Smart Beta ETFs Are Smart Long-Term Investments

“We launched a bunch of smart beta offerings – our LibertyQs,” Caramazza said. “We’ve built them off of a lot of the same stock picking tenets that we’ve sued across the firm, right – quality, value, low volatility, momentum – and looking at those for the entire index, building them together, gives us what we think is a very compelling opportunity that’s built on the tenets of long-term Franklin views.”

Specifically, Franklin Templeton has launched a suite of LibertyQ smart beta ETFs, including the Franklin LibertyQ U.S. Equity ETF (BATS: FLQL), Franklin LibertyQ U.S. Mid Cap Equity ETF (BATS: FLQM), Franklin LibertyQ U.S. Small Cap Equity ETF (BATS: FLQS),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), among others. Each of the smart beta ETFs screen for companies in their respective market capitalization and segments based on four factors, including quality, value, momentum and low volatility.

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“The way we’ve built our smart betas is as we’ve looked at at them for a risk-adjusted perspective,” Caramazza said. “We really tried to do them, not to beat the marketplace in any sort of give year, but really to do a long-term view and to have a risk-adjusted number where we protect on the downside, get some of the upside. And over the long-term, we think we do well.”

For more on smart beta ETFs, visit our Smart Beta Channel.