---
title: "FLQL drops its index strategy on Dec. 1, and a merger would replace its track record"
url: "https://etf.net/news/flql-drops-index-strategy-plans-merger-2026-11-02"
published_at: "2026-11-02T13:05:03.045Z"
updated_at: "2026-11-02T13:05:03.045Z"
byline: "ETF.net Research"
---

# FLQL drops its index strategy on Dec. 1, and a merger would replace its track record

The stated fee stays at 0.15%, and the filing's zero-fee waiver is tied to the mutual fund's existing shareholders, not to other investors.

By ETF.net Research. Published Nov 2, 2026.

The board of Franklin Templeton ETF Trust has approved dropping the index strategy of Franklin U.S. Large Cap Multifactor Index ETF, FLQL, on or about Dec. 1. The fund would become an actively managed portfolio seeking capital appreciation.

A [Sept. 8 supplement](https://www.sec.gov/Archives/edgar/data/1655589/000119312526385241/d351940d497k.htm) to the fund's prospectus says the board approved the new name, goal and strategy on Sept. 3. The fund would be renamed Franklin Core U.S. Enhanced Equity ETF, and the ticker stays.

The supplement says fees and expenses will not change because of those revisions. It sets Dec. 1 as the date and does not mention a merger or shareholder consent.

## What a merger would change at FLQL

A [registration statement](https://www.sec.gov/Archives/edgar/data/1655589/000207184426001640/ftetfffasiun1410302026.htm) the ETF trust filed on Oct. 30 proposes to move Franklin U.S. Core Equity (IU) Fund, an internal-use fund, into FLQL.

The statement solicits consent from that fund's shareholders. Holders of FLQL are not asked to consent.

The filing describes the Dec. 1 strategy as one designed to align the ETF with that mutual fund. With the repositioning, it says, Franklin Advisers, Inc. would be added as a sub-adviser and Franklin Templeton Institutional, the current sub-adviser, would not be kept.

If the reorganization closes, the mutual fund would become what the filing calls the accounting survivor, and FLQL would show that fund's historical returns instead of the record it built as an index fund. The filing anticipates a closing on or about Feb. 7, 2027.

As of Oct. 7, the mutual fund had $1.19 billion and FLQL had $2.21 billion. The filing puts the combined fund at $3.40 billion, so the mutual fund would account for about 35% of the combined assets.

The mutual fund is not sold to the public. A [Sept. 8 supplement](https://www.sec.gov/Archives/edgar/data/1022804/000165558926001236/c497.htm) to its prospectus says it is owned by other Franklin Templeton mutual funds and certain pension accounts managed by Franklin Advisers, and that approval was anticipated because of that structure. The registration statement's principal-holders exhibit, as of Aug. 13, shows Franklin Moderate Allocation Fund with 35% of the mutual fund's shares and Franklin Growth Allocation Fund with 32%, together about two-thirds.

In connection with the reorganization, the filing estimates that about 45% of FLQL's portfolio may be disposed of, apart from ordinary turnover, a share it says can change with the market. The ETF would bear the transaction costs, estimated at about $121,500, a figure the filing says can change.

The filing estimates the cost of the reorganization at about $147,000. Franklin Advisers and Franklin Advisory Services, LLC, the investment managers, would bear all of that except portfolio transaction costs.

The filing says the repositioning may use in-kind custom basket transactions, exchanging securities rather than selling them, and that gains should not be distributed to shareholders for that reason.

The ETF trust's board also approved the reorganizations and, the filing says, determined that existing shareholders of FLQL would not be diluted. The mutual fund's board approved the plan on July 14-15 and recommended that its shareholders consent.

## The 0.15% fee and the zero-fee waiver

The ETF's fee table stays at **0.15%**. Franklin Advisory Services has agreed to waive fees permanently at the client-account level for existing shareholders of the mutual fund, so those accounts would still see a net management fee of 0.00%.

The filing ties that waiver to former and existing shareholders of the mutual fund. It does not extend the waiver to other investors.

The filing says management recommended the reorganizations to the mutual fund's board in part so that fund's existing shareholders would keep a 0.00% net expense through the waivers.

Source: etf.net, https://etf.net/news/flql-drops-index-strategy-plans-merger-2026-11-02. Please cite the page URL.