Franklin Systematic Style Premia ETF

Franklin Systematic Style Premia ETF (FLSP) is an actively managed fund that aims for "absolute return," meaning gains whether markets rise or fall. It bets for and against stocks, bonds, commodities and currencies, mostly through derivatives. Over the year to October 27, 2026, it barely moved with the stock market. Its 0.65% expense ratio is far above the 0.26% average of the similar funds it was compared with.

• Over the year to Oct 27, 2026, FLSP returned +12.0%, 7th of 9 among similar funds.
• Its 5-year annualized return was +8.4%.
• Its worst full calendar year was 2022 (+0.3%); its best was 2025 (+15.5%).
• The deepest fall in its price history was 9.5% (May 27, 2022 to Nov 30, 2022), recovered by Aug 14, 2023.

As of Jun 30, 2026, the fund held 269 securities; the ten largest made up 13.92% of assets, and 23.26% sat in cash and money-market holdings.

By sector

• Over the three months to Jun 30, 2026, investors added a net $257.3M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.81%, +0.56%, +0.77%.

FLSP does not track an index. Franklin Templeton's managers split its money between two rules-based strategies. The first is a "top-down" strategy. It buys some markets and bets against (shorts) others across stocks, bonds, commodities and currencies. To do this it mostly uses futures, currency forwards and total return swaps, which are contracts that pay the return of an asset or index without the fund owning it. It looks for three traits. Value means assets that look cheap on measures like price-to-earnings or dividend yield. Momentum means assets that rose over roughly the past year. Carry means higher-yielding assets, such as currencies with higher interest rates.

The second is a "bottom-up" stock strategy. It holds some individual stocks and shorts others based on quality (return on equity, earnings stability, debt), value and momentum, including analyst earnings forecasts. Most short bets are made through equity index futures and swaps. The managers divide money between the two strategies by each one's estimated risk, using models built on past returns.

Derivatives let the fund use leverage, so its market exposure can be larger than its assets. As of June 30, 2026, it had 269 holdings and 58 derivative positions, including Canadian and UK government bond futures. Stocks made up 67.1% of assets and cash 23.26%. Micron (1.9%) and Alphabet (1.8%) were the largest stocks. Portfolio turnover was 68%.

• FLSP charges 0.65% a year, versus an average of 0.26% for the similar funds below (9th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $66 in the first year and $808 over 10 years (assuming a 5% annual return).

FLSP's long-and-short, multi-asset approach has moved largely apart from stocks, with a one-year beta of 0.02 as of October 27, 2026.

FLSP could add returns that don't depend on the stock market. During the 2022 bear market, from January 3 to October 12, its price rose 1.9%. It still fell 9.5% from May 27 to November 30, 2022, and only got back to its earlier high on August 14, 2023. Its worst calendar year was 2020, when it lost 14.79%. That year included a 6.76% drop in the first quarter. It launched in December 2019, so it has no record for 2008. A retiree forced to sell in a year like 2020 would have locked in losses. It pays income once a year, and its trailing yield was 2.46% as of October 27, 2026. Costs are high: $66 in year one and $808 over 10 years, using the SEC's standard $10,000 example. 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.