ETF Trends
ETF Trends

South Korea is becoming a market leader as it aggressively pushes into other markets with its innovative high-tech products. The country’s potential hasn’t gone unnoticed, and investors have been throwing money at  South Korea’s markets and exchange traded fund (ETF).

South Korea’s ETF took a spill on Friday as one of the county’s naval vessels sank near the border of North Korea, but will it leave any permanent damage? Although details about the incident are spotty, few analysts seem to believe so.

That’s because it otherwise seems like there’s little not to like about the South Korean economy lately. South Korea, a leading manufacturer of microchips, LCD panels and automobiles, is one of Asia’s fastest growing economies and the country has experienced the greatest increase in per-capita GDP since the mid-1960s, remarks Michael Schuman for TIME. [South Korea ETF: Opportunity May Be Knocking.]

  • China has been pushing around other Asian countries as it encroaches on leading sectors and competing with even lower costs. Still, Korea has maintained an edge over China by switching gears from a developing economy based on manufacturing into an advanced country that is increasingly based on innovation. [The Top ETFs to Play International Consumers.]
  • Additionally, Korean companies have been aggressively pushing into markets such as India and China, outmaneuvering Japan in these key economies. Korea has the potential to become a leader in these markets and direct where industries will be heading. [5 ETFs for a Google-Less China.]
  • Foreign investors bought $3.76 billion worth of stocks in South Korea’s stock markets and purchased $15.3 billion in local bonds this year as optimism about an economic recovery and amply liquidity worldwide remain high, according to Bernama. Korean bonds have become favorable on growing expectations that the Citigroup’s World Government Bond Index may soon include Korean Treasury bonds. [Hot New ETF Trend: International Small-Caps.]
  • Cho Jae-hoon, a senior analyst at Daewoo Securities Co. believes that “foreign investors turned their eyes to Korean assets amid mixed favorable conditions: the local currency’s ascent to the dollar, earnings momentum by Korean firms and the low probability of a rate hike in Korea in the near term.”
  • South Korea’s economy is expected to expand about 5% this year.

For more information on South Korea, visit our South Korea category.

  • iShares MSCI South Korea (NYSEArca: EWY)

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.