North Korea Mystery Clouds South Korea ETF

Revelations concerning the declining health of the volatile North Korean leader Kim Jong Il continued this week. While it is widely known that the ruler suffered a stroke last August, new reports are saying that he is suspected to be in the late stages of pancreatic cancer. The common recovery rate of this ailment is dismal, at less than 5%.

This news has not helped ETFs designed to follow South Korean indices. iShares MSCI South Korea Index (EWY - commentary - Trade Now) saw a 2.69% drop on Monday, the first day of trading since the news broke. On the 15-year anniversary of the death of his father, Kim Kim Il Sung, a frail looking Kim Jong made a short appearance that left the media buzzing over the state of the secretive leader's health and the future of the erratic country.

Many are saying that Kim Jong Il's youngest son, Kim Jong Un, will be handed the power of the nation. Though Jong Un is believed to be born around 1983, he was unknown to the rest of the world until a 2003 book made reference to him. By all accounts, the man set to become the leader to this unpredictable nation is a spitting image of his father. Nations looking to increase diplomacy with North Korea are not likely to see an easy road ahead of them.

While South Korea's close proximity to North Korea has not helped the country's markets, others countries in the East will surely be affected when a new chapter for North Korea begins. Be sure to check out China funds such as Claymore/AlphaShares China Small Cap (HAO - commentary - Trade Now), as China is North Korea's largest ally and the main source of many goods than the country relies on.

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Know What You Own: Currency exchange-traded funds include the Wisdom Tree Euro ETF (EU - commentary - Trade Now), the CurrencyShares Japanese Yen Trust ETF (FXY - commentary - Trade Now), the Currency Shares Australian Dollar Trust (FXA - commentary - Trade Now), the CurrencyShares Swedish Krona Trust (FXS - commentary - Trade Now), the CurrencyShares Swiss Franc Trust (FXF - commentary - Trade Now) and the WisdomTree Dreyfus Chinese Yuan Fund (CYB - commentary - Trade Now).

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At the time of publication, Dion had no positions in securities mentioned.

Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.