There was a change to the Franklin International Rotation Model this week; Sell the Franklin FTSE Europe ETF (FLEE) and buy the Franklin FTSE South Korea ETF (FLKR).

There was a change to the Franklin International Rotation Model this week.

Strength among international equities has seen a rotation away from Europe and towards Asia-Pacific nations in recent months. Chief among the Asian-Pacific countries in terms of relative strength is South Korea, which has seen substantial improvement over the last several months. As a result, the Franklin International Rotation Model sold the Franklin FTSE Europe ETF (FLEE), which had been a position since June of last year. During its time in the model, FLEE had gained 17.5% on a price return basis. Entering the model is the Franklin FTSE South Korea ETF (FLKR), which holds the most strength of any international fund in the Franklin inventory. The ETF holds a near-perfect fund score of 5.99, in addition to a sharply positive score direction of 2.89. The fund moved to a positive trend in May of this year and is now up 83.7% YTD. FLKR holds near- and long-term strength versus both international and domestic equities, sitting on an RS buy signal and column of Xs versus the S&P 500 Equal Weight (SPXEWI) and iShares MSCI ACWI ex US ETF (ACWX).

With the recent trade, the Franklin International Rotation Model has 40% exposure to Asia and Europe with the remaining 20% exposure in Canadian equities. The Franklin International Rotation Model will rebalance back to equal weight after the trade, with it now holding exposure to the following funds: