A Fund Held by Koreans Worth 358 Billion Won... Dropped Up to 80% from Its Peak

'ETF Tracking "Tesla Stock x3" Plunges 80%
"Tesla Is the Most Favored Stock Among Korean Investors"'

Recently, the stock price of the U.S. electric vehicle company Tesla has plummeted, causing severe losses for Korean investors. This is largely due to many investing in exchange-traded funds (ETFs) linked to multiples of the stock price.

The U.S. financial media outlet Bloomberg reported on the 28th that leveraged ETFs linked to 2 to 3 times the Tesla stock price have fallen by as much as 80% compared to their peak in December last year.

Tesla. EPA Yonhap News

Tesla's stock price dropped 41% from its peak on December 17 last year to the closing price on the 26th of this month. As a result, the decline rate of the Tesla 3x leveraged ETF listed in London exceeded 80%. It is estimated that the largest holders of this ETF are Korean investors. Bloomberg analyzed data from Mirae Asset Securities, NH Investment & Securities, Samsung Securities, and reported that as of the 21st of this month, Korean investors held about 358 billion KRW worth of the leveraged ETF. The media estimated that Koreans effectively hold 90% of the total assets of the fund.

The ETF listed on the New York Stock Exchange that tracks twice the Tesla stock price also plunged 70% from its peak in December last year. Korean investors hold $1.5 billion (approximately 2.2 trillion KRW) worth of this fund, accounting for 43% of the total fund assets.

ETFs that track stock prices by multiples gained global popularity during the bullish market following the U.S. presidential election last year. However, as economic uncertainty increased due to U.S. President Donald Trump's tough tariff policies and other factors, technology stocks on the New York Stock Exchange have been showing weakness day after day. Consequently, leveraged products have plunged sharply.

In this regard, Kim Bora, Head of Asia-Pacific Strategy at Leveraged Shares, told the media, "Tesla has long been the most favored stock among Korean investors," adding, "This enthusiasm naturally expanded to leveraged products such as TSL3. The high volatility of these products was attractive to investors."