Franklin Templeton launches four S&P 500 sector ETFs

Franklin Templeton has launched four UCITS exchange-traded funds tracking S&P 500 sector indices. The Franklin S&P 500 Information Technology UCITS ETF, Franklin S&P 500 Financials UCITS ETF, Franklin S&P 500 Consumer Discretionary UCITS ETF and Franklin S&P 500 Communication Services UCITS ETF will list on Deutsche Börse Xetra on May 12 and on Borsa Italiana and the London Stock Exchange on May 14.

Each ETF tracks a S&P 500 Capped 35/20 sector index (Net Return). The capped 35/20 method reduces the weight of the largest companies in a sector index so the funds do not become heavily concentrated in a handful of firms.

The funds are domiciled in Ireland and are registered for distribution in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Spain, Sweden and the United Kingdom.

The Information Technology ETF provides exposure to U.S. companies in software, hardware, semiconductors and digital infrastructure. The Financials ETF targets banks, insurers and diversified financial services firms involved in lending, payments and capital markets. The Consumer Discretionary ETF focuses on retailers, automakers and leisure-related businesses tied to consumer spending. The Communication Services ETF covers media companies, telecommunications providers and digital communication platforms.

The ETFs will be managed by Dina Ting, head of Global Index Portfolio Management, with ETF portfolio managers Lorenzo Crosato and Dave McGown.

Matthew Harrison, Head of EMEA and Americas (ex-US) at Franklin Templeton, commented that investors are seeking more targeted allocation options and that the S&P 500 Capped 35/20 sector indices limit the weight of the largest constituents to help manage concentration risk.

Franklin Templeton stated the funds are structured as UCITS to meet European regulatory and distribution requirements and will be offered for sale in the named markets.