Franklin ETF Trust N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22801

Franklin ETF Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906

(Address of principal executive offices)(Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant's telephone number, including area code:(650)312-2000

Date of fiscal year end: 3/31

Date of reporting period: 9/30/21

Item 1.  Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

SEMIANNUAL

REPORT

Franklin

ETF

Trust

September

30,

2021

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

Contents

Semiannual

Report

Franklin

Equity

Portfolio

Fund

2

Franklin

Fixed

Income

Portfolio

Fund

7

Financial

Highlights

and

Statements

of

Investments

12

Financial

Statements

16

Notes

to

Financial

Statements

19

Tax

Information

26

Shareholder

Information

27

Visit

franklintempleton.com

for

fund

updates

and

documents,

or

to

find

helpful

financial

planning

tools.

2

franklintempleton.com

Semiannual

Report

SEMIANNUAL

REPORT

Franklin

Equity

Portfolio

Fund

This

semiannual

report

for

Franklin

Equity

Portfolio

Fund

covers

the

period

ended

September

30,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

achieve

its

investment

goal

of

long-term

capital

appreciation

by

investing

primarily

in

other

Franklin

Templeton

and

Legg

Mason

mutual

funds

and

exchange-

traded

funds

(ETFs)

and

third-party

ETFs

(together,

the

“underlying

funds”).

Through

the

Fund’s

investments

in

the

underlying

funds,

the

Fund

normally

invests

at

least

80%

of

its

net

assets

in

equity

securities

and

other

instruments

that

have

economic

characteristics

similar

to

equity

securities.

Performance

Overview

During

the

six-month

period,

the

Fund

posted

a

+7.13%

cumulative

total

return.

In

comparison,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

which

measures

the

performance

of

global

developed

and

emerging

equity

markets,

posted

a

+6.26%

cumulative

total

return

for

the

same

period.

1

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

4

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Economic

and

Market

Overview

Global

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

World

Index-NR,

posted

a

+6.26%

total

return

for

the

six

months

ended

September

30,

2021.

1

Global

equities

benefited

from

the

continued

progress

of

vaccination

programs

for

COVID-19,

solid

economic

growth,

and

a

rebound

in

global

trade.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

The

combination

of

increased

consumer

demand

and

persistent

supply

chain

disruptions

contributed

to

higher

inflation

in

many

countries.

Additionally,

the

spread

of

the

highly

contagious

Delta

variant,

which

caused

COVID-19

cases

to

rise

even

in

some

intensively

vaccinated

areas,

pressured

global

equities

during

the

six-

month

period.

In

the

U.S.,

the

economy

continued

to

recover

amid

declining

unemployment,

solid

wage

growth

and

high

business

confidence.

GDP

growth

was

robust,

as

strong

consumer

spending,

driven

by

a

surge

in

consumer

demand,

supported

the

economy.

A

rebound

in

corporate

earnings

and

the

U.S.

Senate’s

passage

of

a

bipartisan

infrastructure

bill

further

bolstered

investor

sentiment.

The

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%

and

continued

its

program

of

open-

ended

U.S.

Treasury

and

mortgage

bond

purchases

to

help

keep

markets

functioning.

In

its

September

2021

meeting

statement,

the

Fed

indicated

that

it

plans

to

soon

reduce

its

purchases

of

U.S.

Treasury

and

mortgage-backed

securities

but

declined

to

provide

a

timetable.

The

Fed

also

maintained

that

it

views

inflation

as

partially

transitory,

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

The

eurozone

economy

showed

signs

of

recovery,

as

quarter-over-quarter

GDP

increased

in

the

second

quarter

of

2021

after

contracting

for

the

previous

two

quarters.

Most

of

the

eurozone’s

largest

economies

posted

improving

growth

rates,

as

increased

vaccination

rates

helped

consumer

activity

return

to

pre-pandemic

levels.

The

fastest

rate

of

business

activity

growth

in

more

than

a

decade

also

helped

European

developed

market

equities,

as

measured

by

the

MSCI

Europe

Index-NR,

to

post

a

+5.75%

total

return

for

the

six

months

under

review.

1

However,

in

September

2021,

the

annual

inflation

rate

in

the

eurozone

reached

the

highest

level

in

13

years,

and

the

prospect

of

energy

shortages

as

winter

approaches

tempered

investor

optimism.

Portfolio

Composition

9/30/21

%

of

Total

Net

Assets

Domestic

Equity

65.3%

Foreign

Equity

33.5%

Short-Term

Investments

&

Other

Net

Assets

1.2%

1.

Source:

Morningstar.

The

index

is

unmanaged

and

includes

reinvestment

of

any

income

or

distributions.

It

does

not

reflect

any

fees,

expenses

or

sales

charges.

One

cannot

invest

directly

in

an

index,

and

an

index

is

not

representative

of

the

Fund’s

portfolio.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

13

.

Franklin

Equity

Portfolio

Fund

3

franklintempleton.com

Semiannual

Report

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-2.48%

total

return

for

the

six-month

period.

1

Although

China

continued

to

grow,

its

economy

was

pressured

by

higher

commodity

prices,

increased

fuel

costs

and

production

disruption

caused

by

government-mandated

suspensions

of

power

use.

Asian

equity

markets

experienced

heightened

volatility

due

to

inflation

concerns

and

rising

COVID-19

infection

rates

in

some

countries.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

concerns

about

a

large

property

developer’s

solvency

pressured

Asian

stocks

late

in

the

six-month

period.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-3.45%

total

return

for

the

six

months

under

review.

1

Higher

COVID-19

cases

in

some

countries,

limited

vaccine

rollouts

and

concerns

about

rising

interest

rates

and

elevated

inflation

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Investor

concerns

that

problems

in

China’s

highly

indebted

property

development

sector

could

affect

other

emerging

markets

further

hurt

returns.

Investment

Strategy

The

Fund

primarily

invests

in

underlying

funds

that

provide

exposure

to

U.S.

and

international

equity

securities,

including

emerging

markets

securities,

of

any

market

capitalization.

In

choosing

underlying

funds,

we

consider

the

underlying

funds’

foreign

and

domestic

exposure

and

market

capitalization

ranges.

In

addition,

we

evaluate

the

risk

level

of

each

underlying

fund

by

analyzing

factors

such

as:

(a)

the

underlying

fund’s

performance,

including

comparative

performance

against

its

benchmark

indices

and

its

Morningstar

peer

group,

(b)

the

correlation

of

the

underlying

fund’s

performance

with

other

underlying

funds

and

their

corresponding

benchmark

indices,

and

(c)

volatility.

Manager’s

Discussion

Franklin

Equity

Portfolio

Fund

pursues

an

objective

of

long-

term

capital

appreciation,

while

providing

diversified

equity

exposures

across

capitalization

sizes

and

investment

styles.

The

Fund’s

performance

can

be

attributed

to

its

allocation

among

domestic

and

foreign

equity

securities

and

to

the

actual

performance

of

the

underlying

funds’

investments.

At

period-end,

Franklin

Equity

Portfolio

Fund

allocated

65.3%

of

total

net

assets

to

domestic

equity

and

33.5%

to

foreign

equity.

The

Fund

was

diversified

across

capitalization

sizes

as

the

Fund’s

managers

sought

to

achieve

a

core

investment

style,

having

characteristics

of

both

growth

and

value.

Franklin

U.S.

Core

Equity

(IU)

Fund,

which

seeks

to

outperform

the

Russell

1000

®

benchmark

by

utilizing

a

blended

fundamental

and

quantitative

approach,

was

the

largest

equity

underlying

fund

allocation

at

65.3%.

2

Franklin

International

Core

Equity

(IU)

Fund

was

the

second

largest

equity

underlying

fund

allocation

at

19.9%,

and

Franklin

Emerging

Market

Core

Equity

(IU)

Fund

had

an

allocation

of

11.6%.

Thank

you

for

your

participation

in

Franklin

Equity

Portfolio

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Thomas

A.

Nelson,

CFA

Wylie

Tollette,

CFA

Berkeley

Revenaugh

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

September

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Fund

Holdings

9/30/21

%

of

Total

Net

Assets

a

a

Franklin

U.S.

Core

Equity

(IU)

Fund

65.3%

Franklin

International

Core

Equity

(IU)

Fund

19.9%

Franklin

Emerging

Market

Core

Equity

(IU)

Fund

11.6%

Franklin

FTSE

Japan

ETF

2.0%

CFA

®

is

a

trademark

owned

by

CFA

Institute

.

2.

Frank

Russell

Company

is

the

source

and

owner

of

the

trademarks,

service

marks

and

copyrights

related

to

the

Russell

Indexes.

Russell

®

is

a

trademark

of

Frank

Russell

Company.

Russell

1000

®

Index

is

market

capitalization

weighted

and

measures

performance

of

the

largest

companies

in

the

Russell

3000

®

Index,

which

represents

the

majority

of

the

U.S.

market’s

total

capitalization.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Performance

Summary

as

of

September

30,

2021

Franklin

Equity

Portfolio

Fund

4

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

9

/30

/21

1

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

6-Month

+7.13%

+7.13%

1-Year

+26.00%

+26.00%

Since

Inception

(7/15/20)

+28.14%

+22.72%

See

page

5

for

Performance

Summary

footnotes.

Franklin

Equity

Portfolio

Fund

Performance

Summary

5

franklintempleton.com

Semiannual

Report

All

investments

involve

risks,

including

possible

loss

of

principal.

Because

the

Fund

invests

in

underlying

funds,

the

Fund’s

ability

to

achieve

its

investment

goal

is

directly

related

to

the

ability

of

the

underlying

funds

to

meet

their

investment

goals,

and

the

Fund

indirectly

bears

the

fees

and

expenses

of

the

underlying

funds.

The

Fund’s

investments

in

ETFs

may

subject

the

Fund

to

additional

risks

than

if

the

Fund

would

have

invested

directly

in

the

ETFs’

underlying

securities.

The

market

values

of

securities

or

other

investments

owned

by

the

Fund

will

fluctuate,

sometimes

rapidly

or

unpredictably,

due

to

factors

affecting

individual

companies,

particular

industries

or

sectors,

or

market

activity

or

other

results

of

supply

and

demand

unrelated

to

the

issuer.

Securities

issued

by

small

and

mid-capitalization

companies

may

be

more

volatile

in

price

than

larger

company

securities

and

may

involve

additional

risks.

