Franklin Templeton Investments added two new actively managed municipal bond exchange traded funds to help meet growing demand for yields.
On Tuesday, Franklin Templeton launched the actively managed Franklin Liberty Intermediate Municipal Opportunities ETF (NYSEArca: FLMI) and the Franklin Liberty Municipal Bond ETF (NYSEArca: FLMB). Both ETFs have a 0.30% net expense ratio.
“Creating a world class ETF business is our central objective, and we are delighted to unveil our new muni ETFs amid a surge in client interest in fixed income ETFs,” Patrick O’Connor, head of global ETFs at Franklin Templeton Investments, said in a note. “Leveraging Franklin Templeton’s world class municipal bond platform with more than $71 billion in assets under management, these actively managed ETFs seek to generate yield exempt from federal taxes, allowing investors to keep more of what they earn.”
Franklin Templeton’s James Conn and Chris Sperry will both be on the management team for both ETFs while Daniel Workman will also work on FLMI and Nicholas Bucklin will also work on FLMB.
The Intermediate Municipal Opportunities ETF will invest 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.
The Municipal Bond ETF is not much different from FLMI, but it will invest in muni securities with a longer maturity of five to 15 years and only hold securities rated in one of the top four ratings categories.
“The two ETFs are generally differentiated by the dollar-weighted average portfolio maturity levels they target and the credit ratings of municipal securities they may purchase,” according to a note.
For more information on new fund products, visit our new ETFs category.