Stock Analysis & Valuation Weiss Korea Opportunity Fund Ltd. (WKOF.L)

• Previous Close: £120.00
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	121.51	1
Intrinsic value (DCF)	55.98	-53
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Weiss Korea Opportunity Fund Ltd. (WKOF.L) is a closed-ended equity mutual fund managed by Weiss Asset Management LP, focusing on South Korea's public equity markets. Launched in 2013 and domiciled in Guernsey, the fund invests across diversified sectors and market capitalizations, emphasizing value stocks, preferred shares, and dividend yield. Its portfolio strategy benchmarks against the MSCI Korea 25/50 Net Total Return Index, targeting liquidity and common shares weighting. As part of the Financial Services sector, WKOF.L provides investors exposure to South Korea's dynamic economy, leveraging Weiss Asset Management's expertise in value investing. The fund's niche focus on Korean equities makes it a unique vehicle for investors seeking regional diversification and value-driven returns.

Investment Summary

Weiss Korea Opportunity Fund Ltd. offers specialized exposure to South Korean equities, appealing to investors seeking value-oriented opportunities in an emerging market. However, the fund reported a net loss of -6.45 million GBp (-0.093 diluted EPS) in FY 2023, alongside negative revenue, signaling operational challenges. Positive operating cash flow (4.24 million GBp) and a dividend yield (4.08 GBp per share) provide some mitigation. The fund’s near-zero beta (0.99) suggests market-aligned volatility, but its concentrated geographic focus introduces regional risks, including currency fluctuations and geopolitical tensions. Investors should weigh its value-driven strategy against its recent underperformance and the competitive landscape of Korean equity funds.

Competitive Analysis

Weiss Korea Opportunity Fund Ltd. competes in the niche segment of South Korea-focused equity funds, differentiating itself through a value-oriented approach and preferred shares emphasis. Its benchmark, the MSCI Korea 25/50 Index, aligns it with broader market performance, but its active management by Weiss Asset Management adds a layer of strategic selectivity. The fund’s closed-ended structure provides stability in capital deployment but limits liquidity compared to open-ended alternatives. Competitors include larger, diversified emerging market funds and Korea-specific ETFs, which may offer lower fees or broader diversification. WKOF.L’s edge lies in its targeted value investing, but its recent financial underperformance (-6.45 million GBp net loss) raises questions about execution. The absence of leverage (zero debt) is a conservative strength, yet its small market cap (~96.3 million GBp) may limit scalability versus global asset managers.

Major Competitors

• iShares MSCI South Korea ETF (EWY): The iShares MSCI South Korea ETF (EWY) is a passive ETF tracking the MSCI Korea 25/50 Index, similar to WKOF.L’s benchmark. It offers lower fees and higher liquidity as an open-ended fund, appealing to cost-conscious investors. However, it lacks the active value-stock selection of WKOF.L and does not focus on preferred shares. EWY’s larger AUM provides scale but less tactical flexibility.
• Direxion Daily South Korea Bull 3X Shares (KORU): KORU is a leveraged ETF offering 3x daily exposure to South Korean equities, catering to short-term traders. Its high-risk, high-reward profile contrasts sharply with WKOF.L’s value-driven, long-term approach. KORU’s volatility and expense ratio make it unsuitable for conservative investors, but it fills a different niche in the Korea-focused fund universe.
• Franklin FTSE South Korea ETF (FLKR): FLKR tracks the FTSE South Korea Capped Index, providing broad exposure to Korean large- and mid-caps. Like EWY, it is a passive, low-cost alternative to WKOF.L but lacks active management or value-stock emphasis. FLKR’s capped methodology reduces single-stock risk, appealing to index investors, but it does not target dividends or preferred shares.