As investors look for alternative ways to diversify away from the Bloomberg Barclays US Aggregate Bond Index, many are considering bond ETFs for municipal debt exposure.
“We think munis play a very important role in a client’s portfolio both as a diversifier and for tax-free income,” David Mann, Senior Vice President and Head of Capital Markets at Franklin Templeton, said at the recent Morningstar ETF Conference.
Franklin Templeton recently launched the actively managed Franklin Liberty Intermediate Municipal Opportunities ETF (NYSEArca: FLMI) and the Franklin Liberty Municipal Bond ETF (NYSEArca: FLMB) to help ETF investors better access the municipal debt markets.
The Intermediate Municipal Opportunities ETF invests in municipal securities with a maturity of three to 10 years and may include debt of any rating, including those below investment grade and defaulted securities. The fund won’t focus on any single state and will not invest more than 15% of assets of a single state.