SAN MATEO, CA--(Marketwired - Nov 5, 2013) - Franklin Templeton Investments today announced the introduction of Franklin Short Duration US Government ETF (the "fund") (
"With Franklin Short Duration US Government ETF, we are taking a yield-driven approach and investing where we see the most attractive short-term yield potential across various US government bond sectors, including higher yielding MBS (Mortgage-Backed Securities), ARMS (Adjustable Rate Mortgage Securities) and TIPS (Treasury Inflation-Protected Securities)," said Roger Bayston, CFA1, the fund's lead portfolio manager and senior vice president of Franklin Templeton Fixed Income Group.
"This actively managed ETF can take advantage of opportunities outside of the index (Barclays U.S. Government 1-3 Year Index), which has a much narrower opportunity set," Bayston continued. "The fund may be attractive to risk-averse investors who seek monthly income potential and relative price stability across changing interest rate environments, and do not want exposure to corporate credit cycles."
Under normal market conditions, the fund will invest at least 80% of its net assets in securities issued or guaranteed by the US government, its agencies or instrumentalities, including government-sponsored entities. The fund generally will invest a substantial portion of its assets in mortgage-backed securities including ARMS, but the fund will also invest in direct obligations of the US government (such as Treasury bonds, bills and notes). The fund may also invest in US inflation-indexed securities issued by the US government.
"As a firm, we continue to focus on traditional active fund management and seek to provide attractive long-term returns for our clients," said Peter Jones, president of Franklin Templeton Distributors, Inc. "The vehicles in which we have offered our strategies have evolved and expanded over time, and the introduction of Franklin Short Duration US Government ETF represents our first foray into actively managed ETFs."
The fund's portfolio managers, Roger Bayston and Patrick Klein, PhD, are supported by the analysis and insights of the Franklin Templeton Fixed Income Group, which consists of over 150 investment professionals with an average of more than 15 years of industry experience. Franklin Templeton has been managing US government bond funds since 1947.
The fund is traded on the NYSE Arca under the symbol "FTSD." As an ETF vehicle, this product will offer daily portfolio transparency and intra-day trading. Data and documents for the new fund are available at etf.franklintempleton.com.
Securities owned by the fund, but not shares of the fund, are guaranteed by the US government, its agencies or instrumentalities as to timely payment of principal and interest. The fund's yield and share price are not guaranteed and will fluctuate with market conditions.
All investments involve risks, including possible loss of principal. Interest rate movements, unscheduled mortgage prepayments and other risk factors will affect the fund's share price and yield. Bond prices, and thus a fund's share price, generally move in the opposite direction of interest rates. Therefore, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. These and other risks are discussed in the fund's prospectus. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit etf.franklintempleton.com. Please carefully read a prospectus before you invest or send money.
The fund's principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. (
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