Korea ETFs Explained: EWY, FLKR and Other Ways to Own Korean Stocks

Foreign investors who want Korean stocks without a Korean account have long had one obvious route: an exchange-traded fund (ETF) listed in New York. The largest, the iShares MSCI South Korea ETF (EWY), held $20.06 billion in net assets on Nov. 6, 2026, according to its iShares product page.

A cheaper rival, the Franklin FTSE South Korea ETF (FLKR), charges 0.09% a year against EWY's 0.59%. Both buy roughly the same group of large Korean companies, but they follow different indexes from different providers.

The choice now sits beside a newer one. Since January 2026, brokers abroad have been able to offer Seoul-listed shares directly through omnibus accounts, pooled accounts that a foreign broker holds in Korea for its clients.

Both funds also lean heavily on two chipmakers, Samsung Electronics and SK hynix, and EWY is changing its index on or around Nov. 9, 2026. Here's what you need to know.

What Are the Main U.S.-Listed Korea ETFs?

Two plain index funds and one leveraged fund cover most of the choice. Each tracks an index of Korean stocks, trades on NYSE Arca in U.S. dollars and holds shares listed on the Korea Exchange.

The iShares MSCI South Korea ETF, run by BlackRock, launched on May 9, 2000. iShares describes it as "a way to express a single-country view." It held 75 positions on Nov. 6, 2026.

The Franklin FTSE South Korea ETF launched on Nov. 2, 2017. Franklin Templeton's factsheet dated Sept. 30, 2026, lists $1.79 billion in total net assets and 148 holdings, about twice as many names as EWY.

The Direxion Daily MSCI South Korea Bull 3X ETF (KORU) works differently. Its summary prospectus, dated Feb. 27, 2026, says it "seeks daily investment results, before fees and expenses, of 300% of the daily performance of the Index," the MSCI Korea 25/50 Index.

That daily target matters. The prospectus says the fund's return over any period longer than a day comes from compounding daily returns and "should not be expected to be 300% of the performance of the Index for the period." Simply put, KORU is a trading tool for short holding periods, not a leveraged copy of the Korean market.

Which Index Does Each Fund Track: MSCI Korea 25/50 or FTSE South Korea?

EWY follows an MSCI index and FLKR follows a FTSE Russell index, and both cap their largest stocks so the funds can meet U.S. tax rules for regulated investment companies (RICs). Under those rules, a fund may hold no more than 25% in one issuer at each quarter-end, and holdings above 5% may not add up to more than 50%.

EWY has tracked the MSCI Korea 25/50 Index since Feb. 12, 2013, according to its factsheet. Before that it followed the uncapped MSCI Korea Index.

The MSCI method applies the limits to "group entities," companies MSCI judges to be under common control. At each quarterly rebalance, held at the end of February, May, August and November, no group may exceed 22.5% and groups above 4.5% may not exceed 45%. That 10% buffer leaves room for prices to drift between rebalances.

Prices did drift. On Sept. 30, 2026, SK hynix made up 23.72% of EWY, above the 22.5% ceiling the index applies at each rebalance.

That is the background to the index change. An iShares supplement dated Oct. 23, 2026, says EWY will switch to the MSCI Korea 25/50 Daily 25 Capped Index on or around Nov. 9, 2026, and the product page already lists the new index as its benchmark.

The new index keeps the 25% and 50% limits and the quarterly rebalance. It adds a daily check: if a group entity exceeds 25% at the close of any business day between rebalances, the index is rebalanced so that each group entity is cut back to 22.5%.

FLKR tracks the FTSE South Korea RIC Capped Index, based on the FTSE South Korea Index of large and mid-sized companies. Franklin Templeton's prospectus dated Aug. 1, 2026, says the cap is applied quarterly so that no issuer exceeds 25% and issuers above 5% do not together exceed 50%. The factsheet adds that the index is reconstituted semiannually.

The FTSE index is broader. It had 156 securities on May 31, 2026, ranging from $613 million to $1.39 trillion in market value, the prospectus says. EWY's MSCI index had about 74 constituents on Sept. 30, 2026, according to the iShares supplement.

How Concentrated Are Korea ETFs in Samsung and SK hynix?

Heavily: in both funds, the two chipmakers make up more than 40% of the portfolio. Korea's market itself is dominated by them, and an index that weights by market value passes that on.

On Sept. 30, 2026, the one date both issuers report, SK hynix and Samsung Electronics together accounted for 46.49% of EWY and 40.84% of FLKR. Their top 10 holdings made up 62.14% and 60.80%, respectively.

EWY's daily holdings file shows how quickly weights move. As of Nov. 5, 2026, SK hynix was 22.47% of the fund and Samsung Electronics 21.87%, a combined 44.3%, plus 0.05% in Samsung's non-voting preferred shares.

Sector weights tell the same story. Information technology was 49.18% of EWY on Nov. 5, 2026, and 47.98% of FLKR on Sept. 30, 2026.

Franklin Templeton's prospectus spells out the risk for FLKR. The fund may become "non-diversified" under U.S. fund law if market moves make a few index members very large, and its index was concentrated in the semiconductor industry as of May 31, 2026.

Simply put, a Korea ETF is in large part a bet on the memory-chip cycle. A sharp move in Samsung Electronics or SK hynix moves both funds in the same direction.

Do Korea ETFs Carry Won Currency Risk?

Yes. Both funds hold shares priced in Korean won and report their value in dollars, so a weaker won lowers the fund's value even if Korean share prices do not change.

EWY's summary prospectus states it plainly: "Because the Fund's NAV is determined in U.S. dollars, the NAV could decline if the currency of the non-U.S. market in which the Fund invests depreciates against the U.S. dollar." NAV, or net asset value, is the per-share value of the fund's holdings. The reverse also holds, and a stronger won lifts the dollar value.

Neither prospectus describes hedging the won as part of the fund's strategy. FLKR's prospectus says it may use currency forwards and futures, for example to settle local trades or to protect against currency moves around distributions to shareholders.

EWY's holdings file shows the currency at work. On Nov. 5, 2026, the fund held 1.29% of its assets in won cash, and every Korean stock in the file was listed with the won as its market currency.

How Do Korea ETFs Compare With Buying Seoul Shares Directly?

An ETF gives you a basket in dollars through any U.S. brokerage account, while direct ownership lets you choose individual companies in won. The table sets out the main differences, using the data dates each issuer shows.

Trading hours make a real difference. NYSE Arca's regular session runs while it is night in Seoul and Korean trading has closed, so EWY and FLKR prices reflect what U.S. traders expect Korean stocks to do next. Our guide to Korean stock market hours sets out the Seoul sessions.

Direct ownership has its own costs. Since Jan. 1, 2026, a seller of KOSPI shares pays 0.20% in transaction taxes, and dividends are taxed in Korea when paid. Our guide on how to buy Korean stocks from abroad covers brokers, omnibus accounts and fees, and dividend withholding tax for non-residents explains the treaty rates.

The ETF route has costs that do not appear in the fee line. A fund pays commissions when it trades, and it can trade at a small premium or discount to the value of its holdings. On Nov. 6, 2026, EWY closed at a 0.09% discount and had a 30-day median bid-ask spread of 0.02%, its product page shows.

Dividends from Korean companies are taxed in Korea before they reach the fund, which passes on what remains. EWY pays distributions once a year, according to its factsheet.

Together, EWY, FLKR and KORU offer dollar-priced access to the same narrow Korean market, with yearly costs from 0.09% to 1.32% and 40% or more of the money in two chipmakers, while direct ownership trades those funds' convenience for control over which companies you hold.