FLMI vs SCMB

FLMIAFranklin Dynamic Municipal Bond ETF

SCMBASchwab Municipal Bond ETF

In short

FLMI Franklin's muni fund skips the index-hugging route: a hands-on book of roughly 1,300 tax-exempt bonds, paying out monthly. Federal-tax-free income is the entire job description, and it has been at it since 2017.

SCMB Schwab's take on the core muni sleeve: three basis points, thousands of AMT-free bonds from across the country, and a monthly distribution. Bottom-of-the-table pricing, no frills attached.

Stated mandate

FLMI The fund seeks high current income exempt from federal income taxes. It normally invests at least 80% of net assets in municipal securities whose interest is federally tax-exempt.

SCMB The fund seeks to track, before fees and expenses, the total return of an index representing the U.S. AMT-free municipal bond market.

Why people hold it

• FLMI One mission, stated plainly: high current income exempt from federal income tax, with at least 80% of net assets in municipal securities. No side quests.
• Roughly 1,300 bonds spread the credit risk thin, so no single issuer's bad headline sets the tone for the portfolio.
• Income lands monthly, matching how most people actually spend it.
• Actively traded, and it sticks tightly to the mandate in its prospectus. One of the stronger implementations in a crowded muni field.

• SCMB Three basis points a year, against a 0.30% median for muni bond funds. Among the top-graded names in the category, only Vanguard's VTEB matches that fee.
• Follows the ICE AMT-Free Core U.S. National Municipal Index across thousands of bonds and issuers, so no single borrower or state drives the portfolio.
• Plain passive plumbing done well: it stays close to its index, trades actively, and pays monthly. One of the stronger implementations in the muni aisle.

Worth knowing

• FLMI At 0.30% a year, the fee sits at the muni ETF median but well above index giants like VTEB and SCMB at 0.03%. The premium buys a managed book, not an index.
• The tax break is federal. State and local treatment depends on where you live and what the fund holds.
• It's a bond fund, so share prices move with interest rates even while the tax-exempt coupons keep arriving.

• SCMB Launched in 2022, so its live record is shorter than muni staples like MUB and VTEB, even though the strategy is the same broad-market idea.
• Bond math still applies. This is a portfolio of municipal bonds, so share prices move opposite to interest rates.
• National in scope, not single-state like NYF, so it is not built around any one state's tax rules.

Full FLMI profile⁠

Full SCMB profile⁠