Today, Franklin Templeton has added a fourth ETF to its offering of actively managed thematic strategies. The Franklin Exponential Data ETF (XDAT) joins ETFs targeting the genomics, online commerce and intelligent machines categories. All four are also managed by Matt Moberg, who has also been a portfolio manager of the technology-focused Franklin DynaTech Fund (FKDNX) for more than 15 years and was a technology analyst before that.
XDAT comes with an expense ratio of 0.50% and lists on Cboe Global Markets, the parent company of ETF.com.
XDAT covers a wide range of companies that focus their businesses on activities around what Moberg describes as the “creation, cleaning, storage and delivery” of large sets of data. The fund’s holdings can include the likes of social media companies and cloud computing firms, as well as companies involved in artificial intelligence, virtual reality and machine learning.
Moberg notes that by 2025, there are expected to be 150 billion connected devices, and that means a lot of generated data, much of which can be monetized.
XDAT has no limit on where it can draw its holdings from with regard to size segment, geographic borders or sector designation. Its active management is driven by a fundamental, bottom-up approach to security selection.
“Matt Moberg has a very thoughtful and intelligent way of expressing his active bets in these more narrow technology sleeves, and it really comes off of his technology experience,” said Patrick O’Connor, Franklin’s global head of ETFs.
Franklin’s other thematic ETFs, all of which launched in February 2020, include the Franklin Disruptive Commerce ETF (BUYZ), Franklin Genomic Advancements ETF (HELX) and Franklin Intelligent Machines ETF (IQM).
“We are noticing and we do believe that innovation is starting to accelerate, that innovation is one of the most misunderstood parts of the economy and really should benefit from active management,” said Moberg.
“Some themes that have come out really aren’t investable, but others are. We’re trying to help the client understand which themes we think are really going to be around for a long time and have a rich backdrop in which to invest,” he added, noting Franklin believes those themes have a good chance of outperforming the broader market and becoming true drivers of the economy over the long term.
O’Connor says that the firm entered the ETF space five years ago with the intention of introducing active strategies at the global level. It now offers 55 U.S.-listed ETFs, and global ETF assets under management now stand at $12 billion after having doubled every year since Franklin entered the market. The mutual fund giant also completed its purchase of Legg Mason last summer.
Contact Heather Bell at [email protected]