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What Are Smart Beta ETFs?

Smart Beta ETFs are one of the fastest growing investment options available to investors. While the concept may seem complicated, watch this video for a simple explanation of what Smart Beta ETFs are, how they work and what they are designed to achieve.

Smart Beta refers to a methodology of index construction that seeks to achieve better risk-adjusted returns compared to traditional market capitalization weighted benchmark indexes. There is no guarantee that any strategy will achieve its objective. Franklin Templeton ETFs are not riskless investments, and investors can lose money. For additional risk disclosures, please see the prospectus.

Smart Beta...

…is an index that has been designed to achieve a specific outcome.

…is an evolved way of creating an index, using rules to target companies that demonstrate specific “factors”, or drivers of performance, in order to achieve a specific objective.

…targets a variety of factors, combining them in a strategic way, which may lead to stronger returns with less risk over time.

Smart beta refers to a methodology of index construction that seeks to achieve better risk-adjusted returns compared to traditional market capitalization weighted benchmark indexes. There is no guarantee that any strategy will achieve its objective. Franklin Templeton ETFs are not riskless investments, and investors can lose money. For additional risk disclosures, please see the prospectus.

LibertyQ’s Custom Factor Definitions

While many smart beta strategies utilize the same four factors, many employ standard, widely accepted approaches to measuring these factor exposures. We sought to develop custom factor measures which we believe could provide a more comprehensive evaluation of a stock's exposure to each factor.

What factors do LibertyQ smart Beta ETFs utilize?

Our research led us to utilize four well-known factors in our smart beta ETFs: quality, value, momentum, and low volatility.

How is LibertyQ different from other Smart Beta ETFs?

LibertyQ's methodology is differentiated by how we define factors.

What are the LibertyQ Smart Beta ETFs designed to achieve?

The results of our smart beta research have lead us to believe that our robust factor definitions may help improve risk adjusted returns over the long-term.

Smart Beta ETF's

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10 NOVEMBER 2025

Saudi market signals: reform momentum and global index implications

There has been renewed interest in Saudi Arabia, according to Dina Ting, Franklin Templeton ETFs’ Head of Global Index Portfolio Management. In this article, she examines how the Kingdom has drawn increasing foreign investment for its ongoing large-scale diversification projects coupled with a wave of reforms aligned with global standards.

30 OCTOBER 2025

Six months since Liberation Day: Where global investors are rotating next

Six months after Liberation Day, the global investment landscape has shifted as countries have sought to respond to changes in US tariff policies. In this article, Franklin Templeton ETFs’ Dina Ting discusses the divergence in returns and new opportunities in select countries whose equities are performing well, while others are also showing some potential.

23 OCTOBER 2025

The bull enters its prime

The US equity market is in its fourth year of a bull run, having surged significantly since 2022. Despite concerns about valuations, Marcus Weyerer of Franklin Templeton ETFs suggests that the current AI-driven market may still have room to run, in contrast to what happened during the dot-com bubble.

Important Legal Information

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. To the extent the fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas at focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. For the avoidance of doubt, if you make a decision to invest, you will be buying units/shares in the fund and will not be investing directly in the underlying assets of the fund.

Franklin Templeton ICAV ("the ETF") investment returns and principal values will change with market conditions, and an investor may have a gain or a loss when they sell their shares. Please visit www.franklintempleton.co.uk for the Franklin Templeton ICAV standardised and most recent month-end performance. There is no guarantee that any strategy will achieve its objective.

All performance data shown is in the fund's base currency. Performance data is based on the net asset value (NAV) of the ETF which may not be the same as the market price of the ETF.

Individual investors may realise returns that are different to the NAV performance. Past performance does not predict future returns. The actual costs vary depending on the executing custodian. In addition, deposit costs may be incurred which could have a negative effect on the value. Please find out the costs due from the respective price lists from the processing/custodian bank. Changes in exchange rates could have positive or negative effects on this investment. Please visit www.ftinstitutionalemea.com/our-funds/etf/price-and-performance for current performance and see the latest prospectus or supplement for further details. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.

An investment in Franklin Templeton ICAV entails risks which are described in the latest prospectus or supplement and in the relevant Key Investor Information Document. The Fund's documents are available in English, German and French from your local website or can be requested via FT's European Facilities Service which is available at https://www.eifs.lu/franklintempleton.

In addition, a summary of investor rights is available from franklintempleton.lu . The summary is available in English.

Franklin Templeton ICAV is notified for marketing in multiple EU Member States under the UCITS Directive. Franklin Templeton ICAV can terminate such notifications for any share class and/or sub-fund at any time by using the process contained in Article 93a of the UCITS Directive.

Franklin Templeton ICAV (domiciled outside of the U.S. or Canada) may not be directly or indirectly offered or sold to residents of the United States of America or Canada. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.

Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. 

Important data provider notices and terms available at www.franklintempletondatasources.com.