Momentum flags rapid rise in leveraged ETF assets, warns daily rebalancing flows may amplify volatility
SPY•Leveraged ETF assets grow rapidly
Momentum Global Investment Management flagged rapid growth in leveraged ETF assets, shifting the segment from niche to one of the ETF market’s fastest-growing areas.
Rising use reflects demand for amplified exposure to major equity indices, technology stocks, and single names such as Nvidia and Tesla.
South Korea sees systemic effects
South Korea highlighted systemic effects, with leveraged ETFs exceeding 70% of June 2026 equity trading value in a USD 4.3 trillion market.
Regulators responded by suspending new single-stock leveraged ETF listings on July 16, 2026, tightening deposit rules, restricting product marketing.
Daily rebalancing may amplify market moves
Daily rebalancing to maintain leverage can intensify trading flows in underlying securities and derivatives, amplifying market moves during volatility.
