Leveraged SK Hynix ETF Surpasses US Tech Giants in Inflows

A leveraged fund targeting SK Hynix Inc. has drawn the most inflows among its peers this year, highlighting persistent bets on the South Korean AI chipmaker’s fortunes following a steep selloff. The Hong Kong-listed CSOP SK Hynix Daily 2x Leveraged ETF, which aims to deliver two times the shares’ daily performance, has attracted nearly $1.6 billion in fresh demand in 2026, surpassing products tied to US tech heavyweights such as Tesla Inc. and Microsoft Corp.

The inflows have accelerated since geopolitical events triggered sharp swings in SK Hynix, showing strong appetite among retail investors for leveraged products. This trend also signals enduring optimism about the chipmaker’s pivotal role in the AI supply chain.

The ETF’s popularity has prompted Korean money managers to plan the country’s first leveraged ETFs for Samsung Electronics Co. and SK Hynix, potentially launching as early as May. This follows a regulatory shift in South Korea, which had previously banned single-stock leveraged ETFs due to their higher risks.

Why Did This Happen?

Investor enthusiasm for SK Hynix is driven by its valuation edge, with a lower PE multiple making it appear cheaper than its US memory peers. Gary Tan, a fund manager at Allspring Global Investments, noted that this relative positioning has fueled strong inflows into leveraged ETFs, even amid geopolitical tensions.

SK Hynix produces advanced high-bandwidth memory chips used in AI processors and is currently trading at 4.4 times forward earnings. This compares to 18 times for the Philadelphia Stock Exchange Semiconductor Index.

What Are Analysts Watching Next?

The crowded trade in chipmaker stocks has experienced significant volatility in recent months. Initially affected by concerns over excessive spending and stretched valuations, the sector faced a further downturn due to the Middle East conflict, which raised concerns about surging energy costs and higher interest rates.

The development of Google’s TurboQuant technique also added pressure to the sector, as it may reduce demand for certain types of storage. Analysts are now closely monitoring how these dynamics affect SK Hynix’s performance and investor sentiment.

What Does This Mean for the Market?

The ETF’s assets have swollen to $2.5 billion since its October launch. In a sign of its growing popularity, Korean money managers are reportedly on track to launch the country’s first leveraged ETFs tied to Samsung Electronics Co. and SK Hynix as early as May. This marks a shift in regulatory policy after earlier bans on single-stock leveraged ETFs.

The Hong Kong stock exchange offers additional hours of trading compared to the Korea Exchange, which could lead to arbitrage opportunities. Differences in currency exposure and hedging are also factors that could drive demand.

The CSOP leveraged ETF has become one of the most sought-after products in March, with many domestic investors flocking to offshore offerings after being restricted from local options.

SK Hynix’s planned U.S. listing is also expected to increase its global investor exposure and potentially raise its valuation to match global peers like Micron Technology. This move may help highlight the company’s strong position in the AI memory market.

SK Hynix aims to list about 2% to 3% of its shares in the second half of 2026, with the potential to raise up to $14 billion. The company plans to use the proceeds to fund new chip plants in South Korea and the U.S.

The U.S. listing has raised concerns among some analysts and investors, who worry about potential dilution of existing shareholders. However, the company remains focused on securing funds for long-term growth, including expanding its capacity to meet rising AI-driven demand.

The U.S. listing could help close a long-standing valuation gap with global peers. Despite comparable or stronger production capacity, SK Hynix has historically traded at a discount to U.S.-listed semiconductor firms.

SK Hynix’s U.S. listing is seen as a strategic move to secure funding for capital-intensive projects, including large-scale semiconductor infrastructure and advanced manufacturing expansion. This aligns with broader efforts to meet increasing AI-related memory requirements.

The company plans to invest around $400 billion by 2050 to build a semiconductor cluster in South Korea and is constructing new facilities in South Korea and Indiana, with planned investments of about $25 billion and $3.3 billion, respectively.

This move could also lead other Korean chipmakers to follow suit, potentially reshaping the global semiconductor market and its investment landscape.