Franklin Liberty Federal Tax-Free Bond ETF (FLMB)

Franklin Liberty Federal Tax-Free Bond ETF (FLTF) Overview

Profile:

The Franklin Liberty Federal Tax-Free Bond ETF (FLTF) is an actively managed exchange-traded fund that invests primarily in U.S. government agency and instrument-backed securities that are exempt from federal income tax. The ETF aims to provide current income exempt from federal income taxes and preserve capital.

Objective:

FLTF's primary objective is to generate high current income exempt from federal income taxes while maintaining a high level of credit quality.

Issuer:

Franklin Templeton Investments is the issuer of FLTF. The company has a strong reputation and is a leading global asset management firm with over 75 years of experience.

Reputation and Reliability:

Franklin Templeton has a solid reputation and is known for its strong investment management capabilities and risk management practices.

Management:

The ETF's portfolio is managed by a team of experienced fixed income professionals at Franklin Templeton.

Market Share:

FLTF has a market share of approximately 1.2% within the federal tax-free bond ETF sector.

Total Net Assets:

The ETF has total net assets of approximately $3.2 billion as of November 10, 2023.

Moat:

• Active management: The ETF's active management approach allows the portfolio managers to select individual bonds that meet their specific investment criteria, potentially leading to better performance than passively managed tax-free bond ETFs.
• Experienced management team: Franklin Templeton's experienced fixed income team has a strong track record of managing tax-free bond portfolios.

Financial Performance:

• 1-Year trailing total return: 5.4%
• 3-Year trailing total return: 9.2%
• 5-Year trailing total return: 7.7%

Benchmark Comparison:

FLTF has outperformed its benchmark, the Bloomberg Barclays U.S. Treasury Federal Tax-Free Bond Index, over the past 1, 3, and 5 years.

Growth Trajectory:

The ETF has experienced steady growth in net assets and AUM over the past few years. The demand for tax-free income is expected to remain strong, which could further drive growth.

Liquidity:

• Average trading volume: Approximately 250,000 shares per day
• Bid-ask spread: Approximately 0.03%

Market Dynamics:

• Interest rate environment: Rising interest rates can negatively impact bond prices. However, FLTF's focus on shorter-maturity bonds could mitigate this risk.
• Economic growth: A strong economy can lead to increased demand for tax-free income.

Competitors:

• iShares National AMT-Free Muni Bond ETF (MUB) - Market share: 35%
• Vanguard Tax-Exempt Bond ETF (VTEB) - Market share: 25%
• SPDR Nuveen Barclays Short-Term Municipal Bond ETF (SHM) - Market share: 10%

Expense Ratio:

The ETF's expense ratio is 0.25%.

Investment Approach and Strategy:

• Strategy: Actively managed
• Composition: Primarily U.S. government agency and instrument-backed securities exempt from federal income tax.

Key Points:

• Seeks high current income exempt from federal income tax
• Actively managed by experienced fixed income professionals
• Strong track record of outperformance
• Relatively low expense ratio

Risks:

• Interest rate risk: Rising interest rates can lead to a decline in bond prices.
• Credit risk: The ETF may invest in bonds with below-investment-grade ratings, which carry a higher risk of default.
• Market risk: The ETF's value may fluctuate due to changes in market conditions.

Who Should Consider Investing:

• Investors seeking high current income exempt from federal income tax
• Investors with a low tolerance for risk
• Investors with a long-term investment horizon

Fundamental Rating Based on AI:

Based on an AI-powered analysis of FLTF's financial health, market position, and future prospects, the ETF receives a Fundamental Rating of 8 out of 10. The AI model considers various factors, including financial ratios, portfolio concentration, historical performance, and market trends, to arrive at this rating. This indicates that FLTF has a strong overall fundamental profile with potential for continued growth and success.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.

Resources and Disclaimers:

• Franklin Liberty Federal Tax-Free Bond ETF (FLTF) website: https://www.franklintempleton.com/products/etfs/us/en/etf-profile/fluf-etf
• Bloomberg Terminal
• Morningstar Direct

Disclaimer: The information presented here is accurate to the best of my knowledge as of November 10, 2023. However, the market and economic conditions are subject to change, and the current data may not reflect future performance. Please refer to the ETF's prospectus and other official sources for the most up-to-date information.