Franklin Templeton Launches Templeton Emerging Markets Debt ETF (TEMD)

Key Terms

exchange-traded fund financial

An exchange-traded fund (ETF) is a type of investment fund that holds a collection of assets, such as stocks or bonds, and is traded on stock exchanges like individual stocks. It allows investors to buy and sell a diversified group of investments easily and efficiently, often at a lower cost. ETFs provide a simple way to gain exposure to a broad market or specific sectors without having to buy each asset separately.

derivatives financial

Derivatives are financial contracts whose value depends on the price or performance of another asset, such as a stock, bond, commodity, currency or interest rate. Investors use them to hedge against risk, to speculate on future price moves, or to gain exposure without owning the asset — like buying insurance or placing a leveraged bet — so they can both protect portfolios and magnify gains or losses, affecting risk and market liquidity.

sovereign credit spread financial

The sovereign credit spread is the extra interest a country must pay on its government bonds compared with a safer benchmark government bond. Think of it as the insurance premium investors demand to hold that country's debt: the bigger the spread, the higher the perceived risk of default or economic trouble. Investors watch it because widening spreads raise borrowing costs for the country and signal higher risk for portfolios holding that nation's assets.

hard-currency financial

A hard currency is a national money that is widely accepted and trusted around the world because its value stays relatively stable and it can be easily exchanged for other currencies. For investors, hard currency matters because holding or earning in such money reduces the risk that savings or returns will be wiped out by sudden devaluation or high inflation—think of it as keeping cash in a widely recognized, reliable form rather than in a local currency that might wobble.

local currency financial

The currency that is officially used for everyday transactions and accounting within a particular country or region. For investors, local currency matters because changes in its value relative to other currencies can raise or lower the real returns on foreign investments, affect a company’s revenues and costs when converted for reporting, and influence the local cost of borrowing—similar to how the value of gasoline affects the operating cost of running a car.

J.P. Morgan EMBI Global Diversified Index financial

A widely used bond benchmark that tracks U.S. dollar debt issued by emerging-market governments and government-related borrowers, with weights adjusted so large issuers don’t dominate the index. Think of it as a balanced basket showing how the market for emerging-market sovereign debt is performing; investors use it as a yardstick to compare returns, set prices for funds, and gauge broad risk and yield trends across many countries at once.

currency options financial

Currency options are financial contracts that give the holder the right, but not the obligation, to buy or sell a specific amount of one currency for another at a predetermined exchange rate by a certain date. Think of them like a one-sided reservation or insurance policy: investors use them to protect against sudden currency moves, to lock in favorable rates, or to bet on exchange-rate changes while limiting potential losses.

cross-currency forwards financial

A cross-currency forward is a private agreement to exchange one currency for another at a specific rate on a future date, used when the two currencies are not directly quoted or to avoid using a third currency as an intermediary. Investors use these contracts to lock the price of future foreign cash flows or to place bets on currency moves; think of it like agreeing today on the exchange rate for money you'll swap later, so you avoid surprises from fluctuating rates.

New actively managed ETF is designed to bridge U.S. dollar and local currency emerging markets debt exposures

SAN MATEO, Calif.--(BUSINESS WIRE)-- Franklin Templeton, a global investment leader, today announced the launch of the Templeton Emerging Markets Debt ETF (NYSE Arca: TEMD), an actively managed exchange-traded fund designed for investors seeking interest income and capital appreciation from emerging market debt while aiming to manage currency risk more dynamically.

TEMD expands Franklin Templeton’s actively managed fixed income ETF lineup, offering an emerging markets debt strategy positioned between fully U.S. dollar–denominated and fully local currency–denominated approaches. Unlike indexed strategies that are structurally tied to one currency segment, TEMD is designed to provide access across both segments of the market, offering the potential for attractive yield while seeking to actively manage currency exposure relative to local currency only strategies.

“The Templeton Global Macro team has over three decades of experience navigating emerging markets and evaluating interest-rate, currency, and sovereign credit spread opportunities in this sector on a country-by-country basis,” said Christine Yuhui Zhu, Co-Portfolio Manager of TEMD and member of the Templeton Global Macro Team. “TEMD is designed to give investors a research-driven, active approach that can allocate across both the hard and local currency segments while staying disciplined about risk.”

TEMD is built to combine a hard-currency anchor with flexibility to add select local currency and EM-currency opportunities, while using derivatives to help manage currency, rate and credit exposures. Under normal market conditions, the fund invests at least 80% of its net assets in emerging market debt securities and in derivatives and other instruments that provide similar investment exposure. The fund also invests at least 50% of its net assets in U.S. dollar denominated and euro denominated debt securities issued by emerging market countries included in the J.P. Morgan EMBI Global Diversified Index (and related derivatives). To the extent the fund invests in euro denominated debt securities, its euro currency exposure may be hedged back to the U.S. dollar, and the fund may use derivatives, including currency and cross-currency forwards and currency options, to efficiently adjust and manage exposures across currencies, interest rates, duration, and credit.

The fund applies a holistic, research-intensive approach that leverages multiple lenses, including in-depth country analysis, macroeconomic modeling, and local perspectives to uncover high conviction investment opportunities as identified by the portfolio management team. Alongside Christine Yuhui Zhu, additional portfolio managers from the Templeton Global Macro Team include Michael Sheehan, Vivek Ahuja, and Jaap Willems.

“We continue to see strong demand for research-driven active fixed income delivered through the ETF vehicle, especially in areas where investors want more flexibility than traditional index exposures can provide,” said David Mann, Head of ETF Product and Capital Markets at Franklin Templeton.

This launch represents a strategic expansion of Franklin Templeton’s fixed income ETF offerings and enhances the firm’s growing lineup of ETFs, which now spans 88 ETFs across active, passive, and smart beta strategies, with over $60 billion in ETF assets under management globally, as of January 9, 2026.

For more information, please visit Franklin Templeton ETFs and ETPs.

About Franklin Templeton

Franklin Templeton is a trusted investment partner, delivering tailored solutions that align with clients’ strategic goals. With deep portfolio management expertise across public and private markets, we combine investment excellence with cutting-edge technology. Since our founding in 1947, we have empowered clients through strategic partnership, forward-looking insights, and continuous innovation – providing the tools and resources to navigate change and capture opportunity.

To learn more, visit franklintempleton.com and follow us on LinkedIn.

Franklin Resources, Inc. [NYSE: BEN]

Important Information

ETFs and ETPs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs/ETPs net asset value. Brokerage commissions and ETF/ETP expenses will reduce returns.

ETF/ETP shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs/ETPs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.

What are the risks?

All investments involve risks, including possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. Currency management strategies could result in losses to the fund if currencies do not perform as expected. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. The portfolio is, or could become, non-diversified and may invest in a relatively small number of issuers, which may negatively impact the performance and result in greater fluctuation in value. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. The fund is newly organized, with a limited history of operations. These and other risks are discussed in the fund's prospectus.

Before investing, carefully consider a fund's investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at www.franklintempleton.com. Please read it carefully.

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Media Relations: Beverly Khoo (929) 773 4670,

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Source: Franklin Templeton