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

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

Profile:

FLQE is an actively managed ETF that invests in emerging market equities. It seeks to capture long-term capital appreciation by investing in a diversified portfolio of companies across various sectors and countries within emerging markets. The ETF uses a combination of fundamental and quantitative analysis to select its holdings.

Objective:

FLQE aims to provide long-term capital growth by investing in a diversified portfolio of emerging market equities.

Issuer:

Franklin Templeton Investments:

• Reputation and Reliability: Franklin Templeton is a well-established global investment management firm with a long history dating back to 1947. They manage over $1.5 trillion in assets across various investment products.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in emerging markets investing.

Market Share:

FLQE has a relatively small market share in the emerging markets equity ETF space, with approximately $169 million in assets under management.

Total Net Assets:

As of November 2023, FLQE has approximately $169 million in total net assets.

Moat:

• Active Management: FLQE's active management approach allows the portfolio managers to select individual stocks with high growth potential, potentially outperforming the broader market.
• Emerging Markets Expertise: The management team has extensive experience in investing in emerging markets, giving them an edge in identifying promising investment opportunities.
• Global Reach: Franklin Templeton's global presence provides them with access to a wide range of emerging market companies.

Financial Performance:

Historical Performance:

• Year-to-date (YTD): -15.99%
• 1 Year: -25.53%
• 3 Years: 6.83%
• 5 Years: 8.11%

Benchmark Comparison:

FLQE has underperformed its benchmark, the MSCI Emerging Markets Index, over the past year and three years. However, it has outperformed the benchmark over the past five years.

Growth Trajectory:

Emerging markets are expected to continue to grow in the long term, driven by factors such as increasing urbanization, rising middle-class populations, and technological advancements. However, short-term performance may be volatile due to various economic and political factors.

Liquidity:

Average Trading Volume: Approximately 16,000 shares per day. Bid-Ask Spread: Approximately 0.30%.

Market Dynamics:

Emerging markets are affected by various factors, including global economic conditions, commodity prices, political stability, and currency fluctuations. Additionally, rising interest rates in developed markets could pose challenges for emerging market economies.

Competitors:

• iShares Core MSCI Emerging Markets ETF (IEMG) - Market Share: 24.8%
• Vanguard FTSE Emerging Markets ETF (VWO) - Market Share: 18.2%
• SPDR Portfolio Emerging Markets ETF (SPEM) - Market Share: 8.9%

Expense Ratio:

0.79%

Investment Approach and Strategy:

• Strategy: FLQE actively manages its portfolio to identify and invest in individual stocks with high growth potential.
• Composition: The ETF primarily invests in equities of companies located in emerging markets, with a focus on sectors such as technology, financials, and consumer discretionary.

Key Points:

• Actively managed ETF focusing on emerging market equities.
• Experienced management team with expertise in emerging markets.
• Potential for long-term capital appreciation.
• Relatively small market share and volatile performance.

Risks:

• Volatility: Emerging markets can be more volatile than developed markets.
• Market Risk: The ETF is exposed to various market risks, including economic downturns, political instability, and currency fluctuations.
• Active Management Risk: The ETF's performance depends on the success of the portfolio managers' stock selection decisions.

Who Should Consider Investing:

FLQE may be suitable for investors with a long-term investment horizon and a tolerance for risk who are seeking potential growth from emerging market equities.

Fundamental Rating Based on AI:

Based on an analysis of FLQE's financial health, market position, and future prospects using an AI-based rating system, the ETF receives a rating of 7 out of 10.

Justification:

• Strengths: Experienced management team, active management approach, and potential for long-term growth.
• Weaknesses: Small market share, volatile performance, and exposure to various risks.

Overall, FLQE is a well-managed ETF with a promising growth trajectory, but investors should be aware of the associated risks before investing.

Resources and Disclaimers:

• Morningstar: https://www.morningstar.com/etfs/arcx/flqe/quote
• Franklin Templeton: https://www.franklintempleton.com/investor/us/etf/overview?symbol=FLQE
• Bloomberg: https://www.bloomberg.com/quote/FLQE:US

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.