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Franklin Templeton’s full ETF range registered in Luxembourg

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Franklin Templeton has registered all 21 UCITS ETFs from its Franklin Templeton ICAV range on 12 May for Luxembourg investors as part of the firm’s expansion plans in the European ETF market and, it says, in response to growing client demand for ETF solutions. 

The firm writes that these 21 UCITS ETFs span across a full spectrum of sustainable, passive, actively managed fixed income ETFs, smart beta and thematic products, including:

ETFs that provide exposure to the de-carbonisation goals of the Paris Climate Agreement

Emerging Markets access at a low cost

Exposure to green bonds and active fixed income

A smart beta suite composed of regional multi-factor and dividend ETFs

Cost-efficient thematic exposure to the metaverse

A unique Catholic Principles Fixed Income product.

Guillaume Dambrine, Senior ETF Sales Specialist for France, Belgium and Luxembourg, Franklin Templeton, says: “Registering our UCITS ETF range in Luxembourg is an important step for us given the vast potential of its ETF market, which has been growing in line with the European ETF market at a CAGR 29 per cent since 2008. Luxembourg is one of the major European wealth and asset management markets with one of the biggest concentration of funds of funds in Europe. ETFs are particularly well suited for fund of fund vehicles as they enable tactical and precise allocations, among all asset classes and regions, at a competitive cost, thus making it appealing for us to expand in this market.”

Bérengère Blaszczyk, Head of Distribution – France, Benelux & Nordics, Franklin Templeton, says: “We are excited that our competitively priced and comprehensive UCITS ETF range has been registered in Luxembourg. Franklin Templeton has a strong and long-standing presence in Luxembourg in its mutual funds business, and this registration will enable our Luxembourg clients to utilise our ETF range as a component of a diversified portfolio, complementing our traditional active fund management solutions.”

Paris Aligned Climate ETFs

Franklin Templeton writes that this product suite offers European investors sustainable, low cost and core diversified European, U.S., China and emerging markets equity exposure, consistent with the transition to a low carbon economy, while ensuring portfolios are fully aligned with the de-carbonisation goals of the Paris Climate Agreement. These four sustainable Paris Aligned climate ETFs are classified as Article 84 under EU SFDR (Sustainable Finance Disclosure Regulation).

·         Franklin S&P 500 Paris Aligned Climate UCITS ETF

·         Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF

·         Franklin MSCI China Paris Aligned Climate UCITS ETF

·         Franklin MSCI Emerging Markets Paris Aligned Climate UCITS ETF

Passive ETFs: Emerging Markets focus

The firm writes that building on Franklin Templeton’s strong and extensive emerging markets heritage, with over USD114 billion managed across the firm in emerging markets assets, Franklin FTSE Brazil UCITS ETF, Franklin FTSE China UCITS ETF, Franklin FTSE Korea UCITS ETF, Franklin FTSE India UCITS ETF and Franklin FTSE Taiwan UCITS ETF are market-cap weighted, emerging markets country UCITS ETFs, offering the lowest total expense ratios (TER6) at 0.19 per cent and 0.09 per cent in Europe (TER is on average 57 per cent lower than other emerging markets country UCITS ETFs) for their respective categories, the firm writes).

Active ETFs: focus on Green Bond

The Franklin Euro Green Bond UCITS ETF is Europe’s first actively managed Euro Green bond ETF with TER of 0.18 per cent, which provides exposure to bonds supporting low-carbon projects as well as to the broader European green bond market whilst maximising total returns. This active ETF, classified as article 98 under EU SFDR, invests at least 75 per cent of its net assets in green-labelled bonds, with the remaining balance made up of climate-aligned bonds.

Two fixed income focused funds, which invest primarily in US dollar-denominated corporate debt securities issued by US and foreign companies and Euro-denominated short-term debt securities and investments, respectively, are part of the offering:

·          Franklin USD Investment Grade Corporate Bond UCITS ETF 

·          Franklin Euro Short Maturity UCITS ETF (article 8 under EU SFDR)

Other products in the range include a suite of seven smart beta ETFs covering emerging markets, US, European, Asian and global equity multi-factor strategies, two of which have a dividend focus. In addition, there is also a Catholic Principles Fixed Income ETF (Franklin Catholic Principles Emerging Markets Sovereign Debt UCITS ETF), and a thematic ETF (Franklin Metaverse UCITS ETF) which provides equity exposure to listed companies around the world that are involved in the metaverse and has the lowest TER of 0.30 per cent in Europe in its respective category.

Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton, says: “Guillaume Dambrine joined Franklin Templeton in May 2022 to expand our ETF business in France and other Francophone areas within EMEA. Our ambition is to become a top 10 European ETF provider by continuing the build-up of our ETF platform focusing on fixed income, sustainability and thematics. We are strongly positioned for the future and believe that entering the Luxembourg market now will help us grow further. This region has traditionally been using ETFs for a long time and professional investors tend to be knowledgeable and keen to use ETFs. We are excited to increase our regional coverage and look forward to working with investors in Luxembourg.”

The ETFs are listed on the Deutsche Börse, the London Stock Exchange, Borsa Italiana, Swiss Stock Exchange SIX, and eight are currently listed on Euronext Amsterdam, thus making them available for both Euro and Sterling denominated trading but also in US dollars where relevant.

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