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Franklin Templeton plans to convert two US-registered mutual funds to ETFs


Franklin Templeton has announced plans to convert two US-registered mutual funds to ETFs.

Franklin Templeton has announced plans to convert two US-registered mutual funds to ETFs.

Each of BrandywineGLOBAL – Dynamic US Large Cap Value Fund and Martin Currie International Sustainable Equity Fund has longer than a five-year track record and top quartile Morningstar performance, the firm writes.

The conversions, subject to shareholder approval, are expected to be effective in the third or fourth quarter of 2022. Brandywine Global Investment Management, LLC and Martin Currie Inc. are specialist investment managers of Franklin Templeton.

“The two mutual funds that we plan to convert to ETFs are investment strategies that have delivered exceptional results and are managed in a fashion that fits well in an ETF wrapper,” says Pierre Caramazza, Head of US Product and Specialty Sales for Franklin Templeton. “The addition of these new ETFs would expand our line up in the actively managed U.S. large cap value and international growth spaces, where we have strong investment capabilities among our specialist investment managers.”

Patrick O’Connor, Head of Global ETFs for Franklin Templeton, says: “Active ETFs have experienced phenomenal growth, with a three-year compound annual AUM growth rate of 63 per cent. We believe that client demand will continue to increase as investors seek active insights combined with the benefits of the ETF structure. With these ETF conversions, we are best leveraging the capabilities of our diversified investment management teams to meet the evolving needs of our clients.”

BrandywineGLOBAL – Dynamic US Large Cap Value Fund seeks long-term capital appreciation by quantitatively investing in US equities. The fund normally invests at least 80 per cent of its net assets in equity securities of US large capitalisation companies. The mutual fund had net assets of over USD227 million as of November 30, 2021.

Martin Currie International Sustainable Equity Fund strives to provide long-term capital appreciation by investing in equity and equity-related securities of foreign companies. The fund has a strong focus on environmental, social and governance (ESG) management and typically invests a minimum of 80 per cent of its assets in securities that meet Martin Currie’s ESG criteria. The mutual fund had net assets of over USD26 million as of November 30, 2021.

The firm writes that each new ETF would be managed in a substantially similar manner as the corresponding mutual fund, and the ETF investment objective, principal investment strategies, primary sub-adviser and portfolio management team would be the same as that of the corresponding mutual fund.

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