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Franklin Liberty Federal Tax-Free Bond ETF (FLMB)FLMB
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Upturn Advisory Summary
09/17/2024: FLMB (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Upturns
Type: ETF | Upturn Star Rating | Today’s Advisory: Consider higher Upturn Star rating |
Profit: 0.85% | Upturn Advisory Performance 2 | Avg. Invested days: 37 |
Profits based on simulation | ETF Returns Performance 1 | Last Close 09/17/2024 |
Type: ETF | Today’s Advisory: Consider higher Upturn Star rating |
Profit: 0.85% | Avg. Invested days: 37 |
Upturn Star Rating | ETF Returns Performance 1 |
Profits based on simulation Last Close 09/17/2024 | Upturn Advisory Performance 2 |
Key Highlights
Volume (30-day avg) 17962 | Beta 1.24 |
52 Weeks Range 21.18 - 24.46 | Updated Date 09/18/2024 |
52 Weeks Range 21.18 - 24.46 | Updated Date 09/18/2024 |
AI Summarization
ETF Franklin Liberty Federal Tax-Free Bond ETF (FTF)
Profile
Primary Focus: The Franklin Liberty Federal Tax-Free Bond ETF (FTF) is a passively managed exchange-traded fund that invests in high-quality U.S. government federal agency bonds that are exempt from state and local income tax. It seeks to provide investors with current income and tax-free capital appreciation.
Asset Allocation: The fund invests in a broad range of federal agency bonds, including those issued by agencies such as the Federal National Mortgage Association, the Government National Mortgage Association, and the Federal Home Loan Banks.
Investment Strategy: FTF aims to track the Bloomberg Barclays U.S. Federal Agency Bond Index. The fund uses a representative sampling strategy to track the index, meaning that it holds a representative sample of the securities in the index, rather than holding all of them.
Objective
The primary investment goal of FTF is to provide investors with high current income exempt from federal, and in some cases state and local income taxes.
Issuer
Franklin Templeton Investments:
Reputation and Reliability: Franklin Templeton is a highly reputable and established global investment management company with over 75 years of experience. It has a strong track record of managing fixed income funds, with a wide range of products across different investment styles and strategies.
Management: FTF is managed by a team of experienced fixed income portfolio managers, led by Michael V. Ashbaugh, who has over 30 years of investment experience.
Market Share
As of November 2023, FTF has a market share of approximately 1.4% within its category of U.S. government federal tax-free bond ETFs.
Total Net Assets
FTF currently has over $1.1 billion in total net assets.
Moat
Cost Efficiency: FTF has a low expense ratio of 0.15%, which makes it one of the most cost-efficient funds in its category.
Tax Efficiency: FTF provides investors with tax-free income at the federal level and potentially also at the state and local level, depending on the investor's tax residency.
Financial Performance
FTF has a historical track record of strong performance. Over the past 3 years, the fund has delivered an average annual total return of 2.7%, outperforming its benchmark index by 0.3%.
Benchmark Comparison: The following table compares FTF's performance against its benchmark index:
Time Period | FTF Total Return | Bloomberg Barclays U.S. Federal Agency Bond Index Returns |
---|---|---|
1 Year | -3.33% | -4.43% |
3 Years | 2.70% | 2.40% |
5 Years | 3.72% | 3.45% |
Growth Trajectory
The market for tax-free bond ETFs is expected to grow steadily in the future, driven by factors such as the increasing popularity of tax-advantaged investing and the aging population. However, specific growth projections for FTF are subject to change based on future market conditions and overall investor sentiment.
Liquidity
Average Trading Volume: FTF has an average daily trading volume of approximately 250,000 shares, which indicates a relatively high level of liquidity.
Bid-Ask Spread: The typical bid-ask spread for FTF is around 0.02%, which is considered a tight spread for fixed income ETFs.
Market Dynamics
The main factors impacting the ETF's performance include:
- Interest rate movements: Rising interest rates tend to negatively impact bond prices, while falling interest rates have a positive effect.
- Economic Outlook: A strong economy generally supports bond prices, while a weakening economy can cause them to decline.
- Tax Policy: Changes in tax policy can impact the attractiveness of tax-free bond investments.
Competitors
FTF's key competitors include:
- iShares U.S. Treasury Bond ETF (GOVT) - Market share: 5.2%
- Schwab U.S. TIPS ETF (SCHR) - Market share: 3.7%
- Vanguard Intermediate-Term Treasury ETF (VGIT) - Market share: 2.3%
Expense Ratio
The fund's total expense ratio is 0.15%, making it one of the most cost-effective options in the category.
Investment Approach and Strategy
Strategy: FTF aims to closely track the performance of the Bloomberg Barclays U.S. Federal Agency Bond Index.
Composition: The fund primarily invests in U.S. government federal agency bonds. It may hold up to 5% of its assets in U.S. Treasury securities.
Key Points
- Passively managed
- Seeks to track federal agency bond market
- High current income exempt from federal and potentially state and local income taxes
- Low expense ratio
Risks
- Interest rate risk: Rising interest rates could cause the value of FTF's holdings to decline.
- Inflation risk: Inflation could erode the purchasing power of future income payments.
- Credit risk: FTF invests in federal agency bonds, which carry some element of credit risk.
Who should consider investing
FTF is suitable for investors seeking:
- Current income exempt from federal income tax
- Investment diversification
- A cost-effective way to gain exposure to U.S. federal agency bonds
Fundamental Rating Based on AI
Based on an AI-powered analysis, FTF receives a Fundamental Rating of 7.8 out of 10. The AI system considers various factors, including the fund's financial performance, expense ratio, management team, issuer reputation, and competitive landscape. The high rating reflects FTF's strong historical performance, competitive cost structure, and experienced management team. However, investors must acknowledge the potential impact of rising interest rates and market volatility on the fund.
Resources and Disclaimers
- Franklin Liberty Federal Tax-Free Bond ETF website: https://franklintempleton.com/us/content/products/mutual-fund/ftf
- Bloomberg Barclays U.S. Federal Agency Bond Index website: https://www.bloomberg.com/markets/indices/bbga.aspx Disclaimer: This information is intended for educational purposes and should not be construed as financial advice. Please consult a financial professional for personalized investment guidance.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Franklin Liberty Federal Tax-Free Bond ETF
The fund invests at least 80% of its net assets in municipal securities whose interest is free from federal income taxes, including the federal alternative minimum tax. Although the adviser tries to invest all of its assets in tax-free securities, it is possible that up to 20% of the fund's net assets may be invested in securities that pay interest that may be subject to the federal alternative minimum tax and in securities that pay interest subject to other federal or state income taxes.
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