The fund aims to provide higher risk-adjusted returns and lower volatility over the longer-term than the MSCI Emerging Markets Index. The ETF is the first one of its kind using a multi-factor approach in EM equities, weighting quality, value, momentum and low volatility factors, Franklin Templeton said.
It targets high quality emerging market stocks which are attractively valued, using momentum to identify investment trends and avoid value traps and low volatility to provide a defensive measure against downturns.
Patrick O’Connor, head of Global ETFs at Franklin Templeton, said the multi-factor ETF responds to an investor need for “a lower risk option of accessing EM equities”.
“A multi-factor screened approach can help to identify attractive opportunities within emerging markets, while providing diversification among investment factors, resulting in a potentially less volatile return profile,” he said.