Mutual fund provider Franklin Templeton is testing the waters in the exchange traded funds space, launching its first fund, an actively managed short-term U.S. bond offering.
According to the NYSE, the Franklin Short Duration U.S. Government ETF (NYSEArca:FTSD) will begin trading Tuesday, Nov. 5.
FTSD tries to generate a high level of current income through “prudent investing” while preserving capital, according to an updated SEC filing. The active fund has a 0.30% expense ratio.
Roger Bayston, CFA Senior Vice President of Advisers, and Patrick Klein, PH.D. Portfolio Manager of Advisers, will both manage the Franklin Templeton ETF.
The ETF will consist of investment-grade securities issued by the U.S. government and related agencies with an average duration of three or less years. The majority of holdings will include mortgage-backed securities, including adjustable rate mortgage securities.
The new Franklin Templeton ETF will compete against similar actively managed short-duration bond ETFs like the PIMCO Enhanced Short Maturity ETF (MINT) , Guggenheim Enhanced Short Duration Bond (GSY) , SPDR SSgA Ultra Short Term Bond ETF (ULST) and iShares Short Maturity Bond ETF(NEAR) . [Investors Use Short-Term Bond ETFs to Hedge Rising Rates]
Franklin Templeton is just one of many other large mutual fund providers with SEC approval to launch ETF products. [New Wave of Active ETFs Could Come from Mutual Fund Providers]
For more information on new product launches, visit our new ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.