Launched on 04/26/2017, the Franklin U.S. Large Cap Multifactor Index ETF (FLQL) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Franklin Templeton Investments. FLQL has been able to amass assets over $2.04 billion, making it one of the larger ETFs in the Style Box - Large Cap Blend. FLQL, before fees and expenses, seeks to match the performance of the LibertyQ US Large Cap Equity Index.
The LibertyQ US Large Cap Equity Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000 Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000 Index that have favorable exposure to four investment style factors quality, value, momentum and low volatility.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.15% for FLQL, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.01%.
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.
FLQL's heaviest allocation is in the Information Technology sector, which is about 36.1% of the portfolio. Its Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 7.04% of total assets, followed by Nvidia Corp (NVDA) and Microsoft Corp (MSFT).
FLQL's top 10 holdings account for about 35.83% of its total assets under management.
Performance and Risk
Year-to-date, the Franklin U.S. Large Cap Multifactor Index ETF has added roughly 12.87% so far, and was up about 29.68% over the last 12 months (as of 06/22/2026). FLQL has traded between $61.39 $78.49 in this past 52-week period.
FLQL has a beta of 0.96 and standard deviation of 15.22% for the trailing three-year period. With about 217 holdings, it effectively diversifies company-specific risk .
Alternatives
Franklin U.S. Large Cap Multifactor Index ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard 500 Index Fund ETF Shares (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $825.88 billion in assets, Vanguard 500 Index Fund ETF Shares has $986.09 billion. IVV has an expense ratio of 0.03% and VOO changes 0.03%.
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 - Large Cap Blend
Bottom Line
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Franklin U.S. Large Cap Multifactor Index ETF (FLQL): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).