Minister apologizes as Korean leveraged ETF investors nurse heavy losses amid chip stock rout

South Korea’s finance minister apologized Wednesday after retail investors racked up heavy losses tied to leveraged stock bets following rule changes earlier this year. The May 27 introduction of single-stock leveraged exchange-traded funds (ETFs) drew large retail inflows: KB Financial Group cited net purchases of 14 trillion won (about $9.7 billion) versus roughly 2 trillion won by foreign investors. As the Kospi index corrected sharply—led by declines in chip stocks—many holders faced losses, particularly those in leveraged ETFs linked to Samsung Electronics and SK Hynix. LSEG data shows the KODEX SK Hynix Single Stock Leverage ETF, designed to deliver twice the daily move in SK Hynix shares, has fallen more than 80% since its June 23 peak. The Samsung-tracking product is down almost 75% from its June 3 peak. Over the last month, the Kospi plunged about 35%.