EWY ETF 2025: Ultimate Guide to South Korea's Top Stocks
EWY ETF: The Ultimate 2025 Guide to Investing in South Korea
Last updated: September 24, 2025 | Reading time: 8 minutes
Looking to invest in the world's 12th largest economy and a global tech powerhouse? Want to gain exposure to giants like Samsung and SK Hynix without the hassle of picking individual stocks? The iShares MSCI South Korea ETF, ticker EWY, might be the single most important tool for your portfolio.
In this definitive guide, we'll break down everything you need to know about EWY using the latest 2025 data. We'll cover its top holdings, sector weights, fees, and the unique "Korea Discount" that every investor must understand. This is your one-stop shop for making an informed decision.
🎯 Key Takeaways
✅ One-Stop Diversification: With a single purchase, you get exposure to over 80 of South Korea's largest and most influential companies.
✅ The Korea Discount Factor: Governance issues tied to family-run conglomerates (chaebols) and geopolitical risks have historically suppressed valuations. However, the government's "Corporate Value-up Program" presents a potential catalyst for change.
Quick Answer: The iShares MSCI South Korea ETF (EWY) is a US-listed fund that provides targeted exposure to large and mid-sized South Korean companies. It's heavily weighted towards the technology sector, specifically Samsung Electronics, making it a proxy for the global semiconductor market and the South Korean economy.
🔍 What Exactly is the EWY ETF?
EWY is an Exchange-Traded Fund. Think of it as a basket of stocks that you can buy and sell on an exchange, just like a single stock. This particular fund is designed to track the performance of a specific benchmark: the MSCI Korea 25/50 Index. This index represents about 85% of the entire South Korean stock market, covering its most significant large and mid-cap companies.
In simple terms, buying one share of EWY is like buying a small piece of dozens of leading Korean companies all at once. It's a convenient and cost-effective way to invest in the broader Korean market without having to research each company individually.
- Issuer: BlackRock (the world's largest asset manager)
- Expense Ratio: 0.59%
- Inception Date: May 9, 2000
- 12-Month Trailing Yield: Approximately 1.79%
What is the MSCI Korea 25/50 Index?
This is a market index with specific rules to prevent over-concentration. The '25/50' rule ensures that no single company can exceed 25% of the index, and the sum of all companies with a weight above 5% cannot exceed 50% of the total index. This helps enforce diversification within the ETF.
📊 EWY Holdings & Sector Deep Dive
A look inside EWY’s portfolio reveals the very structure of the South Korean economy. As of September 2025, it is highly concentrated, with the top 10 holdings accounting for over 50% of the entire fund.
| Company | Ticker (KRX) | Sector | Weight (%) |
|---|---|---|---|
| Samsung Electronics | 005930 | Information Technology | 22.38 |
| SK Hynix Inc. | 000660 | Information Technology | 13.18 |
| KB Financial Group | 105560 | Financials | 3.03 |
| Hanwha Aerospace | 012450 | Industrials | 2.48 |
| NAVER Corp. | 035420 | Communication | 2.32 |
| Shinhan Financial Group | 055550 | Financials | 2.11 |
| Hyundai Motor | 005380 | Consumer Discretionary | 2.04 |
| Doosan Enerbility | 034020 | Industrials | 1.96 |
| Celltrion Inc. | 068270 | Health Care | 1.95 |
| Hana Financial Group | 086790 | Financials | 1.85 |
What does this mean? If you invest $100 in EWY, about $22 goes to Samsung and $13 to SK Hynix. With over 35% in these two companies, EWY's performance is heavily tied to the demand and price of global memory chips. If the AI boom drives semiconductor demand, EWY will likely soar. Conversely, if the market slows, it will take a hit.
By sector, Information Technology is dominant at nearly 40%, followed by Financials (~15%) and Industrials (~12%). This clearly illustrates that the South Korean economy revolves around high-tech manufacturing and finance.
📈 Performance vs. Risks: The Two Sides of EWY
EWY offers high growth potential, but it comes with a unique set of risks that investors must understand.
