Franklin Dynamic Municipal Bond ETF (FLMI)
ARCA ARCA Primary Summary
FLMI Chart
FLMI: Not Too Much Signs Of Stress, But Inflation Coming Back
Franklin Dynamic Municipal Bond ETF (FLMI) faces headwinds from rising yields and inflation expectations, especially due to the Iran War's impact on energy prices. FLMI's 7-year duration heightens sensitivity to upward yield curve shifts, making it less attractive versus cash or ultra-short duration fixed income. The ETF's 0.3% expense ratio is good compared to active alternatives, but significantly more than passive, though there is historical outperformance on FLMI.
FLMI: High-Quality Muni Bond ETF, Solid Tax-Advantaged Yield, Outperformance Since Inception
The Franklin Dynamic Municipal Bond ETF is an active muni bond ETF. It focuses on investment-grade munis, with a tax-advantaged 3.9% dividend yield. Before-tax income is competitive, after-tax income should be above-average for most investors in taxable accounts.
FLMI: Perfectly Sensible, Just Produces A Meagre Income
Franklin Dynamic Municipal Bond ETF offers diversified muni bond exposure but delivers an unimpressive 3.51% trailing yield. FLMI's strategy favors middle-to-short tenor and moderate credit risk, resulting in lower interest rate risk but only middling income. I believe more selective muni funds or those taking additional credit risk—without materially higher default risk—offer superior yields.
Franklin Dynamic Municipal Bond ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| TJD Thomas John Drogan PR Inc.IPAL SECURITIES Inc. | 23,389 | $572,599.39 | $583,906.38 | $11,306.99 | 1.97% |
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 37,867 | $936,996.66 | $945,349.65 | $8,352.99 | 0.89% |
 CliftonLarsonAllen Wealth Advisors CliftonLarsonAllen Wealth Advisors LLC | 5.23M | $128.91M | $130.62M | $1.71M | 1.33% |
 Asio Capital Asio Capital LLC | 363,936 | $8.9M | $9.07M | $169,442.6 | 1.9% |
| RR rosemary richard WCG Wealth Advisors LLC | 24,385 | $606,454.95 | $608,649.6 | $2,194.65 | 0.36% |
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Franklin Dynamic Municipal Bond ETF Profile
| ARCA Exchange | US Country |
Overview
The fund described focuses on investing the majority of its net assets in municipal securities that offer tax-free interest income, aiming to provide its investors with an income stream that is exempt from federal income taxes, including the federal alternative minimum tax. The investment strategy emphasizes tax efficiency by targeting securities whose interest payments are not subject to federal income taxes. However, it allows for flexibility by permitting up to 20% of the fund's net assets to be invested in securities that may generate interest subject to the federal alternative minimum tax or even in securities whose interest payments could be subject to other federal or state income taxes. This approach is designed to maximize tax-efficient returns while providing the fund with the flexibility to invest in a broader range of securities, potentially enhancing returns under certain market conditions.
Products and Services
- Tax-Free Municipal Securities
These are the primary investments of the fund, consisting of municipal bonds or other municipal securities that generate interest income exempt from federal income taxes. By investing in these securities, the fund aims to provide investors with a steady, tax-free income stream, making it an attractive option for tax-conscious investors seeking to maximize their after-tax returns.
- Securities Subject to the Alternative Minimum Tax (AMT)
While the fund primarily focuses on completely tax-free securities, it reserves the capability to invest up to 20% of its assets in securities whose interest may be subject to the AMT. This flexibility allows the fund managers to explore a wider range of investment opportunities that may offer higher returns, albeit with some potential tax implications for investors subject to the AMT.
- Securities Subject to Federal and State Income Taxes
Although not a primary focus, the fund has the discretion to invest in securities that pay interest subject to federal and state income taxes. This component of the fund's portfolio is carefully managed to prevent significant tax liabilities for investors, typically making up a minor portion of the overall investment strategy. The inclusion of these securities may be geared towards optimizing the fund's performance by tapping into opportunities outside the scope of entirely tax-free investments.
