Korean ETF Market Sees Currency-Hedged Funds Surge as Dollar-Won Falls

The dollar-won exchange rate has fallen back into the 1,300 won range, favoring currency-hedged ETFs in South Korea. Over the past month, these products outperformed their unhedged peers by about 4 to 5 percentage points.

Currency-hedged ETFs tracking the U.S. S&P 500 and Nasdaq-100 have seen stronger returns, with Mirae Asset's TIGER U.S. S&P500(H) returning -1.81% versus -6.52% for its unhedged peer over the past month.

ETFs designed to profit from a decline in the dollar against the won have also benefited, with major U.S. dollar futures inverse ETFs posting an average return of 5.33%. Double-inverse products even stronger returns, with an average of 10.64%.