Global asset manager Franklin Templeton, which has $1.66 trillion in assets under management (AUM) (about 2,370 trillion won), assessed Korea as a key country for investing in emerging markets.
Franklin Templeton said in a recent report that Korea has diversified growth engines in ▲ semiconductors ▲ defense industry ▲ shipbuilding ▲ K-beauty and K-culture ▲ medical tourism.
Emerging-market stocks have posted returns of more than 28% this year in dollar terms, achieving performance about twice that of the Standard & Poor's (S&P) 500 index (14%). A weaker dollar, policy shifts, solid growth compared with advanced economies, and changes in global capital flows have driven the rebound.
In particular, Franklin Templeton emphasized that, as of the 23rd of last month, the Korean and Chinese stock markets had risen about 61% and 37%, respectively, leading the emerging-market rally.
Franklin Templeton assessed that the rebound in the technology sector centered on semiconductors, as global memory chip demand recovers, is supporting the Korean stock market.
At the same time, it said the Korean stock market has achieved industrial diversification rather than relying only on semiconductors. The top three sectors—telecommunications, technology, and industrials—are evenly distributed at about 20% each, and financials and consumer goods corporations also account for a substantial share.
It also noted that Korea's status in the defense industry has risen rapidly. Korea's defense exports surged from about $3 billion (about 4.2825 trillion won) in the early 2010s to $17.3 billion (about 24.6992 trillion won) in 2022, placing the country among the world's top 10 arms exporters. In addition, it viewed Korea as emerging as a strategic partner of the United States in shipbuilding.
Franklin Templeton added that Korea's consumer goods and cultural exports, including K-beauty and K-culture, are also growth engines for the Korean economy, and that medical tourism is another area enhancing Korea's investment appeal.
Dina Ting, head of Global Index Portfolio Management, said, "As emerging markets regain the lead in global growth, the key question has shifted from whether to invest in emerging markets to which emerging-market countries to invest in," adding, "Among them, Korea is an attractive investment destination where global industry, culture, and healthcare intersect."