Emerging market (EM) equities continue to be the benefactors of a weaker dollar, giving traders plenty of profitable opportunities in EM. Single-country ETFs are in play, with two traders may want to ponder: the Direxion Daily South Korea Bull 3X Shares (KORU) and the Direxion Daily MSCI Mexico Bull 3X Shares (MEXX).
Both funds have been strong performers this year, benefiting from stronger economic outlooks and growth trajectories. KORU is up over 300% while MEXX is up over 150%. Given those numbers, saying they are outperforming would be a disservice to both funds. Of course, having 3x leverage certainly helps, but seasoned traders should only use these products as tactical tools to game the markets.
Though it may still be considered a contrarian play, South Korea presents a certain amount of intrigue. After a pandemic-fueled 2020 caused a negative growth rate, South Korea’s GDP rebounded sharply in 2021, but has been trending lower since. However, in 2025, South Korea is showing signs of life. The country’s Finance Minister noted that the economy is in recovery mode after a stagnant period of growth and more importantly, is showing signs of “vitality.”
Furthermore, the benchmark Korea Composite Stock Price Index (KOSPI) has been touching record highs while the government is implementing stimulus measures to jumpstart consumer spending. As noted in the Korea Economic Daily, there’s more optimism heading towards the end of the year with the Bank of Korea raising its growth targets in recent months. Wall Street is responding in tow with both Goldman Sachs and JP Morgan raising their growth targets.
Artificial intelligence (AI) will continue to be a prevailing theme and South Korea vows to bolster their innovation with an ambitious 5-year economic plan. The country has the government’s staunch backing to support the buildout of AI as well as robots, machine learning applications, drones, and other technological disruptors.
Mexico a Welcome Surprise
Mexico has also delivered a surprise, with its economy growing by 1.8% during the first half of 2025, as noted by the Federal Reserve Bank of Dallas. They do note that the outlook for the second half of the year could be weak. That said, MEXX might be more of a contrarian play versus KORU. Other factors like tariffs and border relations with the United States remain as wildcards moving forward.
As the Dallas Fed indicated, the growth the first half of 2025 was a marked improvement from the 0.4% growth experienced in 2024. As noted in the chart below, net exports were higher this year despite uncertainty surrounding tariffs, which speaks to the overall resiliency of Mexico’s economy. If the economy is to prosper, the country will need additional public and private investments, which have been lagging this year.
Of course, in the cases of both countries, tariffs continue to be a wildcard so traders will certainly have to be wary of that factor. Nonetheless, KORU and MEXX could be primed for continued upside if the economic fundamentals continue to improve for both countries.
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