Still, EWY is a credible play on one of the world’s most most technologically advanced economies, a point underscored by the fund’s nearly 37% weight to tech stocks. That is more than double EWY’s second-biggest sector weight, financial services.
“Korea’s growth performance remains strong and has been resilient to fluctuations in the perceptions of geopolitical risk,” said Fitch. “Despite the escalation of tensions during the second half of 2017 and first months of 2018, real GDP growth reached 3.1% and Fitch expects growth momentum to be sustained, albeit at a slightly lower level of 2.8% in 2018 and 2.7% in 2019.”
Year-to-date, investors have added nearly $68 million to EWY.
“The threat of a trade war between the US and China represents a downside risk to Korea’s growth outlook, as 28% of its exports that are destined for China are partly intermediate goods that are subsequently re-exported,” according to Fitch.
For more information on South Korean markets, visit our South Korea category.