Franklin Templeton Distributors grew its municipal bond fund product line by opening three shorter-term maturity, tax-free income funds this week. The new funds are the Franklin Federal Limited-Term Tax-Free Income Fund, Franklin California Limited-Term Tax-Free Income Fund and Franklin New York Limited-Term Tax-Free Income Fund. Each of the funds invests in investment grade municipal securities and will maintain average weighted maturities of five years or less.

"For investors concerned about rising interest rates, these new funds offer the potential for lower volatility due to interest rate changes, while at the same time generating tax-free income that could be more attractive than short-term, taxable fixed income alternatives," stated Sheila Amoroso, co-director of the Franklin Municipal Bond Department.

Jim Conn and John Pomeroy are the portfolio managers for the federal and New York funds. Chris Sperry, and John Wiley are teaming to manage the California fund.  

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