Franklin FTSE South Korea ETF

FLKR

Market cap $562M

The tenuous ceasefire in Iran has the S&P 500 roaring back to life, reversing a month-long decline that put consumers and investors on edge. But the jump in U.S. stocks might have hidden the true beneficiaries: international stocks dependent on energy imports to sustain their economies.

The Franklin FTSE South Korea ETF (FLKR) offers the most cost-effective exposure to South Korea's dynamic economy. FLKR's outperformance is driven by Korean memory giants Samsung and SK Hynix, benefiting from a global AI-driven memory shortage expected to last years. Current geopolitical risks, notably the Strait of Hormuz closure, present material downside if energy imports to South Korea are disrupted.

South Korea's $350B U.S. investment pledge could lift the country's export momentum while boosting key U.S. sectors. Here are some ETFs that may benefit.

South Korea ETFs have been on a remarkable performance hot streak over the last 12 months. According to ETF Database data, South Korea-specific ETFs have all returned more than 140% over the last twelve months.

The South Korean KOSPI index plunged almost 20% over the last two days, something @CharlesSchwab's Michelle Gibley attributes to a greater alliance on natural gas amid energy volatility. She adds that the storage chip supply shortage adds to complications for South Korea's economic picture.

I initiate coverage of Franklin FTSE South Korea ETF with a Hold rating, citing early-stage selloff and elevated valuations. FLKR's recent 130% rally, driven by Samsung and SK Hynix, leaves its PE at 19 and price-to-book at 2.2, well above historical averages. South Korea's heavy reliance on Middle Eastern energy imports exposes FLKR to heightened geopolitical and macroeconomic risks.

Franklin FTSE South Korea ETF FLKR is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and has moved up 201.99% from its 52-week low price of $16.54 per share.

South Korea ETFs are surging as AI-driven semiconductor demand fuels market highs, strong earnings momentum and bullish outlook for Korean equities.

Market predictions are not easy to make and looking at the YTD winners, there are some head-scratchers.  Let's take a closer look and make some sense out of the recent performance winners: wet and dry shipping; South Korea; and oil services ETFs.

Kospi, South Korea's benchmark index, hit an all-time high above 5,600 on Thursday, after gaining about 3.09% in a single trading session. South Korea remains one of Asia's most lucrative markets, with the Kospi surging 79.35% over the past six months and 115.54% over the past year.