South Korea ETFs offer exposure to economy that may be rebounding (2024)

FAQs

What is the best ETF for South Korea? ›

The largest South Korea ETF is the iShares MSCI South Korea ETF EWY with $5.47B in assets. In the last trailing year, the best-performing South Korea ETF was FLKR at 14.44%. The most recent ETF launched in the South Korea space was the Matthews Korea Active ETF MKOR on 07/17/23.

ETFs have several advantages for investors considering this vehicle. The 4 most prominent advantages are trading flexibility, portfolio diversification and risk management, lower costs versus like mutual funds, and potential tax benefits.

The Republic of Korea (ROK) offers foreign investors political stability, public safety, world-class infrastructure, a highly skilled workforce, and a dynamic private sector.

South Korea, the world's 13th largest economy and a leader in high-tech industries, offers strong opportunities for U.S. businesses. However, exiting the pandemic, Korea's economic growth has been relatively slow, recording 4.15 percent growth in 2021 and 2.59 percent growth in 2022.

Exports The top exports of South Korea are Integrated Circuits ($121B), Refined Petroleum ($61.4B), Cars ($52.1B), Broadcasting Equipment ($24.2B), and Motor vehicles; parts and accessories (8701 to 8705) ($20B), exporting mostly to China ($150B), United States ($112B), Vietnam ($60.7B), Japan ($30.5B), and Hong Kong ...

ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.

ETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.

Because of their wide array of holdings, ETFs provide the benefits of diversification, including lower risk and less volatility, which often makes a fund safer to own than an individual stock. An ETF's return depends on what it's invested in. An ETF's return is the weighted average of all its holdings.

South Korea's economy moved away from a centrally planned, government-directed investment model toward a more market-oriented one. These economic reforms, pushed by President Kim Dae-jung, helped South Korea maintain one of Asia's few expanding economies, with growth rates of 10.8% in 1999 and 9.2% in 2000.

What are the advantages of South Korea's economy? ›

South Korea's dynamic economy has demonstrated notable resilience. A vibrant private sector bolstered by a well-educated labor force and high capacity for innovation has capitalized on the country's openness to global commerce. The legal framework is sound, but corruption undermines government integrity.

Factors in South Korea's Economic Success

Two additional factors have contributed to the increase in international trade and industrialization in South Korea: An improvement in the business environment. Policies incentivizing investment in innovation.

The Korea Composite Stock Price Index or KOSPI (Korean: 한국종합주가지수) is the index of all common stocks traded on the Stock Market Division—previously, Korea Stock Exchange—of the Korea Exchange. It is the representative stock market index of South Korea, analogous to the S&P 500 in the United States.

The easiest way to invest in the whole South Korean stock market is to invest in a broad market index. This can be done at low cost by using ETFs. On the South Korean stock market you'll find 3 indices which are tracked by ETFs. Alternatively, you can invest in indices on the Asia-Pacific region and Emerging Markets.

Foreigners (non residents) need to obtain registered 「Investors Registration Certificate (IRC)」from FSS before opening a trading account. Foreigners need to appoint a Standing Proxy, most likely a global bank offering custodian services and foreign exchange, and conducting these processes on their behalf.

S&P has kept South Korea's long-term sovereign credit rating at the third-highest level on the company's table of "AA" since August 2016, when it upgraded the rating by one notch from "AA-."