CSOP SK Hynix Leveraged Fund Defies New Flexible Structure, Stays at Maximum Exposure
SCMP · 1 SOURCESabout 1 hour ago2 MIN
Summary
CSOP Asset Management's SK Hynix Daily Max (2x) Leveraged Product continued holding maximum two-times exposure every trading day for three weeks after shifting to a flexible leverage model on August 3, a decision that deepened losses for retail investors despite the structural change being promoted as a volatility cushion. The fund, which had attracted heavy trading earlier this year as SK Hynix shares surged 349.23 percent from the start of 2026 to their June 22 peak, saw its assets under management plunge 71.5 percent from HK$132.07 billion to HK$37.65 billion, while its share price fell from HK$42.52 to HK$31.06 in the first week alone.
Key Points
- CSOP Asset Management introduced a flexible leverage ratio ranging from 1.1 times to two times on August 3, replacing its fixed two-times exposure model
- The fund disclosed maintaining maximum double-exposure limits every trading day for three consecutive weeks following the structural adjustment
- SK Hynix shares had climbed 349.23 percent from early 2026 to their June 22 peak, driving the leveraged product's popularity among traders
- In the first week under the new structure, the product's share price dropped 26.9 percent from HK$42.52 to HK$31.06, with weekly turnover falling 44.6 percent to HK$40.15 billion
- South Korean investor Carol Kim, 32, recorded a 75.2 percent drawdown on her Hong Kong position versus a 70.1 percent loss on her domestic equivalent
- Total losses including foreign exchange depreciation reached 77.2 percent for Kim, who said she missed the window to exit
Why It Matters
The episode exposes a gap between how flexible leverage structures are marketed to retail investors and how they perform in practice, raising questions about product transparency and investor protection in Hong Kong's leveraged exchange-traded product market . As the product rebuilds from its trough, market watchers will closely monitor whether CSOP adjusts its exposure strategy during volatility episodes or continues prioritizing full leverage for returns .
The episode exposes a gap between how flexible leverage structures are marketed to retail investors and how they perform in practice, raising questions about product transparency and investor protection in Hong Kong's leveraged exchange-traded product market . As the product rebuilds from its trough, market watchers will closely monitor whether CSOP adjusts its exposure strategy during volatility episodes or continues prioritizing full leverage for returns .