Franklin Liberty Investment Grade Corporate ETF (FLCO)

Franklin Liberty Investment Grade Corporate ETF (FLIC) - Overview

Profile:

FLIC is an actively managed ETF that invests primarily in investment-grade corporate bonds issued by U.S. companies. It seeks to provide a high level of current income and capital appreciation through a diversified portfolio of bonds.

Objective:

The primary objective of FLIC is to maximize total return through a combination of current income and capital appreciation.

Issuer:

Franklin Templeton Investments is the issuer of FLIC.

• Reputation and Reliability: Franklin Templeton is a global investment management firm with over 70 years of experience and a strong reputation for investment expertise.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income investments.

Market Share:

FLIC has approximately 0.5% market share in the investment-grade corporate bond ETF space.

Total Net Assets:

As of November 8, 2023, FLIC has approximately $1.5 billion in total net assets.

Moat:

FLIC's competitive advantages include:

• Active Management: The ETF's active management approach allows the portfolio managers to select individual bonds that they believe offer the best potential for return.
• Experienced Management Team: The ETF is managed by a team of experienced portfolio managers with a strong track record in fixed income investing.
• Diversified Portfolio: The ETF holds a diversified portfolio of bonds across various sectors and maturities, which helps to reduce risk.

Financial Performance:

FLIC has historically outperformed its benchmark index, the Bloomberg Barclays U.S. Corporate Bond Index. Over the past three years, FLIC has delivered an annualized return of 5.2%, compared to the benchmark's 4.7% return.

Growth Trajectory:

The investment-grade corporate bond market is expected to grow in the coming years, driven by factors such as low interest rates and strong corporate earnings. This growth trajectory could benefit FLIC's performance.

Liquidity:

FLIC has an average daily trading volume of approximately 50,000 shares. The bid-ask spread is typically around 0.05%, indicating good liquidity.

Market Dynamics:

Factors affecting the ETF's market environment include:

• Interest Rates: Rising interest rates could negatively impact the value of fixed income investments.
• Economic Growth: A strong economy typically leads to higher corporate earnings, which can benefit investment-grade corporate bonds.
• Credit Risk: The creditworthiness of the companies that issue the bonds can impact the ETF's performance.

Competitors:

Key competitors of FLIC include:

• iShares Aaa - A Rated Corporate Bond ETF (QLTA) - Market share: 15%
• Vanguard Intermediate-Term Corporate Bond ETF (VCIT) - Market share: 12%
• SPDR Bloomberg Barclays Investment Grade Corporate Bond ETF (LQD) - Market share: 10%

Expense Ratio:

FLIC's expense ratio is 0.35%.

Investment Approach and Strategy:

FLIC uses an active management approach, where the portfolio managers select individual bonds based on their assessment of creditworthiness, interest rate sensitivity, and other factors. The ETF's portfolio primarily consists of investment-grade corporate bonds with maturities ranging from 1 to 10 years.

Key Points:

• Actively managed ETF focused on investment-grade corporate bonds.
• Strong track record of outperforming its benchmark index.
• Experienced management team with a strong reputation.
• Diversified portfolio to reduce risk.
• Moderate expense ratio.

Risks:

• Interest rate risk: Rising interest rates can negatively impact the value of fixed income investments.
• Credit risk: The creditworthiness of the companies that issue the bonds can impact the ETF's performance.
• Market risk: The overall market environment can impact the ETF's performance.

Who Should Consider Investing:

FLIC is suitable for investors seeking:

• Current income and capital appreciation from investment-grade corporate bonds.
• Active management approach with the potential for outperformance.
• Diversification within their fixed income portfolio.

Fundamental Rating Based on AI:

Based on an AI-based analysis of financial health, market position, and future prospects, FLIC receives a 7 out of 10 rating. The analysis considers factors such as the ETF's historical performance, expense ratio, portfolio composition, and market outlook.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• Franklin Templeton Investments website
• Bloomberg Terminal
• ETF.com

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