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On the heels of BMO’s entry into the low-cost asset allocation ETF space (see Hub blog here), one of the world’s largest active money managers has unveiled a suite of low-cost passively managed regional and country ETFs for the Canadian market.
Franklin Templeton Investments Canada today announced the expansion of its Franklin LibertyShares ETF offerings with its first suite of passive ETFs. (Franklin LibertyShares originally entered Canada in 2017 with four actively managed funds branded as Franklin LibertyShares).
The new passive funds gives investors exposure to a specific region or country at rock-bottom fees (below 10 basis points). It says (and I agree) that the management fees for these new Canada, United States, Japan and Europe (excluding U.K.) passive ETFs are amongst the lowest in the industry, ranging between 5 to 9 bps.
The company says these include the first Japan passive ETF and Europe (excluding U.K.) passive ETF available on a Canadian exchange. The ETFs are market-cap weighted.
In a press release, Franklin Templeton Investments Canada president and CEO Duane Green said: “With market-moving events like trade tensions and Brexit, investors and their advisors as well as institutional investors are looking to precisely act upon specific country and regional market views … These new passive ETFs provide Canadian investors with individual country and regional exposure options … at a very low cost.”
Here are the new ETFs and their ticker symbols:
Franklin FTSE Canada All Cap Index ETF (FLCD) invests primarily in equity securities of Canadian issuers, seeking to replicate the performance of FTSE Canada All Cap Domestic Index. The management fee is 5 bps.
Franklin FTSE U.S. Index ETF (FLAM) invests primarily in equity securities of mid- and large-capitalization U.S. issuers, seeking to replicate the performance of FTSE USA Index. Management fee is 7 bps.
Franklin FTSE Japan Index ETF(FLJA) invests directly or indirectly, primarily in equity securities of mid- and large-capitalization Japanese issuers, seeking to replicate the performance of FTSE Japan Index. Fee 9 bps.
Franklin FTSE Europe ex U.K. IndexETF(FLUR) invests primarily in equity securities of mid- and large-capitalization issuers in developed markets in Europe excluding the United Kingdom, seeking to replicate the performance of FTSE Developed Europe ex U.K. Index. Fee 9 bps.
“Following the popularity of our competitively-priced passive ETFs listed in the U.S. on the NYSE, we are now offering similar passive ETFs in Canada on the TSX – with some of the lowest pricing across the board,” said Patrick O’Connor, head of global ETFs, Franklin Templeton. “The addition of passive ETFs to our active and smart beta ETF suites, provides Canadians with a broader array of investment options to help them construct portfolios designed to reach their desired outcomes.”
Franklin LibertyShares’ passive ETFs are market cap-weighted and benchmarked to country and regional indices from global index provider FTSE Russell, which has roughly US$16.2trillion in assets currently benchmarked to its indexes. Franklin LibertyShares has more than US$2.4 billion in assets under management globally as of January 31, 2019. For more information, visit franklintempleton.ca/etf.The new passive ETF line-up will be managed by Dina Ting, VP, head of Global Index Portfolio Management and senior portfolio manager, based in San Mateo, California, who also manages the firm’s smart beta ETFs.
A good overview of how the new Franklin Templeton offerings fit in the overall mutual fund/ETF landscape can be found in this piece by the Globe & Mail’s Clare O’Hara, which ran on Family Day: ETF options keep expanding as Franklin Templeton launches index funds while BMO offers ‘one-ticket solution’ products. It also mentions the recent BlackRock RBC partnership, as well as the three Vanguard asset allocation ETFs announced a year ago, plus two additional Vanguard asset allocation ETFs announced two weeks ago. (See this Hub blog from Feb. 5th: Vanguard unveils two more asset allocation ETFs).
The times they certainly are changing! As always we welcome comments from readers.
