Korea Fund : Monthly Insights

Monthly Insights | As of 3/31/2020

The Korea Fund, Inc.

Manager's Commentary

Market Review

The Korean equity market corrected significantly in March 2020, as the further global spread of COVID-19 increased uncertainties on demand outlook. The best performing sector was health care, after several Korean companies announced plans to develop a cure for COVID-19. The communication services sector also outperformed on the defensive nature of the sector as more people were forced to stay indoors. Consumer discretionary was the worst performing sector due to disruption in both demand and production. The industrials sector also underperformed on concerns for a weak order outlook amidst low crude oil prices.

Fund Review

The Korea Fund, Inc. (the "Fund") outperformed the MSCI Korea 25/50 Index (the "benchmark") in March 2020. The Fund's underweight position in the health care sector hurt performance as the sector rallied on hopes of developing a cure for COVID-19. Also, the overweight position in Hanwha AeroSpace Co., Ltd., a company that specializes in the development, production and maintenance of aircraft engines, detracted from performance as the share price corrected on difficulties in the airline industry leading to uncertainty over the company's aircraft engine business.

Meanwhile the overweight position in AfreecaTV Co., Ltd., an internet streaming company specializing in e-sports, contributed positively to performance as the company was regarded as a beneficiary of COVID-19 and mentioned as a potential platform to facilitate online learning in Korea. The Fund's underweight position in Kia Motors Corp., an automobile manufacturer, also helped performance as the company's share price fell after news of production loss and weak demand.

Key Transactions

During March 2020 the Fund reduced its position in the materials sector which we believe should be hurt by weak end demand. The Fund increased its exposure to the information technology sector after excessive share price correction.

Outlook

We expect equity markets to remain volatile in the near term. Markets have already rebounded from the lows of March 2020 thanks to coordinated action from central banks globally through rate cuts and supply of liquidity. But it remains to be seen whether the measures will be sufficient and executed on a timely manner, while the magnitude of COVID-19's impact on demand is still not quantifiable. In Korea, the spread of COVID-19 is gradually being contained which has led to some normalization in economic activity. The result of upcoming regional elections may dictate the direction of government policy going forward. We will closely monitor the impact of these developments to the Fund.

In Brief

Fund Data

Description	Seeks long-term capital
	appreciation through
	investment in Korean
			securities.
Inception Date			August 29, 1984
Total Fund Assets			$129.6
(millions)
Median Market			$5.6
Cap (in billions)
Distribution			Annual
Frequency
Management	Allianz Global Investors
Firm			U.S. LLC
Portfolio		Chris Leung, CFA
Management	Lead Portfolio Manager
			CJ Yun
		Portfolio Manager
Net Asset Value / Market Price
Net Asset Value (NAV) /		$11.16 / $12.00
Market Price at
Inception
NAV / Market Price		$25.72 / $22.36
(as of 3/31/2020)
High / Low Ranges (52-Week)
High / Low NAV			$35.11 / $21.34
High / Low Market Price		$31.23 / $17.32
Premium/Discount to NAV	-13.06%
(as of 3/31/2020)
Fund Data (Common Shares)
Shares Outstanding		5,040,949
Average Daily Volume		7,441
Expense Ratio			1.13%

Fund Managers

Chris Leung, CFA	CJ Yun
Lead Portfolio	Portfolio Manager
Manager

Investment Products: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED

1

Monthly Insights | As of 3/31/2020 | The Korea Fund, Inc.
Average Annual Returns
	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year Inception
NAV	-13.81%	-25.23%	-25.23%	-23.48%	-7.66%	-3.75%	0.42%	10.02%
Market Price	-15.62%	-25.04%	-25.04%	-23.81%	-7.76%	-3.54%	0.43%	9.36%
MSCI Korea 25/50 Index	-11.87%	-23.92%	-23.92%	-20.44%	-6.21%	-1.49%	1.53%	-
MSCI Korea Total Return	-11.60%	-22.45%	-22.45%	-16.82%	-4.55%	-0.22%	2.18%	-
Index
Calendar Year Returns
	2012	2013	2014	2015	2016	2017	2018	2019
NAV	17.09%	1.00%	-9.85%	-4.06%	2.64%	40.88%	-19.14%	6.46%
Market Price	15.41%	-0.01%	-9.07%	-2.81%	1.08%	41.47%	-19.91%	6.83%
MSCI Korea 25/50 Index	20.72%	4.07%	-10.83%	-6.49%	7.71%	45.17%	-20.01%	8.56%
MSCI Korea Total Return	21.18%	3.94%	-11.12%	-6.66%	8.75%	47.30%	-20.94%	12.50%
Index

Past performance is not a guide to future returns.

