“Exchange-traded funds that invest in South Korean stocks have fallen sharply in recent weeks amid escalating political tensions with North Korea. The iShares MSCI South Korea Index Fund (NYSE:EWY) has dropped about 20% over the past month as friction between the two Koreas has increased with Seoul accusing North Korea of torpedoing and sinking one of its warships. Adding to the anxiety, North Korea this week said it would freeze relations with Seoul,” John Spence Reports From MarketWatch.

“If tensions had cooled at all in recent weeks, they have once again reached a boiling point in recent days as a series of maneuvers on both sides has captured the attention of the international community,” said Michael Johnston, ETFdb.com senior analyst, in his daily market update Tuesday. “The escalation in tensions between North and South rippled throughout the global economy, as the latest negative development in a disastrous May hardened investor risk aversion from Australia to Wall Street,” he added.

“The iShares MSCI South Korea holds total assets of nearly $3 billion and tracks one of Asia’s largest economies. Yet the fund is highly concentrated in its largest stock holding,” Spence Reports.

“When evaluating EWY, it is important to consider the outlook for Samsung Electronics, which accounts for almost 20% of the total portfolio,” says Morningstar analyst Patricia Oey in her latest profile of the ETF. She also notes that since the fund doesn’t hedge its foreign-currency exposure, its returns are influenced by the movement of the Korean won against the U.S. dollar.

Here are some more details on the iShares MSCI South Korea Index ETF (NYSE:EWY) below:

iShares MSCI South Korea Index ETF (NYSE:EWY)

The iShares MSCI South Korea Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the South Korean market, as measured by the MSCI Korea Index.

NYSE:EWY