Large

companies

may

underperform

relative

to

small

and

mid-capitalization

companies

because

they

may

be

unable

to

respond

quickly

to

new

competitive

challenges,

such

as

changes

in

technol-

ogy

and

consumer

tastes,

and

may

not

be

able

to

attain

the

high

growth

rate

of

successful

smaller

companies,

especially

during

extended

periods

of

economic

expansion.

U.S.

securities

can

be

volatile

in

response

to

various

forces

including

political

and

economic

events,

federal

and

state

budget

deficits;

unpredictabil-

ity

of

U.S.

legislation

on

financial

reform,

health

care,

tax

reform

and

infrastructure;

risks

of

“trade

wars;”

and

persistently

low

interest

rates.

Investing

in

foreign

securities

typically

involves

more

risks

than

investing

in

U.S.

securities,

and

includes

risks

associated

with

internal

and

external

political

and

economic

develop-

ments,

trading

practices,

availability

of

information,

limited

markets,

and

currency

exchange

rate

fluctuations

and

policies.

The

risks

of

foreign

investments

may

be

greater

in

developing

or

emerging

market

countries.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

7/31/22.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

waivers,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(4/1/21–9/30/21)

Net

Investment

Income

$0.0517

Total

Annual

Operating

Expenses

4

With

Fee

Waiver

Without

Fee

Waiver

0.50%

12.83%

Your

Fund’s

Expenses

Franklin

Equity

Portfolio

Fund

6

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions,

if

applicable;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses,

if

applicable.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value.”

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

183/365

to

reflect

the

one-half

year

period.

Non-recurring

expenses

are

not

annualized.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Beginning

Account

Value

4/1/21

Ending

Account

Value

9/30/21

Expenses

Paid

During

Period

4/1/21–9/30/21

1,2

Ending

Account

Value

9/30/21

Expenses

Paid

During

Period

4/1/21–9/30/21

1,2

a

Annualized

Expense

Ratio

2

$1,000

$1,071.30

$2.58

$1,022.58

$2.52

0.50%

7

franklintempleton.com

Semiannual

Report

Franklin

Fixed

Income

Portfolio

Fund

This

semiannual

report

for

Franklin

Fixed

Income

Portfolio

Fund

covers

the

period

ended

September

30,

2021.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

current

income

with

long-term

capital

appreciation

as

a

secondary

goal,

by

investing

primarily

in

other

Franklin

Templeton

and

Legg

Mason

mutual

funds

and

exchange-traded

funds

(ETFs)

and

third-party

ETFs

(together,

the

“underlying

funds”).

Through

the

Fund’s

investments

in

the

underlying

funds,

the

Fund

normally

invests

at

least

80%

of

its

net

assets

in

fixed

income

securities

and

other

instruments

that

have

economic

characteristics

similar

to

fixed

income

securities.

Performance

Overview

During

the

six-month

period,

the

Fund

posted

a

+1.64%

cumulative

total

return.

In

comparison,

the

Bloomberg

U.S.

Aggregate

Bond

Index,

the

Fund’s

primary

benchmark,

which

measures

the

performance

of

the

investment-

grade,

U.S.

dollar-denominated,

fixed-rate

taxable

bond

market,

posted

a

+1.88%

cumulative

total

return

for

the

same

period.

1

Also

for

comparison,

the

Fund’s

secondary

benchmark,

the

Bloomberg

Global

Aggregate

Bond

Index,

which

measures

the

performance

of

the

global

investment-

grade,

fixed-rate

bond

markets,

posted

a

+0.42%

cumulative

total

return

for

the

same

period.

1

You

can

find

more

of

the

Fund’s

performance

data

in

the

Performance

Summary

beginning

on

page

9

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Economic

and

Market

Overview

The

U.S.

bond

market,

as

measured

by

the

Bloomberg

U.S.

Aggregate

Bond

Index,

posted

a

+1.88%

total

return

for

the

six

months

ended

September

30,

2021.

1

The

inflation

rate

was

elevated

during

the

period

amid

high

demand

and

supply-chain

bottlenecks,

with

the

price

pressures

coming

principally

from

the

areas

most

impacted

by

shutdowns

related

to

the

novel

coronavirus

(COVID-19)

pandemic,

such

as

used

vehicles,

airfares,

semiconductors

and

energy.

However,

investors’

inflation

expectations

were

relatively

stable,

and

a

widely-used

measure

indicated

that

markets

anticipated

inflation

will

moderate.

Longer-term

bonds

generally

outperformed

shorter-term

bonds,

as

the

yield

curve

(a

measure

of

the

difference

between

long-term

and

short-term

bond

yields)

flattened

slightly.

In

an

effort

to

support

the

economy,

the

U.S.

Federal

Reserve

(Fed)

kept

the

federal

funds

target

rate

at

a

record-low

range

of

0.00%–0.25%.

The

Fed

also

maintained

quantitative

easing

measures

aimed

at

ensuring

credit

flows

to

borrowers

and

supporting

credit

markets

with

open-

ended

U.S.

Treasury

and

mortgage

bond

purchasing.

In

its

September

2021

meeting

statement,

the

Fed

indicated

that

it

soon

plans

to

reduce

its

purchases

of

U.S.

Treasury

and

mortgage-backed

securities

but

declined

to

provide

a

timetable.

The

Fed

also

maintained

that

it

views

inflation

as

partially

transitory,

and

that

further

employment

progress

was

needed

before

the

Fed

would

consider

raising

the

range

for

the

federal

funds

target

rate.

U.S.

Treasury

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

+1.83%

total

return

for

the

six-

month

period.

1

The

10-year

U.S.

Treasury

yield

(which

moves

inversely

to

price)

declined

amid

an

increase

in

novel

coronavirus

(COVID-19)

cases

as

the

Delta

variant

spread.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

MBS

Index,

posted

a

+0.43%

total

return

for

the

period,

helped

by

ongoing

Fed

support.

1

Corporate

bonds

followed

a

similar

trajectory

as

U.S.

Treasuries,

but

benefited

from

a

continued

decline

in

spreads

(the

difference

in

yields

between

government

and

corporate

bonds)

amid

an

increase

in

investors’

appetite

for

risk.

High-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

+3.65%

total

return,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

posted

a

+3.54%

total

return.

1

Portfolio

Composition

9/30/21

%

of

Total

Net

Assets

Domestic

Fixed

Income

95.6%

Short-Term

Investments

&

Other

Net

Assets

4.4%

1.

Source:

Morningstar.

The

indexes

are

unmanaged

and

include

reinvestment

of

any

income

or

distributions.

They

do

not

reflect

any

fees,

expenses

or

sales

charges.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

15

.

Franklin

Fixed

Income

Portfolio

Fund

8

franklintempleton.com

Semiannual

Report

Investment

Strategy

The

Fund

primarily

invests

in

underlying

funds

that

provide

exposure

to

U.S.

and

international

fixed

income

securities,

including

emerging

markets

securities,

of

any

maturity

or

duration,

including

government

debt,

corporate

debt,

municipal

securities

and

mortgage-backed

and

asset-backed

securities

(including

those

that

are

issued

on

a

when-issued

or

delayed

delivery

basis).

Certain

underlying

funds

may

hold

securities

across

the

credit

quality

spectrum,

including

below

investment

grade

or

“junk”

bonds.

In

addition,

some

underlying

funds

may

have

exposure

to

certain

derivative

instruments.

In

choosing

underlying

funds,

we

consider

the

underlying

funds’

foreign

and

domestic

exposure,

duration

and

maturity.

In

addition,

we

evaluate

the

risk

level

of

each

underlying

fund

by

analyzing

factors

such

as:

(a)

the

underlying

fund’s

performance,

including

comparative

performance

against

its

benchmark

indices

and

its

Morningstar

peer

group,

(b)

the

correlation

of

the

underlying

fund’s

performance

with

other

underlying

funds

and

their

corresponding

benchmark

indices,

and

(c)

volatility.

Manager’s

Discussion

Franklin

Fixed

Income

Portfolio

Fund

pursues

an

objective

of

current

income

and

long-term

capital

appreciation

as

a

secondary

goal,

while

providing

diversified

fixed

income

exposures

across

rates

and

credit

sectors.

The

Fund’s

performance

can

be

attributed

to

its

allocation

among

fixed

income

securities

and

to

the

actual

performance

of

the

underlying

funds’

investments.

At

period-end,

Franklin

Fixed

Income

Portfolio

Fund

allocated

95.6%

of

total

net

assets

to

domestic

fixed

income

and

had

no

foreign

fixed

income

holdings.

Franklin

Liberty

U.S.

Core

Bond

ETF,

which

seeks

to

obtain

broad

exposure

to

the

Bloomberg

U.S.

Aggregate

Bond

Index,

was

the

largest

position

with

an

allocation

of

58.7%.

Franklin

Liberty

Investment

Grade

Corporate

ETF

was

the

second

largest

position

with

an

allocation

of

9.5%,

and

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

was

the

third

largest

position

with

an

allocation

of

7.7%.

Thank

you

for

your

participation

in

Franklin

Fixed

Income

Portfolio

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Thomas

A.

Nelson,

CFA

Wylie

Tollette,

CFA

Berkeley

Revenaugh

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

September

30,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

country,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Fund

Holdings

9/30/21

%

of

Total

Net

Assets

a

a

Franklin

Liberty

U.S.

Core

Bond

ETF

58.7%

Franklin

Liberty

Investment

Grade

Corporate

ETF

9.5%

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

7.7%

Franklin

Liberty

Federal

Tax-Free

Bond

ETF

5.5%

Franklin

Liberty

U.S.

Treasury

Bond

ETF

4.8%

Schwab

U.S.

TIPS

ETF

4.8%

Franklin

Liberty

Senior

Loan

ETF

2.7%

Franklin

Liberty

High

Yield

Corporate

ETF

1.9%

Performance

Summary

as

of

September

30,

2021

Franklin

Fixed

Income

Portfolio

Fund

9

franklintempleton.com

Semiannual

Report

The

performance

table

does

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

9

/

30

/21

1

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236.

Cumulative

Total

Return

2

Average

Annual

Total

Return

3

–

6-Month

+1.64%

+1.64%

1-Year

-0.39%

-0.39%

Since

Inception

(7/15/20)

-0.39%

-0.32%

See

page

10

for

Performance

Summary

footnotes.

Franklin

Fixed

Income

Portfolio

Fund

Performance

Summary

10

franklintempleton.com

Semiannual

Report

All

investments

involve

risks,

including

possible

loss

of

principal.

