Franklin Templeton Investments has launched a suite of actively managed ETFs on its Franklin LibertyShares platform.
The suite includes two new active ETFs, Franklin Liberty US Low Volatility ETF (FLLV) and Franklin Liberty Investment Grade Corporate ETF (FLCO), as well as Franklin Liberty Short Duration US Government ETF (FTSD), an active ETF launched in 2013.
"Building on the success of our Franklin LibertyShares ETF platform launch earlier this year, we are pleased to reach another milestone by introducing our new suite of actively managed ETFs," says Patrick O'Connor, global head of ETFs for Franklin Templeton Investments. "Investors have embraced the ETF wrapper for its benefits, which may include liquidity, tax efficiency and transparency. Now they want the opportunity to seek better risk-adjusted returns over the long term. Through Franklin LibertyShares, we are providing investors with simple and efficient options to help them address their desired outcomes. Our actively managed ETFs can help investors meet their investment needs by serving as a core or complementary portfolio holding."
Franklin LibertyShares' suite of actively managed ETFs currently includes one equity and two fixed income ETFs.
The Franklin Liberty US Low Volatility ETF (FLLV) seeks capital appreciation with an emphasis on lower volatility than the broader US equity market, as measured by the Russell 1000 Index. The fund applies a fundamentally driven "bottom up" research process to identify stocks that exhibit strong fundamental characteristics and screens for stocks with the lowest realised volatility scores, based on a proprietary quantitative model, relative to their corresponding sectors. Risk considerations are incorporated into the final stock selection process. The ETF is managed by Todd Brighton, vice president, research analyst and portfolio manager for Franklin equity group.
The Franklin Liberty Investment Grade Corporate ETF (FLCO) seeks to provide a high level of current income as is consistent with prudent investing, while seeking preservation of capital by investing at least 80 per cent of its net assets in investment grade corporate debt securities and investments. The fund may invest up to 40 per cent of its net assets in foreign securities, including those in developed markets, and up to 15 per cent of its net assets in non-US dollar denominated securities. The ETF is managed by Marc Kremer, vice president, research analyst and portfolio manager, and Shawn Lyons, vice president, research analyst and portfolio manager for Franklin Templeton fixed income group.
The Franklin Liberty Short Duration US Government ETF (FTSD) seeks to provide a high level of current income as is consistent with prudent investing, while seeking preservation of shareholders' capital by investing at least 80 per cent of its net assets in securities issued or guaranteed by the US government, its agencies or instrumentalities. The fund targets an estimated average portfolio duration of three years or less. The ETF is managed by Roger Bayston, senior vice president and portfolio manager for Franklin Templeton fixed income group. Launched in 2013, the ETF has assets under management of approximately USD169 million.
Franklin Liberty actively managed ETFs strive to outperform traditional market capitalisation weighted index products that are designed only to track benchmark indices. Portfolio managers of the Franklin Liberty active ETFs have the opportunity to respond with discretion to market events and operate outside the confines of traditional benchmark indices. They can make equity and fixed income investments that they believe can outperform the market, including those not owned in benchmark indices.
"Our actively managed ETF offerings leverage Franklin Templeton's extensive expertise and resources as a premier fundamental, active investment manager. Our world-class global research platform integrates the insights of over 650 investment professionals, including seasoned equity and fixed income professionals, to allow us to take a holistic approach in evaluating each company or debt instrument. Our ability to combine our research prowess, with the attractive benefits of an ETF structure, is our competitive advantage," adds O'Connor.