Franklin Templeton Converts Three Mutual Funds into ETFs
Franklin Templeton is converting three of its institutional-only mutual funds in the Fund Allocator Series to exchange-traded funds (ETFs). The move aims to broaden investor access while preserving each fund's investment objective and historical performance. According to a Franklin spokesperson, this decision was made after evaluating which vehicle—mutual fund or ETF—is most suitable for each strategy. The affected mutual funds will transition as follows: the U.S. Core Equity Fund becomes the $2 billion U.S. Large Cap Multifactor Index ETF; the International and Emerging Market Core Equity Funds become new products, both named Franklin Core Enhanced Equity ETFs. Analyst David Cohne noted that while many asset managers have received regulatory approval for dual share classes or conversions, industry infrastructure is still catching up with these changes. Converting to an ETF rather than maintaining a dual-class structure offers advantages such as immediate scale and existing track records, which can help in marketing the new products. This approach also simplifies distribution by avoiding parallel structures around similar portfolios.
Topics: ETF conversion Franklin Templeton mutual funds to ETFs