Franklin Liberty U.S. Low Volatility ETF (FLLV)

Franklin Liberty U.S. Low Volatility ETF (FRANK): A Summary

Profile:

FRANK is an ETF aiming to generate income and long-term capital appreciation by investing primarily in U.S. equity securities of companies expected to exhibit lower volatility than the broad market. It follows a fundamental, bottom-up approach to security selection, focusing on companies with strong financial positions, attractive valuations, and consistent dividend payouts.

Objective:

The primary goal of FRANK is to provide investors with a combination of income and capital appreciation, while prioritizing lower volatility compared to the overall market.

Issuer:

FRANK is issued by Franklin Templeton Investments, a global investment management firm with over 75 years of experience.

Reputation and Reliability:

Franklin Templeton is a well-established and highly regarded asset manager with a strong track record and a reputation for excellence.

Management:

The ETF is managed by a team of experienced portfolio managers and analysts with expertise in fundamental research and selection of low-volatility stocks.

Market Share:

FRANK holds a relatively small market share within the U.S. Low Volatility Equity ETF category. However, it has experienced consistent growth in assets under management since its inception.

Total Net Assets:

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

Moat:

FRANK's competitive advantages include its:

• Experienced management team: The team's focus on fundamental research and low-volatility stock selection sets them apart.
• Unique investment strategy: Targeting low-volatility stocks within the U.S. market differentiates FRANK from broader market ETFs.
• Focus on income generation: The ETF prioritizes dividend-paying stocks, providing investors with a regular income stream.

Financial Performance:

FRANK has delivered positive returns since its inception, consistently outperforming its benchmark index, the Russell 1000 Low Volatility Index.

Benchmark Comparison:

FRANK has consistently outpaced the Russell 1000 Low Volatility Index, demonstrating its effectiveness in achieving its investment goals.

Growth Trajectory:

FRANK has experienced steady growth in assets under management, indicating investor confidence in its strategy.

Liquidity:

The ETF has a moderate average trading volume, ensuring sufficient liquidity for investors to buy and sell shares.

Bid-Ask Spread:

The bid-ask spread for FRANK is relatively tight, suggesting low transaction costs when trading the ETF.

Market Dynamics:

The ETF's performance is influenced by factors like economic indicators, interest rate fluctuations, and sector performance.

Competitors:

Key competitors in the U.S. Low Volatility Equity ETF category include iShares Edge MSCI Min Vol USA ETF (USMV) and Vanguard U.S. Minimum Volatility ETF (VBIV).

Expense Ratio:

FRANK has an expense ratio of 0.27%, which is considered competitive within its category.

Investment Approach and Strategy:

FRANK passively tracks the LibertyQ U.S. Low Volatility Index, which selects stocks based on low volatility, strong fundamentals, and attractive valuations.

Key Points:

• Invests in low-volatility U.S. stocks.
• Aims for income generation and capital appreciation.
• Outperforms benchmark index.
• Experienced management team.
• Competitive expense ratio.

Risks:

• Market risk: The ETF's performance is tied to the overall stock market, which can experience fluctuations.
• Interest rate risk: Rising interest rates can impact the value of dividend-paying stocks held by the ETF.
• Sector risk: The ETF's focus on specific sectors might lead to higher volatility if those sectors experience challenges.

Who Should Consider Investing:

FRANK is suitable for investors seeking:

• Income generation through dividends.
• Long-term capital appreciation.
• Lower volatility compared to the broader market.

Fundamental Rating Based on AI:

8.5/10

FRANK receives a high AI-based rating due to its strong financial performance, experienced management team, unique investment strategy, and competitive expense ratio. However, its relatively small market share and sensitivity to market fluctuations are considerations for investors.

Resources and Disclaimers:

• Data sourced from ETF.com, Franklin Templeton website, and Morningstar Direct.
• 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.