input
correction
Why is it dangerous to enter blindly?
No, there is a triple leverage product in Korea too? Did you click on the video while doing it? yes there is
However, it is not the US-listed triple leverage product like TQQQ or SOXL that you think.
It is an Exchange Traded Securities (ETN), not an Exchange Traded Fund (ETF).
Today, what is the Korean version of 3x leverage, why did it come out, what and why is it different from ETF,
Unlike other stocks or ETFs, we will take a closer look at what we need to be careful regarding when investing.
It was in December of last year that a 3x leveraged product came out in Korea. If you look at 3X in the stock window like this, Meritz manages 3 years, 5 years, 10 years, and 30 years of Korean government bonds, respectively, in the forward triple and reverse direction, that is, to generate profits when the bond price drops, and manages a total of eight bonds, two for each maturity. You can see what you’re doing.
I’ll take a look at each one step by step. Once this product. It’s different from the ETFs we originally knew. It has ETN at the end. ETF and ETN are similar, but ETN is the younger brother of ETF in terms of market size and release date. The biggest difference between ETFs and ETNs is who manages them. ETFs are managed by asset managers. The same asset management company that fund managers roll money with. ETNs are operated by securities companies. So, the reason why Meritz is written in the product name shown earlier means that it is ETN operated by Meritz Securities, not Meritz Asset Management.
Isn’t it the same no matter where you operate it? you can do it yes it is similar But crucially, this is different. If I invest in an ETF, the manager directly buys the stock, stores it somewhere, and returns profits as much as the stock price moves. that’s saying So, even if the manager goes bankrupt, you can receive the stocks that have been kept. However, with ETN, the securities company just contracts to return profits as much as the stock price moves. I don’t know if I bought the stock or not. There is only a contract. Usually, from an investor’s point of view, it is important to make profits as much as stocks, because it does not matter whether there are actual stocks or not. However, if the securities company goes bankrupt, the contract becomes a piece of paper. That’s it. And delisting is easier. First of all, each ETN has a fixed maturity. Upon expiration, the stock will be delisted. Also, if it drops more than 80% in a day or if it falls below 1,000 won per share, it will disappear as a reason for delisting.
Having heard this far, it seems that there is not much different from ETF, and rather, there is a maturity date, and the delisting is well done, and it seems a little more anxious. Why are people doing ETN like that? You can. Wouldn’t the younger siblings instinctively capture the hearts of their parents with a secret weapon different from their older sisters and older brothers and sisters? You know how to survive. The same goes for ETNs. There are many lineups that are not in ETFs. raw materials, for example. aluminum, natural gas, iron ore, etc. In addition, products using complex options and the 3x leverage products mentioned today can only be found in ETN.
It hasn’t been long since a triple leveraged product came out in ETN. Last year, the Korea Exchange said that it would revive the ETN market, but only for ETN, because the volatility might become too high, it allowed to issue triple leverage products only for bonds, not for stocks and other assets. The first products that came out following that are government bond leveraged products. In fact, older brothers and sisters who like capsaicin beyond the spicy taste are very interested in it.
Leverage products are only for the short term! Fees are expensive too! No long-term investment! I’ve talked regarding this too many times, and I’m tired of it, so I’ll move on. However, I would like you to pay attention to this point. These days, there are many products related to long-maturity government bonds and even leveraged government bonds, and there are many explanations regarding them. However, I would like you to pay attention to this point. You may think that it is safe because it is a government bond, but bond-type products can fluctuate as much as stocks as the maturity is long and leverage is applied. The stable advantages we usually expect when investing in bonds. For example, it is expected that even if the price drops in the middle, you can survive while receiving interest, or if you hold it until maturity, the principal will be guaranteed. is difficult to expect. I can predict the direction of market interest rates, and I want to make a lot more profit than my investment, and I can tolerate losses. I think it will be a useful product for those who think it is. Another important point is that you can invest in leveraged ETFs or ETNs only following receiving related education, and there is one more threshold.
In summary, Korea also has products with three times the spicy taste. However, only bond type is available and it is operated only as a product called ETN. If the 30-year bond ETF covered in the last video is Buldak Romyeon, the product with 30-year maturity and 3x leverage is Nuclear Buldak Ramen. A friend next to me said he had good fried chicken noodle, so I ate it too, and the next day I went to the bathroom… (omitted below)
*You can check out more details in the video.
