Korea ETFs — Franklin or MSCI? The Cheap Fund Lost the Chip Year
Two US-listed funds cover South Korea: EWY at 0.59% a year and FLKR at 0.09%. Since 2017 the cheaper fund is ahead by 0.27 points a year, about half the fee gap — and in 2025, when Korea’s market nearly doubled on its chipmakers, the dearer fund won by 3.4 points because it holds more SK Hynix and Samsung.
Two funds, one market
South Korea can be bought through two big US-listed index funds that look interchangeable. The iShares MSCI South Korea ETF (EWY) follows MSCI’s Korea index and charges 0.59% a year. The Franklin FTSE South Korea ETF (FLKR) follows FTSE’s Korea index and charges 0.09%. Half a percentage point a year is a large fee gap for the same country, and the simple reading is that the cheap fund should win by roughly that much every year. The record since FLKR started trading in November 2017 says something more useful: the fee decides the long run only when the two indices hold the same companies in the same weights, and in Korea they do not. How each fund did against its own index is a separate question — that is the tracking difference; this entry compares the two funds with each other.
The record, year by year
Total return with dividends reinvested, in dollars, after every cost inside each fund:
| Year | FLKR | EWY | Gap |
|---|---|---|---|
| 2018 | −21.30% | −20.37% | −0.93 |
| 2019 | +8.88% | +7.97% | +0.91 |
| 2020 | +42.64% | +39.43% | +3.21 |
| 2021 | −7.54% | −7.58% | +0.04 |
| 2022 | −27.49% | −26.59% | −0.91 |
| 2023 | +19.17% | +19.05% | +0.11 |
| 2024 | −18.84% | −20.48% | +1.65 |
| 2025 | +91.91% | +95.33% | −3.42 |
Since November 2017 FLKR returned 13.56% a year and EWY 13.29%, a lead of 0.27 points a year for the cheaper fund. FLKR was ahead in five of the eight full years. But the lead is about half the fee gap, and in 2025 — the year the Korean market nearly doubled on the back of its chipmakers — the expensive fund came out 3.4 points ahead. The full pair table for every market is on the ETF page.
Why the dearer fund can win: concentration
The gap comes from what each index holds, not from what each fund charges. At the latest holdings reports EWY had 24.5% in SK Hynix and 22.0% in Samsung Electronics, 46.5% of the fund in two chipmakers. FLKR held 20.2% and 17.0%, 37.2% together, and spread the rest across more mid-sized names. When the two memory giants run ahead of the rest of the market, as they did in 2025, the fund with nine more points in them wins by more than any fee can take back. When they lag, as in 2024, the broader fund loses less and the fee advantage shows up on top. The two index families also classify Korea differently — FTSE counts it as a developed market, MSCI still as an emerging one — which changes which foreign-ownership limits and size cut-offs apply.
How to read the pair
A fee is certain; an index difference is a bet on which companies lead. Over nine years the cheaper fund kept a little more than half of its fee advantage, because the heavier weighting in two stocks cost EWY in some years and paid it in others. Readers who hold one of the two are, in effect, choosing how much of Korea is Samsung and SK Hynix. The ETF dispersion lab tracks how far the winners inside a fund run ahead of the rest, and investors in the EU who cannot buy either US fund will find the European versions of both on the UCITS page.