Hong Kong’s exchange-traded fund market assets hit a record HK$735 billion (US$94.23 billion) at the end of June as investors piled into
leveraged and inverse exchange-traded products tied to two Korean semiconductor companies, according to figures compiled by Morningstar Inc.
Hunter Beaudoin, analyst for manager research at the firm, describes it as a “tale of two products”, with nearly all of the inflow momentum coming from non-traditional ETFs.
“Hong Kong ETF flows in the second quarter were a tale of two products, as 86% of net inflows were concentrated in just two leveraged and inverse ETPs tied to Samsung Electronics and SK Hynix,” he says in a report on July 14, adding that the demand was fuelled by triple-digit returns earned by the two semiconductor giants.
“However, their subsequent [stock price] crash amidst an artificial intelligence chip selloff in early July serves as a stark reminder of the amplified downside risk that comes with the use of leverage,” he says.
Overall inflows into the 220-plus ETFs and ETPs in Hong Kong were HK$28.6 billion, less than half the HK$60 billion-plus in the first quarter.
Hong Kong equity ETFs saw a net outflow of HK$8.7 billion in the second quarter, reversing from a HK$24.6 billion inflow in the first three months of the year as investors pulled out of technology-focused ETFs.
CSOP Asset Management, a unit of Shenzhen-based China Southern Asset Management, maintained its leading position with its share of the ETF market nearly doubling to 42.3% from 23.7% in the second quarter of 2025, driven by inflows into its single-stock leveraged, and covered call ETFs.
