Franklin Templeton Investments on Tuesday launched two active municipal bond exchange-traded funds that double its roster of active fixed-income ETFs.
The Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI) invests in municipal securities rated in any rating category, including below investment grade and defaulted securities, and seeks to maintain a dollar-weighted average portfolio maturity of three to 10 years. The fund is managed by James Conn, senior vice president and portfolio manager; Christopher Sperry, vice president and portfolio manager and Daniel Workman, vice president and portfolio manager.
The Franklin Liberty Municipal Bond ETF (FLMB) only invests in municipal securities rated—at the time of purchase—in one of the top four ratings categories by one or more U.S. nationally recognized rating services or comparable unrated or short-term rated securities, and seeks to maintain a dollar-weighted average portfolio maturity of five to 15 years. The fund is managed by Conn, Sperry and Nicholas Bucklin, vice president and portfolio manager.
Both funds have a net expense ratio of 0.30 percent.
In a press statement, Patrick O’Connor, head of global ETFs at San Mateo-based Franklin Templeton Investments, said the two new ETFs leverage the company’s $71 billion-plus municipal bond platform.
Muni bonds are exempt from federal taxes, as well as from state taxes because bonds issued in a particular state are exempt from that state's income tax. According to the company, the FLMI and FLMB funds are generally differentiated by the dollar-weighted average portfolio maturity levels they target and the credit ratings of municipal securities they may purchase.
Franklin Templeton’s LibertyShares ETF platform comprises six actively managed funds—two equity funds and now four fixed-income funds, as well as a suite of seven smart beta funds.
The overall platform had more than $920 million in assets under management as of August 31, 2017.