Understanding the Franklin Municipal Green Bond ETF (FLMB)

What this ETF is trying to do

The Franklin Municipal Green Bond ETF (FLMB) is an exchange-traded fund. While the specific holdings are not listed in this report, ETFs like this generally aim to provide exposure to municipal "green" bonds. These are often loans made to government entities to fund environmental projects.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This only tracks how much the share price itself has changed.

• Total Return: This includes both the change in share price *and* any cash distributions (dividends) paid out to investors.

For FLMB, the numbers show different trends depending on how long you look:

• Year-to-Date (YTD): The price return is approximately -7.86%, while the total return is approximately -4.87%.

• One Year: The price return was approximately -7.24%, and the total return was approximately -3.26%.

• Three Years: The price return was approximately -1.79%, but the total return was a positive 10.55%.

To visualize the price change, the estimated price from roughly one year ago was $23.63. The current price is $21.92.

Income and distribution explanation

Some investors look for ETFs that pay out regular cash. This is called the "distribution yield." FLMB has a distribution yield of approximately 4.51%. The fund typically pays out distributions monthly, with 12 payments recorded over the last year. It is important to remember that a high yield does not guarantee you will make money overall; the share price could still go down.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases. StockValueFinder uses an "erosion score" to measure this risk. FLMB has an erosion score of 75, which is labeled as "mild price erosion." This means there has been some slight decline in the share price, but it has not triggered a "severe erosion-risk flag."

Pros

• The fund provides regular monthly distributions.

• Over a three-year period, the total return was positive at approximately 10.55%.

Cons

• The share price has seen a decline over the last year and year-to-date.

• The fund shows "mild price erosion" according to the erosion score.

Beginner takeaway

When studying FLMB, notice how the total return is higher than the price return in several periods. This happens because the cash distributions help offset some of the losses from the falling share price. However, because the price return has been negative recently, a high distribution yield alone does not mean the investment is growing. Always look at both price changes and total returns together.