Investment Product and Service Launches

Franklin Templeton launches new funds, and Wells Fargo incorporates changes to TDFs.

Art by Jackson Epstein

Art by Jackson Epstein

Franklin Templeton Adds Growth Fund

Franklin Templeton has introduced its Franklin Focused Growth Fund, which seeks capital appreciation by investing in a concentrated portfolio of approximately 20 to 50 growth stocks.

The fund is managed by San Mateo, California-based portfolio manager Matthew Moberg. This launch brings to market a fund with an established track record; the Advisor share class initially funded in April 2016.

Franklin Focused Growth Fund seeks to invest predominantly in equity securities of companies that the investment manager believes offer compelling growth opportunities.

“Fundamental research, focused on a long-term view of duration and pace of growth, drive our idea generation. We consider many factors when selecting investments, including a company’s strategic positioning in its industry, its historical and potential growth in free cash flow, and an assessment of the strength and quality of management,” says Moberg, senior vice president and portfolio manager with Franklin Equity Group.

Within this conviction-weighted portfolio, large allocations to growth-oriented sectors such as technology, health care and consumer discretionary are likely. The equity securities in which the fund invests will be predominantly common stock. While the fund primarily invests in large cap companies, it may also invest in small- and mid-capitalization companies. In addition to the fund’s main investments, it may invest a portion (up to 25%) of its net assets in foreign equity securities, including those located in emerging markets.

Franklin Templeton Expands Active ETF Lineup

Franklin Templeton announced the expansion of its active exchange-traded fund (ETF) lineup with the addition of three thematic ETFs: Franklin Disruptive Commerce ETF (BUYZ), Franklin Genomic Advancements ETF (HELX) and Franklin Intelligent Machines ETF (IQM).

The Franklin Disruptive Commerce ETF invests in companies benefitting from or facilitating advancements in emerging areas of the e-commerce space that are facilitating more convenient, customized, secure and time-efficient transactions for both consumers and businesses.

The Franklin Genomic Advancements ETF invests in companies benefitting from or facilitating advancements of new genomic-based research techniques and technologies designed to extend and enhance the quality of human and other life, driven by the advent of cost-effective and rapid gene sequencing.

The Franklin Intelligent Machines ETF invests in companies benefitting from or facilitating advancements of machine learning technologies in areas such as robotics, driverless vehicles and algorithmic data analysis.

All three are listed on the Chicago Board Options Exchange (CBOE) and will be actively managed by portfolio managers Matthew Moberg, CPA, and Joyce Lin, CFA, within Franklin Equity Group, thus not seeking to replicate the performance of a specified index.

“These three new ETFs seek to capture powerful, multi-industry and distinct long-term trends that we believe should have a large impact on our economy and our daily lives,” says Matthew Moberg, portfolio manager with the Franklin Equity Group.

Wells Fargo Incorporates Changes to TDFs

The Wells Fargo Funds Board of Trustees has approved changes to the principal investment strategies of the Wells Fargo Target Date and Dynamic Target Date Funds. These changes will go into effect on or about July 1, although the Factor Enhanced Equity Portfolios will be realigned with their new strategies in a systematic fashion over a period of approximately three months following the effective date.

Each revised portfolio’s risk profile will likely be more similar to its broad market benchmark than it is today, the company says. The realignment of the portfolios will be phased in over a period of approximately three months.

Also effective on or about July 1, Wells Fargo Target Date Funds that either have reached or are nearing their target date (the Today–2030 funds) will begin allocating a portion of their equity exposure to low-volatility equities.

According to Wells Fargo, no changes are being made to the fees, glide path, glide path methodology and underlying fixed-income holdings for the funds. Additionally, the underlying equity portfolios will continue to employ a factor-based investment approach. The portfolios will seek exposure to factors commonly tied to a stock’s potential for enhanced risk-adjusted returns relative to the market, such as value, quality, momentum, size and low volatility.

Wells Fargo says its approach to realigning the underlying equity portfolios over the course of three months is intended to mitigate the point-in-time market risk associated with the overall transition. However, there is no guarantee it will be successful in mitigating risk.

The Dynamic Target Date Funds will continue to use derivatives to implement their volatility management overlay strategy, the firm adds.