Revision made to the “Important Information about the Funds" section on July 3, 2018.
San Mateo, CA, June 4, 2018
– Franklin Templeton Investments introduced three new ETFs—Franklin Liberty Senior Loan ETF (FLBL)
, Franklin Liberty High Yield Corporate ETF (FLHY)
and Franklin International Aggregate Bond ETF (FLIA)
—expanding its line-up of fixed income active ETFs managed by Franklin Templeton Fixed Income Group. The three ETFs are listed on the Cboe BZX exchange.
“In a persistently low-yield environment like the one we’ve been in, the need for income has intensified while advisors and clients are challenged in finding it,” said Patrick O’Connor, head of global ETFs. “With more than 150 fixed income investment professionals globally and dedicated teams that focus on various sectors across the credit spectrum, Franklin Templeton Fixed Income Group brings an in-depth understanding of the full opportunity set that can be leveraged to generate income. As investors look to get more income out of their fixed income allocation, these new ETFs enable them to access additional fixed income sectors globally in a targeted way, as they define what they need and how they want to achieve it.”
The three new ETFs are managed by Franklin Templeton Fixed Income Group team members who specialize in the asset classes.
- Franklin Liberty Senior Loan ETF (FLBL) seeks to provide a high level of current income with a secondary goal of preservation of capital. The fund invests at least 80 percent of its net assets in senior loans and investments that provide exposure to senior loans. Senior loans include loans referred to as leveraged loans, bank loans and/or floating rate loans. The fund invests predominantly in income-producing senior floating interest rate corporate loans made to or issued by U.S. companies, non-U.S. entities and U.S. subsidiaries of non-U.S. entities. FLBL is managed by Mark Boyadjian, SVP, director of Floating Rate Debt and portfolio manager, Madeline Lam, VP and portfolio manager, and Justin Ma, VP and portfolio manager.
- Franklin Liberty High Yield Corporate ETF (FLHY) seeks to provide a high level of current income with a secondary goal of capital appreciation. The fund invests at least 80 percent of its net assets in high yield corporate debt securities and investments that provide exposure to high yield corporate debt securities. The fund may enter into certain derivative transactions, principally currency and cross currency forwards and swap agreements, including interest rate and credit default swaps (including credit default index swaps). FLHY is managed by Glenn Voyles, SVP, director of Portfolio Management, Corporate Bonds, and Patricia O’Connor, VP and portfolio manager.
- Franklin International Aggregate Bond ETF (FLIA) seeks to maximize total investment return, consistent with prudent investing, consisting of a combination of interest income and capital appreciation. The fund invests at least 80 percent of its net assets in bonds and investments that provide exposure to bonds. Bonds include debt obligations of any maturity, such as bonds, notes, bills and debentures. The fund invests predominantly in fixed-and floating-rate bonds issued by governments, government agencies and governmental-related or corporate issuers located outside the U.S. The fund may enter into various currency-related transactions involving derivative instruments, principally currency and cross currency forwards, but it may also use currency futures contracts. FLIA is managed by John Beck, SVP, director of Fixed Income-London, and portfolio manager.
These new ETFs expand Franklin LibertyShares’ line-up of fixed income active ETFs to seven, also including: Franklin Liberty Short Duration U.S. Government ETF (FTSD), Franklin Liberty Investment Grade Corporate ETF (FLCO)
, Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI)
and Franklin Liberty Municipal Bond ETF (FLMB)
. Each combines access to Franklin Templeton Fixed Income Group’s time-tested investment expertise with key ETF features, such as liquidity, competitive pricing, tax efficiency and transparency.
Through its Franklin LibertyShares ETF platform, Franklin Templeton currently offers an actively managed suite of equity and fixed income ETFs, a smart beta suite covering both U.S. and international equity markets, and a passive suite of country- and region-specific ETFs. Franklin LibertyShares has more than $1.5 billion in assets under management globally as of April 30, 2018. For more information, please visit https://www.libertyshares.com
Visit Franklin LibertyShares’ Capital Markets Corner
for insights on ETF investing and follow Franklin LibertyShares on Twitter: @libertyshares
All investments involve risks, including possible loss of principal. Generally, those offering potential for higher returns are accompanied by a higher degree of risk. Bond prices are affected by interest rate changes. Bond prices, and thus a bond fund’s share price, generally move in the opposite direction of interest rates. As the price of bonds in a fund adjusts to a rise in interest rates, the fund’s share price may decline. Investors should be aware that the fund’s share price and yield will fluctuate with market conditions. The fund should not be considered an alternative to money market funds or certificates of deposit (CDs). The senior loans and debt securities in which the fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated, senior loans and debt securities involves greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. Interest earned on senior loans varies with changes in prevailing interest rates. Therefore, while senior loans offer higher interest income when interest rates rise, they will also generate less income when interest rates decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Distributions to shareholders may decline when prevailing interest rates fall or when a fund experiences defaults on debt securities it holds. High-yield, lower-rated (“junk”) bonds generally have greater price swings and higher default risks. These securities carry a greater degree of credit risk relative to investment-grade securities. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security's value and on a fund's ability to sell such securities when necessary to meet the fund's liquidity needs or in response to a specific market event. Special risks are associated with foreign investing, including currency fluctuations, and economic and political uncertainties. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to a fund when a counterparty fails to perform as promised. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due. These and other risks are discussed in the funds’ prospectus.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns.
ETF shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.
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/342-5236 or visit libertyshares.com. Please carefully read a prospectus before you invest or send money.
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 170 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 650 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in over 30 countries, the California-based company has 70 years of investment experience and over $732 billion in assets under management as of April 30, 2018. For more information, please visit franklintempleton.com