Franklin U.S. Mid Cap Multifactor Index ETF

Franklin U.S. Mid Cap Multifactor Index ETF (FLQM) tracks the LibertyQ U.S. Mid Cap Equity Index. The index picks about 200 mid-sized US companies from the Russell Midcap Index based on quality, value, momentum and low volatility. It aims for a smoother ride than the broad mid-cap market. However, its 0.30% expense ratio is above the 0.22% average of similar funds, and it trailed all of them over the year to October 27, 2026.

• Over the year to Oct 27, 2026, FLQM returned +10.8%, 9th of 9 among similar funds.
• Its 5-year annualized return was +7.6%.
• In the 2020 COVID crash it fell 37.3% and regained its old high 5.4 months after the low.
• Its worst full calendar year was 2022 (-12.9%); its best was 2021 (+28.8%).
• The deepest fall in its price history was 37.3% (Feb 19, 2020 to Mar 23, 2020), recovered by Sep 2, 2020.

As of Jun 30, 2026, the fund held 205 securities; the ten largest made up 11.28% of assets.

By sector

• Over the three months to Jun 30, 2026, investors withdrew a net $223.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +3.57%, +0.16%, +2.24%.

FLQM is an index fund. It tries to match the LibertyQ U.S. Mid Cap Equity Index before fees. FTSE Russell builds and calculates that index, starting from the Russell Midcap Index, which holds roughly 800 of the smallest companies in the Russell 1000. The index then scores those stocks on four "factors," or shared traits that help explain returns. Quality looks at measures such as return on equity and gross profit over assets. Value uses measures such as forward earnings yield and price to book value. Momentum looks at 6- and 12-month risk-adjusted price gains. Low volatility uses beta, which measures how much a stock swings compared with the market.

The index is rebuilt twice a year. At each rebuild, no company can make up more than 1% of the index, and the rules limit how much the holdings change. As of May 31, 2026, the index held 201 stocks worth between $911 million and $56.93 billion. The fund held 205 stocks as of June 30, 2026, and its 10 largest positions, led by Teradyne, United Airlines and Cincinnati Financial, made up 11.28% of assets.

The fund usually buys the index stocks directly. It may also hold a representative sample. It can use futures and total return swaps to put cash to work or to track the index more closely, though it reported no derivatives as of June 30, 2026. The fund never moves to defensive positions in falling markets.

• FLQM charges 0.3% a year, versus an average of 0.22% for the similar funds below (8th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $31 in the first year and $380 over 10 years (assuming a 5% annual return).

It adds mid-sized US companies screened for quality, value, momentum and low volatility to a portfolio usually built around large-cap stocks.

FLQM launched in April 2017, so it has no record from the 2008 financial crisis. In the 2020 COVID crash it fell 37.3% from February 19 to March 23, 2020, its deepest drop. It recovered by September 2, 2020, about five months later. The 2022 bear market was slower: the fund fell 21.9% by June 16, 2022 and took about 18 months to recover. Its worst calendar year was 2022, at -12.78%.

Anyone forced to sell shares during those stretches would have locked in losses. Income is modest: the fund yielded 1.62% over the 12 months to October 27, 2026, paid quarterly. Under the SEC's standard $10,000 example, costs come to $31 in the first year and $380 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.