John Seetoo
5 min read
Quick Read
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Samsung and SK Hynix control 80-90% of the AI-critical HBM chip market, fueling South Korea’s boom alongside a weakened won and Value Up regulatory reforms.
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KORU’s 3X leverage has rocketed 500% YTD, while steadier options EWY and KF have each gained over 110% for longer-term investors.
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The analyst who called NVIDIA in 2010 just named his top 10 stocks and iShares MSCI South Korea fund wasn’t one of them. Get them here FREE.
In previous decades, South Korea has always been a cultural and financial afterthought after Japan, with its dominance in electronics and engineering through companies like Sony, Toyota, JVC, Honda, and Mitsubishi; and China, with its enormous low cost manufacturing, geopolitical and military clout, and expanding middle class prosperity. Apart from the Korean War and the TV series about it, M*A*S*H*, many in the west were only vaguely aware of Korea.
JHowever, since the start of the 21st century, Korean cultural and technological influence has exploded around the world. Among its landmark achievements:
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K-Pop became a huge, Grammy Award winning presence in the music industry, with BTS, Blackpink, and others becoming worldwide superstars.
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The class conflict drama Parasite (2019) unprecedentedly won the Oscar for Best Picture.
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The Netflix hit series Squid Game spawned an instantly recognized brand across the globe that has inspired spinoffs in the US, Europe, and elsewhere.
Less heralded but equally impressive has been Korea’s industrial and financial prowess, especially its ability to dominate certain key market niches, like memory chips, and offer a quality/price ratio in competing markets that falls between Japan and China to often overtake both. Additional R&D investments in computer numerical controlled (CNC) manufacturing robotics have helped Korean companies expand factories successfully in Indonesia, ahead of Chinese rivals, where Sino/Indonesian ethnic conflicts are still ongoing. As a result, several Korean ETFs and CEFs have boomed over 100% YTD, with one leveraged Korean ETF up over 500%. Curious investors may wish to take a closer look at the following (quoted at time of this writing):
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iShares MSCI South Korea ETF (NYSE: EWY): +111.72% ytd
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The Korea Fund, Inc. (NYSE: KF): +115.79% ytd
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Direxion Daily South Korea Bull 3X Shares (NYSE: KORU): +500.39% ytd
Turning Memory, Currency and Reform Into Market Rocket Fuel
A weaker Korean won has made its exports cheaper, bolstering record sales of Korean HBM chips, Samsung smartphones, and a menu of other products.
