Samsung, Mirae take early lead in Korea's first single-stock ETF race

Eight asset managers will simultaneously launch Korea’s first single-stock leveraged exchange-traded funds tracking Samsung Electronics and SK hynix on May 22, setting off an intense battle for market share in one of the most competitive ETF rollouts the domestic market has seen.

According to industry sources on Monday, Samsung Asset Management, Mirae Asset, Korea Investment Management and KB Asset Management — the four largest players in terms of assets under management — are each preparing two products per stock: a leveraged ETF and an inverse-leveraged ETF tied to Samsung Electronics and SK hynix.

Smaller rivals are adopting more targeted strategies. Hanwha Asset Management plans to list leveraged and inverse products linked to Samsung Electronics, while Shinhan Asset Management will focus on SK hynix. For mid-tier and smaller firms, inverse ETFs, which profit when the underlying stock falls, are emerging as a key point of differentiation.

Under Korea Exchange rules, each firm can list no more than two single-stock ETF products per underlying. With product offerings capped, competition is expected to center less on variety and more on pricing and execution.

Despite the crowded field, Samsung Asset Management is widely expected to dominate early inflows. Its KODEX brand accounts for roughly 40 percent of the domestic ETF market, with net assets exceeding 170 trillion won ($116 billion) as of April. Mirae Asset is seen as its closest challenger, while mid-tier players such as Korea Investment Management and KB Asset Management are likely to trail. Smaller firms face a steeper uphill battle.

Price competition has historically been fierce in Korea’s ETF market, at times driving fees close to zero. This time, however, the Financial Supervisory Service has imposed a minimum fee floor, effectively ruling out aggressive price undercutting.

With fees constrained, the battleground is shifting to execution — particularly tracking accuracy and liquidity. Leveraged ETFs are especially sensitive to tracking error, while tight bid-ask spreads and sufficient market depth are critical to ensure smooth trading. Industry sources said investors are likely to favor larger managers with established operational track records.

“Samsung Asset Management and other top-tier firms are expected to capture the bulk of inflows,” one market source said. “For second-tier players, it will be a chase. For smaller firms, differentiation is not optional — it is existential.”

Several asset managers said they plan to position the products not merely as short-term trading tools, but as portfolio instruments for investors seeking tactical exposure to Korea’s flagship semiconductor stocks. The strategy reflects an effort to broaden appeal beyond retail day traders, who have historically driven trading volumes.

Still, single-stock leveraged ETFs carry significant risks. In addition to volatility drag, where daily compounding erodes returns in choppy markets, investors are exposed to the full price swings of a single stock, with no diversification buffer. A 2x leveraged ETF on Samsung Electronics, for example, amplifies both gains and losses tied solely to that stock.