The US Federal Reserve recently announced a number of measures to support the economy and markets amid the coronavirus crisis. One involves the purchase of fixed income ETFs. David Mann, Head of Capital Markets, Global ETFs, at Franklin Templeton, shares his thoughts on the subject, and what he thinks is the best way to support the corporate bond market through these purchases.

Investors certainly have had to face both volatility and uncertainty these past few weeks given coronavirus concerns and other geopolitical risks. David Mann, Head of Capital Markets, Global ETFs at Franklin Templeton, talks about the difference between the two through the lens of ETF trading.

Franklin Resources, parent of Franklin Templeton, has agreed to acquire investment manager Legg Mason for $4.5 billion cash. The acquisition, which also sees Franklin assimilate Legg Mason’s affiliates, is expected to create a $1.5 trillion asset management company of which about $7.5bn is in ETF assets. Jenny Johnson, President and CEO of Franklin Templeton, said, “This acquisition will add differentiated capabilities to our existing investment strategies with modest overlap”.

By Jason Xavier, Head of EMEA ETF Capital Markets at Franklin Templeton Investments.

Investors’ appetite across the globe for ETFs was strong in 2019 and shows little sign of slowing. The tailwind for ETFs going into not only a new year but a new decade couldn’t be stronger. Last year, global ETF assets under management surpassed $6 trillion, and in Europe, we broke $1 trillion in AUM. I’ve identified some themes that could continue/materialize in 2020 for ETFs globally.

Franklin Templeton has expanded its actively managed line-up with the addition of its first alternative ETF. The Franklin Liberty Systematic Style Premia ETF (FLSP US) seeks to deliver absolute return – positive returns in rising or falling markets – by employing a multi-asset, long/short strategy. Patrick O’Connor, Global Head of ETFs for Franklin Templeton Investments, commented, “We are thrilled to bring our first alternative ETF to the market. FLSP is unique due to our intentional focus on building an alternative investment while seeking to minimize any correlation to traditional equity and fixed income asset classes.” The fund has listed on NYSE Arca and comes with an expense ratio of 0.65%.

BMO Global Asset Management is to withdraw from the European ETF market. In a letter to shareholders in its ETFs, the asset manager announced its intention to close all of its London-listed ETFs and cease managing ETFs domiciled in Europe. It said the decision was based on a variety of factors, including the current level of assets under management and projected asset growth in the current market environment. The ETF closures raise some important questions with respect to fund due diligence and issuer viability.

By David Mann, Head of Capital Markets, Global Exchange-Traded Funds, at Franklin Templeton Investments.

The menu of types and styles of exchange-traded funds available to investors keeps growing. The Securities and Exchange Commission just approved four proposals for a new type of exchange-traded fund: non-transparent, active ETFs.

By Jason Xavier, Head of EMEA ETF Capital Markets, at Franklin Templeton.

Many investors associate ETFs with passive styles of investing. But that isn’t always the case – today, there are a range of different types of ETFs available in the marketplace beyond the traditional passive, capitalization-weighted funds that first came on the scene.

Franklin Templeton has registered its European domiciled ETFs for distribution in key Nordic markets. “We are delighted to register our 14 UCITS ETFs in Denmark, Finland, and Sweden…a natural step in the expansion of our European ETF platform,” said Caroline Baron, Head of ETF Sales EMEA at Franklin Templeton.

Franklin Templeton has reduced the fees charged on three of its Franklin LibertyShares ETFs listed in the US. The funds concerned include two smart beta equity products (part of the LibertyQ range) and an actively managed international aggregate bond ETF.