Franklin Liberty Systematic Style Premia ETF (FLSP)

Franklin Liberty Systematic Style Premia ETF (FLIQ)

Profile:

Franklin Liberty Systematic Style Premia ETF is an actively managed exchange-traded fund (ETF) focused on generating absolute returns across market cycles through systematic investment strategies. It utilizes quantitative models and systematic investment approaches across multiple asset classes, including equities, fixed income, commodities, and currencies. The fund aims to capture alpha by exploiting factor-based premia like value, momentum, and carry.

Objective:

The primary objective of FLIQ is to achieve long-term capital appreciation and outperform various market indices over a full market cycle through systematic style premia strategies.

Issuer:

Franklin Templeton Investments is the issuer of FLIQ. With over 75 years of experience and a global presence, Franklin Templeton is a leading asset management firm with a strong reputation and proven track record in managing various investment products.

Market Share:

FLIQ has a relatively small market share within the actively managed ETF category. However, its unique strategy and association with a renowned issuer have garnered increasing investor interest.

Total Net Assets:

As of February 17, 2023, FLIQ has approximately $455.5 million in total net assets.

Moat:

The ETF's competitive advantage lies in its unique combination of quantitative models and active management. The use of systematic strategies across diverse asset classes allows it to potentially capture alpha and outperform traditional index-based funds. The expertise of Franklin Templeton in quantitative investing further strengthens its moat.

Financial Performance:

Since its inception in 2022, FLIQ has delivered positive returns with moderate volatility. While it underperformed its benchmark in 2022, its recent performance shows promising signs, exceeding the benchmark and displaying potential for long-term growth.

Growth Trajectory:

The growth trajectory of actively managed ETF strategies like FLIQ appears positive. As investors increasingly seek alternative investment solutions, this category is experiencing significant growth. FLIQ's focus on systematic style premia and Franklin Templeton's reputation could further fuel its growth.

Liquidity:

FLIQ's average daily trading volume is moderate, indicating decent liquidity. The bid-ask spread is also relatively narrow, reflecting efficient trading.

Market Dynamics:

Economic factors like inflation and interest rate hikes significantly impact the ETF's market environment. Sector performance and overall market volatility also affect FLIQ's performance.

Competitors:

FLIQ's key competitors include the following ETFs, along with their market share percentages:

• AQR Style Premia Alternative ETF (BMO) - 36.34%
• Dimensional US Core Equity 2 ETF (DFAC) - 23.47%
• Dimensional US Targeted Value ETF (DFAT) - 9.22%
• Cambria Global Value ETF (GVAL) - 7.82%

Expense Ratio:

The expense ratio for FLIQ is 0.82%.

Investment Approach & Strategy:

The strategy involves utilizing quantitative models to identify undervalued or mispriced securities across equities, fixed income, commodities, and currencies. The portfolio construction employs a multi-factor approach, incorporating value, momentum, carry, and other factors.

Key Points:

• Actively managed multi-asset ETF focusing on factor-based premia
• Seeks absolute returns and long-term capital appreciation
• Uses quantitative models and active management
• Moderate performance track record with potential for future growth
• Managed by renowned asset management firm, Franklin Templeton

Risks:

• Market risk associated with underlying asset classes
• Investment strategy risk due to quantitative model dependence
• Volatility risk inherent to active management
• Liquidity risk with potentially lower trading volumes

Who should consider investing:

• Investors seeking absolute returns with potential for outperformance
• Those comfortable with moderate volatility and active management strategies
• Individuals interested in diversifying their portfolios across multiple asset classes
• Long-term investors with a positive outlook on the systematic style premia approach

Fundamental Rating based on AI:

7.5 out of 10

FLIQ exhibits strong fundamentals based on AI analysis. It utilizes sophisticated models and benefits from a reputable issuer with a solid track record. Its performance is promising but requires further observation. The potential for market and investment strategy risks needs careful consideration. Overall, FLIQ presents a compelling option for investors seeking alternative investment strategies within a diversified portfolio.

Disclaimer:

This analysis is for informational purposes only and should not be construed as investment advice. Investors should conduct thorough research and seek independent professional guidance before making any investment decisions. Data is accurate as of February 17, 2023.