Smart Beta ETFs are all the rage, so why not pump out three new ETFs to capture some of the spot light that’s been shining on strategic beta funds all year. Last month, Franklin Templeton released three new ETFS for this category:
The LibertyQ U.S. Small Cap Equity ETF (
FLQS 39,24 +0,05 +0,13%),
Franklin LibertyQ U.S. Mid Cap Equity (
FLQM 52,06 +0,36 +0,70%), and the
Franklin LibertyQ U.S. Equity (
FLQL 52,47 -0,12 -0,23%) ETF.
All three were launched on April 26 and have a gross expense ratio average of around 0.5%.
“Strategic beta can completely change the way you think of index funds. In the world of investing, beta has been a measure of volatility on a portfolio compared to the stock market as a whole. Nowadays the word beta is a way to get broad stock market exposure through ‘cheap’ beta, namely ETFs,” says Chandra Seethamraju, director of systematic modeling at Franklin Templeton Solutions.
He says that smart beta funds pull out the value and other factors in the index. Cheap beat basically means you’re stuck in a cap weighted fund and missing companies that are lower weighted. Smart beta means you’re invested in the same universe of stocks in the index, but are invested in stocks that may not be part of an ETF tracking that index. Like all smart beta strategies, Templeton uses factors like quality, volatility, momentum and value to pick the best stocks in the index.
The three new funds were built on research-driven, quant models that track an in-house index. Some of their positions and their investment universe are listed below.
The Top Three:
In FLQS (investment universe: Russell 2000)
- Aspen Technology (AZPN 200,86 +1,04 +0,52%)
- Masimo Corp (MASI 134,12 +5,05 +3,91%)
- HealthSouth Corp (HLS 2,70 -0,25 -8,47%)
In FLQM (investment universe: Russell Mid Cap Total Return)
- CR Bard Inc. (BCR 331,24 0,00 0,00%)
- Symantec (SMTC 23,71 +0,39 +1,67%)
- Progressive (PGR 201,87 +2,13 +1,07%)
In FLQL (investment universe: Russell 1000)
- Apple (Apple Inc. 172,62 -0,38 -0,22%)
- Philip Morris (PM 93,95 -1,37 -1,44%)
- HP (HPQ 30,61 -0,14 -0,46%)
To find out more about Templeton’s strategic beta mindset,
see here.
Smart Beta ETFs are all the rage, so why not pump out three new ETFs to capture some of the spot light that’s been shining on strategic beta funds all year. Last month, Franklin Templeton released three new ETFS for this category: The LibertyQ U.S. Small Cap Equity ETF (FLQS 39,24 +0,05 +0,13%), Franklin LibertyQ U.S. Mid Cap Equity (FLQM 52,06 +0,36 +0,70%), and the Franklin LibertyQ U.S. Equity (FLQL 52,47 -0,12 -0,23%) ETF.
All three were launched on April 26 and have a gross expense ratio average of around 0.5%.
“Strategic beta can completely change the way you think of index funds. In the world of investing, beta has been a measure of volatility on a portfolio compared to the stock market as a whole. Nowadays the word beta is a way to get broad stock market exposure through ‘cheap’ beta, namely ETFs,” says Chandra Seethamraju, director of systematic modeling at Franklin Templeton Solutions.
He says that smart beta funds pull out the value and other factors in the index. Cheap beat basically means you’re stuck in a cap weighted fund and missing companies that are lower weighted. Smart beta means you’re invested in the same universe of stocks in the index, but are invested in stocks that may not be part of an ETF tracking that index. Like all smart beta strategies, Templeton uses factors like quality, volatility, momentum and value to pick the best stocks in the index.
The three new funds were built on research-driven, quant models that track an in-house index. Some of their positions and their investment universe are listed below.
The Top Three:
In FLQS (investment universe: Russell 2000)