Franklin Templeton Launches Active ETFs in Europe

Franklin Templeton Launches Active ETFs in Europe

New fixed income funds boost active ETF range to six products.

Reviewed by: Staff
Edited by: Staff

Franklin Templeton has doubled its active ETF range with the launch of three fixed income strategies.

The Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF (GCOR), the Franklin IG Corporate UCITS ETF (EIGC) and the Franklin Sustainable Euro Green Sovereign UCITS ETF (GSOV) will list on the Deutsche Boerse on 1 November and the London Stock Exchange and Euronext Milan later in the month.

Managed by Franklin Templeton’s European fixed income head David Zahn and portfolio manager Rod MacPhee, GSOV will be benchmarked against the Bloomberg Global Government EUR Green Bond index.

GCOR will be benchmarked against the Bloomberg Euro Corporate Green Bond 1-5 Year index and managed by Zahn, MacPhee and Emmanuel Teissier.

The two ETFs have total expense ratios (TERs) of 0.18% and are classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR), designed to invest at least 90% of assets in sustainable investments and at least 75% in green bonds.

Meanwhile, EIGC is benchmarked against the Bloomberg Euro Aggregate Corporate index. Managed by Zhan and Teissier, it will primarily invest in euro-denominated investment-grade corporate debt with a TER of 0.15%.

EIGC is classified as Article 8 with at least 20% of its assets invested in environmentally sustainable investments and 1% in socially sustainable investments.

The launches take the total number of active ETFs in Franklin’s range to six.

In 2019, the Franklin Euro Green Bond UCITS ETF (FVUG) was the first European green bond ETF to launch on the continent which now has €264.5m assets under management (AUM)

Caroline Baron, head of ETF distribution EMEA at Franklin Templeton, said: “We are pleased to offer European investors a diversified range of competitively priced sustainable active ETFs, which include providing a sovereign bond solution with flexible duration and a shorter maturity corporate green bond strategy, the only active ETFs in these segments.

“We continue to see strong investor demand for sustainable active fixed income ETFs combining the merits of active management and the liquidity, accessibility and transparency benefits of the ETF wrapper.”

Franklin Templeton has made several changes to its ETF line recently, slashing fees and removing China from its Franklin AC Asia ex Japan UCITS ETF (FRQX) and terminating its Franklin European Equity UCITS ETF (FREQ).

Theo Andrew joined ETF Stream as a senior reporter in September 2021. He has over four years of investment writing experience spanning pensions and retail investments, most recently at Citywire, where he was a senior reporter covering environmental, social and governance investing.