Active Broad Bond ETF Launches

September 20, 2019

Yesterday, Franklin Templeton rolled out an actively managed fixed income ETF, bringing its total number of such funds to eight. The Franklin Liberty U.S. Core Bond ETF (FLCB) invests in a wide range of debt securities from U.S. issuers, which are defined as companies listed in the U.S. or that generate more than half of their revenue from U.S. operations or that have more than half of their assets in the U.S.

FLCB comes with an expense ratio of 0.15% and lists on the NYSE Arca.

Franklin Templeton expects the fund to generally reflect the characteristics of the Bloomberg Barclays U.S. Aggregate Bond Index and to invest primarily in investment-grade securities. The manager of FLCB will combine top-down macroeconomic analysis with bottom-up fundamental analysis of sectors down to the individual issuers, the prospectus says.

While expense ratios for broad-based investment-grade U.S. bond ETFs are as low as 0.04% for passively managed funds, active bond ETFs in this category are more expensive, except for the largest active fund in the category, the JPMorgan U.S. Aggregate Bond ETF (JAGG), which charges 0.07% and has $200.6 million in assets under management. The two other actively managed funds in the category are much more expensive, charging 0.35% or higher.

Contact Heather Bell at [email protected]

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