Franklin Templeton debuted its first alternative exchange-traded fund on Monday, expanding its existing lineup of actively managed ETFs.

The Franklin Liberty Systematic Style Premia ETF (FLSP) is an absolute return fund that aims to produce positive returns in rising or falling markets by employing a multi-asset, long/short strategy. The fund seeks an annualized volatility of 8%, and targets four style factors: quality, value, momentum and carry.

As described in the prospectus, risk premium refers to the return that is expected for assuming a particular market risk. The fund’s strategies are twofold.

The first involves a top-down risk premia strategy focusing on value, momentum and carry factors and taking both long and short positions across equity, fixed income, commodity and currency asset classes. The exposure to the commodity and currency asset classes is obtained indirectly through the use of derivatives, while the exposure to the equity and fixed income asset classes is primarily obtained indirectly through the use of derivatives. Under normal market conditions, the top-down risk premia strategy invests mainly in equity, interest rate/bond and commodity index futures; equity and commodity-linked total return swaps; and currency forwards.

The second main approach involves a bottom-up long/short equity strategy focused on quality, value and momentum factors to determine whether to hold long or short positions in individual equity securities. According to the prospectus, under normal market conditions the bottom-up long/short equity strategy invests primarily in equity securities and equity total return swaps, with equity total return swaps being used to obtain short exposures.

The fund’s net expense ratio is 0.65%. It’s managed by Chandra Seethamraju, senior vice president and head of quantitative strategies for Franklin Templeton Multi-Asset Solutions. It will tap into firm’s factor-based research that underpins its LibertyQ smart beta ETFs.

Franklin Templeton now has 11 actively managed funds, and its overall ETF lineup consists of 41 products with nearly $4.5 billion in assets under management, according to