The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Franklin Dynamic Municipal Bond ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The management team doesn't personally invest much alongside shareholders. This is a large contributor to the strategy's Below Average People Pillar. The strategy earns an Average Process Pillar rating.  The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. Franklin Dynamic Municipal Bond ETF earns an Average Process Pillar rating.    The most important driver of the rating is the experience of the management team, which averages 26 years at this fund. Strong risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 37%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the High Yield Muni Morningstar Category, this fund's cash position and interest-rate sensitivity are historically in line with peers over the past few years. 

 This strategy's 12-month yield is 3.8%, lower than its average peers' 4.0%. While a lower yield may deliver less income, it also tends to indicate lower credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been lower than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BB.

Average

Process

Franklin Dynamic Municipal Bond ETF earns a Below Average People Pillar rating. The team benefits from the experience of the management team, which averages 26 years at this fund. However, the rating is limited by the parent firm's five-year success ratio of 37%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. A high expense ratio, with fees ranking in its category's most expensive quintile, also holds the team back. Fees detract from net returns, giving this team a significant hurdle to overcome.

Below Average

People

Franklin Templeton Investments, the asset-management arm of publicly traded but family managed Franklin Resources BEN, has been busy with acquisitions. The struggle in streamlining these disparate capabilities underpins its Average Parent rating. 
Franklin’s July 2020 acquisition of multiboutique manager Legg Mason remains its largest as of March 2023, but the firm has continued to grow through acquisitions. Its April 2022 and November 2022 purchases of Lexington Partners and Alcentra, respectively, make it one of world’s largest managers of alternative investments (with alts comprising USD 231 billion of its USD 1.4 trillion assets under management as of December 2022), while its July 2022 acquisition of O’Shaughnessy Asset Management adds a novel direct-indexing capability to its managed account offerings. These purchases, however, do little to alleviate the operational complexity of a firm with dozens of investment teams split by asset class, region, and investment platform.   
Although there are several standout strategies at the firm, many teams have struggled with personnel turnover, succession challenges, and unappealing performance patterns. Shepherding these geographically disparate capabilities, which have varying levels of centralization of distribution and risk management, shall be quite the challenge for the firm to manage.

Parent

Franklin Dynamic Municipal Bond ETF

FLMI is an actively managed fund that invests in municipal bonds of any credit quality. The portfolio manager seeks dollar-weighted average maturity of three to ten years.

First Trust Managed Municipal ETF

First Trust Municipal High Income ETF

First Trust Municipal CEF Income Opportunity ETF

IQ MacKay Municipal Insured ETF

Tax-exempt municipal bonds serve not only as an investment option.

Should You Tap Pricey Muni Bond ETFs Now?

Franklin Municipal Green Bond ETF

Franklin Templeton's head of ETF product and capital markets David Mann heard “a lot of good chatter” at Exchange 2023. Two main themes dominated the chatter: Franklin Templeton's “active fixed income lineup,” and “where to get income.

NYSE's ETF Leaders: Franklin Templeton's David Mann

Municipal bonds, the subject of a recent debate here at VettaFi, are nonetheless an area that some market watchers are tapping for a “renaissance” of sorts this year. After a difficult 2022, municipal bond yields may benefit from higher interest rates that should be settled in the early stages of 2023.

Active Muni Funds Can Stake Their Claim in 2023

While economists and political pundits debate the recession status of the U.S. economy, investors may want to take steps to prepare for an economic downturn. After all, failure to prepare is preparing to fail.

Focus on FLMI for Municipal Bond Recession Protection

Municipal bonds, like the bulk of the fixed income space, are being adversely affected by the Federal Reserve's aggressive interest rate hikes — more of which could be on the way due to persistently high inflation.

Summer Buying Could Kick-Start Muni Bond Rebound

Headline risk remains in the fixed income space. On Wednesday, the Labor Department said that the June reading of the Consumer Price Index (CPI) checked in at 9.1%.

FLMI Could Be Fabulous Idea as Municipal Bonds Regain Form

As is the case with nearly every other corner of the bond market this year, municipal bonds are languishing due to the Federal Reserve's interest rate tightening efforts. However, muni bonds and the related exchange traded funds are performing less poorly than aggregate bond strategies.

Investors Are Renewing Faith in Municipal Bonds

Bond investors can utilize actively managed municipal bond exchange traded funds to  seek out the best opportunities and exploit inefficiencies in the complex muni market. In the recent webcast, Exploiting Inefficiencies in the Muni Market with Active Management, James Conn, senior vice president and portfolio manager for Franklin Templeton, noted that the municipal bond market [.