Because

the

Fund

invests

in

underlying

funds,

the

Fund’s

ability

to

achieve

its

investment

goal

is

directly

related

to

the

ability

of

the

underlying

funds

to

meet

their

investment

goals,

and

the

Fund

indirectly

bears

the

fees

and

expenses

of

the

underlying

funds.

The

Fund’s

investments

in

ETFs

may

subject

the

Fund

to

additional

risks

than

if

the

Fund

would

have

invested

directly

in

the

ETFs’

underlying

securities.

The

market

values

of

securities

or

other

investments

owned

by

the

Fund

will

go

up

or

down,

sometimes

rapidly

or

unpredictably.

When

interest

rates

rise,

debt

security

prices

generally

fall.

The

opposite

is

also

generally

true:

debt

security

prices

rise

when

interest

rates

fall.

An

issuer

of

debt

securities

may

fail

to

make

interest

payments

or

repay

principal

when

due,

in

whole

or

in

part.

Changes

in

an

issuer’s

financial

strength

or

in

a

security’s

or

government’s

credit

rating

may

affect

a

security’s

value.

Because

of

prepayments,

mortgage

securities

may

be

less

effective

than

some

other

types

of

debt

securities

as

a

means

of

“locking

in”

long-term

interest

rates

and

may

have

less

potential

for

capital

appreciation

during

periods

of

falling

interest

rates.

Derivatives

involve

costs

and

can

create

economic

leverage

in

the

Fund’s

portfolio

which

may

result

in

significant

volatility

and

cause

the

Fund

to

participate

in

losses

(as

well

as

gains)

in

an

amount

that

significantly

exceeds

the

Fund’s

initial

investment.

Because

the

Fund

can

only

distribute

what

it

earns,

the

Fund’s

distributions

to

shareholders

may

decline

when

prevailing

interest

rates

fall

or

when

the

Fund

experiences

defaults

on

debt

securities

it

holds.

The

prices

of

high-yield

debt

securities

generally

fluctu-

ate

more

than

those

of

higher

credit

quality.

Investing

in

foreign

securities

typically

involves

more

risks

than

investing

in

U.S.

securities,

and

includes

risks

associated

with

internal

and

external

political

and

economic

developments,

trading

practices,

availability

of

information,

limited

markets,

and

currency

exchange

rate

fluctuations

and

policies.

The

risks

of

foreign

investments

may

be

greater

in

developing

or

emerging

market

countries.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund

is

actively

managed

but

there

is

no

guarantee

that

the

manager’s

investment

decisions

will

produce

the

desired

results.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

invest-

ment

risks.

1.

The

Fund

has

an

expense

reduction

and

a

fee

waiver

associated

with

any

investments

it

makes

in

a

Franklin

Templeton

money

fund

and/or

other

Franklin

Templeton

fund,

contractually

guaranteed

through

7/31/22.

Fund

investment

results

reflect

the

expense

reduction

and

fee

waiver;

without

these

waivers,

the

results

would

have

been

lower.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

4.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(4/1/21–9/30/21)

Net

Investment

Income

$0.0985

Total

Annual

Operating

Expenses

4

With

Fee

Waiver

Without

Fee

Waiver

0.57%

54.23%

Your

Fund’s

Expenses

Franklin

Fixed

Income

Portfolio

Fund

11

franklintempleton.com

Semiannual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions,

if

applicable;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses,

if

applicable.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value.”

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=

$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

183/365

to

reflect

the

one-half

year

period.

Non-recurring

expenses

are

not

annualized.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Beginning

Account

Value

4/1/21

Ending

Account

Value

9/30/21

Expenses

Paid

During

Period

4/1/21–9/30/21

1,2

Ending

Account

Value

9/30/21

Expenses

Paid

During

Period

4/1/21–9/30/21

1,2

a

Annualized

Expense

Ratio

2

$1,000

$1,016.40

$1.07

$1,024.01

$1.07

0.21%

Franklin

ETF

Trust

Financial

Highlights

Franklin

Equity

Portfolio

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

12

a

Six

Months

Ended

September

30,

2021

(unaudited)

Year

Ended

March

31,

2021

a

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

......................................................

$11.80

$10.00

Income

from

investment

operations

b

:

Net

investment

income

c,d

.............................................................

0.09

0.10

Net

realized

and

unrealized

gains

(losses)

................................................

0.75

1.85

Total

from

investment

operations

.........................................................

0.84

1.95

Less

distributions

from:

Net

investment

income

...............................................................

(0.05)

(0.15)

Net

asset

value,

end

of

period

...........................................................

$12.59

$11.80

Total

return

e

........................................................................

7.13%

19.61%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

g

..........................................

15.41%

38.20%

Expenses

net

of

waiver

and

payments

by

affiliates

g

...........................................

0.50%

0.50%

h

Net

investment

income

................................................................

1.36%

1.30%

Supplemental

data

Net

assets,

end

of

period

(000’s)

.........................................................

$387

$347

Portfolio

turnover

rate

.................................................................

8.97%

81.63%

a

For

the

period

July

15,

2020

(effective

date)

to

March

31,

2021.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Recognition

of

net

investment

income

by

the

Fund

is

affected

by

the

timing

of

declaration

of

dividends

by

the

Underlying

Funds

and

exchange

traded

funds

in

which

the

Fund

invests.

e

Total

return

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

g

Does

not

include

expenses

of

the

Underlying

Funds

in

which

the

Fund

invests.

The

weighted

average

indirect

expenses

of

the

Underlying

Funds

was

0.00%

for

the

period

ended

September

30,

2021.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

ETF

Trust

Statement

of

Investments

(unaudited),

September

30,

2021

Franklin

Equity

Portfolio

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

13

a

a

Shares

a

Value

a

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

98.8%

Domestic

Equity

65.3%

a

Franklin

U.S.

Core

Equity

(IU)

Fund

.....................................

17,152

$

252,643

Foreign

Equity

33.5%

a

Franklin

Emerging

Market

Core

Equity

(IU)

Fund

............................

3,902

44,796

a

Franklin

FTSE

Japan

ETF

.............................................

243

7,506

a

Franklin

International

Core

Equity

(IU)

Fund

...............................

6,022

77,082

129,384

Total

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

(Cost

$318,704)

382,027

a

a

a

a

Short

Term

Investments

0.4%

a

Money

Market

Funds

0.4%

a,b

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

...................

1,666

1,666

Total

Money

Market

Funds

(Cost

$1,666)

.......................................

1,666

Total

Short

Term

Investments

(Cost

$1,666

)

....................................

1,666

a

Total

Investments

(Cost

$320,370)

99.2%

.......................................

$383,693

Other

Assets,

less

Liabilities

0.8%

.............................................

2,996

Net

Assets

100.0%

...........................................................

$386,689

See

Abbreviations

on

page

25

.

a

See

Note

3(d)

regarding

investments

in

FT

Underlying

Funds.

b

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

ETF

Trust

Financial

Highlights

Franklin

Fixed

Income

Portfolio

Fund

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

14

a

Six

Months

Ended

September

30,

2021

(unaudited)

Year

Ended

March

31,

2021

a

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

......................................................

$9.66

$10.00

Income

from

investment

operations

b

:

Net

investment

income

c

,d

.............................................................

0.10

0.17

Net

realized

and

unrealized

gains

(losses)

................................................

0.06

(0.37)

Total

from

investment

operations

.........................................................

0.16

(0.20)

Less

distributions

from:

Net

investment

income

...............................................................

(0.10)

(0.14)

Net

asset

value,

end

of

period

...........................................................

$9.72

$9.66

Total

return

e

........................................................................

1.64%

(2.00)%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

g

..........................................

68.45%

165.29%

Expenses

net

of

waiver

and

payments

by

affiliates

g

...........................................

0.21%

0.21%

h

Net

investment

income

................................................................

2.04%

2.39%

Supplemental

data

Net

assets,

end

of

period

(000’s)

.........................................................

$84

$78

Portfolio

turnover

rate

.................................................................

10.68%

121.64%

a

For

the

period

July

15,

2020

(effective

date)

to

March

31,

2021.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Recognition

of

net

investment

income

by

the

Fund

is

affected

by

the

timing

of

declaration

of

dividends

by

the

Underlying

Funds

and

exchange

traded

funds

in

which

the

Fund

invests.

e

Total

return

is

not

annualized

for

periods

less

than

one

year.

f

Ratios

are

annualized

for

periods

less

than

one

year,

except

for

non-recurring

expenses,

if

any.

g

Does

not

include

expenses

of

the

Underlying

Funds

in

which

the

Fund

invests.

The

weighted

average

indirect

expenses

of

the

Underlying

Funds

was

0.47%

for

the

period

ended

September

30,

2021.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

ETF

Trust

Statement

of

Investments

(unaudited),

September

30,

2021

Franklin

Fixed

Income

Portfolio

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

a

a

Shares

a

Value

a

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

95.6%

Domestic

Fixed

Income

95.6%

a

Franklin

Liberty

Federal

Tax-Free

Bond

ETF

...............................

170

$

4,594

a

Franklin

Liberty

High

Yield

Corporate

ETF

.................................

60

1,586

a

Franklin

Liberty

Investment

Grade

Corporate

ETF

...........................

308

7,993

a

Franklin

Liberty

Senior

Loan

ETF

.......................................

91

2,275

a

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

........................

68

6,441

a

Franklin

Liberty

U.S.

Core

Bond

ETF

.....................................

1,944

49,183

a

Franklin

Liberty

U.S.

Treasury

Bond

ETF

..................................

167

4,012

Schwab

U.S.

TIPS

ETF

...............................................

64

4,005

80,089

Total

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

(Cost

$81,943)

80,089

a

a

a

a

Short

Term

Investments

1.9%

a

Money

Market

Funds

1.9%

a,b

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

...................

1,579

1,579

Total

Money

Market

Funds

(Cost

$1,579)

.......................................

1,579

Total

Short

Term

Investments

(Cost

$1,579

)

....................................

1,579

a

Total

Investments

(Cost

$83,522)

97.5%

........................................

$81,668

Other

Assets,

less

Liabilities

2.5%

.............................................

2,125

Net

Assets

100.0%

...........................................................

$83,793

See

Abbreviations

on

page

25

.

a

See

Note

3(d)

regarding

investments

in

FT

Underlying

Funds.

b

The

rate

shown

is

the

annualized

seven-day

effective

yield

at

period

end.

Franklin

ETF

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

September

30,

2021

(unaudited)

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

..................................................

