Toronto-based Franklin Templeton Investments Corp. announced on Wednesday that its first slate of actively managed and strategic beta ETFs will launch in the coming weeks.
Specifically, Franklin Liberty Risk Managed Canadian Equity ETF and Franklin Liberty Canadian Investment Grade Corporate ETF will be listed on the Toronto Stock Exchange (TSX) on May 30.
As well, the firm plans to debut two strategic beta ETFs, Franklin LibertyQT U.S. Equity Index ETF and Franklin LibertyQT International Equity Index ETF, on the TSX on June 5.
“Many Canadian investors have embraced ETFs for the benefits of intraday trading, liquidity, tax efficiency and transparency. We believe the future of ETF investing is in continuing to provide these foundational benefits while innovating beyond the limitations of passive investments,” says Duane Green, president and CEO of Franklin Templeton Investments Canada, in a statement. “These new ETFs are built on a rigorous investment approach, as they are designed by investment professionals with decades of active management and quantitative experience.”
Franklin Liberty Risk Managed Canadian Equity ETF and Franklin Liberty Canadian Investment Grade Corporate ETF — the first -products to be released — will be managed by the firm’s investment teams, which will seek to identify “attractive equity and fixed-income opportunities that they believe can outperform the market,” the firm’s news release says.
Meanwhile, the firm’s strategic beta ETFs will aim to replicate a rules-based index that applies four custom-factor weightings to its underlying index, allocating 50% to quality, 30% to value, 10% to momentum and 10% to low volatility.
In terms of quality, for example, each index will seek to “identify securities that have potential for long-term performance and balance-sheet strength,” the firm says. Its low-volatility factor comes into play as a “defensive mechanism against market downturns.”
“Franklin LibertyQT strategic beta ETFs seek to track indices that use custom-weighted factors that pursue lower volatility and higher risk-adjusted returns over the long term relative to corresponding cap-weighted benchmarks,” says Patrick O’Connor, global head of ETFs at Franklin Templeton, in a statement.
Franklin Templeton launched its ETF platform in the U.S. in June 2016. Since then, Franklin LibertyShares has approximately US$623 million in assets under management.
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