Franklin Templeton ETF Trust - Franklin LibertyQ Emerging Markets ETF (DIEM)

Overview

The Franklin LibertyQ Emerging Markets ETF (FLQE) seeks to provide investment results that closely correspond to the performance of the LibertyQ Emerging Markets Equity Index. The ETF focuses on emerging market equities, aiming for long-term capital appreciation by using a quality, value, momentum, and management quality factor-based approach.

Reputation and Reliability

Franklin Templeton is a well-established global investment management organization with a long history and a strong reputation.

Management Expertise

Franklin Templeton has a large team of experienced investment professionals managing various funds, including the LibertyQ ETFs.

Goal

The fund seeks long-term capital appreciation.

Investment Approach and Strategy

Strategy: The ETF employs a 'smart beta' strategy, selecting and weighting securities based on quality, value, momentum, and management quality factors rather than simply tracking a market-cap weighted index.

Composition The ETF primarily holds stocks of companies located in emerging market countries.

Market Share: Data not readily available to calculate market share directly.

Total Net Assets (AUM): 145658845

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE)

Competitive Landscape

The emerging market ETF space is highly competitive with numerous ETFs tracking different indices or employing different weighting methodologies. FLQE distinguishes itself through its multi-factor (quality, value, momentum, management quality) approach. A potential disadvantage is that the factor tilts may underperform the broader market during certain periods. While competitors like VWO and IEMG offer broad market exposure, FNDE screens based on fundamental factors.

Historical Performance: Historical performance data needs to be retrieved from financial data providers. Data would consist of a time series array.

Benchmark Comparison: The ETF's performance should be compared to MSCI Emerging Markets Index or similar benchmarks to evaluate its relative performance. Data would consist of a time series array.

Expense Ratio: 0.45

Average Trading Volume

The ETF's average daily trading volume indicates moderate liquidity, which should be sufficient for most investors.

Bid-Ask Spread

The bid-ask spread is typically tight, reflecting reasonable liquidity.

Market Environment Factors

Emerging market equities are influenced by global economic growth, commodity prices, currency fluctuations, geopolitical events, and changes in government policies.

Growth Trajectory

The growth trajectory depends on the overall performance of emerging market economies and the effectiveness of the ETF's factor-based investment strategy, which may evolve over time.

Competitive Edge

FLQEu2019s primary advantage is its proprietary LibertyQ index that combines quality, value, momentum, and management quality factors, potentially leading to superior risk-adjusted returns compared to market-cap weighted indices. The multi-factor approach diversifies the sources of excess return, which could make the fund more resilient across different market environments. Franklin Templetonu2019s established brand name and distribution network add to its credibility. However, the success of the fund hinges on the continuing efficacy of its factor model.

Volatility

Historical volatility can be assessed using standard deviation or beta, calculated from the ETF's historical price data.

Market Risk

Specific risks include currency risk, political risk, and economic instability in emerging market countries. Also factor risk (underperformance of the factor model).

Ideal Investor Profile

The ideal investor is one who seeks exposure to emerging market equities with a potentially enhanced return profile due to the fund's factor-based investment approach. They should be comfortable with the inherent risks of investing in emerging markets.

Market Risk

The ETF is suitable for long-term investors seeking capital appreciation, but not for short-term active traders due to its investment strategy.

Franklin LibertyQ Emerging Markets ETF offers a smart beta approach to emerging market equities by weighting securities based on quality, value, momentum and management quality. The multi-factor model offers potentially superior risk-adjusted returns over the broad emerging market. Investors should be aware of the inherent risks of investing in emerging markets, like currency risk and political instability. FLQE is more suitable for investors seeking long-term capital appreciation than short-term traders. Overall, the ETF provides an alternative to traditional market-cap weighted emerging market ETFs.

Data Sources:

• Franklin Templeton Website
• ETF.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered financial advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions. Market share data was not available at time of generation.