Franklin US Index

Charting a course toward stable growth

Details

Name Franklin US Index
Ticker FTUSLX
Weighting Method Risk Weighted
Rebalancing Frequency Daily
Calculation Frequency End of Day
Currency US Dollar
Inception Date November 13, 2017
   
Composition Smart Screen US Equity
10 Year US Treasury
5 Year US Treasury
Cash

"Smart Index" starts with a "Smart Screen"

Built on a "smart screen" foundation and focused on US Large Cap stocks, the Franklin US Index is enhanced by its MarketNav Technology, which reacts to changing market conditions in an effort to create a smoother ride over time.

SMART SCREEN

250 US stocks selected to seek growth

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MARKETNAV TECHNOLOGY

Reacts to changing conditions in an effort to create a smoother ride over time

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FRANKLIN US INDEX

Daily Blended Index

The equity component of the Franklin US Index starts with a “smart screen” approach to stock selection.

The smart screen starts with a list of 1000 well-recognized US stocks and looks for those that demonstrate financial Quality and Value—two factors our research shows are important contributors to stock performance.

We also look at technical signals such as Momentum and Low Volatility. All four factors are then strategically combined to seek to achieve a lower level of risk and higher risk-adjusted performance over to the long term, when compared to traditional market-cap weighted indexes.

Approximately the top 250 stocks are then selected to act as the growth engine of the index.


MARKETNAV TECHNOLOGY

The Franklin US Index was designed to react daily to changing market dynamics and provide a smoother ride over time.

The Franklin US Index shifts exposure to stocks, when market conditions appear favorable, to help drive performance. Stocks have historically shown the strongest growth potential over time. The Franklin US Index is designed to have higher exposure to equities during periods of lower volatility.

MarketNav Technology in different market conditions

In calmer seas, the index retains a higher stock allocation which helps boost the engine’s performance. When markets are calmer, the index’s MarketNav Technology reacts by shifting exposure to stocks in search of long-term growth potential.

In choppier seas, the index uses bonds to smooth the ride. If interest rates are rising, the index's MarketNav Technology reacts by choosing 5-year US treasuries. In the same way, if interest rates are falling, the index's MarketNav Technology chooses 10-year US treasuries1.

In stormier seas, cash is used as a safe harbor. When markets become too volatile, the index's MarketNav Technology shifts into cash, helping with downside protection.



Chandra Seethamraju, PhD

Summary
Director of Quantitative Strategies
Franklin Systematic
Franklin Templeton Multi-Asset Solutions
San Mateo, California, United States
Experience: 2000, Tenure: 2013

Chandra Seethamraju is the director of quantitative strategies at Franklin Systematic, the quantitative hub of Franklin Templeton Multi-Asset Solutions. His research focuses on empirical research to support the different investment strategies that the group offers. He is also responsible for developing the models and the methodology behind Franklin Templeton's Smart Beta ETF's.

Prior to joining Franklin Templeton Investments in 2013, Dr. Seethamraju was a vice president and senior research analyst at Mellon Capital Management in San Francisco where he developed quantitative active equity stock selection strategies for seven years. Prior to that, Dr. Seethamraju spent six years as an assistant professor at Olin Business School, Washington University in St. Louis focusing on academic equity research.

Dr. Seethamraju earned his Ph.D. in business administration with a focus on accounting from NYU's Stern School of Business, an M.B.A. in finance from Drexel University and a bachelor's degree in commerce from Osmania University in Hyderabad, India. He is a Chartered Accountant (Institute of Chartered Accountants of India, inactive) and a member of the American Accounting Association.

Vaneet Chadha, CFA

Summary
VP / Director of Style Premia &
Volatility Management
Franklin Systematic
Franklin Templeton Multi-Asset Solutions
San Mateo, California, United States
Experience: 2009, Tenure: 2012

Vaneet Chadha is director of Style Premia and Volatility Management for Franklin Systematic, the quantitative hub of Franklin Templeton Multi-Asset Solutions (FTMAS). He is a member of the FTMAS Investment Strategy and Research Committee. Vaneet supports style premia strategies at Franklin Systematic and is also named co-portfolio manager on style premia products (ETF and UCITS). Vaneet is also a co-portfolio manager for the Volatility Cap on an Asia-based institutional multi-asset account. Additionally, Vaneet supports Fixed Indexed Annuity FIA index business at Systematic too. Along with his direct manager, Dr. Chandra Seethamraju, Director of Quantitative Strategies, Vaneet was instrumental in helping launch first ever Franklin Index in FIA (FTUSLX ) space in 2017. Throughout the years 2012-2015, Mr. Chadha was a senior member of the firm's GTAA (Global Tactical Asset Allocation) portfolio management and investment research team specifically focusing on Global Equity Value and Global FX Carry strategies inside GTAA.

