Neither of these ETFs holds special appeal

Article Excerpt

Here we take a closer look at two relatively new North American ETFs. This month’s selections include a quantitative, low-volatility Canadian equity ETF and a global pet-products ETF. FRANKLIN LIBERTY RISK MANAGED CANADIAN EQUITY ETF $21.04 (Toronto symbol FLRM; Market cap: $12.7 million) aims to invest in Canadian equities to generate capital gains, but with lower volatility. The fund does not provide much detail on how it will reduce volatility except that it uses a “black box” rules-based model to select stocks “based on a mix of historical and projected financial and stock-market data. That system is designed to identify factors measuring growth, value, risk and momentum. It also states that it may purchase put options to reduce downside risk and may also hold cash while seeking investment opportunities. The ETF holds a large portfolio of 137 stocks of which the top 10 represent 48% of its assets. Financials (32%) are the biggest component, while Industrials (21%) and Energy (17%) are other major portions. Top holdings include…

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