KORU’s 274 Percent YTD Gain Looks Stunning Until You See How Fast Daily Resets Can Reverse It

The Direxion Daily MSCI South Korea Bull 3X Shares (NYSEARCA:KORU) is up astir 274% twelvemonth to day and a stomach-churning 1,500% implicit the past 12 months, which is simply a illustration that pulls retail wealth retired of wealth marketplace funds and into a merchandise astir of those buyers bash not understand.

KORU exists to lick a constrictive problem, which is however to explicit a short-term bullish stake connected Korean equities with borrowed firepower. The money is wired to present 3 times the regular instrumentality of the MSCI Korea 25/50 Index, and that word, daily, is doing astir each the work.

What you are really buying

Under the hood, KORU holds astir 78.53% of its publication successful the iShares MSCI South Korea ETF (NYSEARCA:EWY) with the remaining 21.47% successful US dollar instruments, past uses swap contracts to lever that exposure. The disbursal ratio is 1.18% and assets nether absorption beryllium adjacent $1.2 billion.

Every afternoon, the money rebalances its swap publication truthful that the adjacent greeting starts caller astatine 3x exposure. That reset is the full crushed KORU tin nutrient a 1,500% number, and besides the crushed a purchaser astatine today's terms tin suffer astir of it successful a fewer choppy weeks adjacent if Korean stocks decorativeness flat.

The mathematics that breaks astatine the apical

Compounding cuts some ways. On a azygous league successful March 2026, KORU fell 27.83% portion EWY, the 1x Korea ETF, mislaid 8.66%, much than 3 times the underlying drawdown due to the fact that regular resets punish volatility.

Around that aforesaid window, Korean retail investors poured astir $100 cardinal into KORU during the Iran situation and watched the money driblet 35.8%. A garden-variety 15% pullback successful Korean equities, dispersed crossed 2 volatile weeks, tin hitch retired fractional of a leveraged presumption erstwhile the way dependency kicks in.