Active ETF Strategies Could Help Exploit Inefficiencies in the Municipal Bond Market

While municipal bonds have always been known for investor benefits such as tax-free income and diversification, the muni market has cheapened amid 2022's heightened volatility – making now an opportune time to invest. In the upcoming webcast, Exploiting Inefficiencies in the Muni Market with Active Management, James Conn, Senior Vice President, Portfolio Manager, Franklin Templeton, [.

Exploiting Inefficiencies in the Muni Market with Active Management

MerlynAI SectorSurfer Momentum ETF

Alpha Architect Gadsden Dynamic Multi-Asset ETF

MomentumShares International Quantitative Momentum ETF

Alpha Architect International Quantitative Value ETF

Alpha Architect US Quantitative Momentum ETF

ValueShares U.S. Quantitative Value ETF

Alpha Architect Value Momentum Trend ETF

Merlyn AI Bull-Rider Bear-Fighter ETF

Meanwhile, several funds had changes to their indexes, names or expense ratios.

ETF Odds & Ends: 2022 Leads 2021 For Launches

Avantis Core Municipal Fixed Income ETF

Invesco BulletShares 2021 Municipal Bond ETF

Invesco BulletShares 2022 Municipal Bond ETF

Invesco BulletShares 2023 Municipal Bond ETF

Invesco BulletShares 2024 Municipal Bond ETF

Invesco BulletShares 2025 Municipal Bond ETF

Invesco BulletShares 2026 Municipal Bond ETF

Invesco BulletShares 2027 Municipal Bond ETF

Invesco BulletShares 2028 Municipal Bond ETF

Invesco BulletShares 2029 Municipal Bond ETF

iShares California Muni Bond ETF

First Trust California Municipal High Income ETF

First Trust New York Municipal High Income ETF

First Trust Short Duration Managed Municipal ETF

First Trust Ultra Short Duration Municipal ETF

Hartford Municipal Opportunities ETF

iShares iBonds Dec 2021 Term Muni Bond ETF

iShares iBonds Dec 2022 Term Muni Bond ETF

iShares iBonds Dec 2023 Term Muni Bond ETF

iShares iBonds Dec 2024 Term Muni Bond ETF

iShares iBonds Dec 2025 Term Muni Bond ETF

iShares iBonds Dec 2026 Term Muni Bond ETF

iShares iBonds Dec 2028 Term Muni Bond ETF

VanEck Vectors Intermediate Muni ETF

JPMorgan Ultra-Short Municipal Income ETF

JPMorgan Municipal ETF

VanEck Vectors Muni Allocation ETF

iShares Short Maturity Municipal Bond ETF

VanEck Vectors Long Muni ETF

IQ MacKay Municipal Intermediate ETF

iShares National Muni Bond ETF

PIMCO Intermediate Municipal Bond Active ETF

Columbia Multi-Sector Municipal Income ETF

iShares New York Muni Bond ETF

Overlay Shares Municipal Bond ETF

Invesco VRDO Tax-Free ETF

Invesco California AMT-Free Municipal Bond ETF

Invesco National AMT-Free Municipal Bond ETF

Invesco New York AMT-Free Municipal Bond ETF

Xtrackers Municipal Infrastructure Revenue Bond ETF

SPDR Nuveen Bloomberg Short Term Municipal Bond ETF

VanEck Vectors Short Muni ETF

PIMCO Short Term Municipal Bond Active ETF

iShares Short-Term National Muni Bond ETF

American Century Diversified Municipal Bond

SPDR Nuveen Bloomberg Municipal Bond ETF

Vanguard Tax-Exempt Bond Index ETF

VanEck CEF Municipal Income ETF 

Truly active managers shine in challenging investment environments, especially when they are given a flexible mandate. With tax-loss harvesting, active investors can deliberately sell at a loss to offset taxes on gains elsewhere in a portfolio.

Muni Investors Stay Flexible As Rates Rise

SAN MATEO, Calif.--(BUSINESS WIRE)--Franklin Templeton Announces Name Change to Two Tax-Free Bond ETFs

Franklin Templeton Announces Name Change to Two Tax-Free Bond ETFs

VanEck Short High Yield Muni ETF

Democratic presidential candidates are pitching for tax hikes in some way or the other. This should keep the winning momentum alive for muni bond ETFs.

Democrats Favoring Tax Hikes: Muni Bond ETFs to Soar?

News for Franklin Dynamic Municipal Bond ETF ETF (FLMI)