Franklin Municipal Green Bond ETF

Franklin Municipal Green Bond ETF (FLMB) is an actively managed fund. It holds municipal bonds whose interest is generally free from federal income tax, and at least 80% of its assets go into "green bonds" that pay for projects such as clean water, renewable energy and clean transportation. Its 0.30% expense ratio is below the 0.39% average of similar funds. With $78.2 million in assets as of June 30, 2026, it is also the smallest fund in its peer group.

• Over the year to Oct 27, 2026, FLMB returned -1.3%, 7th of 8 among similar funds.
• Its 5-year annualized return was +0.1%.
• In the 2020 COVID crash it fell 13.9% and regained its old high 4.1 months after the low.
• Its worst full calendar year was 2022 (-12.1%); its best was 2019 (+8.9%).
• The deepest fall in its price history was 17.9% (Jul 20, 2021 to Oct 26, 2022), recovered by Nov 28, 2025.

As of Jun 30, 2026, the fund held 79 securities; the ten largest made up 37.26% of assets.

The bonds mature in 19.8 years on average (weighted by size), with an average coupon of 4.64%.

• Over the three months to Jun 30, 2026, investors withdrew a net $9.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.29%, +0.59%, +0.92%.

FLMB does not track an index. Franklin Templeton's managers choose the bonds. At least 80% of net assets must be in municipal bonds whose interest is free from federal income tax, including the alternative minimum tax (AMT), a parallel tax that catches some high earners. Up to 20% may be in bonds whose interest is subject to the AMT or other taxes. At least 80% must also be in municipal green bonds.

No law defines a green bond. To check each one, the managers read offering documents and issuer websites, and sometimes talk with the underwriter or the issuer. Each bond is then rated eligible based on Franklin's own review, eligible based on its review plus an outside verifier's, or not eligible. Bonds without a green label can qualify too. Most holdings are rated investment grade (the top four credit tiers). Up to 20% may be below investment grade, meaning a higher risk of default.

There is no fixed rebalancing schedule. The managers usually hold bonds for the income, but they may sell to manage credit risk or rate sensitivity, or to harvest tax losses. Turnover was 24%. As of June 30, 2026, the fund held 79 bonds, and the top 10 made up 37.3% of assets. The largest were two California Community Choice Financing Authority bonds (4.7% and 4.3%), a California Municipal Finance Authority bond (4.5%) and an Intermountain Power Agency bond (4.1%). The average maturity was 19.8 years, so prices react strongly to interest-rate changes.

• FLMB charges 0.3% a year, versus an average of 0.39% for the similar funds below (4th of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $31 in the first year and $380 over 10 years (assuming a 5% annual return).

FLMB pays monthly income that is mostly free from federal income tax, which matters most in a taxable account.

FLMB could add monthly income that is largely free from federal income tax. That benefit matters most in a taxable account, not an IRA or 401(k). Its trailing 12-month yield was 4.32% as of October 27, 2026. Costs are modest. In the SEC's standard example, $10,000 invested would cost $31 in the first year and $380 over 10 years.

Bonds can still fall hard. The fund launched in 2017, so it has no record from 2008. It fell 13.9% in March 2020 and recovered in about four months. Rising rates did more damage. It lost 12.2% in 2022, its worst calendar year. Its deepest drop, 17.9% from July 2021 to October 2022, took about 37 months to recover. Anyone who had to sell shares during that stretch would have locked in losses. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).