Bae Jae-gyu warned single-stock leveraged and double-inverse products can rapidly lose value in volatile markets, and said investors should diversify across the semiconductor supply chain instead of concentrating on memory names.
Korea Investment Trust Management chief executive officer Bae Jae-gyu said single-stock leveraged products tied to Samsung Electronics Co. and SK Hynix Inc. should be allowed to fade out naturally rather than be delisted. Writing on social media on July 30, he said such products should not be left to investors alone and argued a gradual wind-down could be supported by asset managers, liquidity providers and limited institutional backing. Bae warned that leveraged and double-inverse products can erode in value quickly during volatile trading because daily rebalancing and compounding amplify losses when prices swing repeatedly. He also said semiconductors remain essential in the artificial intelligence era, but described memory as a cyclical industry and urged investors to diversify across chip design, memory, foundry and equipment rather than focus narrowly on Samsung Electronics and SK Hynix. He pointed to large investment plans from Samsung Electronics, SK Hynix and Micron Technology Inc., alongside the rapid rise of Chinese companies including ChangXin Memory Technologies and Yangtze Memory Technologies, saying further supply expansion is only a matter of time.