California-based investment manager Franklin Templeton continues expanding its exchange-traded fund (ETF) range. 

Franklin Templeton has just launched two new indexed exchange-traded funds (ETFs), classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR): the Franklin S&P 500 Screened UCITS ETF and the Franklin S&P World Screened UCITS ETF. 

This offering adds to the suite of index tracking ETFs in the Franklin Templeton ETF range, bringing the total number of UCITS ETFs classified as either Article 8 or 9 to 17. The new ETFs will list on the Deutsche Börse (XETRA) on 16 April 2025, London Stock Exchange (LSE) and Euronext Paris on 17 April 2025, and the Borsa Italiana on 24 April 2025. They are registered for distribution in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Spain, Sweden and the UK, the firm said in a statement.

The Franklin S&P 500 Screened UCITS ETF and the Franklin S&P World Screened UCITS ETF will invest in large and mid-capitalisation stocks in the US and globally respectively. The new ETFs will track the S&P 500 Guarded Index and the S&P Guarded World index, which provide a screened equity exposure with an enhanced ESG profile; They aim to minimise performance deviation from their respective parent index (the S&P 500 Index and the S&P World Index), providing core low tracking error allocations.

“These new ETFs offer a cost-efficient and transparent way to access core equity exposures with enhanced ESG profiles and reduced carbon footprint, keeping a tight tracking to traditional core indices,” Caroline Baron, head of ETF distribution, EMEA, Franklin Templeton, said. “These ETFs would be suitable for investors looking to invest in core exposures that are Article 8 compliant and those seeking a tight tracking versus the traditional benchmarks such as S&P 500 and S&P World.” 

“These ETFs align with the growing investor focus on integrating ESG considerations without compromising on index performance,” London-based Lotfi Ladjemi, vice president, ETF distribution, added.

The two new funds target a minimum 10 per cent improvement in carbon intensity and a 10 per cent minimum improvement in ESG rating versus their parent indices. Companies involved in controversial businesses such as thermal coal, tobacco, controversial weapons and military arms are excluded as well as those companies which have been involved in serious ESG or UN Global Compact related controversies.

The funds aim to provide broad diversified market coverage with some exclusions and relative weighting constraints targeting market-like returns with a low tracking error relative to the S&P 500 and S&P World Index respectively.

Both new ETFs will be managed by Dina Ting (pictured), head of global index portfolio management, and Lorenzo Crosato, ETF portfolio manager, who have more than three decades of combined experience in the asset management industry and track records in managing ETF strategies.

Franklin Templeton has been continuously expanding its ETF range, most recently with the launch of its new Franklin US Dividend Tilt UCITS ETF for European investors and a new Franklin MSCI Emerging Markets Paris Aligned Climate UCITS Exchange-Traded Fund.