March 2026 will be remembered as the month the Iran war fully repriced every equity market on earth. The conflict that began on February 27 — when US and Israeli forces struck Iran and the Strait of Hormuz was effectively closed — spent the month methodically separating winners from losers along a single fault line: energy trade balance. When March closed on Monday March 31, the damage was historic in scope and precise in its logic.

The iShares MSCI South Korea ETF (EWY) posted its worst monthly return since October 2008 — the depths of the global financial crisis — falling -18.74%. The iShares MSCI South Africa ETF (EZA) recorded its worst month since March 2020 — the Covid crash — falling -16.9%. The SPDR S&P 500 ETF Trust (SPY) closed its worst quarter since 2022, per NBC News. The MSCI ACWI lost -2.21% for the year-to-date, confirming that no globally diversified portfolio escaped March unscathed.

On the other side of the ledger: the iShares MSCI Norway ETF (ENOR) gained +6.27% in March — its fourth consecutive positive month — and closed Q1 2026 as the best-performing country ETF in the universe at +28.39% year-to-date. The iShares MSCI Saudi Arabia ETF (KSA) gained +6.11% in March and is up +9.17% year-to-date.

March 31 itself offered a brief respite. Reuters reported that "global equities rebounded on de-escalation hopes, ending a weak month," and Bloomberg noted that "Powell eased hike fears" as Treasuries bounced following the Fed Chair's late-month comments. But one day of hope does not erase four weeks of repricing. The month is closed. The numbers are final.

Global Equity Market Overview: March 202

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March 2026 was defined by four overlapping pressures that compounded through the month:

1. The Hormuz disruption held. The Strait of Hormuz — through which approximately 20% of global crude oil and 25% of global LNG flows — remained closed throughout March. Prediction markets on Polymarket confirmed this: the probability of a US-Iran ceasefire by March 31 closed at 99.95% No — meaning virtually no chance of resolution materialised during the month. Brent crude sustained above $100 per barrel for the entire month.

2. Inflation expectations surged. The Polymarket probability of US inflation exceeding 3% in 2026 rose to 97.95% by April 1. More significantly, the probability of inflation exceeding 4% rose from 44.5% at the start of March to 59% by month-end — a 14.5 percentage point jump in a single month, reflecting the oil shock's accelerating feed-through to consumer prices.

3. Fed rate hike risk went mainstream. CNBC reported in late March that futures markets priced a 52% probability of a Fed rate hike by year-end — a scenario that was essentially unpriced at the start of 2026. The New York Times confirmed SPY's "5th consecutive weekly loss, its worst streak in roughly four years." NBC News called it the "worst quarter since 2022."

4. The month ended with partial de-escalation hopes. Reuters reported on March 31 that markets closed higher on the last day of the month on speculation of potential Middle East de-escalation. Prediction markets now price a 37.5% probability of a US-Iran ceasefire by April 30 and a 21.5% probability of Kharg Island — Iran's primary oil export terminal — falling out of Iranian control by April 30, according to Polymarket data as of April 1. The war is not over, but the forward probability curve for April is materially more constructive than it was for March.

Best Performing Country ETFs: March 202

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The leaderboard tells a clear structural story. Norway and Saudi Arabia — the only two country ETFs that were positive since February 27 — extended their leads through March. Colombia and Argentina, both commodity exporters with Atlantic routing, benefited from elevated commodity prices without Hormuz exposure. Thailand is the surprise entry: despite being an energy importer, it benefited from strong domestic tourism revenues and a relatively resilient baht during the month.

ENOR's four-month streak deserves specific emphasis. The iShares MSCI Norway ETF (ENOR) has now delivered four consecutive positive months — December 2025, January 2026, February 2026, and March 2026 — building a +28.39% year-to-date return that is the highest in the country ETF universe. January and February reflected pre-war energy repricing and European gas demand. March reflected the war itself. The streak is built on a single structural advantage: Norway supplies approximately 25% of Europe's natural gas demand via pipeline — a supply that bypasses Hormuz entirely and whose price rises whenever Gulf LNG flows are disrupted.

Worst Performing Country ETFs: March 202

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EWY: Worst Month Since October 200

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The iShares MSCI South Korea ETF (EWY) fell -18.74% in March — its worst monthly return since October 2008, when the global financial crisis produced a synchronized global equity collapse. The October 2008 comparison is striking because the causes are structurally different: 2008 was a financial contagion event; March 2026 is a single-variable macro shock acting on a specific vulnerability. South Korea imports approximately 98% of its energy requirements. When Brent sustains above $100 for an entire month, the cost is absorbed with no domestic offset.

The severity also reflects unwinding from an extreme starting position. EWY entered March having gained approximately +35% year-to-date through late February — the highest pre-war YTD return in the country ETF universe. Samsung and SK Hynix's Nvidia HBM contracts had driven extraordinary pre-war appreciation. March collapsed that position not because the AI earnings thesis broke — it did not — but because the energy import shock overwhelmed everything. EWY still closes Q1 2026 at +26.53% YTD, meaning the pre-war gains partially cushioned the damage. But the monthly drawdown itself is a crisis-era reading.

EZA: Worst Month Since March 202

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The iShares MSCI South Africa ETF (EZA) fell -16.90% in March — its worst monthly return since March 2020, when Covid shutdowns triggered a global equity crash. South Africa's March 2026 decline reflects the triple shock described across multiple analyses this month: energy import costs, a historic precious metals collapse (gold -12% month-to-date at its worst point, platinum -17%, palladium -20%), and rand depreciation. EZA now stands at -1.45% year-to-date — meaning all of its pre-war gains have been erased, and the fund is essentially flat on the year despite the severity of the current drawdown.

The Q1 2026 Scoreboard: Full Year-to-Date Ranking

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As March closes and Q1 2026 is complete, the year-to-date rankings reflect the full impact of the pre-war AI boom and the post-war oil shock:

Top 5 YTD through March 31:

Bottom 5 YTD through March 31:

The contrast between ENOR (+28.39%) and EIDO (-15.56%) — a spread of nearly 44 percentage points after just three months — is one of the widest Q1 cross-country return dispersions in recent market history. It is entirely explained by one variable: energy trade balance adjusted for Hormuz routing.

What Drove March: The Four-Link Chai

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The causal chain that defined March 2026 was sequential, self-reinforcing and — in retrospect — structurally inevitable once the Hormuz closure held beyond the first week.

Link 1: Hormuz held all month. No commercial ship was escorted through Hormuz by March 31 (Polymarket: 99.95% No). No ceasefire materialised (Polymarket: 99.95% No by March 31). The supply deficit of approximately 15 million barrels per day persisted for the entire month. Brent remained above $100.

Link 2: Inflation expectations accelerated. The Polymarket probability of US inflation exceeding 4% in 2026 rose from approximately 44.5% to 59% during March — one of the sharpest single-month inflation expectation shifts on record for a prediction market with this volume. Inflation >3.5% probability rose to 85.5%; inflation >3% sits at 97.95% — effectively certain.

Link 3: Rate hike risk repriced equities. With inflation expectations surging, the market began pricing Fed rate hike probability at 52% in futures markets by late March. This directly compressed the multiple on high-P/E markets — most acutely SPY at 21.73x forward P/E, the most expensive country ETF in the universe.

Link 4: Currency weakness amplified importer losses. South Korean won, Indian rupee, Indonesian rupiah and South African rand all depreciated against the US dollar during March, amplifying the USD-denominated losses for EWY, INDA, EIDO and EZA holders beyond the local equity market moves alone.

What April Looks Like: The Forward Probability Ma

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March ended with a partial shift in the probability landscape. The Polymarket data as of April 1, 2026 — available in real time at countryetftracker.com/polymarket-macro-situation-room — shows:

The ceasefire probability curve has shifted materially relative to March. A 37.5% probability of April 30 resolution is not a base case — but it is no longer negligible. Reuters reported on March 31 that markets closed higher on "de-escalation speculation," and Bloomberg noted that Powell's late-March comments eased rate hike fears modestly.

For country ETF investors entering April, the regime is shifting from "energy exporter/importer binary" toward a more nuanced probability-weighted framework. The historical seasonal data is also constructive: SPY's April win rate over 20 years is 79% with a +2.02% average return — its second-strongest month. ENOR's April average is +1.89% with an 80% win rate. EWZ's April averages +2.45% with a 63% win rate.

The question entering April is not whether the war is ending — it is whether the ceasefire probability curve is moving fast enough to trigger a rotation out of energy exporters and into the deepest-value energy importers. EWY at 10.29x forward P/E and EZA at 11.07x are pricing prolonged structural impairment. If either the Hormuz disruption eases or Powell confirms no hike at the May meeting, both funds carry significant mean-reversion potential from historically depressed levels.

Track the full country ETF universe, live ceasefire probabilities and macro market signals at countryetftracker.com.

Frequently Asked Question

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Which country ETF performed best in March 2026?

Norway (ENOR) and Saudi Arabia (KSA) led in March with gains of +6.27% and +6.11% respectively, followed by Colombia (COLO) at +6.34%. All three are net energy exporters with Hormuz-insulated delivery routes. ENOR also closed its fourth consecutive positive month.

Which country ETF performed worst in March 2026?

South Korea's EWY fell -18.74% — its worst month since October 2008. South Africa's EZA fell -16.90% — its worst month since March 2020. Both reflect concentrated vulnerability to the Iran war's energy shock, amplified by currency depreciation and, in EZA's case, a simultaneous precious metals collapse.

What is the YTD leader after Q1 2026?

Norway's iShares MSCI Norway ETF (ENOR) leads the country ETF universe year-to-date at +28.39% after Q1 2026, having gained in all three months of the year. South Korea's EWY is second at +26.53% YTD despite its -18.74% March — reflecting the exceptional pre-war gains it built through February.

What is the outlook for April 2026?

Prediction markets as of April 1 assign a 37.5% probability to a US-Iran ceasefire by April 30 and a 24% probability to Hormuz normalising by the same date. A ceasefire scenario would likely trigger sharp recoveries in the most beaten-down energy importers (EWY, EZA, EIDO) and a partial unwind of ENOR's war premium. Seasonal data is broadly constructive — April is historically SPY's second-strongest month and ENOR's strongest by win rate.