Yahoo Finance Should Franklin U.S. Mid Cap Multifactor Index ETF (FLQM) Be on Your Investing Radar?
Launched on 04/26/2017, the Franklin U.S. Mid Cap Multifactor Index ETF (FLQM) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $202.16 million, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 21.70% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Cadence Design Sys Inc (CDNS) accounts for about 1.20% of total assets, followed by Ww Grainger Inc (GWW) and Fortinet Inc (FTNT).
The top 10 holdings account for about 11.4% of total assets under management.
Performance and Risk
FLQM seeks to match the performance of the LibertyQ U.S. Mid Cap Equity Index before fees and expenses. The LibertyQ U.S. Mid Cap Equity Index includes U.S. mid-capitalization companies that have favorable exposure to four investment style factors - quality, value, momentum and low volatility.
The ETF return is roughly 7.19% so far this year and is up about 16.06% in the last one year (as of 06/16/2023). In the past 52-week period, it has traded between $37.44 and $45.55.
The ETF has a beta of 1 and standard deviation of 17.76% for the trailing three-year period. With about 205 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Mid Cap Multifactor Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FLQM is a great option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $53.42 billion in assets, iShares Core S&P Mid-Cap ETF has $68.42 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Franklin U.S. Mid Cap Multifactor Index ETF (FLQM): ETF Research Reports
W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
