Hit by dwindling enthusiasm for AI investments and regulatory measures that have curbed investment demand, leveraged exchange-traded funds (ETFs) tied to South Korean chip companies have experienced a capital outflow of nearly $1 billion this month. This marks the first monthly net outflow since these funds were listed at the end of May. Specifically, leveraged products linked to Samsung Electronics saw an outflow of $381 million, while those tracking SK Hynix recorded an outflow of $601 million.

These leveraged ETFs are structured to double the daily price movements of individual chip company stocks, a feature that has been identified as a contributor to heightened market volatility. In response, South Korean regulators have tightened the entry requirements for new investors, mandating them to complete five days of simulated trading before they can invest in these high-risk products.