Franklin Templeton has launched three new investment products for emerging markets, responding to growing client demand for broader and diversified market access.
The offerings include the actively managed Templeton Emerging Markets Ex-China fund and two Ireland-domiciled passive Ucits ETFs: the Franklin FTSE Emerging Ex-China Ucits ETF and the Franklin FTSE Emerging Markets Ucits ETF.
The Templeton Emerging Markets Ex-China fund, registered in Luxembourg and Sustainable Finance Disclosure Regulation (SFDR) Article 8 compliant, targets emerging market companies outside China with strong fundamental characteristics. Co-managed by Chetan Sehgal and Andrew Ness from Franklin Templeton’s Emerging Markets Equity team, the fund follows a valuation-aware, high-conviction strategy. It will hold 40-60 stocks through a bottom-up approach and is available in major European markets, including France, Germany, Italy, Spain and the UK.
The two new ETFs, meanwhile, offer cost-effective access to large and mid-cap stocks. The Franklin FTSE Emerging Ex-China Ucits ETF and Franklin FTSE Emerging Markets Ucits ETF are priced with a total expense ratio (TER) of 0.11% at launch. Managed by Dina Ting and Lorenzo Crosato, the ETFs track the FTSE Emerging Ex-China Index NR and the FTSE Emerging Index NR, respectively.
These ETFs will be listed on Deutsche Börse Xetra on October 23, 2024, and on the London Stock Exchange and Borsa Italiana the following day.
Geopolitical tensions push investors to eye emerging markets
Jaspal Sagger, global head of product, Franklin Templeton, said: “Our market and client research has demonstrated that many clients are looking to customise their allocations to China. We also recognise that not all clients wish to manage their China allocation separately and prefer to seek broad emerging markets exposure simply. In this regard, the new Franklin FTSE Emerging Markets Ucits ETF (an indexed ETF) complements the firm’s comprehensive offering of actively managed emerging market products.”
Andrew Ness, portfolio manager, Franklin Templeton Emerging Markets Equity, said: “With China making up a large portion of the MSCI EM Index, we also see a large opportunity set in countries outside of China such as Brazil, India, South Korea and Taiwan, which are producing leading companies benefitting from rising domestic consumption and those that are powering the global economy. There are strong investment opportunities such as offline and online consumer companies, banking, rising healthcare players and technology. These opportunities are underpinned by structural growth drivers such as consumer penetration, demographics and digitalisation.”
Matt Harrison, head of Americas (ex-US), Europe & UK, Franklin Templeton, added: “Our goal is to provide our clients with many different tools and precision exposures as they seek to construct diversified portfolios; these tools include the choice of approach, style, and vehicle that best suit their objective.”
