Investors face losses in Hong Kong-based SK Hynix leveraged product

AI-summarized · Neutrality-checked

Hong Kong-based CSOP Asset Management faced criticism from retail investors, including Seoul-based Carol Kim, after the CSOP SK Hynix Daily Max (2x) Leveraged Product experienced a 77.2 per cent decline in value. On August 3, the fund transitioned from a fixed leverage model to a flexible ratio between 1.1 and two times intended to mitigate volatility during market downturns. However, the fund maintained its maximum double-exposure limit for three weeks following the adjustment. This contributed to a 26.9 per cent drop in the product's value in the first week, alongside a 44.6 per cent decline in weekly turnover to HK$40.15 billion.

Consequences

Retail investors who expected the flexible structure to act as a buffer against losses instead experienced significant financial devaluation during a period of market volatility. The fund's decision to maintain maximum exposure despite the structural change resulted in performance that reportedly felt more severe to investors than similar products in South Korea.

Sources

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