The universe of smart beta exchange-traded funds is getting bigger thanks to the addition of three new ETFs from Franklin Templeton. Franklin Templeton introduced four smart or strategic beta ETFs last year and the issuer also offers four actively managed ETFs, giving it an ETF lineup of 11.
The three new strategic beta ETFs from Franklin Templeton are U.S. equity products, including the Franklin LibertyQ U.S. Equity ETF (BATS: FLQL). FLQL tracks the LibertyQ U.S. Large Cap Equity Index and emphasizes four investment factors — quality, value, momentum and low volatility. FLQL charges 0.25 percent per year, or $25 on a $10,000 investment.
The new ETF's three largest sector weights are technology, consumer discretionary and consumer staples. Those sectors combine for over 55 percent of FLQL's weight. None of the new ETF's individual holdings command weights of more than 1.2 percent.
The Franklin LibertyQ U.S. Mid Cap Equity ETF (BATS: FLQM) follows the LibertyQ U.S. Mid Cap Equity Index and like the aforementioned FLQL, FLQM emphasizes the quality, value, momentum and low volatility factors. FLQM holds nearly 200 stocks.
FLQM's three largest sector allocations are consumer discretionary, industrials and financial services. Those sectors combine for over 55 percent of the new ETF's weight. None of FLQM's holdings have weights of more than 1.4 percent. The new ETF charges 0.3 percent per year.
The Franklin LibertyQ U.S. Small Cap Equity ETF (BATS: FLQS) tracks the LibertyQ U.S. Small Cap Equity Index, which is also a multi-factor benchmark focusing on the quality, value, momentum and low volatility factors. FLQS charges 0.35 percent on an annual basis, or $35 on a $10,000 investment.
FLQS is top heavy at the sector level as consumer discretionary, technology and industrial stocks combine for over 56 percent of the new ETF's weight None of FLQS's 483 holdings command weights of more than 1.05 percent.
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