Last updated: 10:28 / Thursday, 9 June 2016
LibertyShares

Franklin Templeton Investments Launches First Suite of Strategic Beta ETFs

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Franklin Templeton Investments Launches First Suite of Strategic Beta ETFs
  • The funds are launched within LibertyShares, a new line of business, and track the LibertyQ indices
  • The suite includes three multi-factor core portfolio funds and one fund that focuses on stocks with high and persistent dividend income

Franklin Templeton Investments announced on Monday the launch of its first suite of strategic beta exchange traded funds (ETFs), within LibertyShares, a new line of business. The funds track the LibertyQ indices developed with the asset management company´s team of quantitative experts who have a broad experience developing quantitative active equity strategies. “We approached the creation of the LibertyQ indices in the same way we have approached quantitative stock selection, and we believe that, just as with discretionary stock picking, all factors are not created equal—some are more correlated to certain outcomes,” said Patrick O’Connor, head of Global Exchange Traded Funds for the company.

The suite includes three multi-factor core portfolio funds and one fund that focuses on stocks with high and persistent dividend income. The firm´s strategic beta ETFs use proprietary LibertyQ indices1, which have employed a research-driven approach in customizing their factor weightings - The indices are constructed with four factors.

“Many of our clients have embraced the ETF wrapper for its benefits, including liquidity, tax efficiency and transparency, and now they are looking for more than what a traditional market cap-weighted index can offer,” added O’Connor.

The three core multi-factor funds use indices that apply an approach of using custom factor weightings—quality (50%), value (30%), momentum (10%) and low volatility (10%)—in seeking to capture desirable, long-term performance attributes.

The new funds are:

  • Franklin LibertyQ Global Equity ETF offers global equity exposure.
  • Franklin LibertyQ Emerging Markets ETF offers broad emerging markets exposure.
  • Franklin LibertyQ International Equity Hedged ETF offers international developed markets exposure.
  • Franklin LibertyQ Global Dividend ETF offers global exposure to high-quality, dividend-oriented stocks to help meet investors’ needs for income and total return.

“The launch of LibertyShares, taking an active approach to ETFs, is a strong complement to our commitment to active management,” added Greg Johnson, chairman and CEO of Franklin Resources.

 

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