Franklin Templeton Canada Announces Approval of Changes for Certain ETFs

TORONTO, Dec. 9, 2022 /CNW/ - Franklin Templeton Canada today announced that investors have approved the new investment objectives for two equity ETFs and the merger of two fixed income ETFs at special meetings held today, December 9, 2022.

ETF Changes

Effective on or around December 21, 2022, Franklin Emerging Markets Multifactor Index ETF (FLEM) and Franklin FTSE Europe ex U.K. Index ETF (FLUR) will have a new index provider, Solactive AG1, and adopt the following new investment objectives and names.

  • Franklin Emerging Markets Equity Index ETF (FLEM) – the new investment objective: The ETF seeks to replicate, to the extent possible and before fees and expenses, the performance of Solactive GBS Emerging Markets Large & Mid Cap CAD Index-NR. It invests primarily in equity securities in emerging markets.

  • Franklin International Equity Index ETF (FLUR) – the new investment objective: The ETF seeks to replicate, to the extent possible and before fees and expenses, the performance of Solactive GBS Developed Markets ex North America Large & Mid Cap CAD Index-NR. It invests primarily in equity securities of large- and mid-capitalization issuers in developed markets, excluding North America.

The management fee for FLEM will be reduced from 45 basis points (bps) to 15 bps on December 21, 2022. This is a further reduction to the management fee that was announced on September 21, 2022. Both tickers will remain the same, and the management fee for FLUR will remain at 9 bps.

As previously announced on October 25, 2022, FLEM was voluntarily delisted from the TSX at the close of business on December 5, 2022, and listed on the NEO Exchange on December 6, 2022.

ETF Merger

Franklin U.S. Investment Grade Corporate Bond Active ETF (CAD-Hedged) (FLUI) will merge into Franklin Western Asset Core Plus Bond Active ETF (FWCP) on a taxable basis on or around December 16, 2022. The number of units of FWCP to be received by a unitholder of FLUI will be determined by multiplying the number of units of FLUI held by that unitholder by the exchange ratio (which will equal the NAV per unit of FLUI on the merger date divided by the NAV per unit of FWCP on the merger date) and rounding the result to the nearest whole number.

Estimated Distributions

Unitholders of record for FLUI and FWCP as of December 16, 2022, will receive a per-unit reinvested distribution as part of the merger. These distributions, detailed in the chart below, are only estimates as of December 2, 2022. If there are any changes to these distribution amounts, the final amounts will be announced on December 19, 2022.

ETF Name

Ticker  

Estimated
Reinvested
Distribution Per Unit  
($)

Franklin U.S. Investment Grade Corporate Bond Active ETF (CAD-Hedged)    

FLUI

0.134111

Franklin Western Asset Core Plus Bond Active ETF

FWCP

0.096303

Effective today, December 9, 2022, no further direct subscriptions for units of FLUI will be accepted.

The Independent Review Committee of the ETFs has reviewed the merger and determined that it will achieve a fair and reasonable result for FLUI. All costs and expenses associated with the merger will be borne by the manager and not charged to the ETFs. No commissions or other fees will be charged to investors for the exchange of units of FLUI for units of FWCP.

Investors are encouraged to speak to their investment advisor about these changes. Franklin Templeton's client service team is also available between 8 a.m. and 6 p.m. EST at 1-800-387-0830 or service@franklintempleton.ca.

About Franklin Templeton

Franklin Resources, Inc. [NYSE: BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 155 countries. In Canada, the company's subsidiary is Franklin Templeton Investments Corp., which operates as Franklin Templeton Canada. Franklin Templeton's mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers boutique specialization on a global scale, bringing extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has 75 years of investment experience and approximately US$1.3 trillion (approximately CAN$1.8 trillion) in assets under management as of October 31, 2022. For more information, please visit franklintempleton.ca and connect with Franklin Templeton on TwitterFacebook and LinkedIn, and read the Beyond Bulls & Bears blog.

1. Solactive AG ("Solactive") is the licensor of Solactive GBS Emerging Markets Large & Mid Cap CAD Index-NR and Solactive GBS Developed Markets ex North America Large & Mid Cap CAD Index-NR (the "indices"). The financial instruments that are based on the indices are not sponsored, endorsed, promoted or sold by Solactive in any way and Solactive makes no express or implied representation, guarantee or assurance with regard to: (a) the advisability in investing in the financial instruments; (b) the quality, accuracy and/or completeness of the indices; and/or (c) the results obtained or expected to be obtained by any person or entity from the use of the indices. Solactive reserves the right to change the methods of calculation or publication with respect to the indices. Solactive shall not be liable for any damages suffered or incurred as a result of the use (or inability to use) of the indices.

Commissions, management fees and expenses all may be associated with investments in ETFs. Investors should carefully consider an ETF's investment objectives and strategies, risks, fees and expenses before investing. The prospectus and ETF facts contain this and other information. Please read the prospectus and ETF facts carefully before investing. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF's net asset value. Brokerage commissions and ETF expenses will reduce returns. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.

Copyright © 2022. Franklin Templeton. All rights reserved.

SOURCE Franklin Templeton Investments Corp.

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