Franklin Templeton has changed the name, investment objective, and principal strategies of the Franklin Liberty Municipal Bond ETF (NYSE Arca: FLMB). Effective May 3, the fund was renamed the Franklin Municipal Green Bond ETF, and under normal market conditions, it will invest at least 80% of its net assets in municipal green bonds.

The actively managed fund will continue trading on the NYSE Arca Exchange under the FLMB ticker. The ETF will maintain its current policy to invest at least 80% of its net assets in municipal securities whose interest is free from federal income taxes, including the federal alternative minimum tax.

The ETF’s investment goal will now be to maximize income exempt from federal income taxes to the extent consistent with prudent investing and the preservation of shareholders’ capital.

A company spokeswoman said that the change was made because Franklin Templeton believes sustainable investment funds will continue to see an increase in demand, with U.S.-listed ESG funds and ETFs expected to reach $41 trillion in assets by the end of 2022. Money held in sustainable mutual funds and ESG-focused ETFs rose globally by 53% last year to $2.7 trillion, with a net $596 billion flowing into these investments. ESG-related assets account for one in three dollars managed globally.

Fixed income sustainable investment funds are a significant gap within the sustainable investment space. The ESG ETF space is dominated by equity strategies as fixed income ETFs make up roughly 7% of all ESG ETF assets, so the issuer believes investors will continue seeking exposure in the sustainable space, as Franklin Templeton has seen increasing investor demand for green strategies that also benefit from the ETF structure.

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