Franklin Templeton Investments has added two new actively managed municipal bond ETFs to its Franklin LibertyShares lineup for US investors – Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI) and Franklin Liberty Municipal Bond ETF (FLMB) – expanding its active fixed income ETF offering.
“Creating a world class ETF business is our central objective, and we are delighted to unveil our new muni ETFs amid a surge in client interest in fixed income ETFs,” says Patrick OConnor, head of global ETFs at Franklin Templeton Investments. “Leveraging Franklin Templetons world class municipal bond platform with more than $71 billion in assets under management, these actively managed ETFs seek to generate yield exempt from federal taxes, allowing investors to keep more of what they earn.”
The new municipal bond ETFs, listed on NYSE Arca, seek to provide investors with a high level of current income that is exempt from federal income taxes by investing at least 80 percent of their net assets in municipal securities whose interest is free from federal income taxes, including federal alternative minimum tax. The two ETFs are generally differentiated by the dollar-weighted average portfolio maturity levels they target and the credit ratings of municipal securities they may purchase.
Franklin Liberty Intermediate Municipal Opportunities ETF (NYSE Arca:FLMI) may invest 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.
Franklin Liberty Municipal Bond ETF (NYSE Arca:FLMB) only invests in municipal securities rated, at the time of purchase, in one of the top four ratings categories by one or more US nationally recognised 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.
Through the LibertyShares ETF platform, the firm currently offers a suite of actively managed ETFs, which includes two equity funds and now four fixed income funds. LibertyQ, the smart beta suite, includes seven equity ETFs covering US, emerging markets, international and global equity strategies and an income-focused global equity strategy.
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