Franklin Federal Tax-Free Income Fund
Actively managed U.S. bond fund
As of its 2026 Q2 report, Franklin Federal Tax-Free Income Fund held 979 positions with $7.74B in net assets. Its ten largest holdings made up 7.6% of the fund. The FKTIX share class costs 0.62% a year. Over the 12 months to May 2026, FKTIX returned 7.7%, with dividends reinvested. In 2026 Q3 it added 21 new positions and exited 27.
To provide investors with as high a level of income exempt from federal income taxes as is consistent with prudent investment management and the preservation of shareholders capital.
The fund invests at least 80% of assets in investment-grade municipal securities whose interest is exempt from federal income taxes, selecting securities rated in the top four categories by nationally recognized rating services based on credit quality, risk, structure, and pricing to balance income and capital preservation. Up to 20% of assets may be held in securities subject to federal alternative minimum tax or taxable interest. Because security selection depends on the manager's assessment of individual credit profiles and market conditions, the fund's composition and returns will differ from any broad municipal index.
What you own
| Company | Weight | Value | Shares |
|---|---|---|---|
Public Finance Authority 0.00% · due 2045-12-01 | 1.19% | $92.26M | — |
Public Finance Authority 0.00% · due 2044-12-01 | 1.05% | $81.01M | — |
New York State Dormitory Authority 5.00% · due 2045-03-15 | 0.80% | $62.05M | — |
Tennergy Corp. 5.50% floating · due 2053-10-01 | 0.76% | $58.47M | — |
San Mateo Foster City School District 0.00% · due 2042-08-01 | 0.73% | $56.61M | — |
Louisiana Public Facilities Authority 5.50% · due 2059-09-01 | 0.66% | $51.36M | — |
Capital Trust Authority 0.00% · due 2029-03-01 | 0.61% | $47.17M | — |
Metropolitan Transportation Authority 5.00% · due 2045-11-15 | 0.61% | $47.11M | — |
New York Liberty Development Corp. 5.25% · due 2035-10-01 | 0.59% | $45.81M | — |
California Community Choice Financing Authority 5.25% floating · due 2054-01-01 | 0.59% | $45.78M | — |
The 200 largest of 979 holdings, with the share counts as filed, open with a free account.
What the fund is made of
Percentages are of fund net assets. Rounding, liabilities and short positions can make totals differ from 100%.
| Bonds | 98.73% |
| Cash & short-term | 0.64% |
How it has done
FKTIX share class · total returns with dividends reinvested
Volatility over the last 12 months: 4.64%. Past returns are a record, not a forecast.
Jun 2026 and Jul 2026 have been filed since the trailing figures were struck, so they are not in the table above or the curve — every figure here shares one cut-off, which is what makes them comparable with other funds.
The 5 share classes hold the same portfolio
| Share class | Expense ratio | 1 year | 3 years | 5 years | Worst fall |
|---|---|---|---|---|---|
| 0.62% | +7.70% | +13.54% | +3.78% | -6.27% | |
| 1.17% | +7.22% | +11.80% | +1.06% | -6.40% | |
| 0.52% | +7.90% | +13.97% | +4.39% | -6.24% | |
| 0.48% | +7.85% | +14.02% | +4.53% | -6.32% | |
| 0.77% | +7.54% | +13.03% | +3.01% | -6.39% |
These classes hold the same portfolio, so the 3.47pp spread over 5 years is the cost difference between them — roughly 0.69pp a year — not a difference in what they own.
Fees & fund details
Franklin Federal Tax-Free Income Fund is an actively managed U.S. bond fund.
- Asset class
- Bonds
- Region
- United States
- Management
- Actively managed
- Fund type
- Open-end fund
- Credit quality
- Mixed credit
- Rate sensitivity
- Long duration
- Expense ratio, by class
- 0.48% – 1.17%· FKTIX 0.62%
- Portfolio turnover
- 9.61% a year · as of 2025 Q3
Turnover is how much of the portfolio was replaced in a year.
Classified from what the fund holds, not from its name · 2026 Q2. The summary is a paraphrase of the prospectus; the objective is verbatim.
What changed this quarter
Positions that entered or left the fund since its previous filing. Positions that were only resized are not listed.
21 new· the largest 7
27 exited· the largest 8
Debt profile
What this fund holds — value-weighted across its bond and securitized long positions · as of 2026-04-30
Share of the fund's debt by how its coupon behaves — the fact that decides whether a rate move reaches this portfolio at all.
| Fixed rate | 86.2% |
| Zero-coupon or unclassified | 8.1% |
| Floating rate | 5.7% |
Share of the fund's debt value in each maturity band, shortest first.
| <1y | 0.3% |
| 1-3y | 1.6% |
| 3-5y | 1.1% |
| 5-10y | 7.3% |
| 10y+ | 89.7% |
These three overlap — one holding can be in arrears and paying in kind at once — so they are shown separately and never summed.
Risk profile
Interest-rate and credit-spread sensitivity, both in years · as of 2026Q2
Most of this fund’s sensitivity is to interest rates, with credit spreads carrying nearly as much.
Where the loss would come from. The two shocks are the same size, so this is the balance of the fund's two sensitivities rather than a bet on one moving more.
| Interest rates | 51% |
| Credit spreads | 49% |
Filers report the impact of a 0.01% move only, so the total is our own scaling of that one number and overstates the loss on most bonds — read it as approximate, never as precise. The two sensitivities overlap rather than add up: they measure the same positions against different shocks, which is why the durations above are shown side by side and never summed.
Share of the fund's spread duration carried by each credit tier.
| Investment grade | +5.68 yr |
| High yield | +1.72 yr |
Share of duration at each point, shortest first. A positive figure loses value when spreads widen; a negative one offsets — a credit hedge.
| 3 mo | 0.00 yr | 0% |
| 1 yr | 0.02 yr | 0% |
| 5 yr | 0.19 yr | 3% |
| 10 yr | 2.88 yr | 38% |
| 30 yr | 4.49 yr | 59% |
| 3 mo | 0.00 yr | 0% |
| 1 yr | 0.02 yr | 0% |
| 5 yr | 0.19 yr | 3% |
| 10 yr | 2.81 yr | 38% |
| 30 yr | 4.38 yr | 59% |
The two bands measure the same positions against different shocks and do not add — a Treasury carries rate duration and no spread duration, a floating-rate credit the reverse. Rate tenors are also summed across every currency the fund discloses.
Show the numbers
| Tenor | Rate yrs | IG yrs | HY yrs | IG $/bp | HY $/bp |
|---|---|---|---|---|---|
| 3 mo | +0.00 | +0.00 | +0.00 | $439 | $202 |
| 1 yr | +0.02 | +0.02 | +0.01 | $13.1k | $5.4k |
| 5 yr | +0.19 | +0.17 | +0.03 | $127.9k | $21.2k |
| 10 yr | +2.88 | +2.14 | +0.67 | $1.65m | $519.6k |
| 30 yr | +4.49 | +3.36 | +1.01 | $2.60m | $783.0k |
Dollar change per 1bp of spread movement, as filed and sign-anchored. A blank cell was not filed; a zero was.
A newer credit-spread reading (2026Q3) is on file. This page holds one quarter across every figure on it, so that one appears here next quarter.
Understand how this fund fits with the rest.
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