FLKR Overview

Investment Performance: In 2025, international stocks significantly outperformed U.S. equities, with South Korea's market rising 65% and Spain's by 40%, while the S&P 500 increased by about 15%.

Top International ETFs: Recommended ETFs for gaining exposure to international markets include the Franklin FTSE South Korea ETF, iShares MSCI Spain ETF, Franklin FTSE Latin America ETF, Vanguard FTSE Europe ETF, and iShares MSCI Canada Index Fund ETF, each with unique advantages and low expense ratios.

Market Drivers: The strong performance of international markets is attributed to factors such as favorable domestic policies, a decline in the U.S. dollar, and increased spending in Europe, particularly in Spain's banking sector and South Korea's tech industry.

Future Outlook: The trend of international stocks outperforming U.S. equities is expected to continue into 2026, making diversification through international ETFs a strategic investment approach.

Impact of U.S. Immigration Raid: A U.S. immigration raid at a Hyundai-LG Energy battery joint venture in Georgia has led to the detention of 475 individuals, primarily South Korean nationals, raising concerns about disruptions in the electric vehicle supply chain and planned investments.

Response from Hyundai and LG Energy: In light of the raid, LG Energy has postponed the start of its EV battery plant, while Hyundai has banned U.S. travel for its staff and paused construction at the site, stating that none of the detained individuals are directly employed by the company.

South Korea's AI Advancements: Upstage, a South Korean startup, is making significant strides in the global AI landscape by developing competitive large language models (LLMs) and advanced Optical Character Recognition technology, focusing on tailored B2B solutions.

Cost Efficiency and Partnerships: CEO Sung Kim highlighted that Upstage's Solar Pro 2 model is more cost-efficient, utilizing only 10% of the AI chips compared to competitors, while the government supports AI development with over $70 billion in funding and initiatives.

Tariff Announcement Impact: President Trump announced a 100% tariff on foreign-made semiconductors unless companies build fabs in the U.S., positively affecting stocks like Apple and Taiwan Semiconductor Manufacturing Co. (TSMC), while raising questions about which ETFs will benefit or suffer from these changes.

ETF Winners and Losers: Semiconductor ETFs with U.S.-based manufacturing, such as VanEck and iShares, are likely to gain, while those with exposure to Asian tech supply chains, like iShares MSCI All Country Asia ex Japan ETF, may face risks due to potential tariff impacts.

Trade Agreement Overview: President Trump announced a trade deal with South Korea that includes a 15% tariff on imports and a commitment from South Korea to invest $350 billion in U.S. infrastructure and manufacturing, benefiting certain sectors while creating volatility for others.

Investment Implications: The agreement is expected to lead to capital inflows into U.S. sector ETFs related to infrastructure, energy, and semiconductors, while investors may also consider defensive strategies through minimum volatility and gold ETFs due to ongoing geopolitical risks.

Impeachment of South Korea's President: Yoon Suk Yeol was removed from office by the Constitutional Court after being impeached for declaring martial law, which was deemed a violation of constitutional authority and trust with the public.

Political and Economic Impact: Acting president Han Duck-soo will serve until a new election is held, while political uncertainty has negatively affected South Korean markets, with significant declines in major ETFs and the KOSPI index.