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Further Reading from MarketBeat Media This Country's Stock Market Was the World's Top Performer in 2025Written by Leo Miller. Article Published: 1/28/2026. 
At a Glance- U.S. stocks have dominated global returns over the past 20 years, far outpacing developed and emerging markets overall.
- That trend flipped in 2025, when international benchmarks delivered much stronger gains than the S&P 500.
- South Korea led the global leaderboard, powered by AI-linked memory chip winners and reform-driven momentum heading into 2026.
Over long periods, U.S. stocks have established themselves as among the best performers in global equity markets. In the 20 years ended Jan. 26, 2026, the S&P 500 Index delivered a total return exceeding 650%. The iShares MSCI EAFE ETF (NYSEARCA: EFA) and the iShares MSCI Emerging Markets ETF (NYSEARCA: EEM) track the performance of international stock market indexes. EFA focuses on stocks in developed economies, while EEM focuses on emerging or developing markets. Over the same period, these ETFs returned less than 200%. However, the United States got the short end of the stick in 2025. The S&P 500's 17.7% total return was well below EFA and EEM, which gained 31.5% and 34%, respectively. Among international markets, one country outperformed all others. That U.S. ally is a key player in the artificial intelligence (AI) ecosystem and saw massive gains in its largest companies. Samsung and SK Hynix Lead South Korea’s RallyIn 2025, South Korea was the world's top-performing stock market. The iShares MSCI South Korea ETF (NYSEARCA: EWY), which tracks more than 80 South Korean stocks, delivered a total return of 95% for the year. JPMorgan notes that, in U.S. dollar terms, the South Korean market gained almost 101%. South Korea's market is highly concentrated, a dynamic that worked in its favor in 2025. Samsung Electronics (OTCMKTS: SSNLF) and SK Hynix make up 26.5% and 18.4% of EWY's weighting, respectively—almost 45% of the fund. Shares of those companies posted massive gains in 2025: Samsung returned roughly 130%, while SK Hynix soared about 278%. The companies are two of the big three in the memory chip market, alongside U.S. rival Micron Technology (NASDAQ: MU), which returned 240% during the year. AI systems place heavy demand on advanced memory chips, and constrained supply drove chip prices higher in 2025. Analysts expect further price increases in 2026. That dynamic prompted investors to buy these memory stocks, since higher prices translate into significantly stronger revenue, margins and profits. Value Up Reforms Look to Mitigate the “Korean Discount”Reforms to South Korea's corporate governance policies have also influenced the rally. The market has long suffered from the so-called "Korean Discount," where Korean stocks often trade at lower valuation multiples than peers elsewhere. Weak protection of minority shareholders' interests has been a key reason. Chaebols—large, family-controlled conglomerates—dominate much of the South Korean economy. Through various mechanisms they can limit the voice of outside shareholders and make it harder to assess true corporate value. Their structures tend to prioritize family control over maximizing shareholder returns. South Korean policymakers are attempting to address these issues through the "Value Up" program. Reforms include extending the fiduciary duty of independent directors from the "Company" to the "Company and Shareholders," which would give minority owners greater ability to challenge decisions that do not serve their interests. Memory Stocks and Value Up Could Support More Upside in 2026Looking ahead, many analysts remain bullish on the South Korean market. Goldman Sachs projects a 23% return in 2026 in U.S. dollar terms. Samsung and SK Hynix together control around 80% of the global market for high-bandwidth memory (HBM) chips, positioning them as major beneficiaries if shortages persist. Still, their sharp run-ups raise questions about how much further their rallies can continue. Morgan Stanley also views South Korea as early in its Value Up journey. It identifies tax reform, treasury share cancellations and consistent government follow-through as steps that could bolster investor confidence. That implies potential for further Value Up-driven gains if deeper reforms are enacted, although Morgan Stanley calls South Korea's tax policy "notoriously difficult to predict." EWY is the simplest way for U.S. investors to gain exposure to the South Korean market. Keep in mind, however, that currency movements between the U.S. dollar and the South Korean won will affect returns.
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