Designed to provide broad exposure to the Style Box - Mid Cap Blend category of the market, the Franklin U.S. Mid Cap Multifactor Index ETF (FLQM) is a smart beta exchange traded fund launched on 04/26/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.61 billion, this makes it one of the average sized ETFs in the Style Box - Mid Cap Blend. FLQM is managed by Franklin Templeton Investments. FLQM, before fees and expenses, seeks to match the performance of the LibertyQ U.S. Mid Cap Equity Index.
The LibertyQ U.S. Mid Cap Equity Index includes U.S. mid-capitalization companies that have favorable exposure to four investment style factors - quality, value, momentum and low volatility.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FLQM are 0.30%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.61%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For FLQM, it has heaviest allocation in the Industrials sector --about 18.1% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Cincinnati Financial Corp (CINF) accounts for about 1.18% of the fund's total assets, followed by Allstate Corp (ALL) and Expedia Group Inc (EXPE).
The top 10 holdings account for about 11.13% of total assets under management.
Performance and Risk
The ETF has added roughly 9.64% and is up roughly 12.51% so far this year and in the past one year (as of 08/05/2026), respectively. FLQM has traded between $54.05 and $61.20 during this last 52-week period.
FLQM has a beta of 0.90 and standard deviation of 14.41% for the trailing three-year period. With about 209 holdings, it effectively diversifies company-specific risk .
Alternatives
Franklin U.S. Mid Cap Multifactor Index ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap Index Fund ETF Shares (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Vanguard Mid-Cap Index Fund ETF Shares has $109.13 billion in assets, iShares Core S&P Mid-Cap ETF has $126.16 billion. VO has an expense ratio of 0.03% and IJH changes 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Franklin U.S. Mid Cap Multifactor Index ETF (FLQM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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