Franklin Templeton Launches Three New Active Fixed Income ETFs for European Investors

CONTACT

Franklin Templeton

Alina Ulkina

0790 090 0184

Two of the new ETFs, classified as Article 9 under EU SFDR, will invest in green bonds and support the transition to a low-carbon future

London, 31 October 2023 – Franklin Templeton¹ is pleased to announce the launch of three new active fixed income 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. These new funds extend the total number of active ETFs to six , while 13 ETFs are now classified under SFDR as Article 8 or 9³, which now represent more than half of the overall Franklin Templeton ETF range. These new ETFs provide exposure to bonds that support the transition to a low-carbon future.

David Zahn, Head of European Fixed Income, Franklin Templeton, commented: “Having launched the first active European green bond ETF over 4 years ago, we continue to see significant growth opportunities, with Europe remaining a cornerstone in the global green bond market with cumulative issuance totalling €331 billion⁴ last year. The launch of the Franklin Sustainable Euro Green Sovereign UCITS ETF and the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF continue to expand our Green bond offering to better address client needs. Our new green bond strategies seek to generate attractive risk-adjusted returns while providing liquidity to projects with environmental benefits.”

The new funds will be managed by Franklin Templeton’s European Fixed Income team with significant expertise in sustainable fixed income investments.

New ETFs	Franklin Templeton Fixed Income Group (Investment Teams)
Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF	David Zahn, Head of European Fixed Income Emmanuel Teissier, Portfolio Manager Rod MacPhee, Portfolio Manager
Franklin Euro IG Corporate UCITS ETF	David Zahn, Head of European Fixed Income Emmanuel Teissier, Portfolio Manager
Franklin Sustainable Euro Green Sovereign UCITS ETF	David Zahn, Head of European Fixed Income Rod MacPhee, Portfolio Manager

2 Euro Green bond ETFs - Objectives

The investment objective of the Franklin Sustainable Euro Green Sovereign UCITS ETF, classified as Article 9 under EU SFDR, is to pursue a sustainable investment objective by providing exposure primarily to the European sovereign green bond market, whilst maximising total returns.

Meanwhile, the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF, also classified as Article 9, will pursue a sustainable investment objective by providing exposure to the European corporate green bond market with a short to mid duration of less than 5 years, whilst maximising total returns.

Both Green Bond ETFs seek to achieve their investment objectives by investing at least 90% of assets in sustainable investments and will invest at least 75% of assets in green bonds, with the balance made up of conventional bonds, which are deemed by the portfolio management team to be sustainable investments. By investing in this manner, the new ETFs expect to provide liquidity to new and existing climate-aligned projects with environmental and social benefits.

1 Euro IG Corporate ETF - Objective

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 Article 8 under EU SFDR, the fund will primarily 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.

Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton, commented: “We are pleased to offer European investors a diversified range of competitively priced sustainable active ETFs, which include providing a sovereign bond solution with flexible duration and a shorter maturity corporate green bond strategy, the only active ETFs in these segments.”

Competitive fees

With a total expense ratio (TER⁵) of 0.18⁶% for Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF and Franklin Sustainable Euro Green Sovereign UCITS ETF and 0.15⁷% for Franklin Euro IG Corporate UCITS ETF, the new ETFs will provide European investors with competitive fees amongst the lowest levels for sustainable solutions within their respective active categories in Europe.

Baron concluded: “We continue to see strong investor demand for sustainable active fixed income ETFs combining the merits of active management and the liquidity, accessibility and transparency benefits of the ETF wrapper.”

The new ETFs will list on the Deutsche Börse Xetra (XETRA) on 1^st November, the London Stock Exchange (LSE) on 2^nd November and the Borsa Italiana on 16^th November. They are registered in Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and in the UK.

Franklin Templeton’s global ETF platform enables investors to pursue their desired outcomes through a range of active, factor-based and passive ETFs. Supported by the strength and resources of one of the world’s largest asset managers, the global ETF platform has over $16 billion in assets under management globally as of 30 September 2023.

For more information on the Franklin Templeton ETF range please visit: www.franklintempleton.co.uk.

