Retail investors in a CSOP leveraged product saw significant losses after the fund kept maximum exposure despite a new flexible leverage structure.
Key facts
- •Investor Carol Kim experienced a 77.2 per cent loss on her holding in the CSOP SK Hynix leveraged product.
- •The fund adopted a flexible leverage ratio between 1.1 and two times on August 3.
- •CSOP maintained maximum double-exposure for three weeks after the policy change.
- •The fund's share price dropped 26.9 per cent in the first week under the new structure.
- •Weekly turnover for the product fell to HK$40.15 billion, a 44.6 per cent week-on-week decline.
South Korean retail investor Carol Kim reported a 77.2 per cent loss on her investment in the CSOP SK Hynix Daily Max (2x) Leveraged Product. The fund, managed by Hong Kong-based CSOP Asset Management, maintained its maximum double-exposure limit every trading day for three weeks following a structural change implemented on August 3.
By the numbers
Flexible leverage structure changes
On August 3, the fund transitioned from a fixed leverage model to a flexible ratio ranging from 1.1 times to two times. This adjustment was intended to serve as a structural buffer, allowing managers to reduce exposure during market sell-offs to mitigate volatility. However, daily disclosures indicated that the fund continued to operate at its maximum leverage limit throughout the following three weeks.
Market performance and investor impact
The product had previously gained popularity as the underlying SK Hynix stock rose 349.23 per cent between the start of 2026 and its peak on June 22. Following the structural change, the fund's share price fell from HK$42.52 to HK$31.06 in the first week, resulting in a 26.9 per cent decline. During that same period, weekly turnover dropped 44.6 per cent to HK$40.15 billion.
Timeline
- Start of 2026The underlying SK Hynix stock began a period of growth.
- June 22The underlying SK Hynix stock reached its peak price.
- August 3CSOP Asset Management implemented a flexible leverage structure for the fund.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by SCMP Business.
