A forex trader, wearing a mask to prevent the spread of coronavirus (COVID-19), works in front of electronic signs showing the Korea Composite Stock Price Index (KOSPI) at a bank in Seoul, South Korea, September 10 2020.
Kim Hong Ji | Reuters
Investors who held South Korean shares until 2020 were properly rewarded.
The Kospi index, the benchmark for South Korea’s stock market, rose 30.8% for the year, its biggest annual jump in more than a decade. The iShares MSCI South Korea ETF (EWY) rose 38.4% in 2020, outperforming the most developed and emerging markets. The annual gains of the ETF are above those of other emerging markets that are widely followed, as well as the S&P 500 in the US.
South Korea’s strong returns on the stock market came when the country’s health response to the coronavirus pandemic – coupled with fiscal and monetary stimulus measures already in place – withheld its economy for most of 2020.
“In South Korea, you have this combination of good public policy and a lot of [economic] policy support, “said Mehran Nakhjavani, partner and emerging market strategist at MRB Partners.” The timing of everything was random. “