Franklin Templeton Investments has launched a new actively managed Franklin Short Duration US Government ETF for US investors.
The new ETF, traded on the NYSE Arca under the symbol FTSD, seeks to generate a high level of current income and preservation of capital.
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Franklin Templeton said that the ETF is designed for investors who are income focused while also looking to achieve lower volatility than intermediate and longer duration strategies as well as for those seeking for a portfolio free from corporate credit risk.
The fund will invest in 80% of its net assets in securities issued or guaranteed by the US government bond sectors, and also in a substantial portion of its assets in mortgage-backed securities including ARMS.
Additionally the fund will also invest in direct obligations of the US government and in US inflation-indexed securities issued by the US government.
Roger Bayston, the fund’s lead portfolio manager and senior vice president of Franklin Templeton Fixed Income Group, said: "This actively managed ETF can take advantage of opportunities outside of the index (Barclays U.S. Government 1-3 Year Index), which has a much narrower opportunity set. The fund may be attractive to risk-averse investors who seek relative price stability across changing interest rate environments, and do not want exposure to corporate credit cycles."
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