South Korean investors leverage Hong Kong to cash in on AI and chips boom
Some South Korean retail investors are turning to Hong Kong’s leveraged semiconductor ETFs for higher AI-driven returns
Analysts have credited FOMO (the fear of missing out) for the turn among some South Korean retail investors to Hong Kong-based platforms to leverage their investments and cash in on the boom in semiconductors and AI.
Observers said the diversion to Hong Kong could be attributed to leveraged products issued by some of the city’s financial institutions, its currency advantages, easier access and regulatory arbitrage. However, the number of South Korean investors using Hong Kong-based platforms remains relatively small.
Two chip exchange-traded funds (ETFs) managed by Hong Kong-based CSOP Asset Management Limited, which track blue-chip semiconductor stocks Samsung Electronics and SK Hynix, have attracted substantial retail demand in South Korea as investors look to increase their leverage in an upcycle market amid the global AI surge.
When the 2X products – which deliver double the daily performance of an underlying index or stock – were launched in May and October last year, South Koreans were still unable to access such leveraged products at home.