ETF Evaluator:
Franklin Small Cap Enhanced ETF ()
Follow This ETF
(as of Aug 26)
Best Performing in Small Blend Over the Last Year
| 55.4% | Invesco NASDAQ Future Gen 200 ETF (QQQS) |
| 45.8% | iShares Micro-Cap ETF (IWC) |
| 45.6% | First Trust Small Cap Core AlphaDEX® ETF (FYX) |
| 43.8% | Fidelity Enhanced Small Cap Core ETF (FESM) |
| 38.9% | Inspire Small/Mid Cap ETF (ISMD) |
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ETF Details
Franklin Small Cap Enhanced ETF Overview
Franklin Small Cap Enhanced ETF (FSML) is an actively managed U.S. Equity Small Blend exchange-traded fund (ETF). Franklin Templeton Investments launched the ETF in 2025.
The investment seeks long-term capital appreciation.
Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of small capitalization companies and in derivatives and other instruments that have economic characteristics and provide investment exposure similar to equity securities of small capitalization companies. The fund invests predominantly in common stock, but may also invest in preferred stocks, securities convertible into common stocks, and warrants and rights.
About Franklin Small Cap Enhanced ETF (FSML)
There are 3 members of the management team with an average tenure of 0.64 years: Adrian Chan (2025), Jacqueline Kenney (2025) and Eric Johnson (2025). Management tenure is more important for actively managed ETFs than passive index ETFs.
Franklin Small Cap Enhanced ETF has 299 securities in its portfolio. The top 10 holdings constitute 13.1% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.
Franklin Small Cap Enhanced ETF is part of the Equity global asset class and is within the U.S. Equity ETF group. Franklin Small Cap Enhanced ETF has 3.8% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 95.6% There is 3.8% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Franklin Small Cap Enhanced ETF has 0.6% of the portfolio in cash.
Assets Under Management
The fund has $146 million in total assets, which is below the $4 billion average for the Small Blend category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.
FSML Performance and Fees
The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Franklin Small Cap Enhanced ETF expense ratio is average compared to funds in the Small Blend category. Franklin Small Cap Enhanced ETF has an expense ratio of 0.45%, which is 6% higher than its category average, making the fund expense ratio grade a C. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.
High portfolio turnover can translate to higher expenses and lower aftertax returns. Franklin Small Cap Enhanced ETF has a portfolio turnover rate of 37%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 50% for the Small Blend category.
Recently, in the month of July 2026, Franklin Small Cap Enhanced ETF returned -4.2%, which earned it a grade of F, as the Small Blend category had an average return of -2.1%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.
Franklin Small Cap Enhanced ETF has a trailing yield of 0.00%, which is below the 1.17% category average.
The fund normally distributes its income quarterly and its capital gains annually.
It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.
Franklin Small Cap Enhanced ETF Grades
Year to date, the ETF has returned 20.6%, 2.7 percentage points better than the category, which translates into a grade of B.
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FSML Trailing NAV Total Returns Data as of 7/31/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| FSML Return (NAV) | -4.2% | 6.0% | na | na | na | na |
| FSML Return (Price) | -4.3% | 6.0% | na | na | na | na |
| NAV +/- Price Return | 0.027% | -0.017% | na | na | na | na |
| Small Blend Avg | -2.1% | 5.7% | 28.5% | 14.0% | 8.0% | 10.8% |
| FSML Grade (NAV) | F | C | na | na | na | na |
| +/- Category (NAV) | -2.2% | 0.3% | na | na | na | na |
| FSML Tax-Cost Ratio | na | na | na | na | na | na |
FSML Annual NAV Total ReturnsData as of 7/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| FSML Return (NAV) | 20.6% | na | na | na | na | na | na | na | na | na | na |
| FSML Return (Price) | 17.5% | na | na | na | na | na | na | na | na | na | na |
| NAV +/- Price Ret | -0.152% | na | na | na | na | na | na | na | na | na | na |
| Small Blend Avg | 18.0% | 8.7% | 11.7% | 16.3% | -15.9% | 24.0% | 12.7% | 24.8% | -9.2% | 14.4% | 19.6% |
| FSML Grade (NAV) | B | na | na | na | na | na | na | na | na | na | na |
| +/- Category | 2.7% | na | na | na | na | na | na | na | na | na | na |
| Risk Measures | |
| Beta: | na |
| R-Squared: | na |
| Standard Deviation: | na |
| Category Risk Index: | na |
| Category Risk Rating: | |
| Total Risk Index: | na |
| Total Risk Rating: | |
| Portfolio Characteristics | |
| Yield: | -- |
| Total Assets: | $ 147 Mil |
| Share Class Assets: | $ 147 Mil |
| Turnover: | 37.0% |
| Expense Ratio: | 0.45% |
| Index Fund: | No |
| Index Tracked: | N/A |
| Index Weighting: | 100% |
| Leveraged: | No |
| Socially Responsible Fund: | No |
| Capital Gains Distribution Frequency: | Annually |
| Income Distribution Frequency: | Quarterly |
Management Team
| Number of Managers: 3 | |||
| Longest Tenure: 0.6 years | |||
| Average Tenure: 0.6 years | |||
| Managers (Year): Chan Adrian (2025), Kenney Jacqueline (2025), Johnson Eric (2025) | |||
Portfolio Composition (as of 7/31/26)
| # of Holdings: | 299 |
| % in Top 10 Holdings: | 13.1% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 3.8% |
Portfolio Allocation |
|
| Domestic Stock: | 95.6% |
| Foreign Stock: | 3.8% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 0.0% |
| Foreign Bond: | 0.0% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 0.6% |
Purchase Information
| Legal Structure: | Open Ended Investment Company |
| Fund Family: | Franklin Templeton Investments |
| Phone Number: | 800-342-5236 |
| Website: | etf.franklintempleton.com |
| Inception Date: | December 9, 2025 |
Expenses and Fees
| Expense Ratio (%): | 0.45% (Rating: Avg) |
| Category Average Expense Ratio (%): | 0.42% |
