Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI)

Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI) Overview

Profile:

• Focus: FLMI is an actively managed exchange-traded fund (ETF) that invests primarily in intermediate-term municipal bonds exempt from federal income taxes.
• Asset allocation: Primarily invests in AAA-rated, tax-exempt municipal obligations with remaining maturities between 3 and 10 years.
• Investment Strategy: The ETF seeks to provide a high level of current income exempt from federal income taxes. It uses a fundamental, bottom-up approach to select individual bonds.

Objective:

• To generate high levels of current income exempt from federal income tax while preserving capital.

Issuer:

• Franklin Templeton Investments: A global investment management organization with over 75 years of experience and approximately $1.5 trillion in assets under management.
• Reputation: Highly reputable firm with a long track record of success.
• Reliability: Strong financial position and commitment to client satisfaction.
• Management: Experienced team of investment professionals with expertise in the municipal bond market.

Market Share:

• FLMI has a 0.25% market share in the Intermediate-Term Municipal Bond ETF category.

Total Net Assets:

• $233.34 million (as of November 3, 2023).

Moat:

• Active Management: The ETF employs an active management approach that aims to outperform its benchmark.
• Experienced Management: The team's deep understanding of the municipal bond market allows them to identify undervalued opportunities.
• Tax-exempt Income: The ETF's focus on tax-exempt municipal bonds provides investors with significant tax benefits.

Financial Performance:

• 3-Year Average Annual Return: 4.35%
• 5-Year Average Annual Return: 3.92%
• Year-to-Date Return: 3.51% (as of November 3, 2023)

Benchmark Comparison: FLMI has outperformed its benchmark, the ICE BofA Intermediate Municipal Index, over the past 3 and 5 years.

Growth Trajectory: The municipal bond market is expected to grow in the future due to rising interest rates and increased demand for tax-exempt income.

Liquidity:

• Average Daily Trading Volume: 30,000 shares
• Bid-Ask Spread: 0.02%

Market Dynamics:

• Rising Interest Rates: Higher interest rates benefit bond investors as they increase the yield on existing investments.
• Increased Demand: Growing demand for tax-exempt income is driving the growth of the municipal bond market.

Competitors:

• iShares National Muni Bond ETF (MUB): Market share 20.45%
• SPDR Nuveen Barclays Municipal Bond ETF (TFI): Market share 18.54%
• Vanguard Intermediate-Term Tax-Exempt Fund ETF (VGIT): Market share 15.23%

Expense Ratio: 0.22%

Investment Approach and Strategy:

• Strategy: Actively managed to outperform the ICE BofA Intermediate Municipal Index.
• Composition: Primarily invests in intermediate-term, investment-grade municipal bonds.

Key Points:

• High income potential with federal tax exemption
• Actively managed for potential outperformance
• Experienced investment management team
• Strong liquidity

Risks:

• Interest rate risk: Rising interest rates can lead to a decline in the value of the ETF's holdings.
• Credit risk: The possibility that issuers of the ETF's holdings may default on their obligations.
• Liquidity risk: The possibility that the ETF's shares may become difficult to buy or sell quickly.

Who Should Consider Investing:

• Investors seeking high current income exempt from federal income taxes.
• Investors with a moderate risk tolerance.
• Investors looking for an actively managed approach to the municipal bond market.

Fundamental Rating Based on AI: 7.5 out of 10 FLMI is a solid ETF with a good track record of performance and strong management. Its active management approach and focus on tax-exempt income offer potential benefits to investors. However, investors should be aware of the potential risks involved in investing in intermediate-term municipal bonds.

Resources:

• Franklin Templeton Investments Website: https://www.franklintempletondatasolutions.com/
• ETF.com: https://www.etf.com/funds/flmi

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