Invest in South Korea EWY

Invest in Korea focused mutual funds.

There are a few mutual funds out there focused on Korea specifically. There are many more “East Asia” funds.

Country focused funds tend to have above average annual expense fees that can run in some cases up to 2%. These funds are usually “loaded” in addition to heavy yearly expenses. Loads are commissions paid to the broker who sells you the fund. I generally avoid country focused mutual funds due to the expense. However, if you find a Korea focused fund that you really like it may make sense to invest this way. 

  Buy shares in Korean firms

South Korea has hundreds, if not thousands, of firms you can buy shares of. Hyundai, Daewoo, and Kyocera, are 3 great examples of Korean firms traded on the world’s stock exchanges. An international stock portfolio should have some exposure to Korean companies.

Buy the South Korean ETF (EWY)

The best way to play the Korean economy is to buy the iShares Korean Exchange Traded Fund. It seeks to follow the ebbs and flows of the Korean stock exchange within a couple of percentage points.

With EWY one can bet that the economy of South Korea as a whole is going to trend up by simply buying shares. Or, conversely one could bet that the South Korean economy will deteriorate by buying options against EWY and going “short.”

I believe that it is easier to bet on the direction of international economies by using country focused ETFs than it is to bet on individual companies. One can “get a feel” for a country by reading the international business press. It is much more difficult to get good information on individual companies, especially ones that issue quarterly reports in Korean.

So if you want to get a piece of Korea, EWY is probably your best bet.