The US semiconductor leveraged ETF has lost $53.4 billion in half a month, and deleveraging is already underway As I mentioned earlier, the daily rebalancing of leveraged ETFs has become an amplifier for short-term fluctuations in the US stock market. The scale of semiconductor leveraged ETFs has significantly decreased now. The total size of US semiconductor leveraged ETFs was only $47.3 billion on March 30th, and surged to $157.4 billion on June 22nd. In less than three months, it increased by $1101 billion, a growth of 233%. By July 8th, the scale had dropped to 104 billion US dollars. Half a month, there was a shortfall of $53.4 billion, with a drawdown of nearly 34%. Please note that the decrease of $53.4 billion in half a month represents a reduction in the total asset management scale of leveraged ETFs, and does not mean that investors have sold a net of $53.4 billion. AUM is influenced by both the net asset value and cash flow of the fund. After the decline in semiconductors, the net value of 2x and 3x products will experience a significant decrease, even if investors do not redeem a penny, the fund size will also decrease noticeably. If combined with investor redemptions and net asset losses in volatile market conditions, AUM will fall even faster. At present, it is impossible to calculate the actual net outflow of funds based solely on this set of data, but the fund size has decreased from $157.4 billion to $104 billion, which means that the leverage exposure that needs to be maintained the next day is also decreasing, and the deleveraging scale behind it may be much higher than $53.4 billion. To put it simply, the semiconductor sector in the US stock market is undergoing a significant deleveraging. Every $1 managed by a leveraged ETF may correspond to $2 or $3 of stock, futures, and swap exposure. There is still a management scale of 104 billion US dollars, and the directional exposure behind it may still reach over 200 billion US dollars. After the decline in semiconductors, the net value of leveraged ETFs decreased, and investors began to redeem them again. The fund also had to continue to reduce its exposure according to the daily reset rule. The combination of active reduction, redemption, and mechanical selling has led to an accelerated decline in funds that were previously on the rise. It is worth noting that this round of deleveraging has not completely ended yet. At present, the management scale of 104 billion US dollars is still 81% higher than the same period last year's 57.5 billion US dollars, and 56% higher than the average scale of 66.5 billion US dollars in the past year. That is to say, although it has dropped by one-third from its peak, the funds in semiconductor leveraged ETFs are still at a high level. As long as the semiconductor continues to decline, the pressure of mechanical reduction will continue to emerge. Even if the semiconductor market no longer drops sharply, as long as the volatility continues to remain high, the losses generated by the daily reset of leveraged ETFs will continue to accumulate. Holders who see a continuous decline in net asset value are likely to continue redeeming, and a decrease in fund size will lead to a new contraction in exposure. So the recent significant fluctuations in semiconductors can no longer be explained solely by financial reports and fundamentals. Professional funds and hedge funds are reducing their holdings, while individual investors are chasing high prices through leveraged ETFs in the early stages. After a trend reversal, institutional selling, retail redemption, and leveraged product rebalancing will occur simultaneously, especially before and after the closing, which can easily turn a normal correction into greater volatility. The risks in the Korean market may be more direct. The US semiconductor leveraged ETF has begun to deleverage, and the weight of the South Korean market is highly concentrated in Samsung Electronics, Hynix, and a few semiconductor companies, with a market depth much smaller than that of the US. The pressure to reduce holdings brought about by the decline in US semiconductor stocks will be transmitted to South Korea through the storage and AI industry chain, and then amplified by South Korea's own leveraged ETFs. @Gate Crypto、 US stocks, Hong Kong stocks, South Korean stocks, gold CFD、 Predicting one-stop trading in the market