A currency trader, wearing a mask to prevent the spread of coronavirus disease (COVID-19), works for electronic signs with the Korea Composite Stock Price Index (KOSPI) at a bank in Seoul, South Korea, September 10, 2020 .
Kim Hong Ji | Reuters
Investors who stuck with South Korean stocks until 2020 were richly rewarded.
The Kospi index, South Korea’s stock market benchmark, rose 30.8% this year, 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 year-to-date rise in the ETF is better than other much-tracked emerging markets, as well as the S&P 500 in the US.
South Korea’s strong stock market returns came as the country’s health response to the coronavirus pandemic – along with fiscal and monetary stimulus measures already taken – kept the economy from taking hold for most of 2020.
“In South Korea, you have this combination of good public health policy and a lot [economic] policy support, “said Mehran Nakhjavani, emerging markets partner and strategist at MRB Partners.” The timing of all this was accidental. “