Safe Haven ETFs In Focus Amid Geopolitical Threats

North Korea has been relatively silent for two months. Safe haven funds were out of investor radar. However, they are back in reckoning as the North Korean leader made claims of his regime completing its nuclear program.  

Latest Developments in the Space

North Korea launched a Hwasong-15 missile with improved technology that can put the entire United States within range, per Korean Central News Agency (KCNA). Per United States Secretary of Defense James Mattis, this missile flew higher than any previous missile.

Despite widespread global criticism, North Korea has been continuously testing missiles to develop a nuclear program in order to safeguard itself from potential U.S. invasion, per North Korean leader Kim Jong-Un. North Korea seems to be anything but willing to scrap its nuclear program, as it broke its two-month-long period of silence by testing a missile that reached an altitude of more than 4,000 kilometers.

South Korea responded with its own missile test in a show of force within minutes of the launch. Moreover, North Korea was recently added to a list of nations that the United States considers sponsors terrorism. The Asian nation strongly condemned this action.

This came as President Donald Trump enacted new sanctions aimed at North Korean shipping to put further pressure on the country to abandon its nuclear program. However, North Korea responded by saying that they will continue to work on the nuclear program amid continuous sanctions by the United States.

Let us discuss a few ETFs impacted by the rising geopolitical risks relating to North Korea.

Japanese yen funds are the go-to investment vehicles in periods of rising risks. Although Japan’s proximity to North Korea creates doubts over its reliance as a safe haven currency, its significant foreign asset position makes it a good bet. Moreover, yen’s track record of safeguarding investors from global risks may also be a factor for its current relative appeal.