If you have been looking for Muni – Bonds funds, it would not be wise to start your search with Franklin Federal Tax-Free Inc A1 (FKTIX). FKTIX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

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Zacks categorizes FKTIX as Muni – Bonds, which is a segment packed with options. Muni – Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are ” general obligation ” and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.

Franklin is based in San Mateo, CA, and is the manager of FKTIX. Franklin Federal Tax-Free Inc A1 debuted in October of 1983. Since then, FKTIX has accumulated assets of about $4.46 billion, according to the most recently available information. The fund’s current manager is a team of investment professionals.

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 1.39%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -0.27%, which places it in the middle third during this time-frame.

It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.

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When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. FKTIX’s standard deviation over the past three years is 8.47% compared to the category average of 13.08%. The standard deviation of the fund over the past 5 years is 7.33% compared to the category average of 13.71%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.85, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FKTIX has a positive alpha of 0.22, which measures performance on a risk-adjusted basis.

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