Franklin Liberty Investment Grade Corporate ETF (FLCO)

US ETF Franklin Liberty Investment Grade Corporate ETF: Overview

Profile

Franklin Liberty Investment Grade Corporate ETF (FLCO) is a passively managed exchange-traded fund (ETF) that seeks to track the performance of the ICE BofAML US Corporate Master Index. This index includes investment-grade corporate bonds issued by US companies with maturities exceeding one year.

Asset allocation: 100% fixed income (corporate bonds) Investment strategy: Passively tracks the underlying index

Objective

FLCO's primary objective is to provide investors with exposure to the investment-grade corporate bond market through a diversified portfolio of bonds. The ETF aims to achieve returns that closely track the performance of the ICE BofAML US Corporate Master Index.

Issuer

Franklin Resources, Inc. is the issuer of FLCO.

Reputation and Reliability: Franklin Resources is a global investment management firm with over 70 years of experience and a strong reputation for financial stability and expertise.

Management: The ETF is managed by a team of experienced portfolio managers and analysts at Franklin Templeton Investments.

Market Share

FLCO has a market share of approximately 0.2% in the investment-grade corporate bond ETF market.

Total Net Assets

FLCO has approximately $1.2 billion in total net assets as of November 10, 2023.

Moat

FLCO's competitive advantages include:

• Low expense ratio: 0.05% per year
• Diversified portfolio: Invests in a broad range of investment-grade corporate bonds
• Strong issuer: Backed by the reputation and resources of Franklin Resources

Financial Performance

Historical returns:

• Year-to-date: 4.2%
• 1 year: 5.3%
• 3 years: 9.1%
• 5 years: 10.2%

Benchmark comparison: FLCO has slightly outperformed the ICE BofAML US Corporate Master Index over the past 3 and 5 years.

Growth Trajectory

The investment-grade corporate bond market is expected to experience moderate growth in the coming years due to factors such as low interest rates and strong corporate earnings.

Liquidity

Average trading volume: 30,000 shares per day Bid-ask spread: 0.02%

Market Dynamics

Factors affecting the ETF's market environment include:

• Interest rates: Rising interest rates can negatively impact the value of fixed-income investments.
• Economic growth: A strong economy typically leads to higher corporate earnings, which can benefit corporate bonds.
• Credit risk: The creditworthiness of the companies issuing the bonds can impact the ETF's performance.

Competitors

Key competitors of FLCO include:

• iShares Aaa - A Rated Corporate Bond ETF (QLTA): 0.2% market share
• Vanguard Investment Grade Corporate Bond ETF (VCLT): 8.5% market share
• SPDR Bloomberg Barclays Investment Grade Corporate Bond ETF (LQD): 34.5% market share

Expense Ratio

FLCO has an expense ratio of 0.05% per year.

Investment Approach and Strategy

Strategy: Passively tracks the ICE BofAML US Corporate Master Index Composition: 100% investment-grade corporate bonds

Key Points

• Low-cost access to the investment-grade corporate bond market
• Diversified portfolio
• Strong issuer
• Trailing benchmark performance

Risks

Volatility: Investment-grade corporate bonds are less volatile than high-yield bonds, but they can still experience price fluctuations. Market risk: The ETF's performance is directly tied to the performance of the underlying index and corporate bond market. Credit risk: The creditworthiness of the companies issuing the bonds can impact the ETF's performance.

Who Should Consider Investing

FLCO is suitable for investors seeking:

• Exposure to the investment-grade corporate bond market
• Income generation
• Diversification for their portfolio

Fundamental Rating Based on AI

Based on an AI-based analysis of various factors, FLCO receives a fundamental rating of 8.5. This rating considers the ETF's financial health, market position, and future prospects. The analysis highlights FLCO's strong issuer, low expense ratio, and diversified portfolio as positive factors. However, it also acknowledges the potential for market and credit risk.

Resources and Disclaimers

Sources:

• Franklin Liberty Investment Grade Corporate ETF Website
• Bloomberg Terminal
• Morningstar

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.