ASIA-PACIFIC WEEKLY KICKSTART

Research evidence excerpt

ASIA-PACIFIC WEEKLY KICKSTART

Goldman Sachs Asia-Pacific Weekly Kickstart

Charts of the Week: Korea Leveraged ETFs and Margins

Exhibit 7: Korea leveraged ETF AUM has declined from a peak of US$53bn to Exhibit 8: Investors added US$8bn of exposure during the market correction,

US$26bn, with leveraged exposure now equivalent to 2.1% of market free float while taking profits and selling US$1bn during the recovery earlier this week

US$bn Korea's Leveraged ETFs AUM and Gross Exposure % of FF US$bn Korea-focused Leveraged ETFs AUM Breakdown

60 55

Foreign-domiciled AUM 50 AUM contribution from returns

3.5%

50 Domestic-domiciled AUM 45 LETFs Cumulative Flows

LeveragedLeveraged ExposureExposure asas % 3.0% 40 Leveraged ETFs AUM

40 % of Free Float Cap 35

2.5%

2.0% 25

1.5% 15

10 1.0% 10

0 0.5% 0

Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26

Source: Bloomberg, Goldman Sachs Global Investment Research Source: EPFR, Bloomberg, Refinitiv, Goldman Sachs Global Investment Research

Exhibit 9: With the reduced size, leveraged ETF daily rebalancing flows have Exhibit 10: Potential LETF daily rebalancing flows have roughly halved from

declined to around 10–15% of daily turnover on large-move days over the past their peak, although the impact remains meaningful

week, compared with the 20–30% range since June

KOSPI Korea-focused Leveraged ETFs Flow Impact %Volume Leveraged & Inverse ETFs: Calculated Dealer Gamma-Hedge

10000 40% US$mn Rebal Flows on a 5% Parallel Move in Underlyings % ADVT

Leveraged & Inverse ETF Daily In/Outflows 7,000 40% Daily Rebalancing Flows 45% 6,310 Leveraged Net Exposure (% of Daily Turnover) 30%

9000 Leveraged & Inverse ETF Daily Rebalancing 6,000 Flows As % of 1M ADVT 40%

Flows (% of KOSPI Daily Turnover) 20% 35%