A Nifty Idea For A Safe Emerging Market?

South Korea can get kind of a bum wrap. An emerging market, at least according to the indexers at MSCI, though many analysts and experts would say South Korea has attained developed market status, the country and its corresponding ETF, the iShares MSCI South Korea Index Fund EWY, can be beholden to a variety of negative scenarios. There is the obvious, which includes sharing a border with a hostile neighbor (North Korea). There is the China factor given South Korea's burgeoning trade relationship with the world's fastest growing major economy. And there is the unforeseen, such as the Japan earthquake and tsunami. Still, there may be opportunity with EWY, particularly if you're a believer in the tech trade. South Korea is no play on the sexy materials sector to be sure, but 80% of South Koreans have a home computer and the country's Internet penetration rate is a world-leading 94.3%, according to ETFdb.com. Frankly, South Korea has more of a developed market feel to it with a stable political system that encourages free markets and free trade and demographic, education and income statistics that are more on par with the U.S. or Japan than Brazil or India. And let's not forget that Warren Buffett is bullish on South Korea and could be looking to make a big deal in the country. Maybe that will be with an EWY constituent and the ETF will get a boost on that news. Tech accounts for about 30% and consumer cyclicals get an allocation of about 20%, making EWY a fine play on a robust economy. From the trader's perspective, the ETF just broke above resistance in the $59.75 area on Monday, which could set it up for a run to $65 in the near-term.