What Is the FSML ETF? Returns, Expense Ratio, Holdings, and Alternative ETFs Explained
The Franklin Small Cap Enhanced ETF (FSML) is an actively managed fund that selects U.S. small caps from the Russell 2000 universe using a multi-factor strategy and conviction signals from affiliated managers. It is a useful reference for investors weighing the small-cap outlook and related funds.
SubscribeWhat Is the Franklin Small Cap Enhanced ETF?
It is an active ETF that selects stocks from the Russell 2000 small-cap universe by combining a multi-factor model with conviction signals from affiliated managers.
It suits investors who seek small-cap excess returns and have confidence in active management.
The ETF is actively managed by Franklin Templeton.
How Does the Franklin Small Cap Enhanced ETF Invest?
| Item | Details |
|---|---|
| Universe | Russell 2000 small caps |
| Management style | Active (multi-factor + conviction signals) |
| Rebalancing frequency | Monthly |
| Dividend frequency | Quarterly |
| Total expense ratio | 0.45% |
The fund evaluates small caps with a multi-factor model covering quality, value, sentiment, and alternative signals. It also incorporates conviction signals drawn from stock-level positioning among affiliated specialist managers to build the portfolio. Monthly rebalancing maintains the target exposures.
- Portfolio construction that goes beyond a simple factor model by adding conviction signals from affiliated managers
- Monthly rebalancing, so signals are reflected at a relatively short interval
Franklin Small Cap Enhanced ETF Size and Costs (AUM and Management Fee)
Assets under management (AUM) stand at $150.9M, and the total expense ratio is 0.45% per year.
Compared with passive index-tracking ETFs in the same small-cap category, an actively managed fund differs in its fee level and its method of selecting stocks.
Franklin Small Cap Enhanced ETF Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe small-cap category tends to be more volatile than large caps depending on interest rates and the economic cycle, and whether an active strategy delivers excess returns can vary with market conditions.
As a recently launched active small-cap ETF, it is still seeing early-stage fund flows, and the size of inflows may change as market interest in small caps shifts.
Franklin Small Cap Enhanced ETF Strengths and Weaknesses
Its active strategy combining multiple factors with conviction signals from affiliated managers is its strength, while the short track record and the volatility typical of small caps deserve attention.
💪 Key Strengths
⚠️ Points to Watch
Franklin Small Cap Enhanced ETF Alternative and Related ETFs
Products such as HELO and FHEQ, which use hedged strategies, CBOX, which uses a collateral structure, INFO, a large-cap dynamic strategy, and CAOS, which specializes in tail-risk hedging, each respond to market volatility in a different way and are worth comparing with this fund's pure small-cap active strategy. As passive small-cap alternatives, you can also consider IWM, which tracks the Russell 2000 directly, VB, a low-cost core small-cap product, and IWN, which focuses on small-cap value stocks.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 HELO | JPMorgan Hedged Equity Laddered Overlay ETF | $68.55 | -0.4% | $4.9B | 0.50% | 0.57% | +4.2% |
 CBOX | Calamos Tax-Aware Collateral ETF | $102.37 | +0.0% | $1.8B | 0.14% | - | - |
 FHEQ | Fidelity Hedged Equity ETF | $32.80 | -0.3% | $992.5M | 0.48% | 0.6% | +5.8% |
 INFO | Harbor PanAgora Dynamic Large Cap Core ETF | $27.37 | -0.4% | $939.8M | 0.35% | 0.31% | +11.4% |
 SFTY | Horizon Managed Risk ETF | $31.21 | -0.5% | $802.2M | 0.77% | 0.17% | +11.4% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| BE | Bloom Energy Corp | 0.05% | $185.42 | -4.4% | $54.8B | 114.8 | - |
 GH | Guardant Health Inc | 0.03% | $155.35 | -2.2% | $21.0B | - | - |
 TXG | 10x Genomics Inc | 0.02% | $62.90 | -3.3% | $8.2B | - | - |
 GPOR | Gulfport Energy Corp | 0.02% | $161.91 | +4.1% | $2.8B | 6.2 | - |
 WGS | GeneDx Holdings Corp | 0.02% | $54.83 | -16.6% | $1.6B | - | - |
 CRDO | Credo Technology Group Holding Ltd | 0.02% | $129.80 | -2.3% | $24.4B | 46.3 | - |
 BOX | Box Inc | 0.02% | $42.55 | +2.2% | $5.8B | 61.4 | 0.08% |
 VICR | Vicor Corp | 0.01% | $161.68 | -1.1% | $7.5B | 42.4 | - |
Franklin Small Cap Enhanced ETF Investor Checkpoints
Here are the points to review before investing in FSML. You should first check the cost burden of active management, the volatility typical of small caps, and the still-short track record.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense ratio | Check the level of the total expense ratio under active management | Higher than passive |
| 📊 Track record | Long-term performance data is limited due to the recent launch | Building up |
| 📉 Small-cap volatility | Check volatility across economic and interest rate phases | On the high side |
| 🔄 Rebalancing | Check turnover resulting from monthly rebalancing | Maintained monthly |
The high volatility typical of small caps and the relatively high cost of active management are the main risk factors. With such a short track record, the strategy's long-term effectiveness is still being validated.
As an active small-cap product that combines multiple factors with conviction signals from affiliated managers, it can be an alternative for investors seeking excess returns. If you want low-cost passive exposure, index-tracking products such as IWM and VB may be a better fit.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of July 2, 2026.
Today's 5 AI picks, all free