In a year of strength for emerging markets equities and exchange traded funds, tactical investors have not needed to take on excessive risk to profit with single-country ETFs. Just look at the Deutsche X-trackers MSCI South Korea Hedged Equity ETF (NYSEARCA:DBKO).
That currency hedged spin South Korea stocks is up more than 23% year-to-date and raced to another record high on Thursday.
DBKO “seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI Korea 25/50 US Dollar Hedged Index. The index is designed to provide exposure to South Korean equity markets, while at the same time mitigating exposure to fluctuations between the value of the U.S. dollar and the South Korean won,” according to Deutsche Asset Management.
The low energy prices and cheap financing have also supported investor sentiment and positive outlook for earnings growth ahead. Tech companies, such as Samsung Electronics, are leading hopes of a turnaround in earnings. South Korea is Asia’s fourth-largest economy behind China, Japan and India and is one of the most advanced emerging markets.