San Mateo, CA, June 6, 2016 – Franklin Templeton Investments today introduced LibertyShares, a new line of business, with the launch of its first suite of strategic beta exchange traded funds (ETFs), LibertyQ. The suite includes three multi-factor core portfolio funds and one fund that focuses on stocks with high and persistent dividend income. Franklin Templeton’s strategic beta ETFs use proprietary LibertyQ indices1, which are truly unique indices that have employed a research-driven approach in customizing their factor weightings. The multi-factor LibertyQ indices1 are constructed with four factors - quality, value, momentum and low volatility - which together are designed to pursue lower volatility and higher risk-adjusted returns over the long term versus relevant cap-weighted benchmarks.
"Many of our clients have embraced the ETF wrapper for its benefits, including liquidity, tax efficiency and transparency, and now they are looking for more than what a traditional market cap-weighted index can offer,” said Patrick O’Connor, head of Global Exchange Traded Funds for Franklin Templeton Investments. “LibertyQ offers investors our fundamental and quantitative expertise that drives our ability to seek specific outcomes with reduced risk, packaged within the ETF wrapper."
"Franklin Templeton strategic beta funds track the LibertyQ indices developed with Franklin Templeton’s team of quantitative experts who have spent decades developing quantitative active equity strategies, coupled with academic research. We approached the creation of the LibertyQ indices in the same way we have approached quantitative stock selection, and we believe that, just as with discretionary stock picking, all factors are not created equal—some are more correlated to certain outcomes,” added O’Connor.
The three core multi-factor LibertyQ funds use LibertyQ indices that apply a truly unique approach of using custom factor weightings—quality (50%), value (30%), momentum (10%) and low volatility (10%)— in seeking to capture desirable, long-term performance attributes:
- Franklin LibertyQ Global Equity ETF (NYSE: FLQG) tracks the LibertyQ Global Equity Index, which offers global equity exposure and seeks to achieve higher risk-adjusted returns than the MSCI ACWI Index.
- Franklin LibertyQ Emerging Markets ETF (NYSE: FLQE) tracks the LibertyQ Emerging Markets Index, which offers broad emerging markets exposure and seeks to achieve higher riskadjusted returns than the MSCI Emerging Markets Index.
- Franklin LibertyQ International Equity Hedged ETF (NYSE: FLQH) tracks the LibertyQ International Equity Hedged Index, which offers international developed markets exposure and seeks to achieve higher risk-adjusted returns than the MSCI EAFE Index.
The index for Franklin LibertyQ Global Dividend ETF was constructed using proprietary dividend and quality screens, which account for not only long-term dividend sustainability and growth, but also for underlying balance sheet strength:
- Franklin LibertyQ Global Dividend ETF (NYSE: FLQD) tracks the LibertyQ Global Dividend Index, which offers global exposure to high-quality, dividend-oriented stocks to help meet investors’ needs for income and total return.
"For nearly 70 years, Franklin Templeton has been committed to providing best-in-class investment solutions to meet the evolving needs of our clients. The launch of LibertyShares, taking an active approach to ETFs, is a strong complement to our commitment to active management,” added Greg Johnson, chairman and CEO of Franklin Resources, Inc. “Our dedicated team of seasoned ETF specialists, in collaboration with our quantitative research experts and experienced active managers, positions us at the forefront of the advancement of ETF investing."
Important Information about the Funds
Franklin LibertyQ ETFs: All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Performance of the funds may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. These and other risks are discussed in the fund’s prospectus.
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN / (800)342-5236 or visit franklin.kurtosysdev.com. Please carefully read a prospectus before you invest or send money.
About Franklin Templeton Investments
The funds’ principal underwriter is Franklin Templeton Distributors, Inc., a wholly-owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 180 countries. Through specialized teams, the company has expertise across all asset classes – including equity, fixed income, alternative and custom solutions. The company’s more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in 35 countries, the California-based company has more than 65 years of investment experience and over $747 billion in assets under management as of April 30, 2016. For more information, please visit franklintempleton.com.
1. The LibertyQ Global Equity Index, LibertyQ Global Dividend Index, LibertyQ Emerging Markets Index and LibertyQ International Equity Hedged Index are owned and calculated by MSCI and are based on the MSCI ACWI Index, the MSCI ACWI ex REITs Index, the MSCI Emerging Markets Index, and the MSCI EAFE Index, respectively, and aim to reflect the performance of a Franklin Templeton strategy. The Franklin LibertyQ ETFs are not sponsored, endorsed, issued, sold or promoted by or affiliated with MSCI Inc. MSCI Inc. does not make any representation regarding the advisability of investing in any Franklin LibertyQ ETF.