$—

$3,935

Cost

-

Non-controlled

affiliates

(Note

3

d

)

.......................................

320,370

79,587

Value

-

Unaffiliated

issuers

.................................................

$—

$4,005

Value

-

Non-controlled

affiliates

(Note

3

d

)

......................................

383,693

77,663

Receivables:

Capital

shares

sold

.......................................................

245

—

Dividends

..............................................................

—

142

Affiliates

...............................................................

—

5,737

Other

assets

.............................................................

50,874

12,742

Total

assets

.........................................................

434,812

100,289

Liabilities:

Payables:

Investment

securities

purchased

.............................................

—

1,176

Capital

shares

redeemed

..................................................

—

245

Transfer

agent

fees

.......................................................

664

565

Reports

to

shareholders

fees

...............................................

3,293

3,654

Professional

fees

........................................................

9,245

9,245

Affiliates

...............................................................

32,598

—

Accrued

expenses

and

other

liabilities

..........................................

2,323

1,611

Total

liabilities

........................................................

48,123

16,496

Net

assets,

at

value

................................................

$386,689

$83,793

Net

assets

consist

of:

Paid-in

capital

............................................................

$320,511

$86,134

Total

distributable

earnings

(losses)

............................................

66,178

(2,341)

Net

assets,

at

value

................................................

$386,689

$83,793

Shares

outstanding

........................................................

30,709

8,624

Net

asset

value

per

share

...................................................

$12.59

$9.72

Franklin

ETF

Trust

Financial

Statements

Statements

of

Operations

for

the

period

ended

September

30,

2021

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

17

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

.......................................................

$—

$98

Non-controlled

affiliates

(Note

3

d

)

............................................

3,514

805

Total

investment

income

..................................................

3,514

903

Expenses:

Management

fees

(Note

3

a

)

..................................................

473

100

Transfer

agent

fees

(Note

3

c

)

.................................................

2,250

1,629

Reports

to

shareholders

fees

.................................................

1,805

1,805

Professional

fees

..........................................................

12,587

12,678

Amortization

of

offering

costs

(Note

1d

)

.........................................

22,526

20,705

Other

...................................................................

803

801

Total

expenses

........................................................

40,444

37,718

Expenses

waived/paid

by

affiliates

(Note

3

d

and

3

e

)

............................

(39,501)

(37,633)

Net

expenses

........................................................

943

85

Net

investment

income

...............................................

2,571

818

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

.....................................................

—

2

Non-controlled

affiliates

(Note

3

d

)

..........................................

816

(270)

Net

realized

gain

(loss)

.................................................

816

(268)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

.....................................................

—

83

Non-controlled

affiliates

(Note

3

d

)

..........................................

20,881

600

Net

change

in

unrealized

appreciation

(depreciation)

...........................

20,881

683

Net

realized

and

unrealized

gain

(loss)

...........................................

21,697

415

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.........................

$24,268

$1,233

Franklin

ETF

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

Semiannual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Six

Months

Ended

September

30,

2021

(unaudited)

Year

Ended

March

31,

2021

a

Six

Months

Ended

September

30,

2021

(unaudited)

Year

Ended

March

31,

2021

a

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$2,571

$2,572

$818

$1,066

Net

realized

gain

(loss)

............

816

2,582

(268)

(371)

Net

change

in

unrealized

appreciation

(depreciation)

.................

20,881

42,442

683

(2,537)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

24,268

47,596

1,233

(1,842)

Distributions

to

shareholders

.........

(1,489)

(4,147)

(780)

(999)

Capital

share

transactions

(Note

2

)

.....

16,816

303,645

5,380

80,801

Net

increase

(decrease)

in

net

assets

.....................

39,595

347,094

5,833

77,960

Net

assets:

Beginning

of

period

................

347,094

—

77,960

—

End

of

period

.....................

$386,689

$347,094

$83,793

$77,960

a

For

the

period

July

15,

2020

(effective

date)

to

March

31,

2021.

Franklin

ETF

Trust

19

franklintempleton.com

Semiannual

Report

Notes

to

Financial

Statements

(unaudited)

1.

Organization

and

Significant

Accounting

Policies

Franklin

ETF

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

three

separate

funds, two

of

which

are

included

in

this

report

(Funds)

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

Funds

invest

primarily

in

mutual

funds

(Underlying

Funds)

and

exchange

traded

funds

(ETFs),

including

affiliated

funds

managed

by

Franklin

Templeton

(FT

Underlying

Funds). 

The

accounting

policies

of

the

Underlying

Funds

are

outlined

in

their

respective

shareholder

reports.

A

copy

of

the

Underlying

Funds’

shareholder

reports

in

which

each

Fund

invests

is

available

on

the

U.S.

Securities

and

Exchange

Commission

(SEC)

website

at

sec.gov.

The

Underlying

Funds’

shareholder

reports

are

not

covered

by

this

report.

Effective

July

15,

2020,

the

Trust

began

offering

shares

of

the

Franklin

Equity

Portfolio

Fund

and

Franklin

Fixed

Income

Portfolio

Fund. 

The

following

summarizes

the Funds'

significant

accounting

policies. 

a.

Financial

Instrument

Valuation 

The

Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The

Funds

calculate

the

net

asset

value

(NAV)

per

share

as

of

4

p.m.

Eastern

time

each

day

the

New

York

Stock

Exchange

(NYSE)

is

open

for

trading.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the

Funds'

administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value.

Investments

in

the

Underlying

Funds

are

valued

at

their

closing

NAV

each

trading

day.

Exchange

traded

funds

(ETFs)

listed

on

an

exchange

or

on

the

NASDAQ

National

Market

System

are

valued

at

the

last

quoted

sale

price

or

the

official

closing

price

of

the

day,

respectively.

b.

Income

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

taxable

income

and

net

realized

gains

to

relieve

it

from

federal

income

and

excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

c.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Dividend

income

and

capital

gain

distributions

are

recorded

on

the

ex-dividend

date

except

for

certain

dividends

from

securities

where

the

dividend

rate

is

not

available.

In

such

cases,

the

dividend

is

recorded

as

soon

as

the

information

is

received

by

the

Funds.

Distributions

to shareholders

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust.

Certain

Fund

specific

expenses

are

allocated

directly

to

the

Fund

that

incurred

the

expense.

The

Funds

indirectly

bear

their

proportionate

share

of

expenses

from

the

Underlying

Funds

and

ETFs.

Since

the

Underlying

Funds

and

ETFs

have

varied

expense

levels

and

the

Funds

may

own

different

proportions

of

the

Underlying

Funds

and

ETFs

at

different

times,

the

amount

of

expenses

incurred

indirectly

by

the

Funds

will

vary.

d.

Organization

and

Offering

Costs

Organization

costs

were

expensed

as

incurred.

Offering

costs

are

amortized

on

a

straight

line

basis

over

twelve

months.

Franklin

ETF

Trust

Notes

to

Financial

Statements

(unaudited)

20

franklintempleton.com

Semiannual

Report

e.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

f.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Funds,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

2.

Shares

of

Beneficial

Interest

At

September

30,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds’

shares

were

as

follows:

a

For

the

period

July

15,

2020

(effective

date)

to

March

31,

2021

.

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Funds

are

also

officers

and/or

directors

of

the

following

subsidiaries:

a.

Asset

Allocation

Fees

The

Funds

pay

an

asset

allocation

fee

to

Advisers

of

0.25%

per

year

of

the

average

daily

net

assets

of

each

of

the

Funds

for

investment

advisory

services,

consisting

principally

of

determining

the

allocation

of

assets

of

the

Funds

among

the

Underlying

Funds

and

ETFs.

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Shares

Amount

Shares

Amount

Single

Class

Six

Months

ended

September

30,

2021

Shares

sold

...................................

5,306

$67,262

1,977

$19,297

Shares

issued

in

reinvestment

of

distributions

..........

114

1,437

70

682

Shares

redeemed

...............................

(4,115)

(51,883)

(1,497)

(14,599)

Net

increase

(decrease)

..........................

1,305

$16,816

550

$5,380

Year

ended

March

31,

2021

a

Shares

sold

...................................

44,857

$474,710

10,891

$108,996

Shares

issued

in

reinvestment

of

distributions

..........

374

4,001

86

855

Shares

redeemed

...............................

(15,827)

(175,066)

(2,903)

(29,050)

Net

increase

(decrease)

..........................

29,404

$303,645

8,074

$80,801

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

1.

Organization

and

Significant

Accounting

Policies

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

(unaudited)

21

franklintempleton.com

Semiannual

Report

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

the

Funds'

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

c.

Transfer

Agent

Fees

The

Funds

pay

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

the

Funds

reimburse

Investor

Services

for

out

of

pocket

expenses

incurred

and

reimburses

shareholder

servicing

fees

paid

to

third

parties.

For

the

period

ended

September

30,

2021,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

d.

Investments

in

FT

Underlying

Funds

The Funds

invest in Underlying

Funds

which

are

managed

by

Advisers

(or

by

an

affiliate

of

Advisers).

As

defined

in

the

1940

Act,

an

investment

is

deemed

to

be

a

“Controlled

Affiliate”

of

a

fund

when

a

fund

owns,

either

directly

or

indirectly,

25%

or

more

of

the

Underlying

Fund’s

outstanding

shares

or

has

the

power

to

exercise

control

over

management

or

policies

of

such

Underlying

Fund.

The

Funds

do

not

invest

in

Underlying

Funds

for

the

purpose

of

exercising

a

controlling

influence

over

the

management

or

policies.

Administrative

fees

paid

by

the

Funds

are

waived

on

assets

invested

in

Institutional

Fiduciary

Trust

Money

Market

Portfolio

(Sweep

Money

Fund),

as

noted

in

the

Statements

of

Operations,

in

an

amount

not

to

exceed

the

management

and

administrative

fees

paid

directly

or

indirectly

by

the

Sweep

Money

Fund. 

Investments

in

FT

Underlying

Funds

for

the

period

ended

September

30,

2021,

were

as

follows:

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Transfer

agent

fees

........................

$1,673

$1,244

3.

Transactions

with

Affiliates

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

(unaudited)

22

franklintempleton.com

Semiannual

Report

e.

