Franklin Templeton has launched three new emerging market funds — the actively-managed Templeton Emerging Markets Ex-China, and the passively-managed Franklin FTSE Emerging ex-China Franklin and FTSE Emerging Markets UCITS ETFs.
The former, which is domiciled in Luxembourg, will be co-managed by Singapore-based Chetan Sehgal and Edinburgh-based Andrew Ness, who are portfolio managers on the Franklin Templeton emerging markets equity team. It will hold a portfolio of between 40 and 60 stocks at any one time, chosen using a bottom-up process and with a long-term time horizon in mind. The portfolio is EU SFDR Article 8 compliant.
Franklin FTSE Emerging ex-China UCITS ETF and Franklin FTSE Emerging Markets UCITS ETF are Ireland-domiciled, and aim to offer diverse exposure to large and mid-cap emerging market stocks at a total expense ratio (TER) of 0.11% at launch.
They will track the FTSE Emerging ex China and FTSE Emerging Markets index, respectively. Both funds will be managed by Dina Ting, head of global index portfolio management, and Lorenzo Crosato, ETF portfolio manager.
See also: Franklin Templeton to overhaul ailing Japan equity fund in value assessment report
Ness (pictured), new co-manager of Franklin Templeton’s active proposition, said: “We’re currently at an interesting juncture for emerging markets. With China making up a large portion of the MSCI EM index, we also see a large opportunity set in countries outside of China such as Brazil, India, South Korea and Taiwan, which are producing leading companies benefitting from rising domestic consumption and those that are powering the global economy.
“There are strong investment opportunities such as offline and online consumer companies, banking, rising healthcare players and technology to name a few. These opportunities are underpinned by structural growth drivers such as consumer penetration, demographics and digitalisation.”
See also: Franklin Templeton launches FTSE Japan ETF
Jaspal Sagger, global head of product at Franklin Templeton, said the firm’s market and client research has demonstrated that “many clients are looking to customise their allocations to China”.
“We are delighted that clients are now able to manage their Chinese equity exposure separately through these two new ex-China funds alongside our dedicated China-only products. We also recognise that not all clients wish to manage their China allocation separately and prefer to simply seek broad emerging markets exposure. In this regard, the new Franklin FTSE Emerging Markets UCITS ETF (an indexed ETF) complements the firm’s comprehensive offering of actively managed emerging market products.”
