With the Federal Reserve stepping in during Monday’s trading session to shore up the individual bond market, exposure to fixed income couldn’t come at a better time. Franklin Templeton expanded its active exchange-traded fund lineup with its ninth active fixed income ETF offering: Franklin Liberty U.S. Treasury Bond ETF (FLGV).
According to a Think Advisor article, the fund, “managed by Patrick Klein and Warren Keyser, senior vice president, adds a Treasury-bond focused option to the company’s active fixed income ETF lineup that also includes investment grade, high yield, muni, and international bond ETFs along with a short duration U.S. government ETF and senior loan ETF.”
“The launch of FLGV further exemplifies our steadfast belief that active management is critical to achieving investor goals in fixed income,” according to Patrick O’Connor, Global Head of ETFs for Franklin Templeton. “Franklin Templeton Fixed Income has engineered a seamless active quant approach—where portfolio managers, analysts, traders, and data scientists work as one team to create a synergistic loop between quantitative and fundamental analysis,” he said in a statement.
As more investors enter the bond market, the space becomes more challenging as yield gets harder to come by, leaving investors clamoring for other ways to obtain yield in the current fixed income environment. Nonetheless, it’s still necessary for investors to get core, safe haven bond exposure given the uncertainty in the market that remains in a post-COVID world.
Other Fixed Income ETF Options
One fund to consider is the Franklin Liberty U.S. Core Bond ETF (NYSEArca: FLCB). FLCB seeks to provide investors with diversified core fixed income exposure. FLCB is an active ETF that seeks total return through bottom-up fundamental bond selection and top-down sector.
Investors wanting an active option can look at the PGIM Active High Yield Bond ETF (PHYL). PHYL seeks total return, through a combination of current income and capital appreciation.
Under normal market conditions, the fund invests at least 80% of its investable assets in a diversified portfolio of high yield bonds that are below investment grade and other investments (including derivatives) with similar economic characteristics.
It may invest in securities which are the subject of bankruptcy proceedings or otherwise in default as to the repayment of principal and/or interest at the time of acquisition by the fund or are rated in the lower rating categories or, if unrated, are in the judgment of the Subadviser of equivalent quality.
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