KODEX Leverage (122630) 🔎 In-depth

The benchmark index is KOSPI 200, Korea's headline index. It does not simply follow the index, however; it tracks the index's 'daily return' at 2x. The crucial point is that this is on a 'daily' basis. The 2x ratio applies to each day's move; it does not mean that a return accumulated over several days or months will be 2x that of the index.

The most important feature is the 'daily reset' and the compounding effect it produces. Because the 2x exposure is re-set each day, over several days the cumulative return will differ from 'the index's cumulative return x 2.' In particular, if the index moves up and down in a sideways range, a 'volatility loss' can occur in which value is gradually ground away in the process of re-setting 2x each day. For example, even if the index rises 10% one day and then falls 10% the next to return to its original level, a 2x product experiences +20% on the first day and -20% on the second, ending below where it started (1 -> 1.2 -> 0.96). Because it is based on a Korean index, there is no FX effect.

It can legitimately serve short-term purposes, such as making large use of a short-term directional move or briefly offsetting (hedging) the downside risk of assets you hold. On the other hand, because of the daily reset and volatility loss described above, the longer it is held the more likely it is to drift away from the intended '2x' outcome, so it is generally unsuitable for long-term holding. It rises much faster than an ordinary ETF in an uptrend, but its declines are also twice as large in a downturn, so it must be handled with a clear understanding that it is a high-risk product.

When the benchmark KOSPI 200 moves sharply, this ETF swings twice as much. On the reference date (2026-07-13), the close was -19.1% on the day, showing plainly how sharply a 2x product reacts on a day when KOSPI 200 falls significantly. Rather than trying to predict direction, it is important to be mindful of the very fact that this is a product in which the index's daily move is amplified twofold.

In a word, it is a product that tracks the 'daily' move of KOSPI 200 magnified twofold. It is a tool for taking a short-term directional view; if held for a long time in a sideways market, value can gradually leak away through volatility loss, so it is not suited to long-term holding.