The top three sectors in this fund are Technology (40.39% of assets), Financial Services (15.27%), and Consumer Cyclicals (11.47%).
MSCI South Korea Hedged Equity ETF (DBKO)
From Jack Adamo’s Insiders Plus
What I like about Deutsche X-trackers MSCI South Korea Hedged Equity ETF (DBKO) is very simple. Its P/E multiple is just 9.6; its price-to-book ratio is 1.14 and price-to-sales is 1.07. South Korean equities usually sell at a discount to U.S. stocks, yet the unhedged ETF has outperformed the S&P 500 by 25% (total) over the 18 years it has existed. The only thing I don’t like about it is that Samsung Electronics makes up a bit more than 20% of its holdings. I have nothing against Samsung; I’d just prefer less concentration. However, the reality is that Samsung probably does represent a significant portion of South Korea’s output, and the ETF’s performance is almost identical to that of the KOSPI (S. Korean) Index; so, I guess the weighting is appropriate.
The chart below is not of the Deutsche X-trackers MSCI South Korea Hedged Equity ETF. DBKO has only been around for a few years, so I’m showing EWY, which is essentially the same fund by the same management firm. The difference is that the one we’re buying hedges its currency. For the period the two ETFs have coexisted, their performance has been almost identical, but if the dollar strengthens with the Fed’s balance sheet reduction, the hedged version may do better.
The DBKO’s expense ratio of 0.58% is slightly higher than its peers (0.53%), but not enough to make a difference over the long term. The Deutsche X-trackers MSCI South Korea Hedged ETF is a buy up to $30.50. Take a 3% position in the Main Portfolio.
Jack Adamo, Jack Adamo’s Insiders Plus, www.jackadamo.com, September 23, 2017