Franklin Templeton has launched three new active fixed income ETFs – Franklin Sustainable Euro Green Sovereign UCITS ETF, Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF and Franklin Euro IG Corporate UCITS ETF.
The firm writes that these new funds extend the total number of active ETFs to six, while 13 ETFs are now classified under SFDR as Article 8 or 93, which now represent more than half of the overall Franklin Templeton ETF range. These new ETFs provide exposure to bonds that support the transition to a low-carbon future.
David Zahn, Head of European Fixed Income, Franklin Templeton, says: “Having launched the first active European green bond ETF over four years ago, we continue to see significant growth opportunities, with Europe remaining a cornerstone in the global green bond market with cumulative issuance totalling EUR331 billion last year. The launch of the Franklin Sustainable Euro Green Sovereign UCITS ETF and the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF continue to expand our Green bond offering to better address client needs. Our new green bond strategies seek to generate attractive risk-adjusted returns while providing liquidity to projects with environmental benefits.”
The firm writes that the new funds will be managed by Franklin Templeton’s European Fixed Income team with significant expertise in sustainable fixed income investments.
The investment objective of the Franklin Sustainable Euro Green Sovereign UCITS ETF, classified as Article 9 under EU SFDR, is to pursue a sustainable investment objective by providing exposure primarily to the European sovereign green bond market, whilst maximising total returns.
Meanwhile, the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF, also classified as Article 9, will pursue a sustainable investment objective by providing exposure to the European corporate green bond market with a short to mid duration of less than five years, while maximising total returns.
Both Green Bond ETFs seek to achieve their investment objectives by investing at least 90 per cent of assets in sustainable investments and will invest at least 75 per cent of assets in green bonds, with the balance made up of conventional bonds, which are deemed by the portfolio management team to be sustainable investments. By investing in this manner, the new ETFs expect to provide liquidity to new and existing climate-aligned projects with environmental and social benefits.
The investment objective of the Franklin Euro IG Corporate UCITS ETF is to provide income from the European corporate bond market while seeking to preserve capital. Classified as Article 8 under EU SFDR, the fund will primarily invest in Euro denominated investment grade corporate debt securities issued by European companies and has at least 20 per cent of its assets invested in environmental sustainable investments and 1 per cent in social sustainable investments.
Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton, says: “We are pleased to offer European investors a diversified range of competitively priced sustainable active ETFs, which include providing a sovereign bond solution with flexible duration and a shorter maturity corporate green bond strategy, the only active ETFs in these segments.”
With a total expense ratio (TER5) of 0.186 per cent for Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF and Franklin Sustainable Euro Green Sovereign UCITS ETF and 0.157 per cent for Franklin Euro IG Corporate UCITS ETF, the new ETFs will provide European investors with competitive fees amongst the lowest levels for sustainable solutions within their respective active categories in Europe.
Baron concludes: “We continue to see strong investor demand for sustainable active fixed income ETFs combining the merits of active management and the liquidity, accessibility and transparency benefits of the ETF wrapper.”
The new ETFs will list on the Deutsche Börse Xetra (XETRA) on 1st November, the London Stock Exchange (LSE) and the Borsa Italiana. They are registered in Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and in the UK.
The firm writes that these new funds extend the total number of active ETFs to six, while 13 ETFs are now classified under SFDR as Article 8 or 93, which now represent more than half of the overall Franklin Templeton ETF range. These new ETFs provide exposure to bonds that support the transition to a low-carbon future.
David Zahn, Head of European Fixed Income, Franklin Templeton, says: “Having launched the first active European green bond ETF over four years ago, we continue to see significant growth opportunities, with Europe remaining a cornerstone in the global green bond market with cumulative issuance totalling EUR331 billion last year. The launch of the Franklin Sustainable Euro Green Sovereign UCITS ETF and the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF continue to expand our Green bond offering to better address client needs. Our new green bond strategies seek to generate attractive risk-adjusted returns while providing liquidity to projects with environmental benefits.”
The firm writes that the new funds will be managed by Franklin Templeton’s European Fixed Income team with significant expertise in sustainable fixed income investments.
The investment objective of the Franklin Sustainable Euro Green Sovereign UCITS ETF, classified as Article 9 under EU SFDR, is to pursue a sustainable investment objective by providing exposure primarily to the European sovereign green bond market, whilst maximising total returns.
Meanwhile, the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF, also classified as Article 9, will pursue a sustainable investment objective by providing exposure to the European corporate green bond market with a short to mid duration of less than five years, while maximising total returns.
Both Green Bond ETFs seek to achieve their investment objectives by investing at least 90 per cent of assets in sustainable investments and will invest at least 75 per cent of assets in green bonds, with the balance made up of conventional bonds, which are deemed by the portfolio management team to be sustainable investments. By investing in this manner, the new ETFs expect to provide liquidity to new and existing climate-aligned projects with environmental and social benefits.
The investment objective of the Franklin Euro IG Corporate UCITS ETF is to provide income from the European corporate bond market while seeking to preserve capital. Classified as Article 8 under EU SFDR, the fund will primarily invest in Euro denominated investment grade corporate debt securities issued by European companies and has at least 20 per cent of its assets invested in environmental sustainable investments and 1 per cent in social sustainable investments.
Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton, says: “We are pleased to offer European investors a diversified range of competitively priced sustainable active ETFs, which include providing a sovereign bond solution with flexible duration and a shorter maturity corporate green bond strategy, the only active ETFs in these segments.”
With a total expense ratio (TER5) of 0.186 per cent for Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF and Franklin Sustainable Euro Green Sovereign UCITS ETF and 0.157 per cent for Franklin Euro IG Corporate UCITS ETF, the new ETFs will provide European investors with competitive fees amongst the lowest levels for sustainable solutions within their respective active categories in Europe.
Baron concludes: “We continue to see strong investor demand for sustainable active fixed income ETFs combining the merits of active management and the liquidity, accessibility and transparency benefits of the ETF wrapper.”
The new ETFs will list on the Deutsche Börse Xetra (XETRA) on 1st November, the London Stock Exchange (LSE) and the Borsa Italiana. They are registered in Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and in the UK.
