U.S.-Listed South Korea ETF Isn’t So Hyped About Trump-Kim Meet
This article was originally published on ETFTrends.com.
U.S. investors aren't so enamored with the South Korea ETF as President Donald Trump meets with North Korean leader Kim Jong Un.
U.S. investors didn't show much faith in Trump as investors pulled cash out of EWY, the largest U.S.-listed South Korea-related ETF. The iShares MSCI South Korea Capped ETF (EWY) experienced $33 million in net outflows over the past week, according to XTF data. EWY was down 1.1% Tuesday on relatively subdued trading activity, with 1.7 million shares changing hands, compared to its 2.6 million daily average.
South Korean officials are optimistic that the meeting between the U.S. and North Korea will help pave the way to an end to the world's last remaining cold war and the division across the Korean peninsula, reports Caroline Wilson for Bloomberg.
However, there is no real concrete resolution as U.S. Secretary of State Mike Pompeo insisted that sanctions against North Korea will remain in place until the reclusive state abandons its nuclear weapons.
ETFs to Play Geopolitical Sports
Bloomberg Intelligence analyst Eric Balchunas argued that traders look to single-country ETFs, like EWY, as a way to play global events like a "geopolitical sports book.”
“This move smells like one big investor because there wasn’t a ton of volume for the fund on Friday,” Balchunas told Bloomberg, referring to the recent large money outflow out of EWY. “But there’s a risk because if the meeting is perceived to be very good and there’s a lot of progress made, that could ultimately lift the ETF. This will be the fund to watch.”
Related: Donald Trump-Kim Jong Un Summit in 60 Seconds
However, South Korean investors were more hopeful of the Trump and Kim meet. The South Korea-listed Samsung Kodex 200 Securities ETF, which follows the Kospi 200 Index, experienced $471 million in net inflows for the week ended June 9, reports Eric Lam for Bloomberg.
On Tuesday, President Trump and North Korea leader Kim Jong Un meeting ended in a joint agreement. A signed document includes a pledge from Kim to rid the Korean peninsula of nuclear weapons, and Trump revealed a halt to U.S. military exercises in South Korea, BBC reports.
For more information on South Korean markets, visit our South Korea category.
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