Korea ETF

It goes without saying that by Korea we mean South Korea. Korea has experienced years of healthy growth. It still is a sound economy but the accelerating growth rates are a thing from the past.

I always compare Korea with Japan. Both countries have a long track record of steady growth. Both economies have been driven by their exports of electronics and technical products from heavy machinery to cars.

The big difference with Japan is that the latter has gotten an early start and has reached its top sooner. Japan’s growth rates are definitely behind us but Korea still has years of growth before them but you can hardly call it a growth tiger anymore.

The advantage of low production and labor costs has evaporated as the Korean people wanted an equal share of the country’s prosperity. Korean’s mission will be to outsmart its competitors by innovation and grow their economy by stepping up exports.

A difficult challenge as many other Asian countries want their share of the pie. But at the same time these other Asian countries in themselves have become new markets for Korea which sweetens the threads.

Korea has two really big multinationals to offer in Samsung and Hyundai. These world brands make a solid base for the Korean economy but it makes them vulnerable at the same time. Especially the dominance of Samsung is important to mention.

Investing in a Korea ETF still is a sensible thing to do although I am expecting some troubles ahead in the long run.

iShares MSCI Korea UCITS ETF (Dist)

Within the iShares Korea ETF you will find 110 publicly traded Korean companies.

Here too Samsung is the predominant factor with a 20% share. It also makes it easy to understand that the IT market sector is good for a 35% share within this Korea ETF. Luxury consumer goods take up 15% and basic consumer good have a 10% share.

Financial stocks only take up 15% which is not much compared to other regional ETF’s. Industrial companies take up slightly more than 10% which also is striking for Korea. All in all IT and Samsung are very dominant within this Korea ETF and I myself would have preferred a different spread.

This particular Korea ETF is a physical ETF so the underlying stocks have to be bought. Half yearly dividends will be paid out.

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