Industry Updates

Franklin Templeton terminates European equity ETF

FREQ ‘no longer economically viable’

Theo Andrew

Map of Europe

Franklin Templeton is terminating its European equity ETF due to low assets under management (AUM).

The Franklin European Equity UCITS ETF (FREQ) will cease trading on 15 November before closing the following day.

FREQ currently houses €3.4m assets under management (AUM) and is no longer considered “economically viable”, according to the firm.

In a note to shareholders, Franklin Templeton said: “The reason for the compulsory redemption and subsequent termination of the fund is due to the small size of the fund, meaning its continuing operation will no longer be considered as economically viable.

“As a result, the directors have determined that it is in the ultimate best interest of shareholders of the fund to terminate the fund.”

The ETF launched in 2018 and tracks the LibertyQ Europe index which selects its holding from the MSCI Europe index using a multi-factor selection process comprised of quality, value, momentum and low volatility.

Since inception, FREQ has returned 48.8% versus 33.2% for the MSCI Europe index.

The move follows a flurry of ETF closures over the past month including the two emerging market factor ETFs by Northern Trust Asset Management and State Street Global Advisors’ sustainable euro corporate bond ETF.

Last week, ETF Stream revealed Roundhill Investments would be exiting the European ETF market 18 months after unveiling its metaverse ETF.

In July, the US asset manager expanded its range of thematic ETFs with the launch of the Franklin Future of Food UCITS ETF (FOFD) and the Franklin Future of Health and Wellness UCITS ETF (FOHW).

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