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.

Sixteen new ETFs/ETPs or additional ETF share classes were listed on the London Stock Exchange in June 2019. ETF providers introducing new products included Franklin Templeton, Invesco, Ossiam, Vanguard, VanEck, and Krane Fund Advisors.

Franklin Templeton Canada has launched two actively managed fixed income ETFs on Toronto Stock Exchange. The Franklin Liberty Core Plus Bond ETF (FLCP CN) and Franklin Liberty Short Duration Bond ETF (FLSD CN) seek to provide moderate to high income while preserving capital by investing in a range of Canadian fixed income securities, including federal and provincial government and corporate bonds, debentures and short-term notes.

Franklin Templeton has launched its first purely passive ETFs in Europe, a suite of four single-country funds providing exposure to the equity markets of Brazil, China, South Korea, and India. The funds are linked to capped, market capitalisation-weighted indices from FTSE Russell and come with total expense ratios of between 0.09% and 0.19%. Caroline Baron, Head of ETF Sales EMEA, Franklin Templeton, said, “We are delighted to introduce these four new emerging markets country passive ETFs at the lowest fees, to European investors.”

Franklin Templeton has launched the Franklin Liberty Euro Green Bond UCITS ETF (FLRG GR), the first actively managed ETF targeting the euro-denominated green bond market. The fund seeks to maximize returns whilst providing exposure to bonds supporting projects that are aligned with a low-carbon future. Caroline Baron, Head of ETF Sales EMEA, Franklin Templeton, said, “Demand is rising in Europe for high conviction ESG products due to increasing investor and regulatory pressure to incorporate green, ethical and governance factors into investment portfolios.”

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

Although ETFs display some similar characteristics to stocks and mutual funds, there are some significant differences. In this blog post, we explain why the selection criteria used in screening mutual funds – notably trading volume and size (AUM) – are not as important as other considerations in the ETF world.