Fearlessly Riding 'Cheonyeongas Inverse·Gopbus ETN', Retail Investors 'Turn Pale'... Nearly 100% Decline This Year

[Asia Economy Reporter Lee Seon-ae] As Europe's natural gas prices soar to unprecedented levels due to Russia's repeated reductions and suspensions of gas supply, U.S. natural gas prices have also risen to their highest levels in 14 years, causing mixed feelings among investors in the domestic stock market's natural gas exchange-traded note (ETN) sector. Leveraged ETNs that track twice the price of natural gas have seen gains exceeding 100% over the past two months. However, individual investors who invested in inverse (-1x) and double inverse (-2x) ETN products are experiencing losses.

According to the Korea Exchange on the 25th, inverse (-1x) and double inverse (-2x) ETNs that track declines in natural gas prices are all recording losses. 'Samsung Inverse 2X Natural Gas Futures C', 'Shinhan Inverse 2X Natural Gas Futures (H)', and 'Daishin Inverse Natural Gas Futures (H)' have recorded declines of 70.53%, 28%, and 41.62%, respectively, from early July to the 23rd.

When using the beginning of this year as the baseline, the decline rate approaches 100%. 'Shinhan Inverse 2X Natural Gas Futures (H)' has fallen by a staggering 95% since the start of the year. 'TRUE Inverse 2X Natural Gas Futures (H)' has also recorded a 96% decline since early this year. The Korea Exchange designated 'Shinhan Inverse 2X Natural Gas Futures (H)', which fell 95% this year and ranked third in decline rate, as a cautionary investment item. This was due to the product's premium/discount rate exceeding twice the management range (6%). After being pre-notified for removal and then designated as a cautionary investment item, general trading is suspended for three trading days due to bid competition. Instead, trading is conducted through a single-price auction where orders are collected and executed at one price at a time.

Previously, the Financial Supervisory Service and the financial investment industry warned investors to exercise caution regarding commodity ETN products. Due to ongoing instability in the commodity market caused by international geopolitical tensions, the risk of investing in commodity-linked products is increasing, necessitating special caution from individual investors. However, those who ignored these warnings have received dismal results. A financial investment industry official stated, "Because no one can predict commodity prices amid the risks stemming from Ukraine, investors should be cautious."

On the other hand, leveraged ETNs are showing strong returns. 'Samsung Leverage Natural Gas Futures B', 'TRUE Leverage Natural Gas Futures (H)', and 'Daishin Natural Gas Futures (H)' recorded gains of 116.59%, 108.78%, and 54.14%, respectively, since early July.

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