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Franklin Templeton Adds Active ETF Offerings: Portfolio Products

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Franklin Templeton expanded its active exchange-traded fund lineup with the addition of its ninth active fixed income ETF offering: Franklin Liberty U.S. Treasury Bond ETF (FLGV)

FLGV, trading on the NYSE Arca with a net exchange ratio of 0.09%, seeks income by investing mainly in Treasury bonds, bills and notes, and investments that the company said provide exposure to direct obligations of the U.S. Treasury.

FLGV, managed by Patrick Klein and Warren Keyser, senior vice president, adds a Treasury-bond focused option to the company’s active fixed income ETF lineup that also includes investment grade, high yield, muni and international bond ETFs along with a  short duration U.S. government ETF and senior loan ETF.

“The launch of FLGV further exemplifies our steadfast belief that active management is critical to achieving investor goals in fixed income,” according to Patrick O’Connor, global head of ETFs for Franklin Templeton. “Franklin Templeton Fixed Income has engineered a seamless active quant approach—where portfolio managers, analysts, traders and data scientists work as one team to create a synergistic loop between quantitative and fundamental analysis,” he said in a statement.

AQR Launches Diversifying Strategies Mutual Fund

AQR Capital Management introduced the AQR Diversifying Strategies Fund in three separate classes: I, with a net expense ratio of 1.62%; N, 1.87%; and R6, 1.52%.

The new mutual fund was “designed to be a single solution to gain exposure to liquid alternatives with attractive long-term risk-adjusted returns by investing in a portfolio of AQR’s alternative mutual funds,” the company said.

The fund is “intended to serve as a complementary addition to an investor’s traditional stock and bond portfolio,” it said.

The fund is managed by AQR’s Multi-Strategy team and offers exposure to active multi-asset strategies and absolute return strategies. Active multi-asset strategies such as risk parity will provide tactical, risk-balanced, active global market exposure. Absolute return strategies, such as managed futures, “will seek to harvest well-established risk premia and provide exposure to less accessible, more proprietary sources of return,” the company said.

The underlying AQR mutual funds that comprise the portfolio are: AQR Multi-Asset Fund, AQR Equity Market Neutral Fund, AQR Global Macro Fund, AQR Managed Futures Strategy HV Fund, AQR Style Premia Alternative Fund and AQR Diversified Arbitrage Fund.

Amplify to Liquidate EASI Tactical Growth ETF

Amplify ETFs is liquidating the Amplify EASI Tactical Growth ETF (NYSE Arca: EASI, with a net expense ratio of 0.81%).

The fund’s investment advisor, the Board of Trustees of the Amplify ETF Trust, “unanimously determined that it was in the best interests of the Fund and its shareholders to liquidate” it, the company said in its announcement.

“There are a variety of factors we monitor and consider in the evaluation of products in the marketplace,” Amplify ETFs CEO Christian Magoon told ThinkAdvisor, explaining: “Performance is a factor but overall it comes down to how well the fund is being received by investors and how that fund is serving those invested in it. In this case we felt shareholders were best served liquidating the fund.”

The fund will no longer accept creation or redemption orders after the close of business July 2. Trading in fund shares will be halted prior to market open July 6. Shareholders may sell their shares in the fund on NYSE Arca until market close July 2. The final distribution to shareholders of the fund is expected to occur on or around July 9. Anybody holding shares in the fund as of the liquidation date will receive a cash redemption amount equal to the net asset value of their shares as of that date, the company said.

Direxion Adds Three New ETFs

Direxion added three new ETFs to its product line: The Direxion Dynamic Hedge  ETF (DYHG, with a net expense ratio of 0.57%); Direxion High Growth ETF (HIPR, 0.40%); and Direxion Fallen Knives ETF (NIFE, 0.50%).

The new ETFs trade on NYSE Arca and have strategies that the company said “seek to target downside risk management, sustainable growth, and potential outperformance.”

DYHG seeks investment results that track the Salt truVol US Large Cap Dynamic Hedge Index, and is a potential core equity holding offering a systematic hedging methodology that seeks to responsively mitigate market risk.

Direxion is partnering with Salt Financial on the strategy, which leverages truVol, Salt’s proprietary analytic tool that uses intraday price data to aim for more accurate and responsive estimates of future volatility, as compared to traditional measures using only end-of-day prices.

HIPR tracks the Russell 1000 Hyper Growth Index, a rules-based methodology that targets stocks with an attractive combination of traditional growth stock measures – including revenue, earnings, and cash flow growth – as well as appealing quality and price momentum measures. Its portfolio includes large and mid-cap domestic companies with the potential for both high and sustained growth over time, rather than targeting traditional growth stock measures alone.

NIFE tracks the Indxx US Fallen Knives Index, which identifies companies that have experienced significant price deterioration, making them possibly poised for a price revival.

Aptus to Transfer Exchange Listing of OSCV

Aptus Capital Advisors plans to transfer the listing of its Opus Small Cap Value Plus actively managed ETF (OSCV) from NYSE Arca to Cboe Global Markets on or about July 1, it said.

The reason for the change wasn’t provided in the company’s announcement, but JD Gardner, Aptus founder, told ThinkAdvisor there was “no issue with NYSE at all” – his firm was “just consolidating all funds in one place as it helps streamline things on our end.”

— Check out last week’s portfolio product roundup here: Allianz Jumps Into ETF Space: Portfolio Products