Core Insights - Global stocks have shown strong gains in early 2026, with the iShares MSCI ACWI ex US ETF (ACWX) up 3.6% and the iShares MSCI Emerging Markets ETF (EEM) up 5% year-to-date as of January 23, 2026 [1] Country ETF Winners Norway - Norway iShares MSCI ETF (ENOR) reached a 52-week high of $30.82, slightly down from $30.86, while Global X MSCI Norway ETF (NORW) was at $31.93, down from $31.97 [2] - Norges Bank maintained a policy rate of 4.00%, with expectations for a rate cut in mid-2026, which could benefit stocks [2] - High oil prices around $65 and strong commodity demand have supported energy sector stocks [2] Turkey - Turkey iShares MSCI ETF (TUR) was at $39.40, slightly down from a 52-week high of $39.44 [3] - Turkey's annual inflation rate decreased to 30.89% in December 2025, down from 31.07%, marking the lowest since November 2021, which has bolstered investor confidence [3] South Korea - South Korea iShares MSCI ETF (EWY) was at $117.99, slightly down from a 52-week high of $118.41, and Franklin FTSE South Korea ETF (FLKR) was at $38.66, down from $38.75 [4] - The KOSPI index has reached record highs, driven by a strong rally in the chip sector, fueled by AI chip demand and December export surges [4] Japan - iShares MSCI Japan Small-Cap ETF (SCJ) was at $96.66, slightly down from a 52-week high of $96.78 [5] - Japanese stocks have surged to record highs amid expectations of snap elections by Prime Minister Sanae Takaichi, who aims to leverage her approval ratings for a parliamentary majority [5][6] - The Bank of Japan has raised its economic growth forecast for the fiscal year ending March 2026 to 0.9% from 0.7%, and for fiscal 2026 to 1.0% from 0.7% [7]

Core Viewpoint - A weakening U.S. dollar, global de-dollarization, and lower interest rates are creating favorable conditions for emerging market (EM) ETFs, with South Korea emerging as a compelling investment opportunity [1]. Group 1: Performance of South Korean ETFs - Country ETFs focused on South Korea have significantly outperformed the broader MSCI Emerging Markets Index this year [2]. - Notable outperforming ETFs include iShares MSCI South Korea Index (EWY), Franklin FTSE South Korea ETF (FLKR), Direxion Daily South Korea Bull 3X Shares (KORU), and Matthews Korea Active ETF (MKOR) [2]. - EWY has over $6 billion in assets under management, benefiting from BlackRock's brand recognition [3]. - KORU, with its 3x leverage, has seen over 300% growth, but is recommended for seasoned traders as a tactical tool [3]. - MKOR is actively managed, capitalizing on the nuances of South Korean equities, which provides an advantage over passive funds [4]. Group 2: Economic Drivers - South Korea's economy is recovering after a pandemic-induced downturn, with signs of vitality noted by the Finance Minister [5]. - The Korea Composite Stock Price Index (KOSPI) is reaching record highs, supported by government stimulus measures aimed at boosting consumer spending [5]. - Optimism is growing as the Bank of Korea has raised its growth targets, with major financial institutions like Goldman Sachs and JP Morgan following suit [5]. Group 3: Future Prospects and Innovations - The focus on artificial intelligence (AI) and technological innovation is expected to drive growth, supported by a five-year economic plan from the South Korean government [7]. - The government is committed to enhancing innovation in AI, robotics, machine learning, and other technological sectors [7]. Group 4: Diversification Strategies - Investors may seek to hedge risks associated with concentrated exposure to South Korea by considering ETFs that include South Korean equities as part of a broader emerging markets strategy [8]. - Suggested funds for diversified exposure include First Trust Asia Pacific ex-Japan AlphaDEX Fund (FPA), VanEck Vietnam ETF (VNM), VictoryShares Emerging Markets Value Momentum ETF (UEVM), and KraneShares MSCI Emerging Markets ex China Index ETF (KEMX) [9].