Franklin Templeton has reduced the fees charged on three of its Franklin LibertyShares ETFs listed in the US.
Franklin Templeton has lowered the fees charged on three of its US-listed ETFs.
The funds include two smart beta products (part of the LibertyQ range) that provide exposure to US or emerging market equities, as well as an actively managed international aggregate bond ETF.
“We are constantly evaluating ways to improve client experiences. I’m excited to announce our latest effort – lower pricing on our large-cap equity and emerging market smart beta ETFs as well as our international bond active ETF,” said Patrick O’Connor, global head of ETFs for Franklin Templeton.
Smart beta equity
The Franklin LibertyQ US Equity ETF (FLQL US) has had its expense ratio reduced from 0.25% to 0.15%.
With assets under management of around $1.2 billion, the fee cut will save current investors approximately $1.2 million in annual charges.
The fund tracks a proprietary index that selects its constituents from the US large-cap Russell 1000 Index.
The stocks in the parent index are given a composite score based on their exposure to four single factors, with a 50% weight given to quality, 30% to value and 10% each to momentum and low volatility.
The 25% of stocks with the highest composite factor scores are selected to become index constituents and are weighted based on a combination of market capitalization and composite factor score.
Franklin Templeton has also reduced the expense ratio of the Franklin LibertyQ Emerging Markets ETF (FLQE US) from 0.55% to 0.45%.
With AUM of $350m, current investors will see their annual management bill cut by around $350,000.
The fund follows a similar methodology as its US-focused counterpart but selects its constituents from the MSCI Emerging Markets Index.
Both strategies are also available as UCITS ETFs listed in Europe.
Active international bond
The Franklin Liberty International Aggregate Bond ETF (FLIA US) has had its expense ratio reduced from 0.35% to 0.25%.
The fund seeks to maximize total investment return, consisting of a combination of interest income and capital appreciation, by investing primarily in investment-grade fixed or floating-rate bonds issued by governments, government agencies and governmental-related or corporate issuers located outside the US.
A maximum of 20% of the portfolio’s value may be invested in high yield securities, and the portfolio manager regularly enters into various currency-related and other transactions involving derivatives.
The fund houses just $5m in AUM.