Franklin Templeton has launched three active fixed income ETFs providing exposure to bonds that support the transition to a “low-carbon future”.
The new ETFs – Franklin Sustainable Euro Green Sovereign Ucits ETF, Franklin Sustainable Euro Green Corp 1-5 Year Ucits ETF and Franklin Euro IG Corporate Ucits ETF 2 – bring the asset manager’s total number of active ETFs to six and those falling under SFDR as Article 8 or 9 to 13.
The Franklin Sustainable Euro Green Sovereign Ucits ETF, an Article 9 fund under EU SFDR, aims to achieve sustainability by primarily investing in the European sovereign green bond market while maximizing total returns.
Similarly, the Franklin Sustainable Euro Green Corp 1-5 Year Ucits ETF, also classified as Article 9, pursues sustainability by offering exposure to the European corporate green bond market with a short to mid duration (under 5 years) to maximise total returns.
Both green bond ETFs aim to meet their investment goals by allocating a minimum of 90% of assets to sustainable investments, including at least 75% in green bonds, with the remaining portion consisting of conventional bonds considered sustainable by the portfolio management team.
The investment objective of the Franklin Euro IG Corporate Ucits ETF is to provide income from the European corporate bond market while seeking to preserve capital. Classified as an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation, it aims to invest in Euro-denominated investment grade corporate bonds issued by European firms, with a minimum of 20% of assets in environmentally sustainable investments and 1% in socially sustainable investments.
David Zahn, head of European fixed income, Franklin Templeton, commented: “We continue to see significant growth opportunities, with Europe remaining a cornerstone in the global green bond market with cumulative issuance totalling €331 billion last year.”
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