Franklin Templeton Investments may soon be entering the exchange traded fund space with a handful of smart-beta or alternative index-based ETF options.
According to a recent Securities and Exchange Commission filing, Franklin Templeton is working on its first group of ETFs, including the Franklin LibertyQ International Equity Hedged ETF, Franklin LibertyQ Emerging Markets ETF, Franklin LibertyQ Global Dividend ETF and Franklin LibertyQ Global Equity ETF.
The International Equity Hedged ETF will try to reflect the performance of the Franklin International Equity Hedged Index, a rules-based proprietary index based off the MSCI EAFE Index. Specifically, the fund will include company stocks from Europe, Australasia and the Far East with favorable style factors, including quality, value, momentum and low volatility. Additionally, the index will hedge currency risk against the U.S. dollar.
The Emerging Markets ETF will try to reflect the performance of the Franklin Emerging Markets Index, which also tracks a different version of the MSCI Emerging Markets Index that aims to follow the performance of the Franklin Templeton’s investment strategy. The underlying index will include the four style factors of quality, value, momentum and low volatility, and generate lower level of risk and higher risk-adjusted performance than the MSCI Emerging Market benchmark.
The Global Dividend ETF will track the Franklin Global Dividend Index, which is based off the MSCI ACWI ex REITs Index. The new ETF, though, will also utilize a multi-factor selection process based off growth and sustainability of dividends as well as quality while seeking a lower level of risk and higher risk-adjusted performance than the MSCI ACWI ex REITs Index.
Lastly, the Global Equity ETF will try to reflect the performance of the Franklin Global Equity Index, which is based off the MSCI ACWI Index. The ETF’s benchmark will also screen for the four quality, value, momentum and low volatility factors.
The four new funds will be listed on the NYSEArca exchange. No expense ratios or tickers were given at the time of the updated filing.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.