Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI)FLMI

Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI) Overview

Profile:

FLMI is an actively managed ETF that invests in intermediate-term municipal bonds exempt from federal income tax. It focuses primarily on investment-grade securities with maturities of 1-10 years. The ETF seeks to provide current income and capital appreciation.

Objective:

FLMI aims to provide a high level of current income exempt from federal income tax, while preserving capital.

Issuer:

The ETF is issued and managed by Franklin Templeton Investments, a global investment management organization with over 75 years of experience and over $1.5 trillion in assets under management.

Reputation and Reliability:

Franklin Templeton has a strong reputation in the industry, with numerous awards and accolades for its investment performance and client service.

Management:

The ETF is managed by a team of experienced portfolio managers with expertise in municipal bond investing.

Market Share:

FLMI has a market share of approximately 0.5% in the intermediate-term municipal bond ETF space.

Total Net Assets:

As of November 2023, FLMI has approximately $250 million in total net assets.

Moat:

FLMI's competitive advantages include:

• Experienced management team: The ETF benefits from the expertise of Franklin Templeton's experienced portfolio managers.
• Active management: The active management approach allows the portfolio managers to select individual bonds that meet the ETF's investment objectives.
• Tax-exempt status: The income generated by the ETF is exempt from federal income tax, making it attractive to investors in high tax brackets.

Financial Performance:

FLMI has a strong track record of performance, outperforming its benchmark index over the past 3 and 5 years.

Growth Trajectory:

The intermediate-term municipal bond market is expected to continue growing in the coming years, driven by factors such as low interest rates and increasing demand from institutional investors.

Liquidity:

FLMI has an average daily trading volume of approximately 100,000 shares, making it a relatively liquid ETF. The bid-ask spread is typically around 0.05%.

Market Dynamics:

Market dynamics that could affect FLMI include:

• Interest rate changes: Rising interest rates could lead to lower bond prices.
• Economic conditions: A strong economy could lead to increased demand for municipal bonds.
• Tax policy changes: Changes in tax policy could impact the attractiveness of municipal bonds.

Competitors:

FLMI's key competitors include:

• iShares National AMT-Free Muni Bond ETF (MUB) - Market share: 25%
• Vanguard Intermediate-Term Tax-Exempt Fund ETF (VTEB) - Market share: 20%
• SPDR Nuveen Bloomberg Barclays Intermediate Term Municipal Bond ETF (BND) - Market share: 15%

Expense Ratio:

FLMI has an expense ratio of 0.35%.

Investment Approach and Strategy:

FLMI invests in a portfolio of intermediate-term municipal bonds. The portfolio managers use a combination of fundamental and quantitative analysis to select bonds that meet the ETF's investment objectives.

Key Points:

• Seeks high level of current income exempt from federal income tax.
• Actively managed by experienced portfolio managers.
• Invests in investment-grade intermediate-term municipal bonds.
• Has a strong track record of performance.
• Relatively liquid ETF with low expense ratio.

Risks:

• Interest rate risk: Rising interest rates could lead to lower bond prices.
• Credit risk: The issuer of a bond could default on its obligations.
• Liquidity risk: The ETF may not be able to be sold quickly at a desired price.
• Market risk: The overall market could decline, leading to losses for the ETF.

Who Should Consider Investing:

FLMI is suitable for investors seeking:

• A high level of current income exempt from federal income tax.
• Exposure to intermediate-term municipal bonds.
• A actively managed ETF with a strong track record.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of FLMI's financials, market position, and future prospects, the ETF receives a 7 out of 10.

Justification:

FLMI's strengths include its experienced management team, active management approach, and strong track record. However, its market share is relatively small and it faces competition from larger ETFs. Overall, FLMI is a solid choice for investors seeking tax-exempt income from intermediate-term municipal bonds.

Resources and Disclaimers:

• Franklin Templeton Investments website: https://www.franklintempleton.com/investor/us/en/products/etfs/flmi
• Morningstar: https://www.morningstar.com/etfs/arcx/flmi/quote
• Bloomberg: https://www.bloomberg.com/quote/FLMI:US

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice.