Is Franklin U.S. Mid Cap Multifactor Index ETF (FLQM) a Strong ETF Right Now?

A smart beta exchange traded fund, the Franklin U.S. Mid Cap Multifactor Index ETF (FLQM) debuted on 04/26/2017, and offers broad exposure to the Style Box - Mid Cap Blend category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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

FLQM is managed by Franklin Templeton Investments, and this fund has amassed over $1.67 billion, which makes it one of the average sized ETFs in the Style Box - Mid Cap Blend. 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

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.

FLQM's 12-month trailing dividend yield is 1.56%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

For FLQM, it has heaviest allocation in the Industrials sector --about 20.1% of the portfolio --while Consumer Discretionary and Financials round out the top three.

When you look at individual holdings, Old Dominion Freight Line (ODFL) accounts for about 1.31% of the fund's total assets, followed by Tapestry Inc (TPR) and Garmin Ltd (GRMN).

FLQM's top 10 holdings account for about 12.1% of its total assets under management.

Performance and Risk

So far this year, FLQM has lost about -2.14%, and was up about 5.24% in the last one year (as of 04/01/2026). During this past 52-week period, the fund has traded between $46.92 and $58.61.

FLQM has a beta of 0.97 and standard deviation of 14.45% for the trailing three-year period. With about 207 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 $91.27 billion in assets, iShares Core S&P Mid-Cap ETF has $106.2 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 Reports

This article originally published on Zacks Investment Research (zacks.com).

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