Returns are annualized, except for periods of less than one year.

Source: IDS GmbH-Analysis and Reporting Services, a subsidiary of Allianz SE. Inception date is August 29, 1984. Returns for the fund are historical returns that reflect changes in net asset value and market price per share during each period and assume that dividends and capital gains, if any, were reinvested. Net asset value is total assets less total liabilities divided by the number of shares outstanding. NAV performance includes the deduction of management fees and other expenses. Market price performance does not include the deduction of expenses and would be lower had expenses been deducted. NAV and market price returns do not reflect broker sales charges or commissions, which would reduce returns. It is not possible to invest directly in an index.

Premium/Discount

90%

60%

30%

0%

-30%

-60%

12/31/1996

3/31/2005

3/31/2010

3/31/2015

3/31/2020

1. MSCI Korea 25/50 Index.

Sector Breakdown

Fund Benchmark¹

Information	38.60%	34.95%
Technology
Communication	11.52%	9.20%
Services
Industrials	11.01%	9.42%
Consumer	10.92%	10.98%
Discretionary
Consumer Staples	7.43%	7.07%
Financials	6.90%	11.16%
Materials	6.44%	7.31%
Energy	1.68%	1.73%
Health Care	1.52%	7.14%
Utilities	0.00%	1.03%
Source: IDS GmbH - Analysis and Reporting
Services, a subsidiary of Allianz SE.
Top 10 Holdings
SAMSUNG ELECTRONICS CO LTD	24.56%
(S.Korea)
SK HYNIX INC (S.Korea)		9.72%
NAVER CORP (S.Korea)		4.35%
LG HOUSEHOLD & HEALTH CARE LTD	3.95%
(S.Korea)
LG CHEM LTD (S.Korea)		3.30%
HYUNDAI MOTOR CO (S.Korea)	3.04%
AFREECATV CO LTD (S.Korea)	2.78%
SHINHAN FINANCIAL GROUP CO LTD	2.45%
(S.Korea)
KAKAO CORP (S.Korea)		2.44%
KB FINANCIAL GROUP INC (S.Korea)	2.24%
Portfolio Characteristics
P/E Ratio		10.61
P/B Ratio		0.92
Issues in Portfolio		44
Foreign Holdings (%)		96.03
Cash (%)		3.97
Risk Statistics (3 Year)
Beta		0.90
R²		0.96
Standard Deviation of NAV	18.84
Standard Deviation of Market Price	20.56

Investment Products: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED

2

Monthly Insights | As of 3/31/2020 | The Korea Fund, Inc.

Distribution History (10 Year)

				Distribution/		Long-term	Short-term
Declaration Date	Ex-dividend Date	Record Date	Payable Date	Share	Income	Capital Gain	Capital Gain
12/21/2010	12/29/2010	12/31/2010	1/14/2011	$0.30000	$0.30000	-	-
12/20/2011	12/28/2011	12/30/2011	1/20/2012	$5.45000	-	$4.50000	$0.95000
12/18/2015	12/23/2015	12/28/2015	1/15/2016	$4.35000	-	$4.35000	-
12/16/2016	12/22/2016	12/27/2016	1/6/2017	$0.32752	$0.27655	$0.05097	-
12/15/2017	12/22/2017	12/26/2017	1/5/2018	$4.02471	$0.22579	$3.79892	-
12/14/2018	12/21/2018	12/24/2018	1/4/2019	$5.22608	$0.60784	$4.61824	-
12/13/2019	12/20/2019	12/23/2019	1/3/2020	$0.07099	$0.07099	-	-

Distribution/Share includes Income, Long-term Capital gains and Short-term Capital gains.

The Korea Fund NAV Performance of $10,000 since inception (with dividends reinvested at NAV price)

$600,000

$500,000

$299,517

$400,000

$300,000

$200,000

$100,000

$0

8/29/1984

3/31/1990

3/31/1996

3/31/2002

3/31/2008

3/31/2014

3/31/2020

Past performance is not a guide to future returns.