Waiver

and

Expense

Reimbursements

Advisers

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

and

to

assume

as

its

own

expense

certain

expenses

otherwise

payable

by

the

Fund

so

that

the

operating expenses

(excluding

acquired

fund

fees

and

expenses

and

certain

non-

routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

for

each

of

the

Funds

does

not

exceed

0.50%

and

0.40%,

respectively,

based

on

the

average

net

assets

of

each

Fund

until

July

31,

2022.

    aa

Value

at

Beginning

of

Period

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Period

Number

of

Shares

Held

at

End

of

Period

Dividend

Income

a

a

a

a

a

a

a

a

a

Franklin

Equity

Portfolio

Fund

Non-Controlled

Affiliates

Franklin

Emerging

Market

Core

Equity

(IU)

Fund

...........

$

42,092

$

8,720

$

(2,915)

$

16

$

(3,117)

$

44,796

3,902

$

588

Franklin

FTSE

Japan

ETF

.....

6,508

1,250

(364)

(9)

121

7,506

243

96

Franklin

International

Core

Equity

(IU)

Fund

................

66,723

14,414

(6,824)

298

2,471

77,082

6,022

1,290

Franklin

U.S.

Core

Equity

(IU)

Fund

228,539

25,584

(23,397)

511

21,406

252,643

17,152

1,540

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

1,429

51,493

(51,256)

—

—

1,666

1,666

—

Total

Non-Controlled

Affiliates

$345,291

$101,461

$(84,756)

$816

$20,881

$383,693

$3,514

Total

Affiliated

Securities

....

$345,291

$101,461

$(84,756)

$816

$20,881

$383,693

$3,514

Franklin

Fixed

Income

Portfolio

Fund

Non-Controlled

Affiliates

Franklin

Liberty

Federal

Tax-Free

Bond

ETF

................

4,514

519

(462)

(4)

27

4,594

170

40

Franklin

Liberty

High

Yield

Corporate

ETF

............

1,471

266

(159)

(1)

9

1,586

60

38

Franklin

Liberty

Investment

Grade

Corporate

ETF

............

7,372

940

(441)

(18)

140

7,993

308

106

Franklin

Liberty

Senior

Loan

ETF

2,235

276

(250)

(2)

16

2,275

91

42

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

...........

5,997

951

(476)

(4)

(27)

6,441

68

29

Franklin

Liberty

U.S.

Core

Bond

ETF

....................

46,180

8,692

(5,863)

(224)

398

49,183

1,944

516

Franklin

Liberty

U.S.

Treasury

Bond

ETF

....................

3,725

604

(337)

(17)

37

4,012

167

34

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

536

20,162

(19,119)

—

—

1,579

1,579

—

Total

Non-Controlled

Affiliates

$72,030

$32,410

$(27,107)

$(270)

$600

$77,663

$805

Total

Affiliated

Securities

....

$72,030

$32,410

$(27,107)

$(270)

$600

$77,663

$805

3.

Transactions

with

Affiliates

(continued)

d.

Investments

in

FT

Underlying

Funds

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

(unaudited)

23

franklintempleton.com

Semiannual

Report

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses.

During

the period

ended

September

30,

2021, the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

March

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

At

September

30,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

and

undistributed

ordinary

income

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

short

term

capital

gains

distributions

from

Underlying

Funds

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

(excluding

short

term

securities)

for

the

period

ended

September

30,

2021,

were

as

follows:

7.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

1

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

.............................

$

—

$

129

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

a

a

a

Cost

of

investments

.......................

$321,692

$84,173

Unrealized

appreciation

.....................

$63,343

$118

Unrealized

depreciation

.....................

(1,342)

(2,623)

Net

unrealized

appreciation

(depreciation)

.......

$62,001

$(2,505)

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Purchases

..............................

$49,968

$12,685

Sales

..................................

$33,500

$8,237

Franklin

ETF

Trust

Notes

to

Financial

Statements

(unaudited)

24

franklintempleton.com

Semiannual

Report

8.

Credit

Facility

The

Funds,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

During

the

period

ended

September

30,

2021,

the

Funds

did

not

use

the

Global

Credit

Facility.

9.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the Funds'

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

At

September

30,

2021,

all

of

the

Funds'

investments

in

financial

instruments

carried

at

fair

value

were

valued

using

Level

1

inputs.

For

detailed

categories,

see

the

accompanying

Statements

of

Investments.

10.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

In

January

2021,

the

FASB

issued

ASU

No.

2021-01,

with

further

amendments

to

Topic

848.

The

amendments

in

the

ASUs

provide

optional

temporary

accounting

recognition

and financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021

for

certain

LIBOR

settings

and

2023

for

the

remainder. The

ASUs

are

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022.

Management

has

reviewed

the

requirements

and

believes

the

adoption

of

these

ASUs

will

not

have

a

material

impact

on

the

financial

statements. 

11.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure.

Franklin

ETF

Trust

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Abbreviations

Selected

Portfolio

ETF

Exchange-Traded

Fund

Franklin

ETF

Trust

Tax

Information

(unaudited)

26

franklintempleton.com

Annual

Report

Under

Section

853

of

the

Internal

Revenue

Code,

the

Franklin

Equity

Portfolio

Fund

intends

to

elect

to

pass

through

to

their

shareholders

$210

of

foreign

taxes

paid

and

$2,606

of

foreign

source

income

earned

by

the

fund,

or

amounts

as

finally

determined,

during

the

fiscal

year

ended

March

31,

2021.

Franklin

ETF

Trust

Shareholder

Information

27

franklintempleton.com

Semiannual

Report

Liquidity

Risk

Management

Program

–

Funds

no

HLIM

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2021,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2020.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Franklin

ETF

Trust

Shareholder

Information

28

franklintempleton.com

Semiannual

Report

Quarterly

Statement

of

Investments

The

Trust

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

FPF

S

11/21

©

2021

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Semiannual

Report

Franklin

ETF

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Distributors,

LLC

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

SEMIANNUAL REPORT

FRANKLIN LIBERTY SHORT DURATION U.S. GOVERNMENT ETF

A Series of Franklin ETF Trust

September 30, 2021

Contents
Semiannual Report
Franklin Liberty Short Duration U.S. Government ETF . .	2
Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Your Fund’s Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Financial Highlights and Statement of Investments . . . . . .	7
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .	19
Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26

Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools.

Not FDIC Insured | May Lose Value | No Bank Guarantee

franklintempleton.com Semiannual Report

1

SEMIANNUAL REPORT

Franklin Liberty Short Duration U.S. Government ETF

This semiannual report for Franklin Liberty Short Duration U.S. Government ETF covers the period ended September 30, 2021.

Your Fund’s Goal and Main Investments

The Fund seeks to provide a high level of current income as is consistent with prudent investing, while seeking preserva- tion of capital, by normally investing at least 80% of its net assets in securities issued or guaranteed by the U.S. govern- ment, its agencies or instrumentalities.1 The Fund currently targets an estimated portfolio duration of three years or less.

Performance Overview

For the six months under review, the Fund posted cumulative total returns of -0.02% based on market price and -0.09% based on net asset value. In comparison, the Bloomberg U.S. Government Index: 1-3 Year Component, which includes U.S. dollar-denominated, fixed-rate, nominal U.S. Treasuries and U.S. agency debentures with at least one year up to, but not including, three years to final maturity, posted a +0.03% cumulative total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 4.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go

to franklintempleton.com or call (800) 342-5236.

Economic and Market Overview

The U.S. bond market, as measured by the Bloomberg

U.S. Aggregate Bond Index, posted a +1.88% total return for the six months ended September 30, 2021.2 The inflation rate was elevated during the period amid high demand and supply-chain bottlenecks, with the price pressures coming principally from the areas most impacted by shutdowns related to the novel coronavirus (COVID-19) pandemic, such

Portfolio Composition* 9/30/21

		% of Total
	Net Assets
MBS ARMs	36.30%
MBS Fixed Rate	36.25%
U.S. Agencies	2.74%
U.S. Treasuries	25.10%
TIPS	0%
Short-Term Investments & Other Net Assets	-0.40%

*Figures reflect certain derivatives held in the portfolio (or their underlying reference assets) and may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.

as used vehicles, airfares, semiconductors and energy. How- ever, investors’ inflation expectations were relatively stable, and a widely-used measure indicated that markets antici- pated inflation will moderate. Longer-term bonds generally outperformed shorter-term bonds, as the yield curve (a mea- sure of the difference between long-term and short-term bond yields) flattened slightly.

In an effort to support the economy, the U.S. Federal Reserve (Fed) kept the federal funds target rate at a record-low range of 0.00%–0.25%. The Fed also maintained quantitative easing measures aimed at ensuring credit flows to borrowers and supporting credit markets with open-ended U.S. Treasury and mortgage bond purchasing. In its September 2021 meeting statement, the Fed indicated that it soon plans to reduce its purchases of U.S. Treasury and mortgage-backed securities but declined to provide a timeta- ble. The Fed also maintained that it views inflation as partially transitory, and that further employment progress was needed before the Fed would consider raising the range for the federal funds target rate.

U.S. Treasury bonds, as measured by the Bloomberg U.S. Treasury Index, posted a +1.83% total return for the six-month period.2 The 10-year U.S. Treasury yield (which moves inversely to price) declined amid an increase in novel coronavirus (COVID-19) cases as the Delta variant spread.

1.Some securities owned by the Fund, but not shares of the Fund, are guaranteed by the U.S. government, its agencies or instrumentalities as to timely payment of principal and interest. The Fund’s net asset value, trading price and yield are not guaranteed and will fluctuate with market conditions. Please see the Fund’s prospectus for the level of credit support offered by government agency or instrumentality issues.

2.Source: Morningstar.

The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.

See www.franklintempletondatasources.com for additional data provider information.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 8.

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F R A N K L I N L I B E R T Y S H O R T D U R AT I O N U . S . G O V E R N M E N T E T F

Mortgage-backed securities (MBS), as measured by the Bloomberg MBS Index, posted a +0.43% total return for the period, helped by ongoing Fed support.2

Corporate bonds followed a similar trajectory as

U.S. Treasuries, but benefited from a continued decline in spreads (the difference in yields between government and corporate bonds) amid an increase in investors’ appetite for risk. High-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a +3.65% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a +3.54% total return.2

Investment Strategy

Under normal market conditions, the Fund invests at least 80% of its net assets in securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities. The Fund currently targets an estimated portfolio duration of three years or less. The Fund generally invests 50%–80% of its assets in mortgage securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, including adjustable rate mortgage securities (ARMs) and collateral- ized mortgage obligations (CMOs). The Fund also invests in direct U.S. government obligations (such as Treasury bonds, bills and notes) and in securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, including government-sponsored entities. All of the Fund’s principal investments are debt securities, including bonds, notes and debentures. To pursue its investment goal, the Fund may invest in certain interest rate-related derivatives, principally U.S. Treasury futures contracts and options on interest rate/ bond futures. The use of these derivatives may allow the Fund to obtain net long or short exposures to selected inter- est rates or durations. These derivatives may be used to hedge risks associated with the Fund’s other portfolio invest- ments and to manage the duration of the Fund’s portfolio. The Fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index. The Fund may have a higher degree of port- folio turnover than funds that seek to replicate the performance of an index.

