If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Franklin LibertyQ U.S. Equity ETF (FLQL), a passively managed exchange traded fund launched on 04/26/2017.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $478.01 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.64%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 20.80% of the portfolio. Consumer Discretionary and Consumer Staples round out the top three.
Looking at individual holdings, Nike Inc Cl B (NKE) accounts for about 1.11% of total assets, followed by Mastercard Inc A (MA) and Intl Business Machines Corp (IBM).
The top 10 holdings account for about 10.67% of total assets under management.
Performance and Risk
FLQL seeks to match the performance of the LibertyQ US Large Cap Equity Index before fees and expenses. The U.S. Large Cap Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000 Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000 Index that have favorable exposure to four investment style factors quality, value, momentum and low volatility.
The ETF has added roughly 11.41% so far this year and was up about 8.01% in the last one year (as of 02/21/2019). In the past 52-week period, it has traded between $26.18 and $31.54.
The ETF has a beta of 0.88 and standard deviation of 11.71% for the trailing three-year period. With about 249 holdings, it effectively diversifies company-specific risk.
Franklin LibertyQ U.S. Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FLQL is a good option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $159.65 B in assets, SPDR S&P 500 ETF has $257.92 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Franklin LibertyQ U.S. Equity ETF (FLQL): ETF Research Reports
International Business Machines Corporation (IBM) : Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
NIKE, Inc. (NKE) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report
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