Trading in international territory takes a discerning eye to spot opportunity. One smart play is South Korea through the Direxion Daily South Korea Bull 3X Shares (KORU).

KORU seeks daily investment results, before fees and expenses, of 300% of the daily performance of the MSCI Korea 25/50 Index. The fund invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.

The index is designed to measure the performance of the large- and mid-cap segments of the South Korean equity market, covering approximately 85% of the free float-adjusted market capitalization of South Korean issuers. The fund has already surpassed its pre-pandemic levels, rising to a 24% gain year-to-date.

KORU Chart

Economic Fundamentals in South Korea Favor The Bulls

From a fundamentals standpoint, South Korea is exhibiting tangible signs of a recovery. Per a Bloomberg article, “South Korea’s economy continued its rebound from a pandemic slump, with exports and manufacturing activity rising in November, offering a positive sign that global demand remains resilient despite the virus resurgence.”

Furthermore, “exports rose 4% in November from a year earlier, supported by robust demand for tech devices and gains in key markets. The IHS Markit purchasing managers’ index for South Korean manufacturing hit 52.9, the highest since 2011, and showed growing optimism in the factory sector.”

South Korea’s “growth figures for the third quarter also indicated greater momentum in the economy heading into the last quarter as stronger-than-first-estimated investment fueled a faster expansion of 2.1%.”

Improving exports fuel South Korea's recovery momentum

 

Export activity will be a prime economic mover for more GDP strength in South Korea.

“The gain in Korean exports, a bellwether for world trade, also suggests demand in the global economy is holding up despite record new virus cases in major markets, likely because governments are taking more targeted approaches to containing infections than during prior lockdowns,” the article added.

“Exports mean a lot in South Korea,” said Lee Jae-sun, an analyst at Hana Financial Investment Co. “The momentum in exports recovery should continue into next year and fuel the economy along with stocks.”

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