Franklin LibertyQ US Equity UCITS ETF

Issuer: Franklin Templeton

Asset Class: Equity

TER: 25bps

Trading Currency: GBP

Pays Income: False

Listing Date: 08 Sep 2017

Ticker: FLXU

ISIN: IE00BF2B0P08

This investment product offers a strategic approach to the U.S. equity market by moving beyond traditional market-cap weighting. It is designed to track a custom index that systematically selects and weights securities from a universe of U.S. large and mid-capitalization companies. The core strategy is to provide exposure to four specific investment factors that have historically been associated with higher risk-adjusted returns: Quality, Value, Momentum, and Low Volatility. This multi-factor methodology aims to build a more resilient portfolio that can adapt to various market conditions, potentially enhancing long-term performance compared to conventional passive investments.

The underlying index employs a rules-based process to identify companies that exhibit strong characteristics across the four targeted factors. 'Quality' focuses on firms with stable earnings and high profitability. 'Value' seeks out companies that appear undervalued relative to their fundamental metrics. 'Momentum' targets stocks that have shown strong recent price performance, while 'Low Volatility' includes companies with historically lower price fluctuations. By combining these distinct factors, the strategy seeks to deliver a smoother return profile, as the different factors tend to perform well at different points in the economic cycle, providing a valuable layer of internal diversification.

This fund is well-suited for investors seeking a core holding for U.S. equity exposure with a potential for improved returns and reduced volatility over the long term. It can serve as a sophisticated, low-cost alternative to both purely passive index-tracking funds and traditional active management. By offering transparent, rules-based exposure to proven investment factors, it allows investors to systematically tilt their portfolio towards stocks with desirable attributes, providing a modern tool for building a well-rounded and robust investment portfolio focused on the world's largest equity market.