leverage Shares, a global manager specializing in leveraged products, recently filed a registration statement for the "Leverage Shares 2X Long Memory Daily ETF." The product is designed to track twice the daily return of the "Roundhill Memory ETF (DRAM)."
The DRAM ETF concentrates its investments in memory semiconductor companies making high bandwidth memory (HBM), DRAM and NAND flash. Its major holdings include SK hynix (25.95%), Samsung Electronics (20.27%) and Micron (6.41%). With Korea's flagship memory chipmakers accounting for nearly half of its weighting, the ETF is effectively regarded as a direct bet on growing global AI memory demand.
Capital inflows have been rising rapidly since the ETF's listing on November 1. According to ETF Check, the DRAM ETF had net assets of $6.6582 billion (about 9.7876 trillion won) as of the 11th of this month. Over the past month, net inflows totaled $4.6733 billion (about 6.8698 trillion won), and inflows reached $2.5463 billion (about 3.7431 trillion won) over the past week. This marked the second-largest weekly inflow among U.S. equity ETFs, trailing only the "SPY ETF," which tracks the Standard & Poor's (S&P) 500 index.
A leveraged ETF directly targeting SK hynix is also set to appear in the U.S. U.S. asset manager REX Shares is pursuing the listing of the "T-Rex 2X Long SK Hynix Daily Target ETF." The product tracks twice the daily price return of SK hynix's American depositary receipts (ADRs).
In the domestic market, single-stock leveraged and inverse-2x ETFs based on Samsung Electronics and SK hynix will launch later this month. Sixteen single-stock leveraged ETFs prepared by eight asset managers — Samsung, Mirae Asset, KB, Korea Investment, Shinhan, Hanwha, Kiwoom and Hana — are scheduled to list simultaneously on the 27th.
"Considering the size of Korea's ETF market and individual investor trading patterns, inflows into Samsung Electronics and SK hynix leveraged ETFs are expected to reach 1.7 trillion won on a conservative estimate and 5.3 trillion won on an aggressive estimate," Yoon Jae-hong, an analyst at Mirae Asset Securities, said.
Products that launched earlier in the Hong Kong market are growing in size. The "CSOP SK Hynix Daily 2X Leveraged" ETF surpassed $5.37778 billion (about 7.8995 trillion won) in assets under management (AUM) as of the 7th (local time). This figure overtook the "Direxion Daily TSLA Bull 2X," a 2x leveraged Tesla ETF listed on the U.S. stock market, making it the world's largest single-stock leveraged and inverse ETF.