Manager’s Discussion

The six-month period ending September 30, 2021, was char- acterized by a rise in yields for Treasuries with maturities less than 5 years, a drop in yields for Treasuries with maturities more than 5 years, and some widening of spreads for agency fixed-rate mortgage-backed securities (MBS) and agency col- lateralized mortgage obligations (CMO). The Fund’s yield curve exposure was the largest positive contributor to

performance versus the benchmark. The Fund was posi- tioned with less duration than the benchmark overall, but with more exposure than the benchmark beyond the two-year point on the yield curve. The outperformance due to yield curve exposure was largely offset by the impact of spread widening in the Fund’s exposure to MBS and CMOs. The Fund’s exposure to other mortgage-related sectors – multi- family agency MBS and agency ARM securities – had a negligible impact on performance over the period.

The Fund invested in U.S. Treasuries, agency debentures, agency mortgage pass-through securities and other U.S. government-related bonds and cash investments. We looked for valuations we considered attractive within lower interest- rate risk government bond markets with a focus on high current income. We used U.S. Treasury futures and options on U.S. Treasury futures for duration and convexity manage- ment. Over the period, the futures and options positions had a net realized loss.

Thank you for your participation in Franklin Liberty Short Duration U.S. Government ETF. We look forward to serving your future investment needs.

Patrick A. Klein, Ph.D.

Paul Varunok

Neil Dhruv

Portfolio Management Team

The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2021, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic condi- tions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, coun- try, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their complete- ness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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F R A N K L I N L I B E R T Y S H O R T D U R AT I O N U . S . G O V E R N M E N T E T F

Performance Summary as of September 30, 2021

Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The per- formance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/13), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been rein- vested at Market Price and NAV.

Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for oper- ating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.

Performance as of 9/30/211

			Cumulative Total Return2			Average Annual Total Return2
			Based on		Based on	Based on	Based on
				NAV3	market price4	NAV3	market price4
6-Month		-0.09%			-0.02%	-0.09%	-0.02%
1-Year	+0.04%				-0.03%	+0.04%	-0.03%
5-Year	+7.81%				+7.60%	+1.51%	+1.48%
Since Inception (11/4/13)	+10.77%				+10.45%	+1.30%	+1.26%
					30-Day Standardized Yield6
Distribution Rate5				(with fee waiver) (without fee waiver)
0.90%					0.40%	0.29%

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

See page 5 for Performance Summary footnotes

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F R A N K L I N L I B E R T Y S H O R T D U R AT I O N U . S . G O V E R N M E N T E T F

P E R F O R M A N C E S U M M A R Y

Distributions (4/1/21–9/30/21)

Net Investment

Income

$0.441950

Total Annual Operating Expenses7

0.25%

All investments involve risks, including possible loss of principal. Interest rate movements, unscheduled mortgage prepayments and other risk factors will affect the Fund’s share price and yield. Bond prices, and thus a fund’s share price, generally move in the opposite direction of interest rates. Therefore, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a discussion of the main investment risks.

ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.

1.The Fund has a fee waiver and/or an expense reimbursement contractually guaranteed through 7/31/22. Fund investment results reflect the expense reduction; without this reduction, the results would have been lower.

2.Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

3.Assumes reinvestment of distributions based on net asset value.

4.Assumes reinvestment of distributions based on market price.

5.Distribution rate is based on an annualization of the 7.136 cent per share September dividend and the NAV of $94.71 per share on 9/30/21.

6.The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.

7.Figures are effective as of October 1, 2021 (as stated in the Fund’s prospectus supplement dated October 1, 2021) and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.

See www.franklintempletondatasources.com for additional data provider information.

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Your Fund’s Expenses

As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 invest- ment held for the six months indicated.

Actual Fund Expenses

The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “End- ing Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, com- pare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.

			Actual			Hypothetical
		(actual return after expenses)				(5% annual return before expenses)
				Expenses				Expenses
Beginning		Ending		Paid During		Ending		Paid During
Account		Account		Period		Account		Period		Net Annualized
Value 4/1/21		Value 9/30/21		4/1/21–9/30/211,2		Value 9/30/21		4/1/21–9/30/211,2		Expense Ratio2
$1,000	$999.08		$1.25		$1,023.82		$1.27		0.25%

1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.

2.Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses.

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F R A N K LI N E T F T R U S T

Financial Highlights

Franklin Liberty Short Duration U.S. Government ETF

	Six Months Ended			Year Ended March 31,						Year Ended May 31,
	September 30, 2021
	(unaudited)	2021	2020		2019			2018a	2017		2016
Per share operating performance
(for a share outstanding throughout
the period)
Net asset value, beginning of
period . . . . . . . . . . . . . . . . . . . . . . . . .	$95.24	$94.84	$94.40		$95.18		$96.75		$97.83		$99.03
Income from investment operationsb:
Net investment incomec . . . . . . . . . . .	0.21	0.79	2.11		1.95		1.17		1.02		0.72
Net realized and unrealized gains
(losses) . . . . . . . . . . . . . . . . . . . . . . .	(0.30)	0.89	0.85		(0.03)		(0.89)		(0.08)		(0.39)
Total from investment operations . . . .	(0.09)	1.68	2.96		1.92		0.28		0.94		0.33
Less distributions from net investment
income . . . . . . . . . . . . . . . . . . . . . . . . .	(0.44)	(1.28)	(2.52)		(2.70)		(1.85)		(2.02)		(1.53)
Net asset value, end of period . . . . . . .	$94.71	$95.24	$94.84		$94.40		$95.18		$96.75		$97.83
Total returnd . . . . . . . . . . . . . . . . . . . . .	(0.09)%	1.77%	3.18%		2.04%		0.30%		0.97%		0.34%
Ratios to average net assetse
Expenses before waiver and
payments by affiliates . . . . . . . . . . . .	0.35%	0.37%	0.43%		0.44%		0.50%		0.39%		0.40%
Expenses net of waiver and payments
by affiliates . . . . . . . . . . . . . . . . . . . . .	0.25%f	0.24%	0.23%			0.25%f		0.27%f		0.30%f		0.30%f
Net investment income . . . . . . . . . . . . .	0.44%	0.82%	2.23%		2.06%		1.47%		1.05%		0.73%
Supplemental data
Net assets, end of period (000’s) . . . .	$476,024	$435,827	$187,395		$125,177		$164,279		$169,406		$183,521
Portfolio turnover rateg . . . . . . . . . . . . .	49.47%	210.16%	169.35%		104.49%		103.43%		134.97%		145.14%
Portfolio turnover rate excluding
mortgage dollar rollsg,h . . . . . . . . . . . .	29.73%	189.55%	105.08%		64.69%		68.15%		75.90%		62.17%

aFor the period June 1, 2017 to March 31, 2018.

bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of creation unit Fund shares in relation to income earned, adjustments to interest income for the inflation index bonds, and/or fluctuating market value of the investments of the Fund.

cBased on average daily shares outstanding.

dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.

eRatios are annualized for periods less than one year, except for non-recurring expenses, if any. fBenefit of expense reduction rounds to less than 0.01%.

gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). hSee Note 1(d) regarding mortgage dollar rolls.

franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report

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F R A N K LI N E T F T R U S T

Statement of Investments, September 30, 2021 (unaudited)

Franklin Liberty Short Duration U.S. Government ETF

		Principal Amount			Value
U.S. Government and Agency Securities 27.8%
Dragon 2012 LLC, secured bond, 1.972%, 3/12/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$		23,333	$	23,759
Export-Import Bank of the U.S.,
secured bond, 2.628%, 11/12/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1,426,130		1,494,284
senior secured bond, 1.90%, 7/12/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1,630,265		1,659,072
Iraq Government Agency for International Development Bonds, 2.149%, 1/18/22 . . . . . . . . . . . . . .			1,250,000		1,263,370

aKE Export Leasing LLC, 2013-A, secured note, FRN, 0.351%, (3-Month USD LIBOR + 0.23%),

2/28/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	616,226	615,485
MSN 41079 and 41084 Ltd., 1.631%, 12/14/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,464,253	1,488,204
Petroleos Mexicanos, 2.378%, 4/15/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	560,000	576,865
Reliance Industries Ltd.,
2.512%, 1/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	843,750	877,676
senior secured note, 2.06%, 1/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,125,000	1,158,826
Tayarra Ltd., 3.628%, 2/15/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	71,673	72,125
U.S. International Development Finance Corp.,
2.12%, 3/20/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	916,667	938,513
4.01%, 5/15/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,507,500	1,707,537
U.S. Treasury Note,
0.125%, 12/31/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,000,000	7,999,062
0.125%, 4/30/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,500,000	2,497,119
0.125%, 5/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,000,000	10,986,250
0.125%, 5/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,992,383
0.125%, 7/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,500,000	2,495,264
0.125%, 8/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,988,477
0.125%, 9/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,000,000	2,991,445
0.25%, 4/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,000,000	6,005,508
0.25%, 6/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,000,000	6,002,578
0.25%, 11/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,993,945
0.25%, 3/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,500,000	5,481,953
0.25%, 5/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,976,367
0.25%, 6/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,972,656
0.375%, 4/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,995,313
0.50%, 3/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,500,000	5,526,963
1.25%, 7/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,400,000	3,462,953
1.25%, 8/31/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,000,000	8,174,375
1.50%, 3/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7,500,000	7,648,682
1.50%, 9/30/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,000,000	8,235,938
1.625%, 4/30/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,400,000	3,476,699
1.625%, 10/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,000,000	3,082,266
1.75%, 6/30/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,300,000	5,487,984
Ulani MSN 37894, 2.184%, 12/20/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,130,435	1,159,501
Total U.S. Government and Agency Securities (Cost $132,425,516)
		132,509,397

