"Don't Buy Leverage ETFs": ETF Pioneer Issues Public Warning

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based customized news recommendation and summarization service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. Warning from the "Father of ETFs": Korea Investment Management CEO Bae Jae-kyu Says "Single-Stock Leverage Investment Must Stop"

- Key Summary: Bae Jae-kyu, CEO of Korea Investment Management, publicly stated that investors should refrain from investing in single-stock leverage and inverse exchange-traded funds (ETFs). In a post on Facebook, he emphasized that investors should not invest in individual-stock leverage and inverse 2x ETFs. According to the analysis he disclosed, while SK hynix (000660) shares fell 17.9%, single-stock leverage products plunged 47.5%, far exceeding the theoretical loss rate of 35.8%. Inverse 2x products also showed a gap of 66.9 percentage points from their theoretical returns, revealing the limitations of a structure that rebalances daily.

2. Tech Stocks Shaken by AI Overheating Concerns: Can Big Tech Earnings Calm the Unease?

- Key Summary: With major U.S. technology stocks plunging, attention is focused on whether this week's Big Tech earnings can quell concerns about excessive artificial intelligence (AI) investment. The Philadelphia Semiconductor Index (SOX) fell 10% last week, marking its largest weekly decline since April 2025. In addition, according to the Nihon Keizai Shimbun, the "shadow debt" not reflected in the financial statements of the five major hyperscalers—Alphabet, Microsoft, Amazon, Meta, and Oracle—reached $1.65 trillion, an eightfold increase in four years. As a result, the Big Tech earnings announcements beginning with Alphabet and Tesla on the 22nd are expected to serve as a watershed for gauging whether tech stocks will rebound.

3. DB Shrinks as Pension Investors Feel FOMO: DC and IRP Grow 62 Trillion Won in Six Months

- Key Summary: In Korea's retirement pension market, defined contribution (DC) plans and individual retirement pensions (IRP) have surged, while defined benefit (DB) plans turned to decline for the first time on a half-year basis. According to the Financial Supervisory Service, total accumulated retirement pension assets in Korea reached 553.9 trillion won in the first half of this year, up 57.1 trillion won from the end of last year. DB plan reserves fell 4.7 trillion won, while DC plans and IRP combined increased 61.7 trillion won, lowering the DB plan's share of total reserves from 46.1% to 40.5%. Analysts say that as those born in the 1970s and 1980s enter the 40s and 50s age group, a culture of directly managing one's own retirement assets has taken hold.

4. Miri Capital, Which Acquired STIC, Buys Up KOSDAQ Stocks Across the Board

- Key Summary: U.S.-based asset manager Miri Capital is buying up domestic KOSDAQ stocks across the board. According to the Financial Supervisory Service's electronic disclosure system, Miri raised its stake in KINX to 17.00% this month and successively disclosed stake changes in five KOSDAQ-listed companies, including Korea Alcohol Industrial (017890), Geoyoung Soft (051160), Hyundai Easywel (090850), and Infinitt Healthcare (071200). Miri had also earlier secured management control of STIC Investments, a first-generation Korean private equity fund manager, and continues its long-term accumulation based on a $1.2 billion "Emerging Market Fund." This fund is understood to have recorded annualized returns in the low-to-mid 20% range over the past seven years.

5. Authorities Ultimately Intervene in Chairman Terms: Financial Holding CEOs Barred from Third Term

- Key Summary: The Financial Services Commission will announce a governance improvement plan next week that restricts financial holding company chief executive officers (CEOs) from serving a third consecutive term. FSC Chairman Lee Eok-won is considering including the third-term restriction in the Act on Corporate Governance of Financial Companies and elevating CEO reappointment to a matter requiring special resolution at shareholders' meetings. The plan is also reported to include strengthening board independence and introducing a clawback system for recovering performance-based compensation as well as a say-on-pay system. However, counterarguments have emerged that the board and shareholders should decide terms based on performance, continuing controversy over government intervention.

6. TSMC: "We'll Build 12 Plants Even If U.S. Fab Construction Costs 5 Times More—Won't Cede to Rivals"

- Key Summary: TSMC, the world's largest foundry company, has finalized its Arizona investment at a total of $265 billion and will build 12 semiconductor plants and research facilities. Wendell Huang, TSMC's chief financial officer (CFO), emphasized that the company is witnessing structurally strong long-term demand and will not cede the market to any competitor. In addition, North America accounted for 78% of TSMC's revenue in the second quarter of this year, cited as the backdrop for expanding investment despite U.S. construction costs being 4 to 5 times higher than in Taiwan. TSMC is also accelerating its transition to cutting-edge processes, stating that its 2-nanometer process will establish itself as a new growth driver starting in the third quarter.