Franklin Templeton Launches ESG-Focused Global Growth ETF on ASX

Franklin Templeton’s New Global Growth ETF

Franklin Templeton Australia has introduced the Franklin Global Growth Fund – Class A, an actively managed exchange-traded fund (ETF) now listed on the Australian Securities Exchange (ASX) under the ticker FRGG. The Fund aims to deliver total returns that outperform the MSCI World ex Australia Index over the medium to longer term, measured in Australian dollars after fees but before taxes.

This new offering provides Australian investors with access to a diversified portfolio of global equities, excluding Australian companies, spanning both developed and emerging markets. The Fund’s investment approach is underpinned by a disciplined process targeting approximately 35 high-quality companies with sustainable growth prospects and long-term competitive advantages.

ESG Integration and Ethical Screening

Reflecting growing investor demand for responsible investing, the Fund incorporates environmental, social, and governance (ESG) considerations into its investment analysis. It applies negative screens to exclude companies directly involved in controversial weapons, tobacco production, thermal coal mining, and oil extraction from tar sands beyond specified revenue thresholds. The investment team engages with company management on ESG matters but retains flexibility to invest in companies with varying ESG profiles based on fundamental research and financial sustainability.

Fee Structure and Investor Access

The Fund charges a management fee of 0.90% per annum, inclusive of GST and net of reduced input tax credits, with no performance fees. Investors applying directly to the Responsible Entity pay a 0.10% buy/sell spread on applications and redemptions. Units can also be traded on the ASX, where investors will incur bid-offer spreads set by the market maker. The Responsible Entity has appointed a market maker to provide continuous liquidity and facilitate orderly trading on the exchange.

Investors have the flexibility to enter or exit the Fund either by purchasing or selling units on the ASX or by applying and redeeming units directly with Franklin Templeton Australia. Notably, prices and liquidity may differ between these two methods, and investors should consider these factors when transacting.

Risk Profile and Regulatory Compliance

The Fund carries a very high risk rating, reflecting its exposure to global equity markets, currency fluctuations, emerging market volatility, and operational risks including cyber security. The Product Disclosure Statement (PDS) outlines comprehensive risk factors, including market, liquidity, legal, and regulatory risks. The Fund complies with Australian regulatory frameworks such as the Corporations Act, Anti-Money Laundering and Counter-Terrorism Financing laws, and tax regimes including the Attribution Managed Investment Trust (AMIT) regime, FATCA, and the Common Reporting Standard (CRS).

Distributions are generally paid semi-annually and can be reinvested automatically or taken as cash. Detailed reporting and transparency are provided through regular disclosures on the Franklin Templeton website and the ASX Markets Announcement Platform.

Positioning in the Market

Franklin Templeton’s launch of this global growth ETF adds to the growing suite of actively managed products available to Australian investors seeking international diversification with an ESG lens. The Fund’s relatively moderate fee and active management approach may appeal to investors looking for a balance between cost efficiency and professional stock selection expertise. The success of the Fund will depend on market reception, liquidity provision by the market maker, and the investment team’s ability to navigate global markets and ESG considerations effectively.