Franklin Templeton launches equity and balanced ETFs

Managers screen for quality, value, momentum and low volatility.

Rudy Luukko 29 January, 2018 | 6:00PM

Franklin Templeton Investments Corp. expanded its line-up of exchange-traded funds today as it launched global dividend, emerging-markets equity and balanced ETFs on the Toronto Stock Exchange.

The equity ETFs are strategic-beta mandates based on proprietary rules-based indexes. They are managed by Dina Ting, head of global index portfolio management and senior portfolio manager, global ETFs, who is based in San Mateo, California. Her investment process applies four factor weightings: quality (50%), value (30%), momentum (10%) and low volatility (10%).

The quality factor incorporates metrics such as return on equity, earnings variability, cash return on assets and leverage. The value factor is based on ratios that include price-earnings, price to forward earnings, and price to book value, as well as dividend yield. The momentum factor's criteria include six-month and 12-month risk-adjusted price momentum. The low-volatility factor incorporates metrics such as historical beta, which is a measure of the volatility of a security relative to the total market.

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About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.

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