As Samsung Electronics' share price reclaimed the 80,000-won mark, the price of the leveraged exchange-traded fund (ETF) that uses only Samsung Electronics stock as its underlying asset has more than doubled in about four months since it began transaction.
According to the Hong Kong Exchanges and Clearing (HKEX) on the 18th, "CSOP Samsung Electronics Daily 2X Leverage" was transacted at 16.21 Hong Kong dollars (about 2,890 won) at 1:20 p.m. local time that day. The share price rose 5.74% (0.88 Hong Kong dollar) from the previous day. Starting at its listing price of 7.8 Hong Kong dollars on 5/28, the share price has gained 107.8% through the day.
During the same period, Samsung Electronics' share price also jumped about 50% from 54,300 won to 80,500 won. Not only high-bandwidth memory (HBM) but also general DRAM and NAND flash are tightening in supply, pushing up prices and reinforcing expectations for improved profitability. Coupled with foreign investors' continued "buy" on currency gains, the rally has continued.
CSOP Asset Management, regarded as Asia's largest ETF issuer, launched the CSOP Samsung Electronics Daily 2X Leverage and CSOP Samsung Electronics Daily -2X Inverse, which track twice the daily rise and fall, respectively, of Samsung Electronics common stock. These were the world's first leveraged and inverse ETFs to track only Samsung Electronics' share price.
According to the Korea Securities Depository (KSD), domestic investors made net purchase settlements totaling $3.58 million (about 5 billion won) through the previous day since the launch of the CSOP Samsung Electronics Daily 2X Leverage. Given the steadily upward-sloping curve, most investors appear to be in the profit zone.
However, as a leveraged product, high volatility must be kept in mind. The minimum transaction unit is also 100 shares, and the annual management fee is relatively high at 1.6% of the ETF's net asset value (NAV).