Performance:
EWY's performance is cyclical. When the tech sector, especially semiconductors, is in a bull market, it can deliver explosive returns that outperform even the S&P 500 or Nasdaq. However, it can also underperform significantly during economic downturns. Historical data shows it is a volatile asset, prone to sharp rallies and steep declines.
Risks:
- The "Korea Discount": This refers to the phenomenon where South Korean companies are persistently valued lower than their global peers. Key reasons include: ① the 'chaebol' system of family-controlled conglomerates known for low dividend payouts and opaque governance, ② geopolitical tensions with North Korea, and ③ volatility in the Korean Won (KRW) exchange rate.
- Concentration Risk: As noted, the fund is extremely dependent on two companies. Any negative news affecting Samsung or SK Hynix can shake the entire ETF.
- Currency Risk: While EWY trades in U.S. dollars (USD), its underlying assets are stocks priced in Korean Won (KRW). If the Won weakens against the Dollar (meaning the KRW/USD exchange rate goes up), U.S. investors will see the value of their holdings decrease, even if the stock prices in Korea remain flat.
🇰🇷 Is EWY a Good Investment for 2025?
As of 2025, there are several key factors to consider before investing in EWY.
Opportunities:
- AI and the Semiconductor Super-Cycle: The explosion in AI technology is driving unprecedented demand for high-performance memory chips, a direct tailwind for Samsung and SK Hynix, the world's #1 and #2 memory makers.
- Corporate Value-up Program: The South Korean government is actively pushing to resolve the "Korea Discount." This initiative encourages companies to improve shareholder returns (higher dividends, share buybacks) and reform corporate governance. If successful, it could lead to a major re-rating of the entire Korean market.
- Global Diversification: For investors concerned about being over-exposed to the U.S. market, EWY offers a compelling way to add exposure to a key Asian technology economy.
Threats:
- Global Economic Slowdown: A worldwide recession would reduce demand for consumer electronics like smartphones and PCs, directly impacting the semiconductor industry.
- U.S.-China Trade Tensions: Ongoing friction between the U.S. and China over semiconductor technology creates uncertainty for Korean companies caught in the middle.
- Geopolitical Risk: News related to North Korea is a constant, low-probability but high-impact risk factor.
Who is it for?
EWY is suitable for investors who are bullish on the future of the semiconductor industry, can tolerate high volatility, and want to make a long-term bet on the growth potential of the South Korean economy. It may not be the right fit for those seeking stable dividend income or low-risk investments.
❓ Frequently Asked Questions
Q: Is EWY the only South Korea ETF?
A: No. Another popular option is the Franklin FTSE South Korea ETF (FLKR). FLKR has a much lower expense ratio of 0.09%, but EWY has significantly more assets under management and higher trading volume, making it more liquid.
Q: Does EWY pay a dividend?
A: Yes, it does. EWY typically pays a dividend annually in December. Its trailing 12-month dividend yield is currently around 1.79%, though this amount can vary based on market conditions and the profitability of the underlying companies.
Q: What exactly is a 'chaebol'?
A: A chaebol is a large, family-controlled business conglomerate in South Korea. Samsung, Hyundai, and SK are prime examples. While they were instrumental in Korea's economic growth, their tendency to prioritize the interests of the founding families over those of minority shareholders is a major cause of the "Korea Discount."
🚀 Your Next Actions
2. Analyze: Check the current trend of the KRW/USD exchange rate and consider how currency fluctuations might impact your return.
3. Decide: Evaluate if EWY's tech-heavy, high-volatility profile aligns with your personal investment goals and overall risk tolerance.
💭 My Analysis
Based on my experience analyzing Korean markets since 2020, the government's "Corporate Value-up Program" is a more serious attempt at reform than anything we've seen in the past. While changing the chaebol structure is a monumental task that will take years, the current pressure to increase dividends and cancel treasury shares could meaningfully close the valuation gap. I believe this makes EWY an interesting long-term play, despite its cyclical nature, as it introduces a powerful potential catalyst for growth.
