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

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The Franklin U.S. Large Cap Multifactor Index ETF (FLQL - Free Report) was launched on 04/26/2017, and is a passively managed exchange traded fund designed to offer 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 $1.46 billion, 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 1.11%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 33.60% of the portfolio. Healthcare and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 6.88% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .

The top 10 holdings account for about 34.12% 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 added roughly 24.32% so far this year and it's up approximately 30.97% in the last one year (as of 11/19/2024). In the past 52-week period, it has traded between $45.62 and $60.48.

The ETF has a beta of 0.94 and standard deviation of 16.25% 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 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, FLQL is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard S&P 500 ETF (VOO - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While Vanguard S&P 500 ETF has $556.80 billion in assets, SPDR S&P 500 ETF has $624.04 billion. VOO has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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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