ETFriday: Korea at 10/10, Banks at 8% Yields, and EM Spreads Past 350 bps

This Week's Setup

This week's ETF screen keeps EWY on top with AI listing headlines and a double-digit Korea discount, while FRDM captures EM flows with a freedom-weighted filter that avoids the autocracy trade.

XHB and the bank pairs lean into 6–8% earnings yields on mid-teens multiples, CNRG prices clean-power growth at 22× with the highest life annualized return on the list, and DXJ, KBE, and AVEM add hedged Japan plus diversified EM value without forcing a single-country bet.

The 8 Names

1. iShares MSCI South Korea ETF (EWY)

Stock Pixie Score 10.0/10 | P/E 17.78 | Earnings Yield 5.6% | 52W Drawdown –14.1%

The earnings yield of 5.6% puts EWY 131 bps above the 10-year, a spread rarely seen in a developed market equity basket. The 14% drawdown from the 52-week high creates a reset point for investors willing to stomach geopolitical noise and semiconductor cycle swings.

A Soaring AI Standout Is Eyeing a 2026 U.S. Listing carries direct relevance here, given Samsung and SK Hynix weight in the basket. Zacks flagged EWY as a likely short-term winner after the Google quantum breakthrough, reinforcing the AI infrastructure thesis for memory and logic chip demand.

Korea remains a single-sector bet. If DRAM and NAND pricing roll over or China accelerates domestic chip substitution, this fund has no diversification buffer.

2. Freedom 100 Emerging Markets ETF (FRDM)

Stock Pixie Score 9.9/10 | P/E 16.44 | Earnings Yield 6.1% | 52W Drawdown –10.2%

A 6.1% earnings yield against a 16.44 P/E gives you a 177 bps spread to Treasuries and a 10% drawdown entry. The fund's 15.3% annualized growth since inception signals structural alpha in its screen, which excludes state-controlled enterprises and weights toward economic freedom metrics.

Barron's named FRDM one of six top-performing emerging market ETFs, and The Daily Upside reported that international equity ETF flows more than doubled 2024 totals, confirming demand is rotating back into non-U.S. equity.

The fund's selection criteria tilt it toward smaller democracies and frontier markets with less liquidity. If macro stress forces redemptions, bid-ask spreads widen fast.

3. State Street SPDR S&P Homebuilders ETF (XHB)

Stock Pixie Score 9.6/10 | P/E 14.87 | Earnings Yield 6.7% | 52W Drawdown –16.3%

The 6.7% earnings yield is the richest on this list, and the 241 bps spread to the 10-year compensates you for the sector's interest-rate sensitivity. The 16% drawdown puts XHB firmly in the strong-entry zone, and the fund has compounded at 13.5% annually over its life.

The 1-year trend is nearly flat at 0.08%, signaling the housing cycle remains range-bound as mortgage rates stay elevated. This is a value trap until rate expectations shift.

Yahoo Finance coverage flagged that the U.S. housing market "hasn't been normal since 2018," and Zillow-Esusu rent-reporting partnerships suggest the industry is hunting for alternative credit pathways to unlock demand. Structural innovation is underway, but it takes time to translate into volume.

If the Fed holds rates higher for longer or if recession fears build, homebuilders will re-test the lows. This setup depends on a soft landing playing out.

4. State Street SPDR S&P Kensho Clean Power ETF (CNRG)

Stock Pixie Score 9.6/10 | P/E 22.54 | Earnings Yield 4.4% | 52W Drawdown –13.9%

The 18.4% annualized growth since inception tells you this fund catches the right secular trend, and the 4.4% earnings yield still clears Treasuries by 12 bps despite a higher P/E. The 14% drawdown creates a second-chance entry for investors who missed the 2023–2024 run.

24/7 Wall St. ran a piece titled "The One Fed Signal That Could Flip CNRG From Loser to Leader in 2026," and Zacks listed it among clean energy ETFs poised to benefit from oil disruption. The setup here is binary: if rate cuts arrive, CNRG's capital-intensive holdings re-rate fast.

The P/E of 22.54 is elevated relative to the rest of this list, and the earnings yield spread to the 10-year is razor-thin at 12 bps. You are paying for growth, not income, which means volatility will stay high until the Fed pivots.

5. State Street SPDR S&P Regional Banking ETF (KRE)

Stock Pixie Score 9.5/10 | P/E 12.38 | Earnings Yield 8.1% | 52W Drawdown –14.1%

The 8.1% earnings yield puts KRE 376 bps above the 10-year, the widest spread on this list. The 12.38 P/E is basement-level for a U.S. equity sector, and the 14% drawdown aligns with the stronger-entry zone.

Barron's titled its coverage "Bank Stocks Have Gotten Hit Hard. It's Time to Think About Buying," and a separate piece warned that banks are "the Most Important Stocks to Watch Now" for recession signals. The market is treating regionals as a macro hedge, which creates asymmetry: if recession fears fade, this spread compresses violently.

Commercial real estate exposure remains the unhedged tail risk. If office vacancy spikes or if regional banks face another deposit flight, the P/E will stay compressed regardless of earnings yield.