Episode summary
Innovation in ETFs: From Crypto to Autocallables
ETF Prime
· · 1 hr 1 min · Hosts: Nate Geraci, Simeon Hyman · Guests: David Mann, Matt Kaufman
Summary
Franklin Templeton said it has already surpassed its public goal of $50 billion in global ETF assets, up from a little over $30 billion roughly a year earlier, and the guest framed that growth as coming from three pillars: smart beta, index, and active ETFs. He highlighted strong inflows into funds such as LVHI, PVAL, FIN, and INCM, and argued that active ETFs have benefited both from performance and from a regulatory environment that now treats active and index ETFs more similarly.
The discussion also covered where Franklin is leaning next: more active ETF launches, selective dividend and income products, and broader use of ETFs for strategies the firm already runs in mutual fund or SMA form. The guest said the firm is watching the new ETF share class structure, but does not expect it to overwhelm the already large active ETF market. He also said the broader challenge will be distinguishing products and matching them to portfolio needs.
The second half focused on Calamos and its first autocallable ETF, CAIE, which the guest described as a way to package structured-note-like income in a more transparent, collateralized ETF wrapper. He said the strategy targets high, relatively stable coupons, while still carrying deep equity downside risk if markets fall far enough. A forthcoming NASDAQ 100 version, CAIQ, would push that idea into tech exposure with a somewhat higher income profile.
Key takeaways
- Franklin Templeton says it hit $50 billion in global ETF assets ahead of schedule and is using active ETFs as a major growth engine.
- The guest said PVAL, INCM, and FIN show that investors are still favoring active, value, multi-asset, and single-country exposures.
- He said Franklin is leaning into dividend and income launches, but is only cautiously assessing the ETF share class structure.
- Calamos argues CAIE turns a structured-note autocallable into a transparent ETF with nearly 100% collateralization and live risk disclosure.
- The guest said autocallable ETFs can deliver double-digit coupons, but investors must accept barrier risk and possible principal impairment in severe drawdowns.
- He said the next CAIQ fund will extend the strategy to the NASDAQ 100 and likely offer a slightly higher income profile.
Notable quotes
“we hit it last week. So, a lot of uh a lot of celebratory emails going around”
“the last few years have really been um a boon for active ETFs within the US”
“the simplest way to think of an auto call is like a bond that pays income and returns your principal at par”
“we've built a portfolio of a weekly ladder of auto callables that all have standardized terms”
How the episode opens
So, the simplest way to think of an auto call is like a bond that pays income and returns your principal at par as long as an equity underlying doesn't fall too far. All right, joining me will be David man, head of ETF product and capital markets at Franklin Templeton, who now has nearly $40 billion in US ETF assets. That's across 74 ETFs.
And of course, Franklin Templeton overall, we're talking about a nearly $1.7 trillion asset manager. But in terms of their ETF business, it has been a very strong year thus far. Already about 10 billion dollars in inflows into their US listed ETFs.
That includes products such as the Franklin International Low Volatility High Dividend ETF, ticker LVHI, the Putinham Focus Large Gap Value ETF, ticker PVAL. Those two alone have brought in several billion dollars combined. And as I was looking at the ETF lineup overall for Franklin, I'll tell you it's an interesting one.
Uh it spans both active and passive strategies. They have country specific ETFs, several flavors of fixed income ETFs. They do have a spot bitcoin and spot ether ETF, also a crypto index ETF.
It's a broad and unique ETF lineup. And so David and I are going to look at a handful of those ETFs. And we're also just going to discuss the growth of their ETF business overall, which is part of that.
I'm going to weave in a few broader ETF topics such as the multi-share class structure and where there's still white space in the industry, crypto. I think all of these could play into how Franklin might position for growth moving forward. So, David will join me here in just a moment.
And then later, I will be joined by Matt Kaufman, head of ETFs at Calamos.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- etf innovation
- crypto in etfs
- multi-share class structure
- autocallables
- income etfs
Companies and tickers mentioned
- Franklin Templeton
- Calamos
- Calamos Autocallable Income ETF
Watch the episode
Watch “Innovation in ETFs: From Crypto to Autocallables” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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ETF Prime, this episode and its artwork belong to Nate Geraci. Octagon is not affiliated with the show; this page is an independent summary.
