Effective 3/1/19, the maximum initial sales charge for purchases of less than $100,000 of Franklin Templeton’s long-term fixed income funds (Class A and A1 shares) was lowered to 3.75%. Please see the prospectus supplement for more information. If you have any questions, please contact your financial professional or call Shareholder Services.
Beginning on 10/19/18, Class C shares held for 10 years or more will automatically convert to Class A shares. Thereafter, Class C shares held for 10 years or more will automatically convert to Class A shares on a monthly basis. This conversion allows shareholders to take advantage of the lower expenses offered by Class A shares. Please see the prospectus supplement for more information. If you have any questions, please contact your financial professional or call Franklin Templeton.
Class A shares (NASDAQ: FMISX) were renamed Class A1 and closed to new investors. Existing Class A1 shareholders may continue to add money to their accounts. A new Class A share (NASDAQ: FMAQX) launched with a different expense structure, in which new shareholders can invest. The fund also changed certain sales charges and commissions paid to dealers on Class A and A1 shares. Please see the prospectus supplement for more information. If you have additional questions, please contact your financial professional or call Franklin Templeton.
New investors must invest in new Class A shares. This A1 share class is available only for existing investors as of 9/7/18.
The fund seeks to provide investors with as high a level of income exempt from federal income taxes and Massachusetts personal income taxes as is consistent with prudent investment management and the preservation of shareholders’ capital.
Focus on Income
Franklin municipal managers aim to maximize monthly tax-free income for shareholders. Historically, the income return from municipal bonds has contributed much more to municipal bond returns than changes in municipal bond prices. Additionally, Franklin managers generally limit fund exposure to bonds with income that is subject to the Alternative Minimum Tax.
No Leverage, No Derivatives, No Options
Franklin managers avoid investment practices that may expose shareholder capital to unnecessary risk. For example, we don’t use leverage or invest in derivatives or futures, because they can increase portfolio volatility.
Strict Internal Analysis
Our analysts are responsible for conducting research on credit-driven securities in the municipal market. They are responsible for evaluating an issuer’s credit strengths and weaknesses and working with the portfolio managers on select fund purchase and sale decisions.
Buy and Hold for the Long Term
Franklin managers are focused on seeking to maximize income; we don’t actively trade bonds to try to capture capital gains. We typically sell holdings only if we see an opportunity to enhance a fund’s portfolio structure or its income earning potential.
Market Analysis | Research | Portfolio Construction |
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On a daily basis, we analyze current market conditions, including:
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We search for high-quality, undervalued bonds that we believe should provide a high level of income until maturity. We often make site visits to identify potential problems and opportunities that may not be readily visible on paper. Analysts focus on credit-driven bond issues where we believe they can add the most value to the security selection process. |
We build portfolios with diversification in mind, taking into consideration allocations to sectors, regions, coupons, calls, maturities and quality, as appropriate. We don’t make significant allocation shifts based on expected market conditions. Rather, we look for the best value in the marketplace from an income-oriented perspective. |
We do not publish a style box for this fund.
i. For investors subject to the alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable.
Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. Investment return and principal value will fluctuate with market conditions, and you may have a gain or loss when you sell your shares.