Ticker Information:

Stock Exchanges					Reference benchmarks
		Xetra Ticker	LSE Ticker	Borsa Italiana Ticker
Fund Name	ISIN	EUR	EUR	EUR
Franklin Sustainable Euro Green Sovereign UCITS ETF	IE000P0R7WK6	GSOV	GSOV	GSOV	Bloomberg Global Government EUR Green Bond Index
Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF	IE0006K7DEL9	GCOR	GCOR	GCOR	Bloomberg Euro Corporate Green Bond 1-5 Year Index
Franklin Euro IG Corporate UCITS ETF	IE000H0TSO96	EIGC	EURO	SCOR	Bloomberg Euro Aggregate Corporate Index

Contacts:

Alina Ulkina

Corporate Communications Manager

Franklin Templeton

Cannon Place, 78 Cannon Street

London EC4N 6HL

Tel: 0207 073 8541

Email: [email protected]

Dorine Johnson

Head of Corporate Communications EMEA

Franklin Templeton

Cannon Place, 78 Cannon Street

London EC4N 6HL

Tel: 0207 073 8538

Email: [email protected]

Notes to Editors:

This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID before making any final investment decisions.

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and approximately $1.4 trillion in assets under management as of September 30, 2023. For more information, please visit www.franklintempleton.co.uk and follow us on LinkedIn, Twitter and Facebook.
Franklin Sustainable Euro Green Sovereign UCITS ETF, Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF and Franklin Euro IG Corporate UCITS ETF are sub-funds of the Franklin Templeton ICAV, an Irish Collective Asset-managed Vehicle, incorporated under the laws of Ireland.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as of the publication date and may change without notice. The information provided in this material is not intended as complete analysis of every material fact regarding any country, region or market.

An investment in Franklin Templeton ICAV range entails risks, which are described in the prospectus, its supplements and in the relevant Key Investor Information Document / Key Information Document. The Funds documents are available in English, German and French from your local website. In addition, a Summary of Investor Rights is available from www.franklintempleton.lu/investor-rights. Franklin Templeton ICAV is notified for marketing in multiple EU Member States under the UCITS Directive. Franklin Templeton ICAV can terminate such notifications for any share class and/or sub-fund at any time by using the process contained in Article 93a of the UCITS Directive.

The value of shares in the funds and income received from it can go down as well as up and investors may not get back the full amount invested. Past performance is not an indicator or a guarantee of future performance. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments. There is no guarantee that the funds will meet their objectives. For the avoidance of doubt, if you make a decision to invest, you will be buying units/shares in the fund and will not be investing directly in the underlying assets of the fund. For full details of all the risks applicable, please refer to the "Risk Considerations" section of the current prospectus of Franklin Templeton ICAV.

Franklin Templeton ICAV UCITS ETFs (domiciled outside of the U.S. or Canada) may not be directly or indirectly offered or sold to residents of the United States of America or Canada. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
The Franklin Sustainable Euro Green Sovereign UCITS ETF and Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF have been classified as Article 9 under the Regulation on sustainability related disclosures in the financial services sector (EU) 2019/2088. These are Funds which have an ESG integration approach, have binding environmental and/or social characteristics and a clear sustainable investment objective.

The Franklin Euro IG Corporate UCITS ETF has been classified as Article 8 under the Regulation on sustainability related disclosures in the financial services sector (EU) 2019/2088. These are Funds which have an ESG integration approach and, in addition, have binding environmental and/or social characteristics in their investment process.

Further information in relation to the sustainability-related aspects of the Funds can be found at franklinresources.com/countries. Please review all of the funds objectives and characteristics before investing.
Source: Bloomberg, ICMA-aligned green bonds.
The charges are the fees the fund charges to investors to cover the costs of running the Fund. Additional costs, including transaction fees, will also be incurred. These costs are paid out by the Fund, which will impact on the overall return of the Fund. Fund charges will be incurred in multiple currencies, meaning that payments may increase or decrease as a result of currency exchange fluctuations.
A fee waiver for the new ETFs was introduced at launch date. The total expense ratio (TER) for the Franklin Sustainable Euro Green Sovereign UCITS ETF has been lowered by 2 basis points to 18 basis points in the first year. The TER for the Franklin Sustainable Euro Green Corp 1-5 Year UCITS ETF has been lowered by 7 basis points to 18 basis points in the first year.
The total expense ratio (TER) for the Franklin Euro IG Corporate UCITS ETF has been lowered by 3 basis points to 15 basis points in the first year.

This press release is intended to be of general interest only and does not constitute professional advice. Franklin Templeton and its management groups have exercised professional care and diligence in the collection and processing of the information in this press release. Franklin Templeton makes no representations or warranties with respect to the accuracy of this document. Franklin Templeton shall not be liable to any user of this report or to any other person or entity for the inaccuracy of information contained in this press release or for any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission.

Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes.

Please consult your financial advisor before deciding to invest.

Issued in the UK by Franklin Templeton Investment Management Limited (FTIML). FTIML is authorised and regulated in the United Kingdom by the Financial Conduct Authority.