Franklin LibertyQ Emerging Markets Equity UCITS ETF

Issuer: Franklin Templeton

Asset Class: Equity

TER: 45bps

Trading Currency: GBP

Pays Income: False

Listing Date: 19 Oct 2017

Ticker: FLXE

ISIN: IE00BF2B0K52

This actively managed fund offers strategic exposure to emerging market equities through a sophisticated, multi-factor approach. It systematically selects companies based on four key drivers of return: quality, value, momentum, and low volatility. The 'quality' factor targets financially stable companies with durable business models, while the 'value' component seeks out stocks that appear undervalued relative to their fundamentals. The 'momentum' factor focuses on stocks with strong recent performance trends, and 'low volatility' aims to include companies with historically smoother price movements. By combining these distinct factors, the strategy moves beyond traditional market-cap weighting to build a portfolio designed for long-term capital appreciation.

Investing in emerging markets presents a compelling opportunity for high growth but also entails higher levels of risk and volatility. This fund's multi-factor framework is specifically engineered to navigate this landscape by aiming to enhance returns while managing risk. The inclusion of defensive factors like quality and low volatility can help cushion the portfolio during market downturns, while the value and momentum factors are designed to capture upside potential during periods of growth. This makes the fund a suitable core holding for investors seeking a more refined and potentially less volatile way to access the long-term growth story of emerging economies compared to a standard passive index.

The product is designed for investors with a long-term horizon who understand and are willing to accept the inherent risks of investing in emerging market equities. It appeals to those who believe in the academic evidence supporting factor-based investing and are seeking an active strategy within the transparent, liquid, and cost-effective structure of an ETF. By diversifying across factors as well as across countries and sectors, the fund aims to deliver a more consistent performance profile through various market cycles, providing a valuable building block for a globally diversified portfolio.