South Korea Leveraged ETF Deleveraging Nears End as Fund Scale Drops to $17B

JPMorgan indicates 90% of leveraged ETF unwinding in South Korea is complete, with fund assets falling to $17B. Despite attractive valuations, rate hike risks and tech earnings uncertainty maintain investor caution.

Woofun AI reports that JPMorgan Chase stated the intense deleveraging cycle in the South Korean market since mid-June is largely concluded, with hedge funds completing approximately 90% of their operations. Strategists noted that the asset scale of these leveraged ETFs has declined to $17 billion, while the previous rapid capital influx has significantly decelerated. Although current market positioning appears attractive due to low valuations and strong earnings growth momentum, the report warns that recent sharp price declines could trigger additional deleveraging.

Furthermore, investor caution persists amid expectations for a Federal Open Market Committee rate hike and high stakes surrounding upcoming mega-cap tech earnings reports.