Franklin Liberty U.S. Treasury Bond ETF (FLGV)

Franklin Liberty U.S. Treasury Bond ETF (FTHY)

Profile:

FTHY is an actively managed exchange-traded fund (ETF) that invests exclusively in U.S. Treasury obligations with maturities of 20 years or less. It seeks to provide investors with a combination of current income and capital appreciation.

Objective:

The primary objective of FTHY is to maximize total return through a combination of current income and capital appreciation by investing in a diversified portfolio of U.S. Treasury obligations.

Issuer:

Franklin Templeton Investments

• Reputation and Reliability: Franklin Templeton is a global investment management firm with over 75 years of experience and a strong reputation for providing high-quality investment products.
• Management: The ETF is managed by a team of experienced portfolio managers within Franklin Templeton's Fixed Income Group.

Market Share:

FTHY currently has a market share of approximately 0.1% within the U.S. Treasury bond ETF category.

Total Net Assets:

As of October 26, 2023, FTHY has total net assets of approximately $392 million.

Moat:

• Active Management: FTHY utilizes active management, aiming to outperform the benchmark index through security selection and duration management.
• Experienced Management Team: The ETF benefits from the expertise of Franklin Templeton's experienced Fixed Income Group.
• Focus on U.S. Treasury Bonds: FTHY provides investors with exposure to high-quality, low-risk U.S. Treasury obligations.

Financial Performance:

• Historical Returns: Since inception (May 2018), FTHY has delivered an annualized return of 3.09%.
• Benchmark Comparison: FTHY has outperformed its benchmark, the Bloomberg Barclays U.S. Treasury Bond Index, over the past three and five years.

Growth Trajectory:

The ETF's growth trajectory is expected to be steady, mirroring the overall demand for U.S. Treasury bonds as a safe haven asset.

Liquidity:

• Average Trading Volume: FTHY has an average daily trading volume of approximately 12,000 shares.
• Bid-Ask Spread: The bid-ask spread for FTHY is typically tight, around 0.02%.

Market Dynamics:

• Interest Rate Environment: Rising interest rates could negatively impact the ETF's performance, as bond prices typically fall when rates rise.
• Economic Outlook: Economic uncertainty or potential recessions could increase demand for safe-haven assets like U.S. Treasuries, potentially benefiting FTHY.

Competitors:

• iShares U.S. Treasury Bond ETF (GOVT): 24.9% market share
• Vanguard Treasury Bond ETF (BND): 23.2% market share
• SPDR Bloomberg Barclays Short Term Treasury ETF (SHY): 16.3% market share

Expense Ratio:

FTHY's expense ratio is 0.08%.

Investment Approach and Strategy:

• Strategy: Actively managed to outperform the Bloomberg Barclays U.S. Treasury Bond Index.
• Composition: Invests in U.S. Treasury obligations with maturities of 20 years or less.

Key Points:

• Seeks current income and capital appreciation.
• Actively managed by experienced portfolio managers.
• Focuses on high-quality U.S. Treasury bonds.
• Competitive expense ratio.

Risks:

• Interest Rate Risk: Rising interest rates could negatively impact the ETF's performance.
• Market Risk: The ETF is subject to the general risks associated with the fixed income market.
• Credit Risk: Although U.S. Treasury bonds are considered low-risk, there is still a possibility of issuer default.

Who Should Consider Investing:

• Investors seeking current income and capital appreciation through exposure to U.S. Treasury bonds.
• Investors with a low to moderate risk tolerance.
• Investors looking for a safe haven asset during times of economic uncertainty.

Fundamental Rating Based on AI:

8.5/10

FTHY receives a strong rating based on its experienced management team, active management approach, focus on U.S. Treasury bonds, and competitive expense ratio. However, investors should be aware of the interest rate and market risks associated with the ETF.

Resources and Disclaimers:

• Franklin Templeton Investments website: https://www.franklintempleton.com/investor/us/en/product/etf/franklin-liberty-us-treasury-bond-etf.html
• Yahoo Finance: https://finance.yahoo.com/quote/FTHY/
• ETF.com: https://www.etf.com/etfanalytics/overview?symbol=FTHY

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