August 7, 2018

Many investors have a home country bias, and an easy way to diversify their portfolios is to look to overseas markets and international ETFs.

“Do you want to basically take one small step into a country that you really like? Do you want to take a little bigger step – regional. But as you look at the volatility in this market, lots of opportunity,” Pierre Caramazza, Head of ETF Distribution for Franklin Templeton, said at the 2018 Morningstar Investment Conference.

For example, Franklin Templeton’s smart beta ETF suite includes Franklin LibertyQ International Equity Hedged ETF (NYSEArca: FLQH), Franklin LibertyQ Emerging Markets ETF (NYSEArca: FLQE), Franklin LibertyQ Global Dividend ETF (NYSEArca: FLQG) and Franklin LibertyQ Global Equity ETF (NYSEArca: FLQD).

The quality factor incorporates measures like return on equity, earnings, variability, cash return on assets and leverage. The value factor incorporates measures such as price-to-earnings, price-to-forward earnings, price-to-book value and dividend yield. The momentum factor covers measures such as 6-month risk adjusted price momentum and 12-month risk-adjusted price momentum. Lastly, the low volatility factors include measures like historical beta, a measure of the volatility of a security relative to the total market.

Alternatively, investors can also find more focused exposure through country-specific ETF plays through Franklin Templeton’s low-cost, market cap-weighted ETF suite, which includes Franklin FTSE Canada ETF (NYSEArca: FLCA), Franklin FTSE France ETF (NYSEArca: FLFR), Franklin FTSE Germany ETF (NYSEArca: FLGR) and Franklin FTSE Japan ETF (NYSEArca: FLJP), among others.

The developed country-specific ETFs each come with a 0.09% expense while the emerging country-specific ETFs each have a 0.19% expense ratio. These Franklin Templeton country-specific ETFs are among the cheapest options available for targeting their respective markets.

For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.