Bangkok: For the first time in its history, the Stock Exchange of Thailand (SET) is set to launch Leveraged Fund and Inverse ETFs, with trading commencing on September 26. This initiative aims to increase profit opportunities and manage portfolio risk over the short term.
According to Thai News Agency, Ms. Rinjai Chakrapipat, Senior Executive Vice President and Head of Marketing at SET, has announced the introduction of these new ETF types, which serve as tools for enhancing returns or managing portfolio risk in the short term. Leveraged and Inverse ETFs, collectively known as L and I ETFs, are designed to boost investment efficiency and strategy. Leveraged ETFs align with their underlying index to serve as “profit enhancers,” offering multiples of the daily return of the index, ideal for upward-trending markets. Conversely, Inverse ETFs provide returns opposite to the underlying index, acting as “portfolio enhancers,” and are useful for hedging against anticipated market declines. Investors can select the leverage ratio or multiples of the ETF to match their risk tolerance and needs.
Investors are advised to thoroughly study the characteristics and risks of Leveraged and Inverse ETFs before investing. These ETFs are more suited for short-term investments, as long-term holdings may pose a risk of the ETF’s total return deviating from the underlying index’s multiples, particularly during volatile market periods. This launch marks the first instance of Leveraged and Inverse ETFs being traded on the Thai stock exchange. The number of available funds is expected to grow, with some currently in the process of filing with the SEC.
The Stock Exchange of Thailand aims to create new products to offer investors alternatives and adapt to evolving market conditions. It is anticipated that leveraged and inverse ETFs will further enhance the SET50 product ecosystem.
Mr. Chaiporn Nompitakcharoen, Managing Director of Securities Trading at Bualuang Securities Public Company Limited, disclosed that the Leveraged and Inverse ETFs, set to trade on the Stock Exchange for the first time, will reference the SET50 Total Return Index (SET50 TRI). These ETFs will be issued by Bangkok Capital Asset Management Company Limited (BCAP), with Bualuang Securities Public Company Limited serving as the distributor and liquidity provider. Three funds will be available:
1. The Leveraged ETF ‘2X01BSET50’ aims to generate double the daily return of the SET50 TRI Index, suitable for investors confident in an uptrend and seeking returns exceeding direct index investments.
2. The Inverse ETF ‘1101BSET50’ targets inverse returns of -1 times the daily return of the SET50 TRI Index, catering to those wanting to manage portfolio risk in a declining market.
3. The Inverse ETF ‘2I01BSET50’ aims for inverse returns of -2 times the daily return of the SET50 TRI Index, ideal for investors anticipating a downtrend and looking to capitalize on it.
The L and I ETF trading on the Stock Exchange of Thailand is scheduled to begin on September 26, 2025.