- The iShares MSCI South Korea ETF (EWY) has outperformed an S&P 500 index fund by 1.77% CAGR over the last 18 years
- EWY is an excellent diversifier in a well constructed all-world equity portfolio with a relatively low correlation to U.S. Markets at 0.75
- EWY is considered an Emerging Market fund and carries a similar standard deviation of 29.10%
EWY vs S&P 500 index fund: June 2000 – October 2018
Source:Â https://www.portfoliovisualizer.com/
EWY CAGR 7.26%
SPY CAGR 5.49%
EWY Standard Deviation 29.10%
SPY Standard Deviation 14.32%
EWY to US Market Correlation 0.75
SPY to US Market Correlation 0.99
EWY vs SPY: May 12, 2000 – November 4, 2018
Source:Â https://www.koyfin.com/home
EWY Total Returns 271.13% (18.5 years)
SPY Total Returns 169.54% (18.5 years)
EWY – Pertinents & Such
The iShares MSCI South Korea ETF (EWY) seeks to track the investment results of an index composed of South Korean equities. Exposure to large and mid-sized companies in South Korea. Targeted access to South Korean stocks. Use to express a single country view.
Index – MSCI Korea 25/50 Index
Inception Date – May 9, 2000
Expense Ratio – 0.60%
Net Assets – $3.6B
Average Volume – 4M shares/day
Number of Holdings – 115
P/E Ratio – 8.39 (Outstanding Value)
P/B Ratio – 0.96 (Outstanding Value)
Distribution Yield – 2.97%
Top 10 EWY Holdings
Source: iShares website
The iShares MSCI South Korea ETF (EWY) has an excellent long-term performance track record. It is worth considering EWY for use in an all-world equity portfolio. Investors in this fund should be aware of its’ volatility and assume similar risks of most Emerging Market funds. This volatility combined with the relatively low correlation to U.S. Markets should give patient investors plenty of opportunities to take advantage of arbitrage through either tactical or strategic rebalancing of their portfolios. Investors with a low risk tolerance or those who don’t like much volatility in their portfolio should consider utilizing a broad Emerging Markets ETF such as DEM, VWO or EEM for exposure to South Korea equities.
Thank you for taking time to read this article. If you found it useful, please share it with a friend.
Respectfully yours, Micah McDonald, aka the Deep Value ETF Accumulator
Disclosure: We own shares of EWY and we intend to buy more shares in the future. I am not a professional investment advisor. Please perform your own due diligence or seek assistance from a Registered Investment Advisor prior to investing in any fund mentioned in this article.
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