We have spoken about recent pressure in Emerging Markets rather routinely lately, citing the two largest broad based ETF products there VWO (Vanguard Emerging Markets, Expense Ratio 0.15%) and EEM (iShares MSCI Emerging Markets, Expense Ratio 0.67%), and today we hone in on one single country component with a prominent weighting in these index baskets, South Korea. EWY (iShares MSCI South Korea Capped, Expense Ratio 0.62%) is the largest and benchmark ETF here, having debuted way back in May of 2000.
It recently celebrated its fifteenth birthday as a live traded product, but it has struggled mightily lately in terms of performance, trading at its lowest level this morning since mid-March.
EWY plunged below its 50 day MA in late May, and then continued to deteriorate throughout the month of June thus far clipping its 200 day MA and never looking back. Trading volume has not been exceptionally high in the product given the price pressure, and fund flows have been very flat (+$5 mln net into the fund in the trailing one month).
EWY is a giant in this space compared to the next largest fund DBKO (db MSCI South Korea Hedged Equity, Expense Ratio 0.58%), which has $134 million in AUM, and followed by another “Hedged Equity” product DXKW (WisdomTree Korea Hedged Equity, Expense Ratio 0.58%) which is quite smaller with $24 million in AUM.
There are several other South Korea Equity based products on the market as well, but none of them are larger than $3.4 million in AUM (seed capital size).