Franklin Templeton announced that it will introduce its first passive ETFs
These new passive ETFs will allow investors to gain exposure to a specific region or country at a low, cost-effective fee. The funds’ expense ratios are among the lowest in the industry for their respective categories, empowering more investors with the ability and options to realize the full potential of beta-driven solutions. The suite consists of ETFs that will target exposures to developed countries at an expense ratio of 0.09% and emerging markets at 0.19%.
“In 2016, we began executing upon a multi-year strategy to create a world class ETF business, building an experienced ETF team and leveraging the deep expertise and resources of Franklin Templeton Investments,” said Jenny Johnson, president and COO of Franklin Resources, Inc. “Following successful launches of our Franklin LibertyShares™ ETF platform in the US, Canada and Europe, we are now introducing a suite of passive ETFs covering both single country and regional exposures.”
Patrick O’Connor, head of Global ETFs for Franklin Templeton Investments, added that, “Our goal is to provide investors with the flexibility to construct diversified portfolios across active, smart beta and passive ETF strategies. Our new suite of passive ETFs will provide a cost-effective way to access beta solutions, further rounding out our offerings for US investors."
Dina Ting, vice president and senior portfolio manager, and Louis Hsu, vice president and portfolio manager, Global ETFs, will manage the suite of country and regional ETFs, which will include:
|Ticker||ETF Name|| Expense
|FLAU||Franklin FTSE Australia ETF||0.09%|
|FLCA||Franklin FTSE Canada ETF||0.09%|
|FLEE||Franklin FTSE Europe ETF||0.09%|
|FLEH||Franklin FTSE Europe Hedged ETF||0.09%|
|FLFR||Franklin FTSE France ETF||0.09%|
|FLGR||Franklin FTSE Germany ETF||0.09%|
|FLHK||Franklin FTSE Hong Kong ETF||0.09%|
|FLIY||Franklin FTSE Italy ETF||0.09%|
|FLJP||Franklin FTSE Japan ETF||0.09%|
|FLJH||Franklin FTSE Japan Hedged ETF||0.09%|
|FLGB||Franklin FTSE United Kingdom ETF||0.09%|
|FLKR||Franklin FTSE South Korea ETF||0.09%|
|FLBR||Franklin FTSE Brazil ETF||0.19%|
|FLCH||Franklin FTSE China ETF||0.19%|
|FLMX||Franklin FTSE Mexico ETF||0.19%|
|FLTW||Franklin FTSE Taiwan ETF||0.19%|
The new ETFs will be market cap-weighted and benchmarked to country and regional indices from FTSE Russell, leveraging the global index provider’s capabilities and expertise across developed and emerging markets. FTSE Russell is one of the largest index providers in the marketplace globally, with approximately $15 trillion in assets currently benchmarked to its indices.
“We continue to see significant interest from our clients in passive and smart beta strategies that complement our active fund management capabilities,” added Johnson. “Franklin Templeton remains committed to offering a comprehensive suite of investment strategies and solutions that will provide clients with broad access across investment styles, asset classes and geographies. This is an exciting new chapter in our 70-year history as we evolve our capabilities to address our clients’ needs in the ETF arena.”
Johnson and O’Connor will join a group of Franklin Templeton Investments executives in ringing the NYSE opening bell on November 6, 2017 to mark the commencement of trading of this suite of passive ETFs.
Through its Franklin LibertyShares ETF platform, the firm currently offers an actively managed suite of equity and fixed income ETFs, and a smart beta suite covering both US and international equity markets. Franklin LibertyShares has over $938 million in assets under management globally as of September 30, 2017.
Important Information about the Funds
All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because the funds invest their assets primarily in companies in a specific country or region a fund may also experience greater volatility than a fund that is more broadly diversified geographically. The non-diversified funds may invest in a relatively small number of issuers and, as a result, be subject to a greater risk of loss with respect to their portfolio securities. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause a fund to participate in losses on an amount that exceeds the fund’s initial investment. A fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. These and other risk considerations are discussed in the funds’ prospectus.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns.
ETF shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.