The Franklin Alabama Tax-Free Income Fund Class R6 (FALRX) is a specialized mutual fund aimed at providing investors with a high level of income exempt from federal and Alabama state income taxes. This fund is particularly appealing to residents of Alabama seeking tax-efficient investment opportunities.
Key Features of FALRX
1. Investment Objective
The primary goal of FALRX is to deliver a high level of tax-free income while preserving capital. The fund achieves this by investing at least 80% of its assets in municipal bonds that are exempt from federal and Alabama state income taxes.
2. Fund Details
- Ticker Symbol: FALRX
- Inception Date: August 1, 2017
- Category: Muni Single State Long
- Expense Ratio: 0.62%
- Dividend Yield: 3.05% (as of July 2025)
- Net Assets: $170 million
3. Performance Overview
FALRX has shown consistent performance over the years, with a focus on long-term growth and income stability. Below is a summary of its recent performance:
| Time Period | Return (%) |
|---|---|
| Year-to-Date (YTD) | -2.20 |
| 1-Year | -0.68 |
| 5-Year | -0.74 |
Note: Past performance does not guarantee future results.
Portfolio Composition
The fund’s portfolio is heavily weighted towards municipal bonds issued within Alabama. This focus ensures that the income generated remains tax-exempt for Alabama residents.
Top Holdings
Here are some of the top holdings in the FALRX portfolio:
More EV News
| Security Name | Weight (%) |
|---|---|
| Jacksonville State University | 3.12 |
| Birmingham Water Works Board | 3.10 |
| UAB Medicine Finance Authority | 3.05 |
| University of Alabama | 3.03 |
| City of Huntsville | 2.89 |
Sector Allocation
The fund’s investments are diversified across various sectors, including:
- Education: 29.92%
- Healthcare: 15.65%
- Utilities: 14.18%
- Industrial Development: 13.93%
Benefits of Investing in FALRX
1. Tax-Free Income
FALRX offers income that is exempt from federal and Alabama state taxes, making it an attractive option for high-income earners in Alabama.
2. Professional Management
The fund is managed by experienced professionals, including John Wiley and Chris Sperry, who employ a conservative and disciplined investment strategy.
3. Monthly Dividends
Investors receive monthly dividend payments, providing a steady stream of income.
Risks to Consider
While FALRX offers numerous benefits, it is not without risks. Key risks include:
- Interest Rate Risk: As interest rates rise, the value of fixed-income securities may decline.
- Credit Risk: Changes in the credit rating of a bond or its issuer can impact the fund’s value.
- Geographic Concentration: The fund’s focus on Alabama bonds makes it vulnerable to economic and regulatory changes within the state.
How to Invest in FALRX
Investing in FALRX is straightforward. The fund is available through various financial platforms and requires a minimum initial investment of $1 million for Class R6 shares. For more details, visit Franklin Templeton’s official website.
Related Articles
For more insights into tax-efficient investing and mutual funds, check out our latest articles on TrendsMag:
Conclusion
The Franklin Alabama Tax-Free Income Fund Class R6 (FALRX) is a compelling choice for investors seeking tax-free income and capital preservation. With its focus on Alabama municipal bonds, professional management, and consistent performance, FALRX stands out as a reliable investment option for residents of Alabama.
For more investment tips and financial insights, visit TrendsMag
