Since venturing into the ETF business three years ago, Franklin Templeton has not only seen its ETF portfolio grow but also adoption among investors. The investment management company that started its ETF line with just a handful of funds now has 66 ETFs that are actively traded globally and over $3.8 billion in ETF assets under management.
Three years ago the company debuted its initial smart beta ETFs on June 1, 2016: Franklin LibertyQ Global Equity ETF (FLQG), Franklin LibertyQ Emerging Markets ETF (FLQE), Franklin LibertyQ Intl Eq Hdgd ETF (FLQH), and Franklin LibertyQ Global Dividend ETF (FLQD).
Since inception, investors have embraced the smart beta ETFs.
“We are seeing a strong adoption of smart beta ETFs which validates the desire for clients to have investment choices that seek out a specific outcome,” said Patrick O’Connor, Head of Global ETFs at Franklin Templeton. “The idea that you can generate stronger risk-adjusted returns, or higher yield, by focusing on certain factors in a systematic way that is very cost effective is a tremendous advancement in investing.”
Franklin Templeton has branched out into other types of ETFs. In addition to smart beta, they also have capabilities built out across passive and actively managed ETFs.
Among its ETF lineup, its Franklin LibertyQ U.S. Equity ETF (FLQL) is the largest, amassing $1 billion in less than 2 years.
“We believe that smart beta ETFs will continue to see further adoption amongst investors as well as long term growth with greater education around rules-based investing as well as improved track records for existing strategies,” said O’Connor.
Many investors view “smart beta” within the realm of exchange-traded funds (ETFs) as a replacement for either actively managed or passive investment strategies.
Franklin Templeton ETF Specialists Todd Mathias and Rick Felix view smart beta as an additive investment strategy that can complement these approaches.
In this “Talking Markets” podcast below, they discuss the nuances of smart beta while taking a look at the changing investment landscape in emerging markets:
For more smart beta investment strategies, visit our Smart Beta Channel.