Franklin Templeton launches developed equities ETF

Jun 25th, 2024 | By | Category: Latest news

Franklin Templeton has unveiled a new ETF in Europe offering access to a low-cost portfolio of stocks from developed market countries.

Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton

Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton.

The Franklin FTSE Developed World UCITS ETF is being rolled out this week on London Stock Exchange in US dollars (Ticker: DWLD LN) and pound sterling (WORL LN) as well as on Xetra (DWLD GY) and Borsa Italiana (WORLD IM) in euros.

The fund tracks the FTSE Developed Index which consists of large and mid-cap equities from 25 developed market countries worldwide.

Stocks are screened and selected to ensure that the index is tradeable and investable. Constituents are typically weighted by float-adjusted market capitalization.

As of the end of May, the US accounted for over two-thirds (68.7%) of the index weight with the next-largest country exposures being Japan (6.8%), the UK (4.1%), and France (3.0%).

Tech firms made up over one-quarter (27.2%) of the index’s sector allocation followed by stocks from the industrial goods (12.2%) and health care (11.4%) sectors.

The index was composed of 2,076 constituents with almost a quarter (22.5%) of the total weight allocated to the ten largest firms. The most notable positions included Microsoft (4.7%), Apple (4.2%), Nvidia (3.9%), Amazon (2.4%), and Meta Platforms (1.6%).

Franklin Templeton notes that developed markets currently account for approximately 40% of global GDP as well as three-quarters of the world’s total equity market capitalization. Additionally, the segment drew nearly $20 billion in ETF flows in 2023, highlighting its attraction as a core equity allocation for investors.

The ETF comes with an expense ratio of 0.09%, positioning the fund among the cheapest for its category in Europe.

Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton, commented: “We are pleased to offer this new, low-cost, index-tracking developed market UCITS ETF to European investors. With just one trade, investors can now access more than 2,000 stocks across 25 developed economies as part of a broad diversified, global portfolio.”

Matthew Harrison, Head of Americas (ex-US), Europe & UK, Global Advisory Services, Franklin Templeton, added: “Franklin Templeton is delighted to be expanding its ETF product range with the launch of this new developed market ETF, thus offering investors more choice. This new passive ETF offers international and highly diversified equity exposure and can provide the core equity building block within an investor’s allocation. Such building blocks are essential for model portfolios based on ETFs, which are witnessing significant growth in Europe.”

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