A few things beat down on the U.S. stock market in 2014. Still, investing in the S&P 500 SPDR Trust (SPY) offered roughly 65% at the end of the year, whereas iShares MSCI South Korea Index Fund(ETF) (EWY) has been a disappointing flop.

Admittedly, I have precious little exposure to overseas markets going into 2015. Other than a modest amount in WisdomTree India Earnings Fund (ETF) (EPI), most international assets in my client accounts had hit stop-limit loss orders in July.

So, why am I taking a look at a country that has struggled alongside developed Europe and Japan as well as emerging Asia? In essence, I believe the Bank of Korea will determine that the export-dependent nation must take steps to both stimulate its weak economy as well as depreciate its currency in the region.

If the South Korean won loses value against the dollar, wouldn’t that be bad for EWY? Yes, it would.

On the other hand, additional stimulus from the Bank of Korea would benefit Korean corporations and a depreciating South Korean won would be effectively neutralized in a fund like WisdomTree Korea Hedged Equity Fund (DXKW).

Korean companies in DXKW collectively have an attractive price-to-earnings ratio of 12, an enviable price-to-sales ratio of 0.36 and a price-to-book ratio of 1. If valuations ever start to matter again, who wouldn’t want a piece of Samsung (SSNLF), Hyundai Motor Co Ltd (HYMLF), Posco (ADR) (PKX) and Kia Motors Corp Ord (KIMTF)?

Employing DXKW gives one an opportunistic exposure to equities in South Korea, while simultaneously hedging against dollar-won fluctuations. And from my vantage point, the South Korean won is almost certain to take it on the chin in the year ahead.

How can I be so confident that the South Korean won will fall in value? Well, I can’t. However, since South Korea needs to do a whole lot of business in Asia and Europe, the Bank of Korea has to be livid about its currency being at five-year highs versus the euro and the Japanese yen. Additionally, South Korea is far too dependent on its exports to merely acknowledge the country’s economic weakness while holding its base rate at 2%.

At the Bank of Korea’s recent committee meeting on Dec. 11, it acknowledged that South Korea has been adversely affected by changes in monetary policies of major countries in the region as well as prolonged economic sluggishness in the eurozone.

While I am not capable of reading the tea leaves here, I am going out on a limb: South Korea is going to take a step in the stimulus direction in the early part of 2015. When you combine the attractive valuation with the likely depreciation of the South Korean won, DXKW would be very likely to come out ahead.

There is one glaring problem with DXKW and that is its limited liquidity. With less than $100,000 in daily dollar trading volume, it would be a challenge to own for a more active trader.

However, longer-term holders of a particular theme (e.g., “currency wars,” central bank intervention, massive foreign exchange reserves, current account surplus, etc.) have to like what South Korea is serving.

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Disclosure Statement: ETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc., and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETFExpert website. ETF Expert content is created independently of any advertising relationship.