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

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If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the Franklin U.S. Mid Cap Multifactor Index ETF (FLQM - Free Report) , a passively managed exchange traded fund launched on 04/26/2017.

The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $592.49 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

Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. 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.


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 0.30%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.20%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 22.30% of the portfolio. Consumer Discretionary and Information Technology round out the top three.

Looking at individual holdings, Trane Technologies Plc (TT - Free Report) accounts for about 1.09% of total assets, followed by Fastenal Co (FAST - Free Report) and Kroger Co (KR - Free Report) .

The top 10 holdings account for about 10.58% 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 has gained about 5.39% so far this year and was up about 20.58% in the last one year (as of 04/29/2024). In the past 52-week period, it has traded between $40.75 and $53.46.

The ETF has a beta of 1.02 and standard deviation of 17.01% for the trailing three-year period. With about 208 holdings, it effectively diversifies company-specific risk.


Franklin U.S. Mid 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, FLQM is a reasonable option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The Vanguard Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $62.16 billion in assets, iShares Core S&P Mid-Cap ETF has $81.04 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.


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.

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