(Bloomberg) — Warren Buffett created Berkshire Hathaway Inc. Class B shares. almost 30 years ago to thwart money managers who sought to split the conglomerate's shares at high prices.

One of South Korea's biggest retail brokers now plans to package Class B shares into an exchange-traded fund turbocharged with derivatives, another move Buffett may not like.

Kiwoom Securities Co. teamed up with Milwaukee-based Tidal Investments to form an ETF designed to provide 200% of Berkshire's daily performance, according to a regulatory filing.

Single-stock ETFs like this one have taken the fund world by storm, using leverage that magnifies the potential returns — and losses — of high-profile companies like Nvidia Corp. and Tesla Inc. In South Korea, brokerages such as Toss Securities and Mirae Asset Securities Co. has sought to capitalize on rising demand for U.S. stocks amid sluggish domestic stock performance.

“Traditionally in leveraged ETFs, most of the interest and asset flow has been in the most volatile names,” Gavin Filmore, Tidal's chief revenue officer, said in an interview. “Berkshire is almost the polar opposite.”

Leveraged ETFs are often intended for active traders who want to bet on the performance of a stock for no more than a single day, as these funds typically deviate from course when following stocks over a longer period. Using derivatives for Berkshire's return may not sit well with Buffett, who he once called them “Financial weapons of mass destruction”.

While Buffett's firm is a household name, it remains to be seen whether day traders will have an appetite to ride a bullish stock like this with this type of leveraged strategy. Buffett is known as the ultimate long-term investor, advising people to own stocks they would be comfortable holding for years.

Buffett, 94, and his firm already have a following in South Korea. As of Nov. 8, individual investors in South Korea owned more than $800 million in Berkshire Class A and B shares, according to data compiled by the Korea Securities Depository.

Asian markets “have a bias for Berkshire,” said Matthew Palazola, an insurance analyst at Bloomberg Intelligence.

The listing of the ETF has not yet been finalized and Kiwoom is awaiting approval from the Korea Financial Supervisory Service, the country's financial watchdog, Kiwoom said in response to a Bloomberg query. Representatives for Berkshire did not respond to a message seeking comment.

Retail investors in South Korea have embraced some of the largest US-listed leveraged ETFs. Direxion Daily TSLA Bull 2X Shares, a single-share ETF for Tesla stock, has received $225 million so far this year from South Korean retail investors, increasing their total holdings in the ETF to 1.2 billion as of Nov. 8, according to filings.

While the Kick BRK 2X Long Daily Target is known to be Berkshire's first U.S. stock ETF, several others trade abroad. However, they haven't been able to make much of it: Leverage 2x Long Berkshire Hathaway ETP Securities, which trades on several European exchanges, has only about $2.3 million in assets.

Read more: Korea's Retail Army Is Going All-in on US Leveraged ETFs

Kiwoom's new ETF would buy Berkshire Class B shares and then issue its own shares to investors, potentially at a much lower price than the $467.36 each Class B share was selling for at the close of the market. the moon. To amplify its exposure to Berkshire's daily returns, the ETF will enter into broker-dealer exchanges and also trade listed options on the Omaha, Nebraska B-shares.

The Berkshire ETF would be a Kiwoom product that Tidal runs behind the scenes in exchange for a portion of management fees.

'Tainted Reputation'

Wall Street's efforts to create an early version of a single fund for Berkshire stocks prompted Buffett to create the company's Class B shares almost three decades ago. At the time, Berkshire had only one class of shares that traded for more than $30,000 per share, and ETFs were in their infancy.

In 1995, Philadelphia politician Sam Katz filed papers to create a unit investment trust, a fund-like vehicle that buys a fixed portfolio of stocks and bonds up front and then holds the securities for a set period. He wrote that the trust would provide “convenient and affordable access to Berkshire Hathaway common stock without the requirement to own full shares.”

Berkshire threatened to divest the trust by doing a stock split, creating its own trust or creating a second class of shares, Katz said in an interview.

Buffett met this latter threat by issuing Class B shares equal to 1/30 of a Class A share. Investors flocked to the new shares, rendering trusts such as Katz's obsolete.

IN a 1996 letter to shareholders, Buffett warned that such trusts were “expense” vehicles that brokers would market “en masse to unsophisticated buyers” in order to earn huge commissions. This would have burdened Berkshire “with hundreds of thousands of disgruntled, indirect owners (that is, trust holders) and a tarnished reputation.”

Katz said he has no regrets: “How many guys do you know who could fight Warren Buffett?”