The iShares MSCI South Korea ETF (EWY) delivered an exceptional performance in 2025, posting a total return of between 95% and 101%. This made it the world’s best-performing equity ETF for the year. The rally was driven by broad-based strength across South Korean equities, with the ETF’s net assets increasing by more than 40% as inflows surged from institutional and retail investors seeking exposure to the country’s technology-led growth story.

Nearly 45% of EWY’s portfolio is allocated to two memory chip manufacturers: Samsung Electronics and SK Hynix. In 2025, Samsung shares climbed approximately 130% and SK Hynix shares soared about 278%, fueled by robust demand for DRAM and NAND components within artificial intelligence data centers. With industry analysts forecasting a continued memory supply shortage extending through 2027, the ETF stands to benefit from sustained price increases and margin expansion at these leading semiconductor companies.

South Korea’s ‘Value Up’ corporate governance initiative has led to improvements in board independence, dividend payout policies and minority shareholder rights across the market. These measures have been credited with narrowing the valuation discount between domestic stocks and global peers. Analysts at three major Wall Street firms now project that EWY could achieve additional gains of 15% to 20% in 2026, citing higher dividend yields and an anticipated re-rating as governance standards continue to advance.