SK hynix [WSJ]
SK hynix [WSJ]

Two US-listed leveraged ETFs tracking SK hynix will be liquidated just over three months after their launch.

US ETF manager Tradr ETFs will wind down the Tradr 2X Long SK hynix Daily (ticker: SKHA) and the Tradr 2X Short SK hynix Daily (SKHN) around Nov. 12, Bloomberg reported Monday.

The two products track twice the daily return of SK hynix's American depositary receipts (ADR) — one in the long direction and one in the short. They listed on July 28.

Trading and share creation and redemption will remain available through Nov. 5. After winding down operations, the company plans to liquidate remaining assets and distribute the proceeds to investors.

Bloomberg attributed the liquidation to a cooling of AI-related investment enthusiasm. The combined net assets of the two products stood at just about $1.26 million as of Friday (local time) — $480,489 for the long fund and $777,823 for the short — a decline of more than 60 percent from their peak.

Returns since listing have also been poor. The long ETF has fallen more than 5 percent since trading began, while the short ETF has dropped 42 percent. Over the same period, SK hynix's ADR rose about 5 percent.

SK hynix listed its ADR on the US NASDAQ market on July 10. US asset managers including ProShares, Leverage Shares and Direxion subsequently launched a series of leveraged products tied to SK hynix's share price.

According to Investing.com, SK hynix's ADR closed at $137.02 on Friday — down 31.02 percent from its all-time high of $198.63, recorded Sept. 9.

SK hynix is set to report its third-quarter earnings on Wednesday. According to financial data provider FnGuide, the consensus operating profit estimate stands at 76.96 trillion won ($58.1 billion). Market attention is focused on whether the company will announce additional shareholder return policies following the withdrawal of its Solidigm listing plan.


moon@heraldcorp.com