Index Description

MSCI Korea 25/50 Index

The MSCI Korea 25/50 Index is designed to measure the performance of the large and mid cap segments of the Korean market. It applies certain investment limits that are imposed on regulated investment companies, or RICs, under the current US Internal Revenue Code. One requirement of a RIC is that at the end of each quarter of its tax year no more than 25% of the value of the RIC's assets may be invested in a single issuer and the sum of the weights of all issuers representing more than 5% of the fund should not exceed 50% of the fund's total assets. The index covers approximately 85% of the free float-adjusted market capitalization in Korea. The returns assume reinvestment of dividends (net of foreign withholding taxes) but do not reflect any fees or expenses. It is not possible to invest directly in an index.

MSCI Korea Total Return Index

The MSCI Korea Total Return Index is a market capitalization-weighted index of equity securities of companies domiciled in Korea. The index is designed to represent the performance of the Korean stock market and excludes certain market segments unavailable to US based investors. The returns assume reinvestment of dividends (net of foreign witholding taxes) but do not reflect any fees or expenses.

It is not possible to invest directly in an index.

Investment Products: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED

3

Monthly Insights | As of 3/31/2020 | The Korea Fund, Inc.
Portfolio in Full
		Company				% of
Sector	(exchange ticker)	Price KRW	Holding	Value US$	Market Value
Information Technology						38.52
SAMSUNG ELECTRONICS CO LTD		005930	47,332.38	804,264	31,270,980	24.56
SK HYNIX INC		000660	82,297.73	183,036	12,373,967	9.72
SAMSUNG SDI CO LTD		006400	237,006.26	11,802	2,297,735	1.80
SAMSUNG ELECTRO-MECHANICS CO LTD		009150	96,461.36	15,493	1,227,647	0.96
LG INNOTEK CO LTD		011070	112,027.57	7,695	708,138	0.56
DOUZONE BIZON CO LTD		012510	80,335.07	9,209	607,718	0.48
SAMSUNG SDS CO LTD		018260	148,801.09	4,627	565,575	0.44
Communication Services						11.54
NAVER CORP		035420	169,253.53	39,846	5,539,965	4.35
AFREECATV CO LTD		067160	51,989.28	82,950	3,542,540	2.78
KAKAO CORP		035720	153,974.23	24,516	3,100,860	2.44
NCSOFT CORP		036570	649,704.96	4,706	2,511,613	1.97
Industrials						11.02
LG CORP		003550	58,968.44	53,186	2,576,330	2.02
SAMSUNG C&T CORP		028260	88,825.95	28,037	2,045,766	1.61
CJ LOGISTICS CORP		000120	135,013.32	18,335	2,033,490	1.60
HANWHA AEROSPACE CO LTD		012450	20,361.84	112,019	1,873,671	1.47
PAN OCEAN CO LTD		028670	2,929.58	730,797	1,758,678	1.38
SK HOLDINGS CO LTD		034730	166,515.10	11,244	1,538,009	1.21
KOREA SHIPBUILDING & OFFSHORE ENGINEERING CO LTD	009540	77,358.51	15,419	979,826	0.77
HYUNDAI GLOVIS CO LTD		086280	90,086.39	11,925	882,474	0.69
HYUNDAI HEAVY INDUSTRIES HOLDINGS CO LTD		267250	196,052.13	2,129	342,872	0.27
Consumer Discretionary						10.92
HYUNDAI MOTOR CO		005380	87,699.73	53,686	3,867,620	3.04
HYUNDAI MOBIS CO LTD		012330	168,393.33	17,373	2,403,169	1.89
KANGWON LAND INC		035250	19,617.42	146,232	2,356,507	1.85
SHINSEGAE INC		004170	215,868.32	8,982	1,592,746	1.25
HOTEL SHILLA CO LTD		008770	69,664.50	24,008	1,373,890	1.08
PARADISE CO LTD		034230	12,778.61	97,312	1,021,491	0.80
LG ELECTRONICS INC		066570	47,863.66	21,884	860,433	0.68
FILA HOLDINGS CORP		081660	28,773.27	17,570	415,284	0.33
Consumer Staples						7.47
LG HOUSEHOLD & HEALTH CARE LTD		051900	1,115,077.60	5,495	5,033,352	3.95
GS RETAIL CO LTD		007070	30,866.10	60,132	1,524,656	1.20
E-MART INC		139480	105,605.61	13,782	1,195,594	0.94
KT&G CORP		033780	74,534.99	18,236	1,116,540	0.88
BGF RETAIL CO LTD		282330	131,860.87	5,870	635,826	0.50
Financials						6.90
SHINHAN FINANCIAL GROUP CO LTD		055550	28,478.94	133,435	3,121,606	2.45
KB FINANCIAL GROUP INC		105560	34,236.77	101,411	2,852,084	2.24
HANA FINANCIAL GROUP INC		086790	22,902.75	95,667	1,799,842	1.41
DB INSURANCE CO LTD		005830	34,494.10	35,938	1,018,318	0.80
Materials						6.43
LG CHEM LTD		051910	301,515.07	16,989	4,207,861	3.30
POSCO		005490	160,188.40	20,144	2,650,704	2.08
KOREA ZINC CO LTD		010130	354,270.20	4,608	1,341,009	1.05
Energy						1.68
SK INNOVATION CO LTD		096770	86,134.52	30,232	2,139,088	1.68
Health Care						1.53
YUHAN CORP		000100	227,781.49	3,537	661,817	0.52
HUGEL INC		145020	335,285.01	2,356	648,894	0.51
HANMI PHARM CO LTD		128940	259,302.09	2,976	633,904	0.50

