FalRX.com represents the online access point for the Franklin Alabama Tax‑Free Income Fund – Class R6 (FALRX), part of the Franklin Templeton family. Designed for investors seeking tax-exempt income, the fund focuses primarily on municipal bonds issued by Alabama entities.
1. Fund Overview
The FalRX.com aims to deliver monthly income that is exempt from federal and Alabama state personal income taxes, while prioritizing capital preservation. To achieve this, it invests at least 80% of its assets in securities whose interest meets these tax criteria (including AMT‑exempt instruments).
2. Investment Strategy & Portfolio Composition
The fund is categorized under Muni Single State Long and dedicates approximately 98% of its holdings to tax-exempt Alabama municipal bonds, with the remainder in cash or equivalents .
Within these holdings, asset allocation breaks down as follows:
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Education (nearly 30%)
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Health care (16%)
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Utilities, Industrial development, and others rounding out the portfolio
Credit quality distribution includes exposure to AA and AAA-rated bonds, while the average maturity is about 17 years, and effective duration stands around 7.7 years .
3. Performance & Returns Analysis
As of mid-2025, FALRX’s net asset value (NAV) hovered around $9.71–$9.73, with total asset size of approximately $190–$243 million depending on the source .
Key return figures:
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1-year total return: about –2.1%
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3‑year annualized: +2.1%
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5‑year annualized: +0.03% (effectively flat over the period)
Compared to benchmarks like the Bloomberg Muni Bond Index, the fund’s trailing returns slightly lagged peers in yield but performed consistently within its risk profile.
4. Income & Dividend Details
FALRX distributes income monthly, with a forward dividend yield around 3.1% annualized (~$0.30 per share).
Recent payouts ranged from about $0.023 to $0.028 per share across early 2025, reflecting steady dividend discipline .
5. Fees, Share Class Info & Minimums
As a Class R6 share, FALRX features:
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No sales load
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Low expense ratio of approximately 0.62% (net) with potential waivers through mid-2026
In contrast, other share classes like A, C, Advisor (FALZX), and others carry higher fees—up to 1.30%. The minimum investment for R6 is traditionally high, often $1 million, although institutional plans may vary .
6. Risk Profile & Morningstar Rating
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Blink Stats: Beta >1.0 and a Sharpe ratio slightly negative, indicating moderate volatility relative to return.
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Morningstar Rating: Rated Neutral with Below Average “Process & People” scoring, signaling concerns about fund management but recognition of stability over time.
As a single-state municipal fund, the investment carries state-specific risk—changes in Alabama’s fiscal health or legislation could impact returns.
7. Pros & Cons
| Pros | Cons |
|---|---|
| Tax-exempt income (federal + Alabama) | Concentrated single-state exposure |
| Reliable monthly dividends | Modest returns relative to taxable alternatives |
| Low net expense ratio for R6 class | High minimum investment threshold |
| Institutional share class with strong credit focus | Less geographic diversification |
8. Ideal Investor Profile
FALRX is tailored for:
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High-net-worth investors residing in Alabama seeking tax-efficient income
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Institutional portfolios or retirement plans targeting monthly yield
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Those with minimal federal/state tax liability but consistent income needs
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Investors willing to commit to one state exposure for potential return enhancement
Less ideal for those prioritizing capital growth, liquidity, or nationwide bond diversification.
9. FAQs
Q1: Is income from FALRX fully exempt?
Yes—income is exempt from federal and Alabama personal income tax, given the fund’s concentration in Alabama municipal securities and AMT compliance .
Q2: What’s the minimum required investment?
Typically $1,000,000, though institutional channels may vary .
Q3: How often are distributions paid?
Monthly, with recent dividend history ranging between $0.02 and $0.03 per share each month .
Q4: Should investors be worried about bond risk?
Yes—long duration and single-state exposure increase sensitivity to interest rate changes and state credit shifts.
Q5: How does the R6 share class differ from others?
It enjoys the lowest net expense ratio (0.62%) and no sales load—but comes with a high minimum investment requirement compared to A, C, or Advisor share classes .
Q6: Is FALRX suitable for IRA & 401(k)?
Yes—its tax-free structure and steady income stream make it an attractive option for retirement accounts, where municipal income remains tax-efficient.
10. Conclusion
The Franklin Alabama Tax-Free Income Fund (FALRX) offers a niche solution—reliable, tax-exempt income with a focus on Alabama municipal bonds. Its structured, conservative approach and monthly payouts may appeal to high-income investors or institutions in that region.
However, investors must weigh the trade-offs: limited diversification, long duration, and substantial minimum investment. While it delivers on tax-efficiency and steady income, its long-term total return is moderate. Thanks to its low costs and institutional-level design, FALRX holds a spot in portfolios where dependable, tax-advantaged income is the primary goal.
