Western Asset Fixed Income
Muni Monthly: June 2026
July 21, 2026
Western Asset: The Muni Monthly covers performance, supply and demand technicals, fundamentals and valuations.
Demand more with active muni ETFs
More precision. More control. More opportunity. In today’s evolving landscape, staying ahead means having the right tools. Whether you're seeking income, diversification, or managing risk, our actively managed muni ETF strategies give you the flexibility, expertise, and confidence to do more.
Our Franklin Templeton Fixed Income expertise
Franklin Templeton Fixed Income is one of the largest municipal bond fund managers in the nation, and we apply an active approach that seeks to provide tax-efficient portfolios. Our team of investment professionals conducts in-depth research to uncover opportunities others may miss, and places a premium on risk management, which is fully incorporated into our process.
$70B
Municipal bond assets under management
24+
Investment professionals
21
Years of financial experience, on average
10
Research analysts
Data as of June 30, 2026
Why active for muni ETFs
Learn more about why active management may lead to more favorable outcomes compared to a passive approach.
A complex market
Investing in municipal bonds is difficult because the market is vast in size and complex, with a fragmented trading system making it difficult to navigate – for example, there are 50,000 issuers for municipal securities, compared to 6,000 for corporate securities.1
Shifting dynamics
The proportion of municipal bonds rated AAA has fallen sharply since 2007–from 69% to just 17% in 2026. That dramatic shift underscores the need for the in-depth research from professional managers covering every level of the market.2
Research coverage for non-rated bonds
For many issuers, obtaining a credit rating is not cost effective. Comprehensive credit research is critical to achieve a thorough understanding of non-rated market participants.
A steep municipal curve
When the municipal bond yield curve is steep, it presents opportunities for active managers to add value by exploiting differences in relative value and yields across various bond maturities.
Insufficient market coverage in municipal bond indexed strategies
While municipal bond indexes (and the index ETFs that track them) provide broad exposure to the muni market, they do not offer full market coverage. Key segments, representing roughly 1/3 of the investible muni market, are often excluded from the underlying indexes.3
The active ETF difference
ETFs are becoming a popular vehicle in the muni bond space
Over the last 36 months, ETFs account for 60% of the flows within the municipal bond space (compared to 40% for mutual funds) - mirroring the broader industry trend of increased ETF adoption.4
We believe the future of muni ETFs is active
While the majority of muni ETF assets sit in passive strategies, 100% of muni ETF launches in the first half of 2026 were active.4
Our lineup
| Name | Inception Date | Expense Ratio (%) |
|---|---|---|
| Franklin Dynamic Municipal Bond ETF - FLMI | 8/31/2017 | 0.30 |
| Franklin Municipal Green Bond ETF - FLMB | 8/31/2017 | 0.30 |
| Franklin Municipal High Yield ETF - FTMH | 09/09/1985 | 0.35 |
| Franklin Municipal Income ETF - FTMU | 12/31/1976 | 0.30 |
| Franklin Short-Term Municipal Income ETF - FTMS | 03/18/2013 | 0.20 |
Resources
Aim beyond the horizon: Franklin Templeton active municipal bond ETFs
Why the opportunities in munis are clear
Insights View More
Franklin Templeton Fixed Income Fixed Income
Municipal bond market monthly brief
July 6, 2026
Municipal bonds finished the first half of 2026 with strong momentum, outperforming many other areas of the bond market despite record levels of new issuance. In this month's update, the Franklin Templeton Fixed Income team looks at what's driving demand, why municipal bond fundamentals remain resilient, and what investors should watch as we head into the second half of the year.
Franklin Templeton Fixed Income Fixed Income
The "Silver Tsunami" is changing municipal credit—here’s how
June 4, 2026
As the population ages, municipal credit is evolving. Jennifer Johnston, Director of Municipal Bond Research at Franklin Templeton Fixed Income, breaks down what the “Silver Tsunami” means for key healthcare sectors and investors in the final part of this two-part muni credit research series.
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Important Information
All investments involve risk, including possible loss of principal.
Please see each product's web page for specific details regarding investment objective, risks, performance, and other important information. Review this information and view the prospectus or summary prospectus carefully before you make any investment decision.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
Franklin Distributors, LLC. Member FINRA/SIPC.
Footnotes
- Source: Municipal Securities Rulemaking Board (MSRB) as of January 31, 2025. Most recent data available.
- Source: Bloomberg Municipal Research. Breakdowns are as of 12/31/2007 and 6/30/2026. Ratings shown are assigned by one or more Nationally Recognized Statistical Rating Organizations (`NRSROʼ), such as Standard & Poorʼs, Moodyʼs and Fitch. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSROʼs opinion of an issuerʼs creditworthiness and typically range from AAA (highest) to D (lowest). The Refunded category consists of refunded bonds secured by U.S. government or other high-quality securities. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. The Not Applicable category consists of third-party ETFs and securities that only have a short-term rating and are not cash equivalents. Cash includes equivalents, which may be rated.
- Source: Federal Reserve. As of September 30, 2025, the coverage of outstanding municipal bonds for the following indexes: Bloomberg Muni Bond Index (43%), S&P National AMT-Free Muni Bond Index (21%), ICE AMT-Free US National Municipal Index (25%).
- Source: Morningstar. Data as of June 30, 2026.