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Franklin Templeton Plans 2 Mutual Fund Conversions to ETFs

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What You Need to Know

  • BNY Mellon launches three active, sustainable ETFs, expanding its suite of active ETFs.
  • Franklin Templeton is converting the Brandywine GLOBAL — Dynamic US Large Cap Fund to an ETF.
  • It is also converting the Martin Currie International Sustainable Equity Fund to an ETF.

Franklin Templeton has announced plans to convert two actively managed mutual funds to ETFs.

They are the Brandywine GLOBAL — Dynamic US Large Cap Fund (LMBJX), which had over $227 million in assets as of Nov. 30, and the Martin Currie International Sustainable Equity Fund (LUFIX), with over $26 million in assets.

The two funds “are investment strategies that have delivered exceptional results and are managed in a fashion that fits well in an ETF wrapper,” said Pierre Caramazza, head of U.S. product and specialty sales at the firm, in a statement.

Both funds are rated four stars by Morningstar, but their outlooks from Morningstar analysts are mixed: negative for the Martin Currie International Sustainable Equity Fund and neutral for the Brandywine GLOBAL— Dynamic U.S. Large Cap Value.

LMBJX has performed in the top quartile of its peers in 2020 and year-to-date through Nov. 30. LUFIX has scored in the top quartile in three of the last four years, including 2021 through Nov. 30. (In 2020, it was in the top half.)

“With these ETF conversations, we are best leveraging the capabilities of our diversified investment management teams to meet the evolving needs of clients,” said Patrick O’Connor, head of global ETFs for Franklin Templeton, in a statement.

More on this topic

The ETFs will be managed in “a substantially similar manner” to the mutual funds they replace. with the same investment objectives and strategies and portfolio management team as their predecessors.

BNY Mellon Launches 3 Active Sustainable ETFs

In other ETF news, BNY Mellon Investment Management has launched three active sustainable ETFs on the NYSE.

They are the BNY Mellon Sustainable US Equity ETF (BKUS), BNY Mellon Sustainable International Equity ETF (BKIS) and BNY Mellon Sustainable Global Emerging Markets ETF (BKES). All are fully transparent and designed for investors seeking long-term growth with funds focused on sustainability.

Newton Investment Management, a BNY Mellon investment subsidiary that uses a global thematic investment process and has a long track record in developing responsible investing and ESG solutions, is the subadvisor for the funds. It is a member of the Net Zero Asset Managers initiative and dedicated to helping clients navigate portfolios through complex energy transitions, according to BNY Mellon.

Fees for the new ETFs range from 0.65% for the U.S. fund to 0.75% for the emerging markets ETF, with the international ETF charging 0.70%. They join two other active ETFs from BNY Mellon Concentrated International ETF (BKCI) and BNY Mellon Ultra Short Income ETF (BUKI), which also launched this year.

“The launch of this new suite of ETFs demonstrates our commitment to responding to client demand for sustainable solutions and leveraging the specialist capabilities of our investment firms,” said Andy Provencher, head of North American distribution, BNY Mellon Investment Management, in a statement.