KODEX Crude Oil ETF Investors Claim Losses... Will It Escalate to Litigation?

Investor "No Gains from Oil Price Rebound"... Samsung Asset Management "For Investor Protection"

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[Asia Economy Reporter Kum Bo-ryeong] Some investors have claimed to have "suffered losses" after Samsung Asset Management changed the components of the 'KODEX WTI Crude Oil Futures' exchange-traded fund (ETF). These investors are even showing signs of organizing collective action.

According to Samsung Asset Management on the 28th, on the night of the 22nd, the proportion of June delivery West Texas Intermediate (WTI) crude oil futures held by KODEX WTI Crude Oil Futures was reduced from 79.2% to 32.9%. Instead, futures for delivery from July to September were allocated.

Samsung Asset Management explained on its website on the 23rd, "If the price of the crude oil futures currently held enters negative territory, investors may lose their entire principal, and the ETF cannot be operated normally. For this reason, the ETF changed its management method to include crude oil futures of different contract months than the underlying index components (currently June contracts) to prevent losses exceeding the original investment." From Samsung Asset Management's perspective, this policy was intended to protect investors as the sharp drop in June contracts increased the possibility of total loss.

The problem began when the June contracts rebounded. On the 23rd, June contracts rose by 19.7% (USD 2.72 per barrel) to USD 16.50, but the KODEX WTI Crude Oil Futures ETF only increased by about 4%. Samsung Asset Management explained, "Due to the lower limit (-30%) restriction, the ETF fell less than the oil price and the difference was reflected the next day." However, investors argue that rollover was conducted outside the rollover period stated in the prospectus, and thus the promise was not properly fulfilled.

Investors also posted on the Blue House petition board. In their post, they emphasized, "Investors who waited for a rebound after a sharp drop were unable to gain the profits they would have earned if the original components had been maintained," and "We petition for measures such as compensation for damages to restore the profits that should have been obtained." Some investors on online communities are even mentioning 'lawsuits.'

In response, Samsung Asset Management stated, "For a lawsuit to be possible, there must be a violation in the prospectus, but there is no such fact."

This content was produced with the assistance of AI translation services.