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| ETF
Spotlight -- Korea iShares (EWY) |
Published: February 23, 2004
The MSCI Korea iShares (EWY, $27.40) tracks the Morgan
Stanley Capital International index of the South Korean stock market.
The Korean stock market contains many large technology companies, but
this fund can essentially be called "the Samsung fund," as
that single stock makes up more than one quarter of the fund's total
value. Therefore, if Samsung goes down, so does the fund in all
likelihood. EWY's top ten holdings account for roughly two-thirds of the
fund's overall value.
Much like other foreign funds, an investment in EWY
involves some degree of exchange rate risk. However, South Korea does
peg its currency to the U.S. dollar, so this is currently tightly
managed. Because the Korean economy depends heavily on exports to the
United States and Japan, a downturn in either of these two external
economies would severely harm the Korean stock market.
Please note that Samsung's shares, as well as many of this fund's other
components, do not actively trade in the United States. While they may
be available on the over-the-counter pink sheets, these shares rarely
trade. That would make it very difficult to hedge your exposure to
Samsung on any given trade (you might want to do this if you believed
the Korean stock market was about to rise, yet you saw risk for a fall
in shares of Samsung).
| MSCI
Korea iShares (EWY) |
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|
| Type: |
Country
Index |
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| Similar funds: |
MSCI
Japan iShares (EWJ) |
|
|
MSCI
Hong Kong iShares (EWH) |
|
| Options?: |
None |
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| Performance
Data |
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|
| 52-week High: |
$28.50 |
2/17/2004 |
|
Annualized
return since: |
| 52-week Low: |
$14.70 |
3/17/2003 |
|
One-year |
48.60% |
| 2003 Return: |
37.77% |
|
|
Three-year |
22.43% |
|
|
|
|
Five-year |
N/A |
| Dividends: |
$0.24 |
past 12-mos |
Life of fund* |
9.57% |
| Expense Ratio: |
0.99% |
|
|
*
- Started trading 6/23/2000 |
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| Correlation
Data* |
(1/02/02-1/31/04) |
Holdings* |
(as of
1/31/2004) |
| Dow
Jones Industrials |
54.9% |
|
Samsung
Elec. (SSNLF^) |
25.66% |
| S&P 500 |
|
55.3% |
|
KookminBank
(KB) |
7.57% |
| Nasdaq
Composite |
56.5% |
|
Posco (PKX) |
7.16% |
| Nasdaq-100 |
|
55.0% |
|
SK
Telecom (SKM) |
5.10% |
|
|
|
|
Samsung
SDI (SSDIF^) |
4.47% |
| EWJ |
|
51.3% |
|
Hyundai
Motor (HYMTF^) |
4.32% |
| EWH |
|
58.6% |
|
LG
Electronics (LGEAF^) |
3.64% |
|
|
|
|
Korea
Elec. Pwr. (KEP) |
3.24% |
|
|
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|
KT Corp
(KTC) |
2.79% |
|
|
|
|
Shinhan
Fincl. (SHG) |
2.62% |
|
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|
*
Percent top ten are of total |
66.57% |
|
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|
^
Pink sheets; rarely traded |
| Average
Daily Volume |
|
Average
Daily Price Range |
| Jan-04 |
284,640 |
|
|
Jan-04 |
2.5% |
| 2003 |
122,973 |
|
|
2003 |
2.7% |
| 2002 |
117,272 |
|
|
2002 |
3.0% |
| *
- Correlation measures how closely the two items track each
other |
|
*
Includes prior day's close (true range) |
HOW TO MAKE MONEY IN EWY
THIS YEAR
EWY is rather overbought on a weekly basis. However, the fund has room
for one more leg higher. My target is approximately $28.98, but this
could reach up to as high as the channel resistance line shown at
$31.00. A correction to $26.29 is possible first. In the long-term
though, there is far more downside than upside risk in this fund. As
such, those with a long-term view should look to exit long positions on
the next rally. A move below $26.29 would signal that this fund has
already peaked.
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