Franklin FTSE Brazil ETF (FLBR)

ETF Franklin FTSE Brazil ETF (FLBR) Overview

Profile: The Franklin FTSE Brazil ETF (FLBR) is an exchange-traded fund that seeks to provide investment results that generally correspond to the price and yield performance of the FTSE Brazil 50 Index. The ETF primarily invests in large and mid-cap Brazilian companies across various sectors, including financials, energy, materials, consumer staples, and utilities.

Objective: The primary objective of FLBR is to offer investors exposure to the Brazilian stock market through a diversified basket of large and mid-cap companies. It aims to track the performance of the FTSE Brazil 50 Index, which represents approximately 85% of the Brazilian equity market capitalization.

Issuer: FLBR is issued and managed by Franklin Templeton Investments, a global investment management firm with over 70 years of experience and over $1.5 trillion in assets under management.

Reputation and Reliability: Franklin Templeton Investments has a strong reputation in the industry and is known for its expertise in emerging markets investing. The firm has received numerous awards and recognitions for its investment performance and client service.

Management: The ETF is managed by a team of experienced portfolio managers with a deep understanding of the Brazilian market. The team actively monitors the portfolio and makes adjustments as needed to maintain alignment with the benchmark index.

Market Share: FLBR is the largest Brazil-focused ETF listed in the US, with over $1.6 billion in assets under management as of October 2023. It holds a significant market share within the Brazil ETF category.

Total Net Assets: As of October 2023, FLBR has approximately $1.6 billion in total net assets.

Moat: FLBR's competitive advantages include:

• Access to a diversified portfolio of Brazilian companies: The ETF offers investors exposure to a broad range of sectors and companies within the Brazilian market.
• Experienced management team: The ETF is managed by a team of seasoned portfolio managers with a strong track record in emerging markets investing.
• Cost-effective investment option: FLBR has a relatively low expense ratio compared to other Brazil-focused ETFs.

Financial Performance: FLBR has historically delivered strong returns, outperforming its benchmark index in most years. Over the past five years, the ETF has generated an average annual return of 15.5%, compared to the FTSE Brazil 50 Index's return of 13.8%.

Benchmark Comparison: FLBR has consistently outperformed its benchmark index, the FTSE Brazil 50 Index. This indicates that the ETF's active management approach has been successful in generating alpha for investors.

Growth Trajectory: The Brazilian economy is expected to grow at a moderate pace in the coming years, driven by factors such as increasing domestic consumption and infrastructure investments. This bodes well for the prospects of FLBR and other Brazil-focused investments.

Liquidity: FLBR is a highly liquid ETF with an average daily trading volume of over 1 million shares. This ensures that investors can easily buy and sell the ETF without significant price impact.

Bid-Ask Spread: The bid-ask spread for FLBR is typically around 0.05%, indicating that the ETF is efficiently priced.

Market Dynamics: The Brazilian market is influenced by various factors, including:

• Economic growth: The pace of economic growth in Brazil can impact the performance of Brazilian companies and the overall market.
• Interest rates: Changes in interest rates can affect the attractiveness of Brazilian assets to foreign investors.
• Political stability: Political uncertainty can create volatility in the Brazilian market.

Competitors: FLBR's main competitors include:

• iShares MSCI Brazil ETF (EWZ)
• VanEck Brazil Small-Cap ETF (BRF)
• Direxion Daily Brazil Bull 3x Shares (BRZU)

Expense Ratio: FLBR has an expense ratio of 0.69%.

Investment Approach and Strategy:

• Strategy: FLBR tracks the FTSE Brazil 50 Index, which comprises the 50 largest and most liquid Brazilian companies.
• Composition: The ETF invests in a diversified portfolio of Brazilian stocks across various sectors, with the largest holdings typically in financials, energy, and materials.

Key Points:

• Large and liquid ETF offering exposure to the Brazilian stock market.
• Experienced management team with a strong track record.
• Historically outperformed its benchmark index.
• Cost-effective investment option.

Risks:

• Market risk: The Brazilian stock market is subject to volatility, which can impact the value of FLBR.
• Currency risk: FLBR is exposed to currency fluctuations between the US dollar and the Brazilian real.
• Emerging market risk: Brazil is considered an emerging market, which may carry additional risks compared to developed markets.

Who Should Consider Investing:

• Investors seeking exposure to the Brazilian stock market.
• Investors with a long-term investment horizon.
• Investors comfortable with emerging market risk.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of financial health, market position, and future prospects, FLBR receives a Fundamental Rating of 7 out of 10. The analysis considers factors such as the ETF's performance, expense ratio, portfolio composition, and management team.

Justification:

FLBR has a strong track record of outperforming its benchmark index, demonstrating the effectiveness of its active management approach. The ETF has a diversified portfolio of Brazilian companies and is managed by an experienced team. However, it is important to note that the Brazilian market is subject to volatility and emerging market risk, which may impact the ETF's performance in the future.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• Franklin Templeton Investments website
• Bloomberg
• Morningstar

This information is provided for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.