Daily ETF Watch: Franklin Plans Active Trio

Franklin Templeton files for three actively managed ETFs.

Reviewed by: Heather Bell
Edited by: Heather Bell

Following up its January filing for four index-based ETFs, mutual fund firm Franklin Templeton has put three more funds into registration that are a little more in its wheelhouse. The actively managed ETFs also carry the “Franklin Liberty” brand and are as follows:

  • Franklin Liberty U.S. Low Volatility ETF
  • Franklin Liberty Investment Grade Corporate ETF
  • Franklin Liberty International Opportunities ETF

The low-volatility fund will seek to achieve a lower level of volatility than the Russell 1000 Index while still approximating the index’s sector weightings. The prospectus also noted that the holdings within each sector would be roughly equally weighted. Despite the Russell 1000 being a U.S. index, the fund can invest up to 20% of its assets in international stocks.

The investment-grade corporate debt fund will invest in USD-denominated debt from domestic and foreign issuers and has no target duration or maturity. Strategically, the ETF will mesh a top-down approach to macroeconomic trends with a bottom-up analysis of the fundamentals of the different sectors and issuers, the prospectus said, with the intention of exploiting sector responses to economic stimuli.

Finally, the “International Opportunities” fund will be able to invest in any market outside of the U.S., including frontier markets, and its manager will rely on Franklin Templeton’s asset management teams that are local to each region for insights on individual markets. The fund appears to have a “wide moat” objective designed to target companies with growth potential and a competitive edge. The prospectus notes that the fund’s managers will implement a bottom-up approach that targets potential holdings’ fundamentals.

The filing did not include tickers or expense ratios, but it did indicate that the three ETFs would list on the NYSE Arca exchange.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.