FTTMX vs. LSMSX

Last updated Jun 24, 2026

FTTMX (Franklin Michigan Tax-Free Income Fund) and LSMSX (Western Asset SMASh Series TF Fund) are both Municipal Bonds funds from Franklin Templeton. Over the past 5 years, FTTMX returned 0.71%/yr vs 1.16%/yr for LSMSX. Their correlation of 0.82 suggests significant overlap in exposure. FTTMX charges 0.68%/yr vs 0.01%/yr for LSMSX.

Performance

FTTMX vs. LSMSX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Franklin Michigan Tax-Free Income Fund (FTTMX) and Western Asset SMASh Series TF Fund (LSMSX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FTTMX achieves a 2.01% return, which is significantly lower than LSMSX's 2.43% return.

FTTMX

• 1D: 0.00%
• 1M: 1.93%
• YTD: 2.01%
• 6M: 2.41%
• 1Y: 6.91%
• 3Y*: 4.06%
• 5Y*: 0.71%
• 10Y*: 1.81%

LSMSX

• 1D: 0.00%
• 1M: 1.91%
• YTD: 2.43%
• 6M: 2.64%
• 1Y: 7.81%
• 3Y*: 3.84%
• 5Y*: 1.16%
• 10Y*: —

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

FTTMX vs. LSMSX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
FTTMX Franklin Michigan Tax-Free Income Fund	2.01%	4.37%	2.68%	5.59%	-10.64%	1.08%	5.20%	7.75%	0.85%	2.85%
LSMSX Western Asset SMASh Series TF Fund	2.43%	3.22%	2.22%	7.96%	-10.03%	4.11%	4.48%	8.16%	0.46%	4.92%

Correlation

The correlation between FTTMX and LSMSX is 0.80, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.80
Correlation (3Y) Calculated over the trailing 3-year period	0.87
Correlation (5Y) Calculated over the trailing 5-year period	0.88
Correlation (All Time) Calculated using the full available price history since Feb 1, 2017	0.82

The correlation between FTTMX and LSMSX has been stable across timeframes, ranging from 0.80 to 0.88 - a consistent structural relationship.

Return for Risk

FTTMX vs. LSMSX — Risk / Return Rank

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

FTTMX

FTTMX Risk / Return Rank: 73
FTTMX Sharpe Ratio Rank: 81
FTTMX Sortino Ratio Rank: 87
FTTMX Omega Ratio Rank: 90
FTTMX Calmar Ratio Rank: 58
FTTMX Martin Ratio Rank: 50

LSMSX

LSMSX Risk / Return Rank: 78
LSMSX Sharpe Ratio Rank: 92
LSMSX Sortino Ratio Rank: 93
LSMSX Omega Ratio Rank: 94
LSMSX Calmar Ratio Rank: 60
LSMSX Martin Ratio Rank: 49

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.

FTTMX vs. LSMSX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Franklin Michigan Tax-Free Income Fund (FTTMX) and Western Asset SMASh Series TF Fund (LSMSX). 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.

	FTTMX	LSMSX	Difference
Sharpe ratio: Return per unit of total volatility	2.46	2.85	-0.39
Sortino ratio: Return per unit of downside risk	3.88	4.42	-0.54
Omega ratio: Gain probability vs. loss probability	1.61	1.70	-0.09
Calmar ratio: Return relative to maximum drawdown	2.80	2.86	-0.06
Martin ratio: Return relative to average drawdown	9.67	9.60	+0.07

FTTMX vs. LSMSX - Sharpe Ratio Comparison

The current FTTMX Sharpe Ratio is 2.46, which is comparable to the LSMSX Sharpe Ratio of 2.85. The chart below compares the historical Sharpe Ratios of FTTMX and LSMSX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

FTTMX vs. LSMSX - Drawdown Comparison

The maximum FTTMX drawdown since its inception was -18.79%, which is greater than LSMSX's maximum drawdown of -15.00%. Use the drawdown chart below to compare losses from any high point for FTTMX and LSMSX.

Drawdown Indicators

	FTTMX	LSMSX	Difference
Max Drawdown Largest peak-to-trough decline	-18.79%	-15.00%	-3.79%
Max Drawdown (1Y) Largest decline over 1 year	-2.55%	-2.82%	+0.27%
Max Drawdown (3Y) Largest decline over 3 years	-6.23%	-7.49%	+1.26%
Max Drawdown (5Y) Largest decline over 5 years	-15.65%	-15.00%	-0.65%
Max Drawdown (10Y) Largest decline over 10 years	-15.65%	—	—
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-2.22%	-2.84%	+0.62%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.74%	0.84%	-0.10%

Volatility

FTTMX vs. LSMSX - Volatility Comparison

Franklin Michigan Tax-Free Income Fund (FTTMX) has a higher volatility of 0.83% compared to Western Asset SMASh Series TF Fund (LSMSX) at 0.79%. This indicates that FTTMX's price experiences larger fluctuations and is considered to be riskier than LSMSX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FTTMX	LSMSX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.83%	0.79%	+0.04%
Volatility (6M) Calculated over the trailing 6-month period	2.20%	2.06%	+0.14%
Volatility (1Y) Calculated over the trailing 1-year period	2.91%	2.84%	+0.07%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	4.11%	4.48%	-0.37%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.95%	4.49%	-0.54%

FTTMX vs. LSMSX - Expense Ratio Comparison

FTTMX has a 0.68% expense ratio, which is higher than LSMSX's 0.01% expense ratio.

Dividends

FTTMX vs. LSMSX - Dividend Comparison

FTTMX's dividend yield for the trailing twelve months is around 3.34%, less than LSMSX's 3.84% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FTTMX Franklin Michigan Tax-Free Income Fund	3.34%	4.31%	3.69%	2.78%	2.84%	2.34%	2.50%	3.24%	3.13%	2.97%	3.59%	3.23%
LSMSX Western Asset SMASh Series TF Fund	3.84%	3.83%	4.30%	3.37%	2.38%	2.73%	2.33%	2.55%	2.34%	0.90%	0.00%	0.00%

Frequently Asked Questions

Can I hold both FTTMX and LSMSX in my portfolio?

FTTMX and LSMSX have a correlation of 0.80, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FTTMX or LSMSX?

FTTMX has higher volatility (0.83%) compared to LSMSX (0.79%). In terms of maximum drawdown, FTTMX dropped -18.79% vs LSMSX's -15.00%.

Which has better risk-adjusted returns?

LSMSX currently has the higher Sharpe Ratio (2.85 vs 2.46), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.