Direxion’s KORU delivers triple-leveraged daily returns on South Korean equities but lags long-term due to compounding volatility effects.
Direxion Daily MSCI South Korea Bull 3X Shares (KORU) has climbed 274% year-to-date and 1,500% over the past 12 months, driven by daily resets and swap contracts amplifying the MSCI Korea 25/50 Index’s moves. The fund’s structure targets short-term traders seeking leveraged exposure to Korean equities.
Despite its recent gains, KORU’s five-year total return stands at just 99%, underperforming buy-and-hold alternatives like iShares MSCI South Korea ETF (EWY) due to volatility decay. Daily rebalancing erodes returns during choppy markets, even if the underlying index ends flat.
Retail investors have poured $100 million into KORU during market crises, often unaware of the risks. Analysts recommend unleveraged ETFs for long-term exposure, citing lower fees and reduced decay effects.