FTMS vs. ZTAX

Last updated Jun 27, 2026

FTMS (Franklin Short-Term Municipal Income ETF) and ZTAX (X-Square Municipal Income Tax Free ETF) are both Municipal Bonds funds. Both are actively managed. At a correlation of -0.16, they often move in opposite directions. FTMS charges 0.21%/yr vs 1.14%/yr for ZTAX.

Performance

FTMS vs. ZTAX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Franklin Short-Term Municipal Income ETF (FTMS) and X-Square Municipal Income Tax Free ETF (ZTAX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FTMS achieves a 1.41% return, which is significantly lower than ZTAX's 4.33% return.

FTMS

• 1D: -0.20%
• 1M: 0.39%
• YTD: 1.41%
• 6M: 1.41%
• 1Y: —
• 3Y*: —
• 5Y*: —
• 10Y*: —

ZTAX

• 1D: 2.63%
• 1M: 3.87%
• YTD: 4.33%
• 6M: 3.53%
• 1Y: 8.62%
• 3Y*: 5.18%
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

FTMS vs. ZTAX - Yearly Performance Comparison

	2026 (YTD)	2025
FTMS Franklin Short-Term Municipal Income ETF	1.41%	0.47%
ZTAX X-Square Municipal Income Tax Free ETF	4.33%	4.08%

Correlation

The correlation between FTMS and ZTAX is -0.16, meaning they tend to move in opposite directions. This is especially valuable for risk management - when one declines, the other has historically tended to hold steady or rise.

	Correlation
Correlation (All Time) Calculated using the full available price history since Oct 27, 2025	-0.16

Return for Risk

FTMS vs. ZTAX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

FTMS

Risk / return metrics aren't available yet — we need at least 12 months of trading data to calculate them.

ZTAX

ZTAX Risk / Return Rank: 16
ZTAX Sharpe Ratio Rank: 12
ZTAX Sortino Ratio Rank: 13
ZTAX Omega Ratio Rank: 17
ZTAX Calmar Ratio Rank: 19
ZTAX Martin Ratio Rank: 18

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

FTMS vs. ZTAX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Franklin Short-Term Municipal Income ETF (FTMS) and X-Square Municipal Income Tax Free ETF (ZTAX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	FTMS	ZTAX	Difference
Sharpe ratio: Return per unit of total volatility	—	0.27	—
Sortino ratio: Return per unit of downside risk	—	0.62	—
Omega ratio: Gain probability vs. loss probability	—	1.11	—
Calmar ratio: Return relative to maximum drawdown	—	0.79	—
Martin ratio: Return relative to average drawdown	—	1.86	—

Drawdowns

FTMS vs. ZTAX - Drawdown Comparison

The maximum FTMS drawdown since its inception was -1.24%, smaller than the maximum ZTAX drawdown of -15.33%. Use the drawdown chart below to compare losses from any high point for FTMS and ZTAX.

Drawdown Indicators

	FTMS	ZTAX	Difference
Max Drawdown Largest peak-to-trough decline	-1.24%	-15.33%	+14.09%
Max Drawdown (1Y) Largest decline over 1 year	—	-10.99%	—
Max Drawdown (3Y) Largest decline over 3 years	—	-15.33%	—
Current Drawdown Current decline from peak	-0.20%	-8.39%	+8.19%
Average Drawdown Average peak-to-trough decline	-0.28%	-6.83%	+6.55%
Ulcer Index Depth and duration of drawdowns from previous peaks	—	4.65%	—

Volatility

Volatility by Period

	FTMS	ZTAX	Difference
Volatility (1M) Calculated over the trailing 1-month period	—	19.81%	—
Volatility (6M) Calculated over the trailing 6-month period	—	27.64%	—
Volatility (1Y) Calculated over the trailing 1-year period	1.73%	32.42%	-30.69%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.73%	28.90%	-27.17%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.73%	28.90%	-27.17%

FTMS vs. ZTAX - Expense Ratio Comparison

FTMS has a 0.21% expense ratio, which is lower than ZTAX's 1.14% expense ratio.

Dividends

FTMS vs. ZTAX - Dividend Comparison

FTMS's dividend yield for the trailing twelve months is around 1.97%, less than ZTAX's 4.38% yield.

Position	TTM	2025	2024	2023
FTMS Franklin Short-Term Municipal Income ETF	1.97%	0.57%	0.00%	0.00%
ZTAX X-Square Municipal Income Tax Free ETF	4.38%	4.58%	4.55%	2.14%

Frequently Asked Questions

Can I hold both FTMS and ZTAX in my portfolio?

FTMS and ZTAX have a correlation of -0.16, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which ETF is better, FTMS or ZTAX?

On fees, FTMS is cheaper at 0.21% per year. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF is cheaper, FTMS or ZTAX?

FTMS is cheaper with a 0.21% expense ratio, compared with 1.14% for ZTAX.

Which ETF pays a higher dividend yield, FTMS or ZTAX?

ZTAX has the higher dividend yield at 4.38%, compared with 1.97% for FTMS.

What is the main difference between FTMS and ZTAX?

They also come from different issuers: Franklin Templeton and X-Square. Their fees differ too: 0.21% for FTMS and 1.14% for ZTAX.