Franklin Templeton launches new Franklin US Dividend Tilt UCITS ETF for European Investors on LSE

• This new cost-effective index tracking ETF gives investors access to a broad and diversified US income strategy at a low cost of 12bp
• This ETF is suitable for investors seeking income and capital appreciation from US equities

Franklin Templeton is pleased to announce the launch of its new Franklin US Dividend Tilt UCITS ETF. This offering is a further addition to a suite of index tracking dividend ETFs in the Franklin Templeton ETF range and brings the total number of its indexed ETFs to 26.

The Franklin US Dividend Tilt UCITS ETF invests in large and mid-capitalisation stocks in the US and is designed to offer income and capital appreciation from US equities. The ETF tracks the Morningstar US Dividend Enhanced Select Index-NR, which aims to maximise dividend yield while maintaining low tracking error relative to the broader US market.

Caroline Baron, Head of ETF Distribution, EMEA,Franklin Templeton, commented: “As US equities are an important allocation for our clients, we are delighted to offer this differentiated US equity income solution, which provides both a tilted exposure towards dividend-paying stocks and a high US equity market participation. The ETF is particularly suited for investors looking to generate income and capitalise on the potential growth of US equities, which are known for offering lower yields, but higher capital appreciation compared to other developed markets.”

The ETF will list on London Stock Exchange (LSE) and Euronext Paris on 16 January 2025, and the Borsa Italiana on 28 January 2025. Furthermore, it is registered in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and the United Kingdom.

Key Features of the Franklin US Dividend Tilt UCITS ETF:

• Broad Exposure: The ETF includes 282 US securities, offering significant diversification and reducing the risk of large sector biases which commonly occur in dividend strategies.
• Maximised Yield with Market Alignment: The ETF is designed to deliver higher dividend yield with minimal deviation from its parent index, Morningstar US Target Market Exposure Index, achieving a balance of capital appreciation and income distribution.
• Cost-efficiency: Priced competitively at just 0.12%, the ETF is positioned well below the typical cost range for US dividend-focused ETFs.

The new ETF will be managed by Dina Ting, Head of Global Index Portfolio Management, and Lorenzo Crosato, ETF Portfolio Manager, who have more than three decades of combined experience in the asset management industry and extensive track records in managing ETF strategies.

Dina Ting added: “The Franklin US Dividend Tilt UCITS ETF seeks to extract the maximum yield per unit of risk, balancing additional yield with the capital appreciation that favors US equity exposure post-election. Enhanced yield can help investors weather potential volatility given uncertainties over major policy changes, such as tariffs and their impact on inflation and balance of trades. Our rules-based strategy, featuring a relatively low active risk compared to the broad market, can be an ideal core or satellite allocation for investors seeking diversified US market exposure.”

Franklin Templeton’s global ETF platform enables investors to pursue their desired outcomes through a range of indexed and active ETFs. Supported by the strength and resources of one of the world’s largest asset managers, the global ETF platform has approximately $33 billion in assets under management globally as of 31 December 2024.