Franklin Templeton Debuts Two New Municipal Bond ETFs
San Mateo, CA, September 5, 2017 – Franklin Templeton Investments today announced the addition of 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,” said Patrick O’Connor, head of global ETFs at Franklin Templeton Investments. “Leveraging Franklin Templeton’s world class municipal bond platform with more than $71 billion¹ 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.2”
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 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.
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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Franklin LibertyShares platform of smart beta and actively managed ETFs leverages the investment expertise, active management insights and deep resources of Franklin Templeton Investments, a recognized global leader in asset management with 70 years of experience. Franklin LibertyShares has over $920 million in assets under management as of August 31, 2017. For more information, please visit https://www.libertyshares.com.
Important Information about the Funds
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the funds’ yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the funds adjust to a rise in interest rates, the funds’ share prices may decline. The Franklin Liberty Intermediate Municipal Opportunities ETF’s investments in lower rated bonds include higher risk of default and loss of principal. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond's issuer, insurer or guarantor, may affect the bond's value. The funds may invest a significant part of their assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns.
ETF 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 are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN/342-5236 or visit libertyshares.com. Please carefully read a prospectus before you invest or send money.
About Franklin Templeton Investments
The funds’ principal underwriter is Franklin Templeton Distributors, Inc., a wholly-owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 170 countries. Through specialized teams, the company has expertise across all asset classes – including equity, fixed income, alternative and custom solutions. The company’s more than 650 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in over 30 countries, the California-based company has 70 years of investment experience and over $752 billion in assets under management as of July 31, 2017. For more information, please visit franklintempleton.com.
- As of June 30, 2017, municipal bond assets under management include US retail municipal bond assets and separately managed accounts.
- For investors subject to the alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable. See fund prospectus for further details.