EWY: South Korea ETF Rebounds From Bear Market
- EWY's steep losses in 2024 were driven in part by political instability.
- The fund's performance has reversed and so far this year it's up 35%.
The iShares MSCI South Korea ETF (EWY) has quietly been one of 2025’s biggest comeback stories.
Up nearly 35% year to date, the fund is far outpacing the U.S. market, where the SPDR S&P 500 ETF Trust (SPY) has gained only about 2%. Even compared to international peers, EWY is leading the pack. The Vanguard Total International Stock Index Fund ETF (VXUS) is up a solid 14%, but South Korea has been the standout.
Of course, some of that outperformance comes from just how badly the fund did last year. EWY dropped 20.5% in 2024, lagging SPY and VXUS, which were up 25% and 5%, respectively. This year’s rebound has merely brought EWY back to where it was a year ago, but the momentum is building. If the rally continues, the ETF could break out to its highest level since 2022.
EWY Recovers From Political and Tech Turmoil
The steep losses in 2024 were driven in part by political instability. After declaring martial law, President Yoon Suk Yeol was impeached and removed from office, shaking investor confidence.
The downturn was compounded by weakness in Samsung Electronics, which makes up around 20% of EWY. The tech giant stumbled in the race to capitalize on the AI boom, falling behind in both memory chips and advanced semiconductor manufacturing. Its underperformance weighed heavily on the ETF.
But not all Korean tech names struggled. SK Hynix, a competitor to Samsung in the memory chip space and EWY’s second-largest holding at 10%, has surged to new highs this year. The company has become a key supplier of high-bandwidth memory chips used in AI applications, a trend that has sharply boosted its stock price and contributed to EWY’s resurgence.
Despite the impressive gains in 2025, the ETF remains in recovery mode, not yet exceeding pre-2024 levels. But with political uncertainty easing and some Korean firms proving they can ride the AI wave, investor sentiment appears to be shifting.
For investors seeking international exposure with a tilt toward tech, EWY is one to watch.
