Fixed-income exchange traded fund investors now have more opportunities to tap into tried-and-true strategies offered by seasoned money managers.
“It’s been a real nice time for active fixed-income,” David Mann, SVP, Head of ETF Capital Markets, Franklin Templeton, said at the Inside ETFs conference.
“Taking the macro view at Franklin Templeton then adding in the quant, and then bringing in the fundamental bottom-up approach about how we look at companies; we think it is just a really exciting time to bring that all within the ETF wrapper,” he added.
Franklin Templeton now offers a suite of actively managed ETF strategies to help investors diversify their fixed-income portfolios. For example, among its more popular offerings, the Franklin Liberty Investment Grade Corporate ETF (NYSEArca: FLCO) seeks to provide a high level of current income as is consistent with prudent investing, while seeking preservation of capital by investing at least 80% of its net assets in investment-grade corporate debt securities and investments. The fund may invest up to 40% of its net assets in foreign securities, including those in developed markets, and up to 15% of its net assets in non-U.S. dollar-denominated securities.
Additionally, the Franklin Short Duration U.S. Government ETF (NYSEArca: FTSD) tries to generate a high level of current income through “prudent investing” while preserving capital The ETF will consist of investment-grade securities issued by the U.S. government and related agencies with an average duration of three or less years. The majority of holdings will include mortgage-backed securities, including adjustable rate mortgage securities.
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