Retail investors who piled into single-stock leveraged exchange-traded products (ETPs, including ETNs) have absorbed more than 6.3 trillion won (approximately $4.8 billion) in losses just two and a half months after the products launched. Investors in their 40s accounted for the largest total losses, but the average loss per account was strikingly higher among older age groups.
According to data South Korea’s Financial Supervisory Service submitted to Park Sung-hoon, a lawmaker of the People Power Party on the National Assembly Political Affairs Committee, retail investors’ cumulative losses from the May 27 launch of single-stock leveraged ETPs through Aug. 14 totaled 6.313 trillion won (approximately $4.8 billion). The figure was compiled from trading data at 10 comprehensive financial investment firms: Korea Investment & Securities, Mirae Asset Securities, NH Investment & Securities, Meritz Securities, Samsung Securities, KB Securities, Hana Securities, Kiwoom Securities, Shinhan Investment & Securities and Daishin Securities.
The FSS calculated total profit and loss for every account that bought or sold the products at least once during the period, combining realized gains and losses from trades with the valuation gains and losses on holdings as of the Aug. 14 closing price. Of the total losses, 2.3242 trillion won (approximately $1.8 billion) had been locked in through actual sales, while 3.9888 trillion won (approximately $3.0 billion) were unrealized losses on positions not yet sold. That means about 63% of the losses remain unrealized.
Broken down by age group, investors in their 40s posted the largest losses at 2.053 trillion won (approximately $1.5 billion), across 165,200 accounts. Those in their 50s followed with 1.8655 trillion won (approximately $1.4 billion) across 158,000 accounts, and those in their 30s with 1.0912 trillion won (approximately $823.6 million) across 117,300 accounts. The 40s and 50s alone accounted for 3.9185 trillion won (approximately $3.0 billion), or 62.1% of total losses.
The average loss per account, by contrast, shows a clear reversal: it rises steadily with age. Investors aged 70 and older recorded 293.4 billion won (approximately $221.4 million) in losses across 9,800 accounts, an average of about 29.94 million won (approximately $23,000) per account — 2.6 times the overall average of about 11.56 million won (approximately $8,700) across all 546,000 accounts. Those in their 60s also saw 805.9 billion won (approximately $608.2 million) evaporate across 61,000 accounts, an average of about 13.21 million won (approximately $10,000) per account.
Age groupAccountsTotal lossesAverage loss per account40s165,2002.053 trillion won (approximately $1.5 billion)~12.42 million won (approximately $9,400)50s158,0001.8655 trillion won (approximately $1.4 billion)~11.81 million won (approximately $8,900)30s117,3001.0912 trillion won (approximately $823.6 million)~9.3 million won (approximately $7,000)60s61,000805.9 billion won (approximately $608.2 million)~13.21 million won (approximately $10,000)70 and older9,800293.4 billion won (approximately $221.4 million)~29.94 million won (approximately $23,000)Total546,0006.313 trillion won (approximately $4.8 billion)~11.56 million won (approximately $8,700)
Note: Based on trading data for May 27–Aug. 14 that the Financial Supervisory Service submitted to the National Assembly. Average per account is total losses divided by the number of accounts.
Another notable point is that moves to lock in losses became pronounced in August. Trading losses, which stood at 1.9638 trillion won (approximately $1.5 billion) at the end of July, rose to 2.3242 trillion won (approximately $1.8 billion) by Aug. 14 — an increase of 360.4 billion won (approximately $272.0 million) in just over two weeks. Unrealized valuation losses, by contrast, shrank from 4.0395 trillion won (approximately $3.0 billion) to 3.9888 trillion won (approximately $3.0 billion) over the same period, a decline of 50.7 billion won (approximately $38.3 million). As a result, total losses grew from 6.0033 trillion won (approximately $4.5 billion) to 6.313 trillion won (approximately $4.8 billion), an increase of 309.7 billion won (approximately $233.7 million).
In other words, valuation losses on holdings edged down, but losses locked in through actual sales grew by a larger margin. This suggests investors may have resorted to so-called “stop-loss” selling, cutting their losses by offloading the products, or that brokerages forcibly liquidated collateral in margin and unpaid-balance trades — known as forced selling. However, the decline in valuation losses may have been partly driven by stock price movements, and new trades may have generated additional losses, so the submitted data alone cannot determine the reasons for selling or whether forced liquidation occurred.
The tally is significant as one of the first near-complete datasets showing how much damage a high-risk product — single-stock leveraged ETPs — inflicted on retail investors from the very start. Because the products are designed to track roughly twice the daily move of a single underlying stock, losses swell just as quickly when the underlying stock turns lower. Indeed, about two-thirds of the losses are piled up in positions not yet sold, leaving room for further losses to be locked in depending on how stock prices move.
The age distribution suggests that the risk characteristics of the products played out differently across investor groups. Investors in their 40s and 50s drove up total losses through sheer scale of investment and number of accounts, while those aged 70 and older saw per-account losses exceed twice the average even with relatively few accounts. South Korean lawmakers and financial authorities are expected to continue scrutinizing how retirement-age investors gained access to leveraged products, sales practices and whether investor suitability procedures were adequate.