Franklin Templeton launches three active fixed income ETFs

Franklin Templeton has launched three active fixed income ETFs, increasing its total offering to six.

The 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 are aimed to provide investors with exposure to bonds supporting the transition to a low-carbon future.

The new funds will be managed by members of Franklin Templeton's European fixed income team, David Zahn, head of European fixed income, and portfolio managers Emmanuel Teissier and Rod MacPhee.

Fidelity expands sustainable active ETF suite with double fixed income launch

The Franklin Sustainable Euro Green Sovereign UCITS ETF, which is classified as an Article 9 fund, will pursue a sustainable investment objective by providing exposure primarily to the European sovereign green bond market.

The Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF, is also an Article 9 fund and will also follow a sustainable investment objective by providing exposure to the European corporate green bond market, but in this case with a short to mid duration of less than five years.

Both green bond ETFs seek to achieve their investment objectives by investing at least 90% of assets in sustainable investments, and have a total expense ratio of 0.186%.

They will invest at least 75% of assets in green bonds, with the balance made up of conventional bonds deemed by the portfolio management team to be sustainable.

HSBC AM expands fixed income ETF share classes in bid to become top ten provider

The Franklin Euro IG Corporate UCITS ETF, which is an Article 8 fund and has a total expense ratio of 0.157%, will aim to provide income from the European corporate bond market while seeking to preserve capital. 

It will mainly invest in Euro denominated investment grade corporate debt securities issued by European companies and has at least 20% of its assets invested in environmental sustainable investments and 1% in social sustainable investments.

Zahn said: "Having launched the first active European green bond ETF over four years ago, we continue to see significant growth opportunities, with Europe remaining a cornerstone in the global green bond market with cumulative issuance totalling €331bn last year. 

"Our new green bond strategies seek to generate attractive risk-adjusted returns while providing liquidity to projects with environmental benefits."