Franklin Templeton files two enhanced ETFs to absorb its international core funds

Franklin Templeton is folding two existing international core-equity portfolios into new ETF series and taking their performance records with them. The developed-international version of this product would be measured against JPMorgan International Research Enhanced Equity ETF AJIRE, which holds $11.1 billion at 0.24%. Newer listings in the same style still hold tens of millions, or less.

Thursday’s Rule 485(a) amendment, filed by Franklin Templeton ETF Trust, would add Franklin Core International Enhanced Equity ETF and Franklin Core Emerging Market Enhanced Equity ETF. The trust proposes that the paper become effective 75 days after filing. Tickers, listing venues, fee amounts and a start date remain blank. Neither series has commenced operations. Commencement is written only as “anticipated to occur on or about [ ].”

What the paper would transfer

Simultaneous with each start, the international series would acquire the assets and assume the liabilities of Franklin International Core Equity (IU) Fund. The emerging-market series would do the same for Franklin Emerging Market Core Equity (IU) Fund. Each exchange-traded fund would then adopt the predecessor’s performance and financial history under a plan of reorganization.

Franklin International Core Equity (IU) Fund had $396 million in net assets as of January 31, 2026. Franklin Emerging Market Core Equity (IU) Fund had $208 million. September 8 supplements to Fund Allocator Series shareholders say the board approved the reorganizations at a meeting on July 14-15.

A separate Form 497 on the US sibling is further along on timing. It says that on or about December 1, 2026, Franklin U.S. Large Cap Multifactor Index ETF AFLQL, which holds $2.12 billion, would be renamed Franklin Core U.S. Enhanced Equity ETF and repositioned from an index multifactor product. That is a different document. Thursday’s amendment covers only the two new international and emerging-market series.

A quantitative overlay on broad MSCI universes

Both proposed funds state an investment goal of capital appreciation. Franklin Advisers, through its Franklin Templeton Investment Solutions team, would run a multi-style quantitative process the filing describes as core: growth and value names, or stocks with characteristics of both.

The international fund would invest at least 80% of net assets in equities, predominantly in developed-market issuers outside the United States. Its investable universe generally includes the MSCI EAFE Index. It may put up to 10% of total assets in US and emerging-market securities, including through depositary receipts.

The emerging-market fund would invest at least 80% of net assets in equities of emerging-market issuers, using a universe that generally includes the MSCI Emerging Market Equity Index. It may put up to 10% of total assets in developed-market securities, including the United States. The paper flags China variable-interest-entity structures as a principal risk.

Security selection combines a proprietary multi-factor scoring model, covering quality, value and alternative factors among others, with an “alpha signal” the filing also calls a conviction factor. Quality, as defined here, pulls in profitability, leverage, management signaling and innovation metrics. On the emerging-market fund, the alpha signal is built from holdings data across actively managed emerging-market accounts run by Advisers and from specialized investment managers the filing calls sub-advisors, without identifying the firms. Brett E. Risser, portfolio manager of Advisers, is named on the emerging-market series and has run the predecessor since June 2026. The international series leaves the manager start date blank.

Fee-and-expense tables are in the document. The amounts are not. Until a later amendment fills them in, the price of the strategy is unknown.

Existing Franklin international ETFs

Franklin already sells developed-international and emerging-market equity in index form. The new series would be additions to that lineup.

Franklin International Core Dividend Tilt Index ETF ADIVI charges 0.09%. It starts from a developed-markets-ex-North-America parent index and optimizes for higher dividend yield. Franklin Emerging Market Core Dividend Tilt Index ETF BDIEM charges 0.19% and applies the same dividend-tilt idea to emerging markets. Those are index funds. Thursday’s paper describes active quantitative funds.

Putnam International Stock ETF DPGRI and Templeton International Insights ETF CTINS, listed in October 2025, both charge 0.55%. Franklin International Low Volatility High Dividend Index ETF ALVHI charges 0.40%, with a hedged low-volatility dividend mandate that is not this strategy.

Franklin has already sold a “core enhanced” quantitative sleeve in Europe. A January 2026 company release said a UCITS ETF would use the same Investment Solutions process as the Core Enhanced mutual funds launched for UK investors in 2025. Thursday’s US amendment does not carry over a tracking-error target or a fee from those offshore products. It only describes the factor model and the two reorganizations.

The enhanced-international slot is no longer empty

Developed-international enhanced and core products as of Friday, September 18:

Assets as of Friday, September 18, except —JINT, as of Thursday, September 17.

International Active Equity, the category that houses this style of product, now counts 57 funds. Avantis International Equity ETF AAVDE is larger than AJIRE, at $19.2 billion and 0.23%.

On the emerging-market side, EM Active Equity has 28 funds. Avantis Emerging Markets Equity ETF AAVEM holds $28.4 billion at 0.33%. JPMorgan ActiveBuilders Emerging Markets Equity ETF AJEMA holds $1.76 billion at the same fee. Goldman Sachs Data Enhanced Emerging Markets Equity ETF —GEMQ, listed September 11, holds $9.56 million at 0.40%. JPMorgan has a further research-enhanced filing of its own, JPMorgan All Country Research Enhanced Equity ETF sets 0.22% fee, ticker JALL, still in registration.

The fee Franklin eventually prints will decide where this product sits on that shelf. This amendment does not say. Rule 485(a) filings are reviewed, revised and sometimes delayed; a later amendment can change the names, the fees, or the plan of reorganization. Until the registration is effective, there is nothing to buy.