Prior to joining Franklin Templeton in 2012, Mr. Chadha worked at Citadel LLC, where most recently he worked as a quantitative developer supporting long/short relative value credit strategies. Previously at Citadel, he also completed a financial technology associate rotation program working for various businesses such as options market making and global equities.

Mr. Chadha holds a Bachelor of Computer Engineering from University of Delhi and a Master of Science in Quantitative and Computational Finance from Georgia Institute of Technology. He is a Chartered Financial Analyst (CFA) charterholder.

Important Legal Information

This information is not personalized investment advice or an investment recommendation from Franklin Templeton, and is intended for use only by a third party financial advisor, with other information, as a resource to help build a portfolio or as an input in the development of investment advice for its own clients. Such financial advisors are responsible for making their own independent judgment as to how to use this information. Franklin Templeton does not have investment discretion over or place trade orders for any portfolios or accounts derived from this information. Performance of any account or portfolio derived from this information may vary materially from the performance shown herein. There is no guarantee that any investment strategy derived from this information will be successful or achieve any particular level of results. Please consult your financial advisor for more information.

The Franklin US Index (the "Index") is owned by Franklin Templeton ("Franklin"), and is calculated and maintained by S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices, LLC).  The Index is not sponsored by S&P Dow Jones Indices, their affiliates or their third party licensors (collectively, "S&P Dow Jones Indices").  Franklin and S&P Dow Jones Indices (collectively, "Index Parties") will not be liable for any errors, omissions or interruptions in calculating the Index. The Index Parties make no representations or warranties, express or implied and shall have no liability with respect to the adequacy, accuracy, timeliness and/or completeness of the Index. Products based on the Index are not sponsored, endorsed, sold or promoted by the Index Parties and the Index Parties have no responsibilities, obligations or duties to purchasers of such products. Franklin Templeton®, Franklin®, Franklin US Index, and the corresponding logos are trademarks of Franklin. S&P® is a registered trademark of Standard & Poor's Financial Services LLC, and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC.

Fixed indexed annuities are insurance contracts, not registered securities or stock market investments. Fixed indexed annuities are not invested in the index itself, but rather interest is credited based on the performance of the index and the rules prescribed in the insurers index crediting strategy. Fixed indexed annuities are not issued by Franklin Templeton.

This information should not be relied upon as investment advice, research, or a recommendation by Franklin Templeton Multi-Asset Solutions (FTMAS) regarding (i) any products tied to the Franklin US Index, (ii) the use or suitability of the Franklin US Index or (iii) any security in particular. FTMAS is a global investment management group dedicated to multi-strategy solutions and is comprised of individuals representing various registered investment advisory entity subsidiaries of Franklin Resources, Inc., a global investment organization operating as Franklin Templeton.

This material is strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any product or security or to use any index. There is no guarantee that any strategies utilizing the index will be effective or successful. Multi-asset indices and diversification do not promise any level of performance, success, or guarantee against loss of principal. It is not possible to invest directly in an index.

The hypothetical performance information presented herein does not reflect the results of actual trading and calculation of the index levels and performance do not reflect the fees and expenses that an investor would pay. These fees and expenses would cause the actual and back-tested performance of the index to be lower. For example, if an investor invested $100,000 in an investment product that returned 10% ($10,000 in gains) over a 12-month period and was charged an asset-based fee of 1.5% at the end of the period on the investment plus gains (a $1,650 fee), the investor's net return would be 8.35% ($8,350). Over three years, an annual 1.5% fee taken at the end of each year with the same assumed 10% return per year would result in a cumulative gross return of 33.10% but a net return (after $5,375 in fees) of 27.2%.

WHAT ARE THE RISKS?

Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in an investment portfolio adjust to a rise in interest rates, the performance of the index may decline.

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