New Smart Beta U.S. Equity ETFs to Enhance Returns, Diminish Risks

Franklin Templeton Investments has expanded its line of LibertyShares smart beta exchange traded funds to now include U.S. equity-focused options to track the various market capitalization segments of domestic markets

On Monday, Franklin Templeton rolled out the Franklin LibertyQ U.S. Equity ETF (BATS: FLQL), Franklin LibertyQ U.S. Mid Cap Equity ETF (BATS: FLQM) and Franklin LibertyQ U.S. Small Cap Equity ETF (BATS: FLQS). FLQL has a 0.25% expense ratio, FLQM has a 0.30% expense ratio and FLQS has a 0.35% expense ratio.

“Our new U.S. equity strategic beta ETFs reflect our ongoing commitment to investors, by developing best-in-class offerings that seek to achieve better risk-adjusted returns over the long term. Leveraging our firm’s 70 years of active management experience, our quantitative approach targets specific factors for consistent sources of return. In our proprietary approach, we place an emphasis on the ‘quality’ factor,” Patrick O’Connor, global head of ETFs at Franklin Templeton Investments, said in a note.

FLQL tries to reflect the performance of the LibertyQ U.S. Large Cap Equity Index, which includes the 1,000 largest issuers based on market-cap taken from the Russell 1000 Index using a methodology developed with Franklin Templeton to reflect the money manager’s desired investment strategy. FLQM tracks the LibertyQ U.S. Mid Cap Equity Index, which is comprised of the 800 smallest issuers taken from the Russell 1000 Index. FLQS follows the Liberty Q U.S. Small Cap Equity Index, which is based on the Russell 2000 or the 2000 of the smallest issuers in the Russell 3000 index.