Amid escalating geopolitical drama between the U.S. and North Korea, some traders are getting defensive with the iShares MSCI South Korea Capped ETF (NYSEArca: EWY). EWY is the largest US-listed exchange traded fund tracking stocks in South Korea, Asia’s fourth-larges economy.

Home to $3.8 billion in assets under management and more than 17 years old, EWY is one of the largest and old single-country ETFs in the U.S. This year, it is also one of the best-performing individual country ETFs as highlighted by a year-to-date of nearly 30%.

“However, on Tuesday, the ETF’s shares fell nearly 1 percent, moving in concert with a weakening of the U.S. dollar and a decline in the U.S. benchmark S&P 500 stock index,” reports Reuters. “While news of potential miniaturization of a nuclear device by North Korea was cited in a Japanese Defense Ministry annual report earlier on Tuesday, the decline in global markets during U.S. trading hours coincided with a report from the Washington Post.”

Competitors to EWY include the currency hedged Deutsche X-trackers MSCI South Korea Hedged Equity ETF (NYSEARCA: DBKO).

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.

Related: Alternative ETF Approaches to Yield in the Current Environment

Regarding options activity in EWY, the South Korea ETF with the most robust options activity, “options traders, however, appear to be bracing for a hit to the ETFs’ shares. There are currently 4.2 puts open for each open call contract on the fund’s shares, according to options analytics firm Trade Alert,” according to Reuters.

EWY, which allocates nearly 38% of its weight to technology stocks, is usually one of the more docile single-country emerging markets ETFs. The fund has a three-year standard deviation of just under 18%. Year-to-date, investors have allocated $154 million to EWY.

For more information on the South Korean markets, visit our South Korea category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.