Leverage Shares by Themes is set to launch two single-stock ETFs tied to SK Hynix ahead of what is expected to be one of the most closely watched semiconductor IPOs in years. The Leverage Shares 2x Long SK Hynix Daily ETF (SKHX) and the Leverage Shares 1x Short SK Hynix Daily ETF (SKHZ) will begin trading on July 13, giving investors leveraged bullish and bearish exposure to the South Korean memory-chip giant from its first day as a publicly traded company.

SK Hynix is set to raise up to $29.4 billion through its Nasdaq ADR listing on July 10, potentially making it the largest ADR offering in history, surpassing Alibaba’s $21.8 billion record set in 2014.

The asset manager said the pair of ETFs is designed to capitalize on the heightened volatility typically associated with major IPOs while allowing traders to express directional views without directly trading the underlying stock. Jose C. Gonzalez Navarro, CEO and co-founder of Themes ETFs, said, “SK Hynix doesn’t just participate in the AI revolution, it enables it.” He added that active traders deserve efficient and transparent tools to trade the AI story from day one, noting that the products combine leveraged exposure with competitive pricing.

Key features of the new ETFs:

• Launch date: Both ETFs are scheduled to begin trading on Cboe on July 13.
• Long exposure: SKHX seeks 200% (2x) of the daily performance of SK Hynix common stock, before fees and expenses.
• Inverse exposure: SKHZ seeks -100% (-1x) of the daily performance of SK Hynix common stock, before fees and expenses.
• AI exposure: The launch targets investor interest in SK Hynix, a leading supplier of high-bandwidth memory (HBM) chips that power AI accelerators.
• Trading objective: The ETFs are designed for investors seeking to capitalize on potential post-IPO volatility through leveraged long or inverse exposure.
• Management fee: Both funds carry a 0.75% annual management fee, which the issuer says is below the peer-group average.

The fund will launch at a time when memory chips are hogging the limelight as the next AI trade. Experts are saying that memory chips have become the “backbone of the AI economy” as demand for faster computing and larger AI models continues to grow. Currently, demand is surpassing supply, creating a long-term investment opportunity in AI infrastructure. This situation is likely to persist for the coming few years, according to industry experts.

SK Hynix is widely viewed as a key beneficiary of this bottleneck due to its leadership in high-bandwidth memory (HBM) chips used in AI accelerators.

Photo: Shutterstock