30.2%, -26.73%! "Han-Korea" semiconductor leveraged ETFs collectively plummeted
On July 28, the share prices of South Korean storage giants Samsung Electronics and SK Hynix both plummeted, triggering a collective plunge in related leveraged ETFs. Among them, South China's two-time long Hynix and South China's two-time long Samsung Electronics, which are listed on Hong Kong stocks, fell 30.2% and 26.73% respectively. In addition, many locally listed leveraged ETFs in South Korea also fell close to 30%. According to statistics, in this round of drastic adjustments since July, the scale of some leveraged ETFs has been "halved" or even shrunk by nearly 70%.
On July 28, the share prices of South Korean storage giants Samsung Electronics and SK Hynix both plummeted, triggering a collective plunge in related leveraged ETFs. Among them, South China's two-time long Hynix and South China's two-time long Samsung Electronics, which are listed on Hong Kong stocks, fell 30.2% and 26.73% respectively. In addition, many locally listed leveraged ETFs in South Korea also fell close to 30%. According to statistics, in this round of drastic adjustments since July, the scale of some leveraged ETFs has been "halved" or even shrunk by nearly 70%. Semiconductor leveraged ETFs collectively plummeted On July 28, Nanfang's two-time long Hynix and Nanfang's two-time long Samsung Electronics fell 30.2% and 26.73% respectively. According to statistics, the two ETFs have fallen by 74.48% and 63.51% respectively since July. A number of related leveraged ETFs listed in South Korea also fell sharply today. Among them, Samsung KODEX SK Hynix Single Stock Leveraged ETF fell 28.43%; Samsung KODEX Samsung Electronics Single Stock Leveraged ETF fell 26.63%; KIM ACE SK Hynix Single Stock Leveraged ETF fell 28.44%. Since July, as the semiconductor sector has fluctuated violently, the scale of related leveraged ETFs has also shrunk significantly. Data shows that as of July 27, Nanfang’s twice-long Hynix assets were US$5.752 billion, which has shrunk by 56% compared with US$13.07 billion at the end of June. As of July 27, the South's twice-long Samsung Electronics assets were US$1.23 billion, a nearly 70% decline from US$3.738 billion at the end of June. In the U.S. stock market, the scale of semiconductor leveraged ETFs has also decreased significantly. As of July 24, the assets of the three times long semiconductor ETF were US$19.835 billion, a decrease of 37.22% from US$31.596 billion at the end of June. In addition, as of July 24, the assets of the twice-long Micron Technology ETF were US$4.829 billion, a 43.55% decrease from US$8.554 billion at the end of June. ‘Big Short’ adds short position in Micron Technology Michael Barry, a well-known hedge fund manager and the prototype of the movie "The Big Short" who has frequently warned of excessive hype in the artificial intelligence sector, has recently further increased his short selling of some targets. In early July, Barry posted a post on the social platform Substack, announcing the establishment of a short position in Micron Technology at a price of $1,051.87 per share. On July 25, Barry once again posted that he had further expanded his short positions on Micron Technology, NVIDIA and the Philadelphia Semiconductor Index Exchange Traded Fund (SOXX). Specifically, Barry added a short position in Micron Technology at a price of $933.86 per share, increased his short position in Nvidia at a price of $210.28, and added a short position in SOXX at a price of $535.83. He emphasized that his SOXX short position and put option holdings have accounted for a large proportion of his investment portfolio. Many active fund managers have also reduced their positions in the semiconductor sector during this round of market adjustment. Among them, Alexis Bosal, global equity portfolio manager at Edmund Rothschild Asset Management, said he has reduced his holdings of semiconductor stocks because their valuations have become too expensive relative to expectations. DWS, a large European asset management company, took profits from some positions after the surge in semiconductor stocks and downgraded the industry rating to "neutral", becoming cautious about the short-term outlook. Alberto Conca, chief investment officer of LFG+ZEST, an independent asset management company headquartered in Lugano, Switzerland, also significantly reduced his positions in memory chip and equipment manufacturers while buying put options on some semiconductor stocks. However, BlackRock, the world's largest asset management company, recently stated that the recent decline in technology stocks has been an "overreaction." As more companies integrate AI into their products and workflows, demand for data centers, network equipment, memory chips and power infrastructure will continue to rise. Not only BlackRock, but after the recent sharp sell-off of AI and chip stocks, Morgan Stanley, Bank of America, UBS and other institutions have stated that the current correction is more about the digestion of valuations after crowded transactions, rather than a reversal of industry trends.
Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, a well-known U.S. investment bank, emphasized that the correction of semiconductor stocks, which once "took the lead," should be regarded as a healthy adjustment after unprecedented gains of 100%, 200%, or even 300% in a few months. "However, opportunities are emerging in overlooked corners of the technology sector. There may well be an opportunity among undervalued, underappreciated and depressed semiconductor technology companies that are not exclusively in the chip business but have the potential to report strong results," Evercore ISI said.
Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, a well-known U.S. investment bank, emphasized that the correction of semiconductor stocks, which once "took the lead," should be regarded as a healthy adjustment after unprecedented gains of 100%, 200%, or even 300% in a few months. "However, opportunities are emerging in overlooked corners of the technology sector. There may well be an opportunity among undervalued, underappreciated and depressed semiconductor technology companies that are not exclusively in the chip business but have the potential to report strong results," Evercore ISI said.