FTMS vs TAXS

FTMSBFranklin Short-Term Municipal Income ETF

TAXSANorthern Trust Short-Term Tax-Exempt Bond ETF

In short

FTMS The ETF rebuild of a short-muni strategy that has been running since 2013, managers intact. Active bond picking in an aisle where most rivals track an index: investment grade, three years or less, monthly income exempt from federal tax.

TAXS Northern Trust's muni index fund keeps every bond under five years to maturity and charges 0.05%, a fraction of the typical muni ETF fee. Roughly 1,700 federally tax-exempt bonds, none of them AMT bonds, with interest paid monthly.

Stated mandate

FTMS The fund seeks a high level of current income exempt from federal income tax, consistent with preserving capital.

TAXS The fund seeks to track, before fees and expenses, the price and yield performance of the ICE Short-term Focused Municipal Bond Index. It is designed for tax-exempt income through passively managed, investment-grade municipal bonds with short-term maturities.

Why people hold it

• FTMS Actively managed rather than index-tracking: Franklin's muni team picks bonds across many states and sectors, mainly investment grade with maturities of three years or less.sec.govfranklintempleton.com
• Fee is 0.21% net of a waiver through March 31, 2027 (0.22% gross), near the category median for short-term muni funds.
• Pays monthly, with roughly 300 positions spread across issuers and sectors instead of a concentrated handful.
• Continuity through the wrapper change: the portfolio managers carried over from the predecessor fund, one of them on the strategy since 2016.sec.gov

• TAXS 0.05% a year sits at the low end of the muni aisle, where the typical fund charges several times that, and matches the fee on MUB, the category's iShares heavyweight.
• Index rules admit only investment-grade bonds with under five years left to final maturity, so the portfolio skips the long-end price swings that define all-maturity muni funds.flexshares.com
• About 1,700 bonds, all exempt from federal tax and screened to exclude alternative minimum tax paper, with income distributed monthly rather than accrued.flexshares.com
• Passive, sampled, and run by Northern Trust's municipal desk, which has managed muni portfolios for more than 30 years. The index does the picking, not a manager's hunch.flexshares.comnortherntrust.com

Worth knowing

• FTMS Index rivals undercut it on price: VTES charges 0.05% and SUB 0.07%. Active security selection is what you are paying the difference for.
• Moderately traded rather than one of the category's heavyweights, so the spread at the moment you trade deserves a look.
• Interest is exempt from federal income tax, but some holdings can pay interest subject to the AMT, and state and local taxes may still apply.sec.govfranklintempleton.com

• TAXS It launched in 2025 and trades lightly next to muni mainstays like VTEB and MUB, so spreads can run wider and the track record is short.
• Federally tax-exempt is not tax-free. That interest can still be taxed by your state and city.flexshares.com
• Sub-five-year munis generally carry lower yields than longer maturity portfolios. That is the other side of the milder rate sensitivity.flexshares.com

Full FTMS profile⁠

Full TAXS profile⁠