Advertisement
Singapore markets closed

  • Straits Times Index

    3,296.89
    +4.20 (+0.13%)
     

  • S&P 500

    5,044.94
    +26.55 (+0.53%)
     

  • Dow

    38,130.13
    +226.84 (+0.60%)
     

  • Nasdaq

    15,743.90
    +138.42 (+0.89%)
     

  • Bitcoin USD

    59,152.48
    +1,898.57 (+3.32%)
     

  • CMC Crypto 200

    1,273.11
    +2.37 (+0.19%)
     

  • FTSE 100

    8,173.23
    +51.99 (+0.64%)
     

  • Gold

    2,313.70
    +2.70 (+0.12%)
     

  • Crude Oil

    78.69
    -0.31 (-0.39%)
     

  • 10-Yr Bond

    4.6280
    +0.0330 (+0.72%)
     

  • Nikkei

    38,236.07
    -37.98 (-0.10%)
     

  • Hang Seng

    18,207.13
    +444.10 (+2.50%)
     

  • FTSE Bursa Malaysia

    1,580.30
    +4.33 (+0.27%)
     

  • Jakarta Composite Index

    7,117.42
    -116.77 (-1.61%)
     

  • PSE Index

    6,646.55
    -53.94 (-0.81%)
     

Should Franklin U.S. Large Cap Multifactor Index ETF (FLQL) Be on Your Investing Radar?

Zacks Equity Research
·4-min read

Launched on 04/26/2017, the Franklin U.S. Large Cap Multifactor Index ETF (FLQL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $976.23 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

ADVERTISEMENT

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.98%.

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 Healthcare sector--about 20.50% of the portfolio. Information Technology and Consumer Staples round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM).

The top 10 holdings account for about 27.26% of total assets under management.

Performance and Risk

FLQL seeks to match the performance of the LibertyQ US Large Cap Equity Index before fees and expenses. The LibertyQ US Large Cap Equity Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000 Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000 Index that have favorable exposure to four investment style factors quality, value, momentum and low volatility.

The ETF has lost about -8.31% so far this year and is down about -2% in the last one year (as of 08/22/2022). In the past 52-week period, it has traded between $37.43 and $47.20.

The ETF has a beta of 0.91 and standard deviation of 22.51% for the trailing three-year period. With about 218 holdings, it effectively diversifies company-specific risk.

Alternatives

Franklin U.S. Large Cap Multifactor Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FLQL is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $316.40 billion in assets, SPDR S&P 500 ETF has $385.45 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Franklin U.S. Large Cap Multifactor Index ETF (FLQL): ETF Research Reports
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research