Investment Products: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED

4

Monthly Insights | As of 3/31/2020 | The Korea Fund, Inc.
	Company				% of
Sector	(exchange ticker)	Price KRW	Holding	Value US$	Market Value

Source: State Street Bank and Trust Company, IDS GmbH - Analysis and Reporting Services, a subsidiary of Allianz SE.

Note: Cash (including for these purposes cash equivalents) is not included.

Important Information:

Holdings are subject to change daily. The Fund seeks long-term capital appreciation through investment in Korean securities. An investment in the Fund involves risk, including loss of principal. Investing in non-U.S. securities entails increased risks, including political and economic risk and the risk of currency fluctuations, as well as lower liquidity. These risks, which can result in greater price volatility, will generally be enhanced in less diversified funds that concentrate investments in a particular geographic region.

The information contained herein has been obtained from sources believed to be reliable but Allianz Global Investors U.S. LLC and its affiliates do not warrant the information to be accurate, complete or reliable. The opinions expressed herein are subject to change at any time and without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Investors should consider the investment objectives, risks, charges and expenses of any mutual fund carefully before investing. This and other information is contained in the fund's annual and semiannual reports, proxy statement and other fund information, which may be obtained by contacting your financial advisor or visiting the fund's website at www.thekoreafund.com. This information is unaudited and is intended for informational purposes only. It is presented only to provide information on the Fund's holdings, performance and strategies. The Fund is a closed-end exchange traded management investment company. This material is presented only to provide information and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering by a closed-end fund, its shares can be purchased and sold on the open market through a stock exchange, where shares may trade at a premium or a discount. The market price of holdings is subject to change daily.

P/E is a ratio of security price to earnings per share. Typically, an undervalued security is characterized by a low P/E ratio, while an overvalued security is characterized by a high P/E ratio. P/B is a ratio of the current stock price to the book value. This is used to identify undervalued stocks. Beta measures the market related volatility of a portfolio, where the overall market is represented by the MSCI Korea 25/50 Index. The beta of the market is 1 by definition. A beta greater than 1 indicates that a portfolio's market risk is greater than the overall market's, while a beta less than 1 indicates a lower market risk. It is important to note that having a low market risk does not necessarily imply low volatility. A portfolio may have a low beta while experiencing volatility due to factors independent of the market. R-Squared measures the percentage of a portfolio's movements that are explained by movements in the overall market, represented by the MSCI Korea 25/50 Index. The measures of alpha and beta are most relevant when there is a close correlation between the two, as indicated by a high R-Squared value. Standard deviation is an absolute measure of volatility measuring dispersion about an average which, for an index, depicts how widely the returns varied over a certain period of time. The greater the degree of dispersion, the greater the risk.

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FS-KF-0320 | 1134606

Investment Products: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED