South Korea ETF Surges Nearly 30% YTD on Dollar Weakness and AI Boom
iShares MSCI South Korea ETF has rallied 29.65% year-to-date following a 34% 2025 advance, outperforming other country ETFs. Analysts point to a potential 5% U.S. dollar drop, 29% EM earnings growth forecast and $650 billion in AI infrastructure spending as catalysts.
1. YTD Performance Lead
The iShares MSCI South Korea ETF has outpaced its emerging market peers with a 29.65% gain year-to-date, building on a 34% advance in 2025 and marking it as the top-performing country ETF.
2. Dollar Weakness Driver
A weakening U.S. dollar, projected to fall by as much as 5% on bets of Fed rate cuts, enhances the competitiveness of South Korean exports and reduces local dollar-denominated debt costs, bolstering ETF returns.
3. AI Capex and Earnings Outlook
Emerging market earnings are forecast to grow 29% in 2026, driven by over $650 billion in global AI infrastructure investment and capital expenditure, while a 40% valuation discount to U.S. equities suggests further upside potential.