By Carl Delfeld of the Chartwell ETF Advisor
South Korea's benchmark Kospi index and the MSCI iShares (EWY) exchange-traded fund that tracks it is the third-best performing mainstream ETF so far this year. Up 29.6% through last Friday, EWY has only been bested by China and Thailand. The key question is whether the market is still attractive from a valuation perspective. It seems still cheap - Korea trades at a 24 per cent discount to the region on a price-to-book-value basis.
As the Financial Times point out, foreign investors have plenty of reasons to be wary about putting their money into South Korea. Asia's third largest economy is becoming an increasingly volatile place to do business - rules are changed retrospectively, tax treaties ignored, and the legal framework can be ignored when nationalism directed at foreign enterprises catches fire.
Recent gains have been largely fueled by Korean investors, foreign investors have been selling. Find out five reasons why and whether you should follow the locals or fund managers sitting in front of laptops in New York, Boston and London. Click here for more.
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