Launched on 04/26/2017, the Franklin LibertyQ U.S. Equity ETF (FLQL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $384.48 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
Large cap companies 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.81%.
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 19.50% of the portfolio. Consumer Discretionary and Consumer Staples round out the top three.
Looking at individual holdings, Exelon Corp (EXC) accounts for about 1.10% of total assets, followed by Nextera Energy Inc (NEE) and Procter + Gamble Co/the (PG).
The top 10 holdings account for about 10.66% 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 gained about 0.79% so far this year and is down about -2.67% in the last one year (as of 01/07/2019). In the past 52-week period, it has traded between $26.18 and $31.54.
The ETF has a beta of 0.87 and standard deviation of 11.63% for the trailing three-year period. With about 250 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 $151.13 B in assets, SPDR S&P 500 ETF has $242.48 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
FL-LBTY US EQ (FLQL): ETF Research Reports
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Exelon Corporation (EXC) : Free Stock Analysis Report
ISHARS-SP500 (IVV): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research