BlockBeats News, July 21st, according to Bloomberg, the volatility of the South Korean KOSPI index this year has exceeded 60%, close to twice that of Japan's Nikkei 225 index, and even higher than Bitcoin. The South Korean exchange has triggered the circuit breaker mechanism 7 times as of mid-July this year, while there was none in 2025, and only 1 time in 2024.

Samsung Electronics and SK Hynix currently together account for over 50% of the KOSPI index weight, making index funds largely a concentrated bet on the AI chip market. At the end of June when the KOSPI hit a historical high, out of the 831 constituent stocks, over 650 were still in decline, showing that the index's performance highly depends on a few large chip stocks.

The scale of leveraged ETFs in South Korea has also rapidly expanded. According to Goldman Sachs data, assets of leveraged ETFs tracking indices and individual stocks in Korea have increased from $5 billion at the beginning of the year to over $40 billion. These related products, together with Samsung Electronics and SK Hynix, accounted for over 70% of the daily trading volume in the South Korean stock market, further amplifying stock price fluctuations. South Korean regulators halted the listing of new single-stock leverage products on July 16th.

This year, South Korean individual investors have poured over 100 trillion Korean won into KOSPI stocks, while foreign investors have net sold approximately $108 billion during the same period, with over $40 billion pulled out from SK Hynix. Goldman Sachs believes that leveraged ETFs are a key risk that the South Korean market needs to pay close attention to.