Franklin Debuts Active Treasury ETF

June 11, 2020

Today, Franklin Templeton has rolled out its ninth actively managed ETF. The Franklin Liberty U.S. Treasury Bond ETF (FLGV) primarily invests in Treasury securities with one to 30 years left on their maturity, though it has wide latitude to invest in other fixed income securities.

FLGV comes with an expense ratio of 0.09% after the application of a 0.50% waiver and lists on the NYSE Arca.

The prospectus describes the portfolio as high quality with the goal of achieving current income, noting that the portfolio is “conservatively managed.”

“With FLGV, we are investing primarily in Treasuries across the entire maturity spectrum, for investors looking to generate income in their portfolios without taking on corporate credit risk,” said Patrick Klein, the fund’s manager.

“We have chosen to manage this fund with a low tracking error to the Bloomberg Barclays U.S. Treasury Index, but we still retain flexibility to drive alpha, primarily through duration and yield curve positioning and with selective, limited allocations to U.S. Treasury inflation indexed notes (TIPS), U.S. agency mortgage-backed securities, and other U.S. government and agency guaranteed securities,” he added.

There does not appear to be a comparable Treasury-focused ETF that is also actively managed.

Contact Heather Bell at [email protected]

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