Active asset manager Franklin Templeton ($BEN) has just stepped into the world of passive investing with last week’s announcement of 16 market-cap weighted, single-country, and regional ETFs – the largest simultaneous NYSE listing in five years.
Franklin is taking direct aim at passive ETF offerings from BlackRock’s ($BLK) iShares.
Barron’s reports:
Price is key. Franklin Templeton is charging ultralow fees that will undercut those of the biggest player in this area, iShares from BlackRock (BLK). Franklin Templeton’s single-country ETFs for developed markets will charge just nine basis points, or 0.09%, while those for individual emerging nations will charge 19 basis points, or 0.19%. Market leader iShares, charges 0.48% to 0.64% for ETFs focused on developed lands and 0.48% and 0.93% for those for that invest in one developing country. “Beta should be cheap. It’s a competitive price that reflects value,” says O’Connor.
Todd Rosenbluth, of independent research firm CFRA, says Franklin Templeton picked a good spot to attack with low fees. “This is one of the few areas where there is not much competition other than iShares,” says Rosenbluth. WisdomTree (WETF) and Global X both have international funds that serve other investor needs, he notes.
It also happens to be good timing for specific international strategies. Retail investors don’t have much use for single-country ETFs, says Rosenbluth, but institutional investors may be looking for ways to double down on certain countries or regions, especially emerging markets, where performance often varies widely. And since Franklin Templeton’s funds track the FTSE Russell indexes, they can be used in conjunction with the broader Vanguard FTSE Developed Markets (VEA) and Vanguard FTSE Emerging Markets (VWO) ETFs. The iShares single-country funds track the MSCI indexes.
The funds, their tickers and their expense ratios are as follows:
- Franklin FTSE Australia ETF (FLAU), 0.09%
- Franklin FTSE Canada ETF (FLCA), 0.09%
- Franklin FTSE France ETF (FLFR), 0.09%
- Franklin FTSE Germany ETF (FLGR), 0.09%
- Franklin FTSE Hong Kong ETF (FLHK), 0.09%
- Franklin FTSE Italy ETF (FLIY), 0.09%
- Franklin FTSE Japan ETF (FLJP), 0.09%
- Franklin FTSE United Kingdom ETF (FLGB), 0.09%
- Franklin FTSE Europe ETF (FLEE), 0.09%
- Franklin FTSE Europe Hedged ETF (FLEH), 0.09%
- Franklin FTSE Japan Hedged ETF (FLJH), 0.09%
- Franklin FTSE South Korea ETF (FLKR)
- Franklin FTSE Brazil ETF (FLBR), 0.19%
- Franklin FTSE China ETF (FLCH), 0.19%
- Franklin FTSE Mexico ETF (FLMX), 0.19%
- Franklin FTSE Taiwan ETF (FLTW), 0.19%
“We’re trying to provide the investors with the flexibility to construct across active, across smart beta, across passive. This allows us to acknowledge that investors want to gain exposure to various markets and they want to do it in a cost-effective manner,” said Templeton’s head of capital markets, David Mann.
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Scraping the bottom of the barrel, are we?
What’s not exciting about saving 40 bps?
It’s hard to tie it to the Zionists, that’s all.
@zpn, at times when there’s more mutual funds than stawks, or more ETF’s than underlying stawks, we are just about to put a hole into the bottom of the barrel w/ all that scraping. Nothing can go on forever and 40bps is just to trap those with still some dry powder when base stocks will be worth less than the ETF’s indexing them…. just pointing out the obvious. Other than gambling in the digital crypto nothings casino, everything is picked over. So yeah, scraping the bottom of the barrel.
True, but there are always going to be long-only mandated strategies which use these products. Whoever’s ETF’s are in play are going to get assfucked all the same during a huge drawdown, but the 40bps over 10-20 years will still add up. I get your point though.