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Why are active ETFs gaining momentum?

Active ETFs are rapidly becoming a dominant force in asset management. In 2025, they accounted for 86% of all new U.S.-listed ETF launches, underscoring their accelerating adoption.1

Potential for better investment outcomes

Active ETFs give portfolio managers the flexibility to pursue opportunities based on research-driven insights—rather than simply tracking a benchmark like passive ETFs. This approach can help manage issuer-level concentration risk and adapt to changing market conditions.

Backed by global research expertise

Managed by Franklin Templeton investment professionals, these strategies are supported by global research teams with more than 75 years of experience delivering active investment solutions across market cycles.

The advantages of active management in an ETF

Active ETFs combine professional portfolio management with the structural benefits of the ETF wrapper, including:

  • Potentially lower operating costs
  • Intraday trading flexibility
  • Greater portfolio transparency
  • Operational efficiency under the ETF Rule2

Together, these features help make active ETFs a cost-efficient and flexible alternative to traditional mutual funds.

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Putnam Focused Large Cap Value ETF (PVAL)

Learn about one of our fastest-growing active ETFs.

Active muni bond ETFs

Explore our national and state-specific options.

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Our active ETFs

Available across fixed income, equity, multi-asset and alternative asset classes

Fixed income ETFs

Fixed income ETFs that span the credit quality and duration spectrums.

Equity ETFs

Equity ETFs that may be used either as core solutions or targeted exposures.

Multi-asset and alternative ETFs

Multi-asset and alternative ETFs that break the mold, seeking uncorrelated results.

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Insights from our active experts

Allocation Views: From Goldilocks to geopolitics—repositioning for an energy shock

In this month’s Allocation Views, the Middle East conflict and its impact on the global economy in 2026 continue to be the chief concern for asset allocation, as inflationary pressures challenge central bank policy.

From the US Market Desk: Discipline over emotion worked again. Earnings ahead.

Get ready each week with high-conviction insights that go beyond media headlines.

Municipal bond market monthly brief

Municipal bonds faced a choppy March as rising rates and heavy supply weighed on returns. With yields elevated and relative value attractive, the Franklin Templeton Municipal bond team feels municipals continue to offer compelling investment opportunities.

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  1. Source: Bloomberg. As of December 18, 2025.
  2. Source: SEC Adopts New Rule to Modernize Regulation of Exchange-Traded Funds https://www.sec.gov/news/press-release/2019-190.

Mutual Funds and ETFs, offer different choices to access professional investment management, but have important differences including with respect to fees, ownership structure, investment minimums, customization and tax efficiency.

Active ETFs are actively managed and there is no guarantee that the manager’s investment decisions will produce the desired results.

All investments involve risks, including possible loss of principal.

Distributions to shareholders may decline when prevailing interest rates fall or when a fund experiences defaults on debt securities it holds. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors.

ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.

For more information on any of our funds, contact your financial professional or download a free prospectus.

Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. Download a summary prospectus and/or prospectus, which contains this and other information. Please carefully read a prospectus before you invest or send money.

Franklin Distributors, LLC. Member FINRA/SIPC.

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