JP Morgan recently put out a note on the KOSPI, explaining the recent drop and giving a 12-month target. Their base case is 12,500 points, with a bull case of 15,000 and a bear case at 8,000. From the current level around 6,747, that base target implies a gain of about 85%. That kind of move would obviously be significant for a 3x leveraged ETF like KORU.
According to them, the plunge wasn't really about weak corporate fundamentals in South Korea, which they see as solid. Instead, it was amplified by liquidations from leveraged ETFs and hedge funds unwinding positions.
On the deleveraging front, JPM estimates the leveraged ETF liquidation process—targeting around $18 billion—is already about 75% complete. Hedge fund deleveraging is also thought to be more than halfway done.
Their longer-term view remains positive for Korean equities, driven in part by the AI sector, though they acknowledge short-term volatility.
$SK hynix(SKHY)$ DRAM.X $Micron Technology(MU)$ $Direxion Daily Semiconductors Bull 3x Shares(SOXL)$
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