A forex trader wearing a mask to prevent the spread of coronavirus disease (COVID-19) works in front of electronic boards with the Korea Composite Stock Price Index (KOSPI) at a bank in Seoul, South Korea, on Sept. 10, 2020 .
Kim Hong Ji | Reuters
Investors who stuck with South Korean stocks through 2020 have been amply rewarded.
The Kospi Index, South Korea’s stock market benchmark, gained 30.8% over the course of the year. It was the largest annual jump in more than a decade. The iShares MSCI South Korea ETF (EWY) rose 38.4% in 2020, outperforming most developed and emerging markets. The ETF’s year-to-date earnings have outpaced other widespread emerging markets as well as the S&P 500 in the US.
South Korea’s strong stock market returns were due to the country’s health response to the coronavirus pandemic – along with pre-existing fiscal and monetary stimulus measures – keeping the economy from missing a blow for most of 2020.
“In South Korea there is this combination of good health policy and good health [economic] political support, “said Mehran Nakhjavani, partner and emerging markets strategist at MRB Partners.” The timing for this was coincidental. “