Franklin Investment Grade Corporate ETF

Franklin Investment Grade Corporate ETF (FLCO) is an actively managed Franklin Templeton fund. It holds mostly US dollar bonds from investment-grade companies, and big US banks such as Morgan Stanley, Bank of America and JPMorgan make up much of its top holdings. It pays monthly, with a trailing yield of 4.94% as of October 27, 2026. Its 0.35% expense ratio is the highest among eight comparable funds, which average 0.10%.

• Over the year to Oct 27, 2026, FLCO returned -1.9%, 7th of 8 among similar funds.
• Its 5-year annualized return was -0.5% and its 10-year +2.0%.
• In the 2020 COVID crash it fell 18.6% and regained its old high 2.9 months after the low.
• Its worst full calendar year was 2022 (-16.1%); its best was 2019 (+14.8%).
• The deepest fall in its price history was 22.7% (Dec 31, 2020 to Oct 20, 2022), not yet recovered.

As of Jun 30, 2026, the fund held 226 securities; the ten largest made up 11.58% of assets.

The bonds mature in 10.9 years on average (weighted by size), with an average coupon of 4.7%.

• Over the three months to Jun 30, 2026, investors withdrew a net $5.3M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.46%, +0.73%, +0.19%.

FLCO does not track an index. Instead, Franklin Templeton's managers choose the bonds. Under normal conditions the fund keeps at least 80% of net assets in investment-grade corporate debt. That means bonds in the top four rating tiers: BBB- or better from S&P, or Baa3 or better from Moody's. Unrated bonds the manager judges to be of similar quality also count. The managers pair a "top-down" view of the economy with "bottom-up" research on sectors and companies. They may also use quantitative (computer-based) models. They also set the fund's duration, a measure of how sharply its price reacts to interest rate changes.

The fund has no fixed rebalancing schedule. The manager may sell a bond if its price passes the manager's fair-value target, if the issuer's credit outlook gets worse, if views on the economy or a sector change, or if a better bond becomes available. Portfolio turnover was 32%, according to the prospectus.

The rules allow bonds of any maturity. Up to 40% can be foreign, up to 15% can be in currencies other than the dollar, and up to 15% can be in CDOs and CLOs (pools of loans split into slices). The fund can also use futures and swaps, which can add leverage. As of June 30, 2026, it held 227 positions with an average maturity of 10.9 years, 1.22% in cash and no derivatives.

• FLCO charges 0.35% a year, versus an average of 0.1% for the similar funds below (8th of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $36 in the first year and $443 over 10 years (assuming a 5% annual return).

FLCO pays monthly from a portfolio of investment-grade corporate bonds, with a trailing yield of 4.94% as of October 27, 2026.

FLCO could add a monthly income stream from high-quality company bonds. It does not protect against stock crashes. In the 2020 COVID sell-off it fell 18.6% in under two weeks, but it recovered in about three months. Rising interest rates did more damage: it dropped 19% in 2022, lost 16.17% for that calendar year, and took about 36 months to recover. Its deepest decline was 22.7%, from its December 2020 high, and it had not regained that high as of October 27, 2026. The fund launched in 2016, so it has no 2008 record. Someone drawing income in a bad year might have to sell shares at a loss. The 0.35% fee is well above the 0.10% average of similar funds. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).