Tax Managed Municipal Bond Ladders
Systematic tax loss harvesting for municipal investors.
Systematically harvest losses with Franklin Tax Managed Municipal Bond Ladders
Systematic tax loss harvesting is a feature that automatically identifies and sells securities in your municipal SMA portfolio that have declined in value, generating capital losses that can offset your taxable gains. Unlike traditional municipal ladder SMA strategies that require you to manually request tax loss harvesting at the end of the year, our approach integrates this feature into the investment process, ensuring that you benefit from tax management opportunities throughout the year.
Systematic review of bonds
Our portfolio managers systematically review and sell bonds whose loss exceeds the predetermined thresholds. Thresholds are determined by expected transaction costs for a certain sized position.
Minimize cash on the sidelines
A tax loss sale on a municipal bond will be replaced with a similar bond so the investor can maintain their exposure and minimize uninvested cash in the portfolio.
Daily tax management
The process is executed daily, rather than as a year-end process, to identify sale candidates.
Franklin is a tax-free leader
years of municipal experience1
dedicated investment professionals1
in municipal bond assets under management1
Product offerings
We offer a full range of customizable, laddered strategies across the maturity and duration spectrum. We are committed to collaborating with you to address your clients' objectives including: risk profile, cash flow, investment flexibility and tax management goals.
| 1-3 Years | 1-7 Years | 1-15 Years | 5-20 Years | |
|---|---|---|---|---|
| AMT exposure | Excluded | Excluded | Excluded | Excluded |
| Credit quality2 | Minimum credit rating of A- | Minimum credit rating of A- | Minimum credit rating of A- | Minimum credit rating of A- |
| Coupon income | Choose to reinvest coupon income or receive cash | Choose to reinvest coupon income or receive cash | Choose to reinvest coupon income or receive cash | Choose to reinvest coupon income or receive cash |
| Minimum initial investment | $175K | $175K | $175K | $250K |
| State availability3 | National, 22 state-specific portfolios, 4 state preference | National, 22 state-specific portfolios, 4 state preference | National, 22 state-specific portfolios, 4 state preference | National, 22 state-specific portfolios, 4 state preference |
| Number of bonds4 | Minimum 4 bonds every rung, minimum 14 positions | Minimum 2 bonds every rung, minimum 14 positions | Minimum 1 bond every rung, minimum 15 positions | Minimum 1 bond every rung, minimum 16 positions |
| Benchmark | Bloomberg Municipal 1-3 Year Index | Bloomberg Municipal 1-5 Year Blend | Bloomberg Municipal 1-15 Year Index | Bloomberg Municipal Bond Index |
| Fact sheet | Franklin Municipal Ladder 1-3 Years – Tax Managed | Franklin Municipal Ladder 1-7 Years – Tax Managed | Franklin Municipal Ladder 1-15 Years – Tax Managed | Franklin Municipal Ladder 5-20 Years – Tax Managed |
Portfolio targets and characteristics subject to change.
Transitioning your clients’ accounts is easy
Franklin offers a range of services designed to assist you and your clients as they are considering SMAs.
Hypotheticals
We can provide an example of how the portfolios are allocated given variable parameters of maturity, account size and other customizations.
Municipal bond review
For clients with municipal bond holdings, we offer a detailed breakdown of their current municipal fixed income holdings, including analysis of maturity, quality and sector as they compare with our muni ladder portfolios.
After the review, our sales team we will coordinate a meeting with the Client Portfolio Managers and the SMA Specialist team to discuss a tailored transition plan for your client. The process is highly collaborative—we work directly with you to ensure a smooth transition.
Additional resources
An overview of what bond ladders are, how they work, the benefits and the team overseeing these strategies.
See how tax management is systematically built into our investment process.
Municipal market perspectives
Even with the uncertainty surrounding the new US administration’s economic policies, Franklin Templeton Fixed Income CIO Sonal Desai thinks the US economic outlook for 2025 remains robust, with upside risks to inflation. She thinks the end of the Fed’s easing cycle might be near, and warns that financial markets volatility will likely remain elevated.
The November survey results are in from investment professionals across all asset classes, and we provide our predictions on inflation, recession, asset class performance and more for 2025.
Following consecutive years of robust returns across global equity, fixed income and alternatives, can 2025 offer a repeat performance? Franklin Templeton Institute presents its 2025 outlook.
Call your Franklin Templeton Sales Repres entative at (800) DIAL-BEN / 342-5236.
1. As of December 31, 2025.
2. Ratings shown are assigned by one or more Nationally Recognized Statistical Rating Organizations (NRSRO), such as S&P Global Ratings, Moody's Investors Service and Fitch Ratings, Inc. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO's opinion of an issuer's creditworthiness and typically range from AAA (highest) to D (lowest). The Refunded category consists of refunded bonds secured by the US 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 exchange-traded funds and securities that have only a short-term rating and are not cash equivalents. Cash includes equivalents, which may be rated. The methodology used for the calculation of credit quality ratings displayed may differ from the methodology for monitoring investment limits, if applicable. Please note, the portfolio itself has not been rated by an independent rating agency.
3. State-specific mandates include Arizona, California, Colorado, Connecticut, Florida, Georgia, Louisiana, Massachusetts, Maryland, Michigan, Missouri, Minnesota, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Utah and Virginia. State preference mandates include Alabama, Hawaii, Indiana and Kentucky. At time of implementation, state-specific portfolios will have 100% of the portfolio in the state requested and state preference portfolios will have a minimum of 25% of the portfolio in the state requested. Certain state-specific portfolios may not be available in all programs. Additional state-specific portfolios may be available upon request and are subject to review. Strategy availability may vary by firm. Please contact your Financial Professional or sponsor firm for availability.
4. The number of bonds in a portfolio may vary by the timing of purchases and sales, changes in the purchase and sell list, general market conditions, and factors specific to each existing account due to client considerations. A concentration in a small number of holdings may increase risk exposure. Any decline in value of an individual bond may have a material impact on the account value.
What are the risks?
All investments involve risks, including possible loss of principal.
Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price which they have been valued. Active management does not ensure gains or protect against market declines. Portfolios focused on a single state are subject to greater risk of adverse economic and regulatory changes than a geographically diversified portfolio.
Important Information
Separately managed accounts (SMAs) are investment services provided by Franklin Templeton Private Portfolio Group, LLC (FTPPG), a federally registered investment advisor. Client portfolios are managed based on investment instructions or advice provided by affiliated subadvisors of Franklin Templeton. Management is implemented by FTPPG, the designated subadvisor or, in the case of certain programs, the program sponsor or its designee.
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.