Franklin Templeton Investments has launched two actively managed fixed income ETFs to its Franklin LibertyShares UCITS ETF range in Europe.
The funds are registered in Germany and the UK and will be listed on the Deutsche Börse (DB) and the London Stock Exchange (LSE).
The new active fixed income ETFs have a focus on income generation. Franklin Liberty Euro Short Maturity UCITS ETF aims to provide income while maximising total returns in the Euro-denominated short term fixed income market primarily by investing in European short-term debt securities and investments. The fund will be managed by London based David Zahn, Head of European Fixed Income and Rod MacPhee, Portfolio Manager.
Franklin Liberty USD Investment Grade Corporate Bond UCITS ETF aims to provide income from the USD fixed income market while seeking to preserve capital through investing primarily in U.S. dollar denominated corporate debt securities issued by US and foreign companies. Assets are allocated among a range of market sectors with at least 80 per cent being invested in fixed and floating rate investment grade corporate debt securities and investments. The fund will be managed by New York based Marc Kremer, Portfolio Manager and San Mateo based Shawn Lyons, Portfolio Manager.
Caroline Baron, Head of ETF Sales EMEA, says: “In a persistently low-yield environment and with several inefficiencies present in the bond market, investors are faced with seeking new ways to generate income and diversify their portfolios.
“Traditional debt-issuance weighted ETFs continue to grow in popularity but often face the challenge of being biased towards the biggest debtors or potentially suffering from the effects of ‘crowded trades’ as constituents of an index change. As a result, many investors are turning to actively managed fixed income ETFs with the ultimate objective of achieving true diversification.
The Franklin Liberty Euro Short Maturity UCITS ETF & Franklin Liberty USD Investment Grade Corporate Bond UCITS ETF combine access to Franklin Templeton Fixed Income Group’s time-tested investment expertise with key ETF features, such as liquidity, competitive pricing and transparency.”
David Zahn, Head of European Fixed Income, says: “I am excited to be launching the Franklin Liberty Euro Short Maturity UCITS ETF, an actively managed short-term European fixed income ETF that offers exposure to high quality European short maturity bonds with a yield and return advantage over cash equivalent investments. As active managers, we have the flexibility to pursue investment opportunities that are beyond the fund’s benchmark index to help identify the most attractive securities to invest in.”