06.06.2016

Franklin Templeton Launches Smart Beta Index Funds

This article originally appeared on ETF.com 

ETF.com — Franklin Templeton, a traditionally active mutual fund manager, has launched four index-based smart-beta equity ETFs on the NYSE Arca today to join its actively managed short-term debt fund, the Franklin Liberty Short Duration U.S. Government ETF (FTSD | C-46). The new funds track indexes derived from MSCI benchmarks.

The Franklin LibertyQ International Equity Hedged ETF (FLQH) comes with an expense ratio of 0.40%. In addition to highlighting the quality, value, momentum and low-volatility factors, it is also currency-hedged. Its components are drawn from the MSCI EAFE Index.

The Franklin LibertyQ Emerging Markets ETF (FLQE)charges 0.55%, while the Franklin LibertyQ Global Equity ETF (FLQG) charges 0.35%. Like FLQH, they target the quality, value, momentum and low-volatility factors, but they do not come with a currency hedge.

FLQE’s benchmark is derived from the MSCI Emerging Markets Index, and FLQG’s benchmark is a modified version of the MSCI ACWI.

The Franklin LibertyQ Global Dividend ETF (FLQD) has an expense ratio of 0.45%. The fund’s index is derived from the MSCI ACWI ex REITs Index, with screens applied to highlight stocks with dividend persistence and yield growth, with components selected from the remaining universe based on their exposure to the quality factor, the prospectus said.

Yield-Focused Fund Planned

Christian Magoon’s Amplify Investments has filed for another ETF, this one a follow-up to the $88 million YieldShares High Income ETF (YYY). The YieldShares Prime 5 Dividend ETF will invest mainly in other ETFs; similarly, YYY invests in closed-end funds.

The proposed fund’s underlying index will evaluate dividend ETFs that have at least $250 million in assets under management based on indicated dividend yield, realized volatility and total expense ratio, and rank them according to those criteria, with dividend yield given the most weight, and expense ratio the least. The index selects the five highest-ranked ETFs and weights them based on their composite scores. ETFs must meet an additional liquidity requirement, as well as make regular distributions.

The filing did not include a ticker or expense ratio, but it did say the fund will list on the Bats exchange, which is the owner of ETF.com.

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