CSOP Asset Management, a Hong Kong-based asset manager, has revised its investment strategy for its single-stock leveraged exchange-traded funds (ETFs) tracking Samsung Electronics and SK Hynix. This move comes as these products have gained significant popularity among both Korean and Hong Kong investors, experiencing heightened volatility due to recent sharp price swings in the underlying semiconductor stocks. The new strategy involves adding options structures to enhance flexibility.
Specifically, CSOP Asset Management modified investment strategies for three ETFs: CSOP Samsung Electronics Daily 2X, CSOP Samsung Electronics Daily -2X, and CSOP SK Hynix Daily 2X. Effective December 12, 2026, these products can now utilize options premiums up to 25% of their net asset value to secure leveraged exposure. This is in addition to their existing total return swap arrangements, which remain the primary investment tool. The change addresses the growing fund sizes and potential counterparty capacity limits if only swap contracts were used, with options serving as a supplementary mechanism for additional exposure and operational flexibility.
The SK Hynix 2X leveraged product, in particular, has seen substantial investor interest. As of March 10, 2026, its daily trading volume reached HK$3.6 billion, making it the fourth-highest among all Hong Kong ETFs, with assets under management approximately HK$19.8 billion. The Samsung Electronics 2X leveraged product traded HK$1.2 billion on the same day, with assets totaling HK$6.8 billion. Domestic Korean investors also show strong interest, with holdings in Samsung Electronics and SK Hynix 2X ETFs increasing by 198% to $58.34 million and 79% to $75.9 million respectively from the beginning of the year. The CSOP SK Hynix Daily 2x Leveraged ETF also attracted nearly $1.6 billion in fresh demand in 2026, topping global inflows over products tied to US tech giants like Tesla and Microsoft.
While the options strategy offers greater flexibility and liquidity management, it is expected to increase portfolio construction costs. Consequently, the estimated annual average daily tracking difference for these products may increase to -0.15% from previous estimates of -0.06% and -0.07%. CSOP Asset Management, through its Chief Investment Officer Wang Yi, has also addressed concerns regarding the ETF's impact on underlying stock volatility, stating that their analysis found only a limited impact from the fund's daily rebalancing on SK Hynix's stock swings, even during volatile sessions.
