North Korea attempted to roil global markets and send a message to South Korea late last week with another missile test, but the iShares MSCI South Korea Capped ETF (NYSEArca: EWY) showed some grit. EWY, the largest South Korea exchange traded fund listed in the U.S, gained more than 1% last week.
EWY, which tracks the MSCI Korea 25/50 Index, holds 112 stocks. Amid the geopolitical wrangling, the ETF has recently lost some assets, but is traditionally a favorite among investors due to South Korea’s advanced economy and the country’s emphasis on technology.
“The launch followed threats from Kim Jong Un’s regime that it would ‘sink’ Japan with a nuclear weapon,” reports Bloomberg. “Even with the escalating rhetoric and action from Pyongyang, the Kospi equity benchmark has continued to trade near record levels as analysts expect corporate profits to almost double this year. U.S. markets seemed to shrug off Thursday’s provocation from North Korea, which was responding to further United Nations sanctions.”
U.S. officials are coordinating with their South Korean counterparts, focusing more on diplomacy and economic sanctions against North Korea, while noting that military action against the oppressive North Korean regime is not the desired course of action.