TORONTO, Sept. 21, 2022 /CNW/ - Franklin Templeton Canada today announced proposed changes to the index provider and investment objective for two ETFs, as well as the proposed merger of two fixed income ETFs.
Proposed ETF Changes
Franklin Templeton is proposing a new index provider, Solactive AG1, and new investment objectives for the following ETFs:
- Franklin Emerging Markets Multifactor Index ETF (FLEM) – proposed investment objective: The ETF seeks to replicate, to the extent possible and before fees and expenses, the performance of Solactive GBS Emerging Markets Large & Mid Cap CAD Index-NR. It invests primarily in equity securities in emerging markets. If this investment objective is approved, the ETF's name will change to Franklin Emerging Markets Equity Index ETF.
- Franklin FTSE Europe ex U.K. Index ETF (FLUR) – proposed investment objective: The ETF seeks to replicate, to the extent possible and before fees and expenses, the performance of Solactive GBS Developed Markets ex North America Large & Mid Cap CAD Index-NR. It invests primarily in equity securities of large- and mid-capitalization issuers in developed markets, excluding North America. If this investment objective is approved, the ETF's name will change to Franklin EAFE Equity Index ETF.
If approved, these changes will take effect on or around December 21, 2022. On the same date, the management fee for Franklin Emerging Markets Multifactor Index ETF will be reduced from 45 basis points (bps) to 19 bps. The management fee for Franklin FTSE Europe ex U.K. Index ETF will remain the same at 9 bps. The tickers will remain the same for both ETFs.
Proposed ETF Merger
Franklin Templeton proposes to merge Franklin U.S. Investment Grade Corporate Bond Active ETF (CAD-Hedged) (FLUI) into Franklin Western Asset Core Plus Bond Active ETF (FWCP) on a taxable basis.
Franklin Western Asset Core Plus Bond Active ETF seeks to maximize total return through exposure to investment grade debt instruments of issuers anywhere in the world while following a sustainable investment approach, by investing directly in such instruments and/or in units of Franklin Western Asset Core Plus Bond Fund (or its successor fund).
If approved by investors, the merger will take place on or around December 16, 2022. If the merger is not approved, Franklin U.S. Investment Grade Corporate Bond Active ETF (CAD-Hedged) will be terminated on or around December 21, 2022.
The Independent Review Committee of the ETFs has reviewed the proposed merger and determined that the merger, if implemented, will achieve a fair and reasonable result for Franklin U.S. Investment Grade Corporate Bond Active ETF (CAD-Hedged). All costs and expenses associated with the merger, including the meeting costs, will be borne by the manager and not charged to the ETFs. No commissions or other fees will be charged to investors for the exchange of units of Franklin U.S. Investment Grade Corporate Bond Active ETF (CAD-Hedged) for units of Franklin Western Asset Core Plus Bond Active ETF.
Special Meeting Details for Proposed Changes
The proposed ETF changes and the proposed ETF merger are subject to investor approval, which will be sought at special meetings to be held virtually on December 9, 2022. Investors of record as of October 17, 2022, will have access to the meeting materials via notices posted on Franklin Templeton's website, which will provide more details relating to the proposed changes. Investors are strongly encouraged to vote in advance of the proxy voting deadline via any of the methods described in the meeting materials. Investors who would like to attend the virtual meeting can access it at franklintempleton.ca/december9meeting.
Investors are encouraged to speak to their financial advisor about these changes. Franklin Templeton's client service team is also available between 8 a.m. and 6 p.m. EDT at 1-800-387-0830 or [email protected].
About Western Asset
Western Asset is one of the world's leading fixed-income managers with 50 years of experience and US$407.5 billion in assets under management as of June 30, 2022. With a focus on long-term fundamental value investing that employs a top-down and bottom-up approach, the firm has nine offices around the globe and deep experience across the range of fixed-income sectors. Founded in 1971, Western Asset has been recognized for its approach emphasizing team management and intensive proprietary research, supported by robust risk management. Western Asset is an independent specialist investment manager of Franklin Templeton. To learn more about Western Asset, please visit westernasset.com.
About Franklin Templeton
Franklin Resources, Inc. (NYSE: BEN) is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 155 countries. In Canada, the company's subsidiary is Franklin Templeton Investments Corp., which operates as Franklin Templeton Canada. 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 boutique specialization on a global scale, bringing extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has 75 years of investment experience and approximately US$1.4 trillion (approximately CAN$1.8 trillion) in assets under management as of August 31, 2022. For more information, please visit franklintempleton.ca and connect with Franklin Templeton on Twitter, Facebook and LinkedIn, and read the Beyond Bulls & Bears blog.
1. Solactive AG ("Solactive") is the licensor of Solactive GBS Emerging Markets Large & Mid Cap CAD Index-NR and Solactive GBS Developed Markets ex North America Large & Mid Cap CAD Index-NR (the "indices"). The financial instruments that are based on the indices are not sponsored, endorsed, promoted or sold by Solactive in any way and Solactive makes no express or implied representation, guarantee or assurance with regard to: (a) the advisability in investing in the financial instruments; (b) the quality, accuracy and/or completeness of the indices; and/or (c) the results obtained or expected to be obtained by any person or entity from the use of the indices. Solactive reserves the right to change the methods of calculation or publication with respect to the indices. Solactive shall not be liable for any damages suffered or incurred as a result of the use (or inability to use) of the indices.
Commissions, management fees and expenses all may be associated with investments in ETFs. Investors should carefully consider an ETF's investment objectives and strategies, risks, fees and expenses before investing. The prospectus and ETF facts contain this and other information. Please read the prospectus and ETF facts carefully before investing. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF's net asset value. Brokerage commissions and ETF expenses will reduce returns. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.
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SOURCE Franklin Templeton Investments Corp.
Sarah Kingdon, Corporate Communications, Franklin Templeton, 416.957.6191, [email protected]
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