Fund Description

The fund seeks to provide investors with as high a level of income exempt from federal income taxes and Connecticut personal income taxes as is consistent with prudent investment management and the preservation of shareholders’ capital.

Strategy Statement

"In the Franklin Muni Department, we are committed to a conservative, disciplined investment strategy. We seek to provide shareholders with a high level of tax-free income while preserving capital."

Management

Sonal Desai, Ph.D

Sonal Desai, Ph.D

  • Joined Franklin Templeton in 2009
  • Managed Fund Since 2018
Tina Chou

Tina Chou

  • Joined Franklin Templeton in 2004
  • Managed Fund Since 2019
David Yuen, CFA

David Yuen, CFA®

  • Joined Franklin Templeton in 1988
  • Managed Fund Since 2005
Patrick A. Klein, Ph.D

Patrick A. Klein, Ph.D

  • Joined Franklin Templeton in 2005
  • Managed Fund Since 2019

INVESTMENT PHILOSOPHY, STRATEGY AND APPROACH

Investment Philosophy

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.

Investment Process

Market AnalysisResearchPortfolio Construction
On a daily basis, we analyze current market conditions, including:
  • Trading activity
  • Yield spreads
  • Call option spreads
  • New offerings
  • Secondary market offerings
  • Credit ratings
  • Event risk
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.

Rating

Overall Morningstar Rating As of 09/30/2020

Rating Category: Intermediate Core-Plus Bond

Morningstar
The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Historical Morningstar Rating As of 09/30/2020

Years Ratings Funds
in category
3
2 Stars
537
5
1 Stars
459
10
1 Stars
341

Morningstar Style Box As of08/31/2020

Strategy, Benefits, Results

Strategy

  • Our multi-sector, fixed-income fund focuses on government and corporate debt securities, as well as mortgage- and asset-backed securities.
  • Our research-driven, value-oriented approach identifies bonds with the best prospects for income and capital appreciation.
  • We provide in-depth, fundamental analysis of each of the key fixed-income sectors within the context of a global economic outlook.

Benefits

  • Diversification. Broad diversification makes our fund attractive as a core fixed-income holding.
  • Global Fixed Income Expertise. Investors have full access to the research resources of the Franklin Templeton Fixed Income Group®.