Mortgage-Backed Securities 72.6%

bFederal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 29.2%

FHLMC, 0.25%, (SOFR +/- MBS Margin), 12/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,933,741	1,938,714
FHLMC, 0.25%, (SOFR +/- MBS Margin), 1/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	5,011,891
FHLMC, 0.25%, (SOFR +/- MBS Margin), 1/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	5,011,901
FHLMC, 0.253%, (1-Month USD LIBOR +/- MBS Margin), 12/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	1,000,000	1,001,149
FHLMC, 0.273%, (1-Month USD LIBOR +/- MBS Margin), 2/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	339,444	338,623
FHLMC, 0.28%, (SOFR +/- MBS Margin), 5/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,999,875	5,015,894
FHLMC, 0.28%, (SOFR +/- MBS Margin), 4/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,500,000	2,508,473
FHLMC, 0.29%, (SOFR +/- MBS Margin), 1/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	5,020,681
FHLMC, 0.293%, (1-Month USD LIBOR +/- MBS Margin), 3/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	691,240	691,918
FHLMC, 0.303%, (1-Month USD LIBOR +/- MBS Margin), 3/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . .	729,852	730,332
FHLMC, 0.313%, (1-Month USD LIBOR +/- MBS Margin), 5/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	361,809	362,427
FHLMC, 0.323%, (1-Month USD LIBOR +/- MBS Margin), 1/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . .	630,652	632,537
FHLMC, 0.333%, (1-Month USD LIBOR +/- MBS Margin), 12/25/24 . . . . . . . . . . . . . . . . . . . . . . . . .	492,301	493,379
FHLMC, 0.343%, (1-Month USD LIBOR +/- MBS Margin), 11/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	3,999,159	4,013,332

8

Semiannual Report franklintempleton.com

F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

			Principal Amount	Value
	Mortgage-Backed Securities (continued)
b Federal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate (continued)
	FHLMC, 0.343%, (1-Month USD LIBOR +/- MBS Margin), 12/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	$ 3,500,000		$ 3,505,834
	FHLMC, 0.373%, (1-Month USD LIBOR +/- MBS Margin), 8/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,395,698		2,402,164
	FHLMC, 0.373%, (1-Month USD LIBOR +/- MBS Margin), 6/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . .	890,612		895,077
	FHLMC, 0.383%, (1-Month USD LIBOR +/- MBS Margin), 11/25/24 . . . . . . . . . . . . . . . . . . . . . . . . .	94,044		94,387
	FHLMC, 0.383%, (1-Month USD LIBOR +/- MBS Margin), 7/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	4,366,925		4,379,040
	FHLMC, 0.383%, (1-Month USD LIBOR +/- MBS Margin), 8/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	3,639,178		3,649,217
	FHLMC, 0.383%, (1-Month USD LIBOR +/- MBS Margin), 11/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	1,479,243		1,485,517
	FHLMC, 0.384%, (1-Month USD LIBOR +/- MBS Margin), 12/15/48 . . . . . . . . . . . . . . . . . . . . . . . . .	997,030		1,001,739
	FHLMC, 0.403%, (1-Month USD LIBOR +/- MBS Margin), 9/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,889,540		2,902,489
	FHLMC, 0.413%, (1-Month USD LIBOR +/- MBS Margin), 9/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	661,739		663,205
	FHLMC, 0.413%, (1-Month USD LIBOR +/- MBS Margin), 9/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,771,271		1,779,323
	FHLMC, 0.423%, (1-Month USD LIBOR +/- MBS Margin), 8/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	670,886		671,906
	FHLMC, 0.423%, (1-Month USD LIBOR +/- MBS Margin), 11/25/27 . . . . . . . . . . . . . . . . . . . . . . . . .	533,298		535,803
	FHLMC, 0.433%, (1-Month USD LIBOR +/- MBS Margin), 8/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	494,213		494,799
	FHLMC, 0.433%, (1-Month USD LIBOR +/- MBS Margin), 8/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	6,253,237		6,276,554
	FHLMC, 0.443%, (1-Month USD LIBOR +/- MBS Margin), 1/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	711,833		712,518
	FHLMC, 0.443%, (1-Month USD LIBOR +/- MBS Margin), 8/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	3,352,310		3,361,577
	FHLMC, 0.443%, (1-Month USD LIBOR +/- MBS Margin), 6/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,792,803		1,805,227
	FHLMC, 0.443%, (1-Month USD LIBOR +/- MBS Margin), 6/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,194,000		2,203,625
	FHLMC, 0.453%, (1-Month USD LIBOR +/- MBS Margin), 5/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,692,125		2,695,858
	FHLMC, 0.453%, (1-Month USD LIBOR +/- MBS Margin), 3/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	193,733		194,083
	FHLMC, 0.453%, (1-Month USD LIBOR +/- MBS Margin), 6/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,446,617		1,452,079
	FHLMC, 0.463%, (1-Month USD LIBOR +/- MBS Margin), 5/25/22 . . . . . . . . . . . . . . . . . . . . . . . . . .	28,334		28,320
	FHLMC, 0.463%, (1-Month USD LIBOR +/- MBS Margin), 7/25/22 . . . . . . . . . . . . . . . . . . . . . . . . . .	63,877		63,807
	FHLMC, 0.483%, (1-Month USD LIBOR +/- MBS Margin), 8/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	749,420		752,032
	FHLMC, 0.484%, (1-Month USD LIBOR +/- MBS Margin), 12/15/39 . . . . . . . . . . . . . . . . . . . . . . . . .	874,663		876,406
	FHLMC, 0.503%, (1-Month USD LIBOR +/- MBS Margin), 12/25/26 . . . . . . . . . . . . . . . . . . . . . . . . .	520,198		521,239
	FHLMC, 0.523%, (1-Month USD LIBOR +/- MBS Margin), 6/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,474,254		2,485,143
	FHLMC, 0.523%, (1-Month USD LIBOR +/- MBS Margin), 5/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,871,472		1,884,440
	FHLMC, 0.523%, (1-Month USD LIBOR +/- MBS Margin), 6/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	3,824,931		3,849,045
	FHLMC, 0.534%, (1-Month USD LIBOR +/- MBS Margin), 10/15/40 . . . . . . . . . . . . . . . . . . . . . . . . .	1,601,026		1,622,420
	FHLMC, 0.553%, (1-Month USD LIBOR +/- MBS Margin), 5/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,945,408		1,957,624
	FHLMC, 0.563%, (1-Month USD LIBOR +/- MBS Margin), 4/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,376,959		2,390,751
	FHLMC, 0.573%, (1-Month USD LIBOR +/- MBS Margin), 2/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	3,528,235		3,544,912
	FHLMC, 0.573%, (1-Month USD LIBOR +/- MBS Margin), 7/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,092,727		2,103,907
	FHLMC, 0.583%, (1-Month USD LIBOR +/- MBS Margin), 1/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,103,396		1,109,970
	FHLMC, 0.583%, (1-Month USD LIBOR +/- MBS Margin), 10/25/26 . . . . . . . . . . . . . . . . . . . . . . . . .	3,080,569		3,103,732
	FHLMC, 0.593%, (1-Month USD LIBOR +/- MBS Margin), 11/25/25 . . . . . . . . . . . . . . . . . . . . . . . . .	2,982,247		2,999,713
	FHLMC, 0.593%, (1-Month USD LIBOR +/- MBS Margin), 12/25/29 . . . . . . . . . . . . . . . . . . . . . . . . .	4,976,747		5,044,323
	FHLMC, 0.603%, (1-Month USD LIBOR +/- MBS Margin), 7/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,917,247		1,936,396
	FHLMC, 0.603%, (1-Month USD LIBOR +/- MBS Margin), 8/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,588,837		1,601,486
	FHLMC, 0.603%, (1-Month USD LIBOR +/- MBS Margin), 9/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,368,111		1,380,196
	FHLMC, 0.613%, (1-Month USD LIBOR +/- MBS Margin), 3/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	3,601,630		3,629,288
	FHLMC, 0.623%, (1-Month USD LIBOR +/- MBS Margin), 12/25/28 . . . . . . . . . . . . . . . . . . . . . . . . .	3,973,630		4,017,303
	FHLMC, 0.623%, (1-Month USD LIBOR +/- MBS Margin), 2/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,260,158		1,270,655
	FHLMC, 0.643%, (1-Month USD LIBOR +/- MBS Margin), 11/25/28 . . . . . . . . . . . . . . . . . . . . . . . . .	1,561,240		1,580,106
	FHLMC, 0.783%, (1-Month USD LIBOR +/- MBS Margin), 2/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,574,333		1,591,190
	FHLMC, 0.883%, (1-Month USD LIBOR +/- MBS Margin), 3/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,975,563		2,001,023
	FHLMC, 1.722%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	135,012		141,177
	FHLMC, 1.74%, (12-Month USD LIBOR +/- MBS Margin), 8/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .	123,129		129,131
	FHLMC, 1.771%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/29 . . . . . . . . . . . . . . . . . . . . . . . .	23,652		23,691
	FHLMC, 1.886%, (12-Month USD LIBOR +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	36,437		36,905
	FHLMC, 1.887%, (12-Month USD LIBOR +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	2,580		2,577
	FHLMC, 1.893%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	1,295		1,369
	FHLMC, 1.895%, (12-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	65,123		68,630
	FHLMC, 1.918%, (12-Month USD LIBOR +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	8,753		9,250
	FHLMC, 1.922%, (12-Month USD LIBOR +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	11,167		11,318

franklintempleton.com Semiannual Report

9

F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

Mortgage-Backed Securities (continued)

b Federal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate (continued)

FHLMC, 1.956%, (12-Month USD LIBOR +/- MBS Margin), 12/01/35 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 1.97%, (12-Month USD LIBOR +/- MBS Margin), 12/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 1.975%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/33 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 1.983%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.005%, (12-Month USD LIBOR +/- MBS Margin), 1/01/42 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.011%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.024%, (12-Month USD LIBOR +/- MBS Margin), 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.027%, (12-Month USD LIBOR +/- MBS Margin), 10/01/36 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.035%, (12-Month USD LIBOR +/- MBS Margin), 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.059%, (12-Month USD LIBOR +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.067%, (6-Month USD LIBOR +/- MBS Margin), 1/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.069%, (12-Month USD LIBOR +/- MBS Margin), 4/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.086%, (12-Month USD LIBOR +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.092%, (12-Month USD LIBOR +/- MBS Margin), 5/01/42 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.093%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.098%, (12-Month USD LIBOR +/- MBS Margin), 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.115%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.125%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.126%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.137%, (12-Month USD LIBOR +/- MBS Margin), 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.139%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.147%, (12-Month USD LIBOR +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.151%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.172%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.178%, (12-Month USD LIBOR +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.181%, (12-Month USD LIBOR +/- MBS Margin), 4/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.195%, (12-Month USD LIBOR +/- MBS Margin), 11/01/42 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.205%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.208%, (12-Month USD LIBOR +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.216%, (12-Month USD LIBOR +/- MBS Margin), 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.231%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.25%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.25%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.26%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.28%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.295%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/27 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.314%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.315%, (US 1 Year CMT T-Note +/- MBS Margin), 4/01/29 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.337%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.338%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.34%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.343%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.344%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.347%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.35%, (6-Month USD LIBOR +/- MBS Margin), 9/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.35%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.355%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/36 . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.36%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.364%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.37%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.37%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/38 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.373%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/32 . . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . .

FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . .

Principal Amount		Value
$ 145,795	$	153,884
45,859		48,544
34,080		34,252
32,600		34,640
65,051		68,709
2,586		2,615
47,674		49,461
14,333		15,204
20,012		21,157
8,394		8,895
246		244
5,812		5,896
2,393		2,485
478,751		506,899
5,873		6,098
2,380		2,385
38,258		40,757
220,218		230,517
204,691		216,862
1,438,031		1,523,908
36,165		38,291
14,319		14,456
523,850		556,314
244,658		259,473
6,523		6,929
24,008		24,392
347,346		368,331
6,393		6,786
103,925		105,026
2,492		2,576
12,265		12,516
115,784		124,397
6,881		6,880
33,660		36,205
10,423		11,183
310		310
7,476		7,805
1,334		1,337
312,719		333,946
4,576		4,814
90,797		97,360
14,132		15,059
84,135		89,672
1,380,701		1,475,514
1,733		1,748
112,917		120,356
12,098		12,974
649,283		692,380
106,676		107,478
10,592		11,340
73,556		73,860
22,938		23,883
1,037		1,040
16,171		16,425
13,217		14,031
45,271		48,350
30,793		32,889

10

Semiannual Report franklintempleton.com

F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

Principal Amount Value

Mortgage-Backed Securities (continued)

bFederal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate (continued)

FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . .	$	23,188	$	24,784
FHLMC, 2.376%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . .		37,217		39,858
FHLMC, 2.383%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/30 . . . . . . . . . . . . . . . . . . . . . . . .		31		31
FHLMC, 2.403%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . .		1,032,337		1,103,642
FHLMC, 2.424%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . .		11,182		11,933
FHLMC, 2.433%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/29 . . . . . . . . . . . . . . . . . . . . . . . .		159,277		160,463
FHLMC, 2.455%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/28 . . . . . . . . . . . . . . . . . . . . . . . .		527		528
FHLMC, 2.459%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . .		26,581		26,817
FHLMC, 2.534%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . .		32,667		33,731
FHLMC, 2.582%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/35 . . . . . . . . . . . . . . . . . . . . . . .		212,006		227,720
FHLMC, 2.72%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .		41,380		43,386
FHLMC, 2.854%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/29 . . . . . . . . . . . . . . . . . . . . . . . .		4,749		4,799
FHLMC, 2.902%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/29 . . . . . . . . . . . . . . . . . . . . . . .		4,812		4,883
FHLMC, 5.467%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/24 . . . . . . . . . . . . . . . . . . . . . . . .		568		571
				139,115,631
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 7.0%
FHLMC, 0.75%, 5/25/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,337,963		2,306,013
FHLMC, 0.799%, 5/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,482,240		2,415,994
FHLMC, 0.826%, 2/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		942,921		910,698
FHLMC, 1.054%, 8/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,974,126		1,988,959
FHLMC, 2.00%, 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		12,466,534		12,853,406
FHLMC, 2.00%, 2/25/50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,436,457		1,469,013
FHLMC, 2.745%, 1/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,500,000		1,603,238
FHLMC, 2.995%, 12/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,500,000		1,616,433
FHLMC, 3.062%, 12/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,500,000		1,603,370
FHLMC, 3.458%, 8/25/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,000,000		2,102,228
FHLMC, 3.49%, 1/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,000,000		2,121,395
FHLMC, 3.50%, 6/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		255,577		272,899
FHLMC, 3.50%, 3/15/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		304,802		309,085
FHLMC, 4.00%, 3/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,331,942		1,452,074
				33,024,805

bFederal National Mortgage Association (FNMA) Adjustable Rate 5.9%

FNMA, 0.436%, (1-Month USD LIBOR +/- MBS Margin), 10/25/58 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,927,023	1,952,741
FNMA, 0.486%, (1-Month USD LIBOR +/- MBS Margin), 5/25/40 . . . . . . . . . . . . . . . . . . . . . . . . . . .	626,272	632,714
FNMA, 0.486%, (1-Month USD LIBOR +/- MBS Margin), 9/25/46 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,217,476	1,230,415
FNMA, 0.486%, (1-Month USD LIBOR +/- MBS Margin), 10/25/46 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,068,008	1,078,289
FNMA, 0.536%, (1-Month USD LIBOR +/- MBS Margin), 9/25/22 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,617,387	2,617,814
FNMA, 0.536%, (1-Month USD LIBOR +/- MBS Margin), 10/25/41 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,343,919	2,375,927
FNMA, 0.536%, (1-Month USD LIBOR +/- MBS Margin), 7/25/49 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,294,316	2,316,490
FNMA, 1.175%, (6-Month USD LIBOR +/- MBS Margin), 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	691	691
FNMA, 1.26%, (6-Month USD LIBOR +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,048	2,060
FNMA, 1.262%, (6-Month USD LIBOR +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .	445	441
FNMA, 1.48%, (6-Month USD LIBOR +/- MBS Margin), 3/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,661	1,669
FNMA, 1.484%, (6-Month USD LIBOR +/- MBS Margin), 9/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,890	2,905
FNMA, 1.494%, (1 Year CMT +/- MBS Margin), 1/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17,569	17,717
FNMA, 1.499%, (1 Year CMT +/- MBS Margin), 6/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37,279	38,679
FNMA, 1.499%, (1 Year CMT +/- MBS Margin), 11/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,886	12,123
FNMA, 1.556%, (6-Month USD LIBOR +/- MBS Margin), 8/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,006	4,141
FNMA, 1.561%, (6-Month USD LIBOR +/- MBS Margin), 5/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,560	1,566
FNMA, 1.572%, (12-Month USD LIBOR +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .	43,490	45,170
FNMA, 1.648%, (6-Month USD LIBOR +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .	234,179	243,144
FNMA, 1.656%, (6-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,619	2,703
FNMA, 1.668%, (6-Month USD LIBOR +/- MBS Margin), 2/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	123,431	127,643
FNMA, 1.677%, (6-Month USD LIBOR +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .	12,715	13,228
FNMA, 1.693%, (6-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .	91,012	94,674
FNMA, 1.696%, (12-Month USD LIBOR +/- MBS Margin), 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .	381	385

franklintempleton.com Semiannual Report

11

F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

Mortgage-Backed Securities (continued)

b Federal National Mortgage Association (FNMA) Adjustable Rate (continued)

FNMA, 1.706%, (12-Month USD LIBOR +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.713%, (6-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.737%, (6-Month USD LIBOR +/- MBS Margin), 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.742%, (12-Month USD LIBOR +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.746%, (6-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.748%, (6-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.75%, (12-Month USD LIBOR +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.758%, (6-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.759%, (6-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.765%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.766%, (6-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.768%, (6-Month USD LIBOR +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.773%, (12-Month USD LIBOR +/- MBS Margin), 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.80%, (6-Month USD LIBOR +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.80%, (6-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.805%, (12-Month USD LIBOR +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.815%, (6-Month USD LIBOR +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.817%, (6-Month USD LIBOR +/- MBS Margin), 12/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.82%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.82%, (6-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.828%, (12-Month USD LIBOR +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.829%, (6-Month USD LIBOR +/- MBS Margin), 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.841%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.864%, (6-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.892%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.899%, (12-Month USD LIBOR +/- MBS Margin), 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.90%, (12-Month USD LIBOR +/- MBS Margin), 4/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.918%, (6-Month USD LIBOR +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.923%, (12-Month USD LIBOR +/- MBS Margin), 12/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.925%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.925%, (1 Year CMT +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.931%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.934%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.94%, (12-Month USD LIBOR +/- MBS Margin), 4/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.941%, (12-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.943%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.945%, (12-Month USD LIBOR +/- MBS Margin), 4/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.955%, (12-Month USD LIBOR +/- MBS Margin), 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.961%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.964%, (1 Year CMT +/- MBS Margin), 1/01/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.971%, (12-Month USD LIBOR +/- MBS Margin), 11/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.973%, (12-Month USD LIBOR +/- MBS Margin), 1/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.982%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.988%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.99%, (6-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.993%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.996%, (12-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 1.999%, (12-Month USD LIBOR +/- MBS Margin), 3/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.00%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.00%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.001%, (12-Month USD LIBOR +/- MBS Margin), 8/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.002%, (6-Month USD LIBOR +/- MBS Margin), 1/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.007%, (12-Month USD LIBOR +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.009%, (12-Month USD LIBOR +/- MBS Margin), 6/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.01%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.013%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNMA, 2.018%, (12-Month USD LIBOR +/- MBS Margin), 12/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .

Principal Amount			Value
$	34,932	$	36,147
	5,122		5,341
	7,566		7,866
	17,257		18,130
	2,753		2,870
	329,220		343,302
	3,401		3,429
	2,714		2,822
	7,861		8,182
	5,951		6,261
	11,091		11,563
	5,420		5,445
	122,120		128,119
	7,611		7,682
	1,653		1,717
	5,092		5,116
	10,298		10,736
	375		379
	45,831		48,047
	5,415		5,592
	45,229		45,820
	117,727		122,654
	17,740		18,491
	3,224		3,371
	25,257		26,568
	38,686		39,036
	377		379
	11,960		12,056
	2,075		2,080
	19,523		20,599
	117,012		122,304
	16,842		17,735
	18,343		19,175
	5,661		5,705
	167,435		176,274
	23,756		24,102
	227,784		240,458
	80,563		85,155
	18,565		19,375
	257		257
	28,195		29,807
	17,143		17,169
	410		418
	55,901		56,775
	7,634		7,667
	144,200		145,444
	7,766		8,194
	242,368		255,958
	3,569		3,570
	2,140		2,157
	293,014		309,531
	872		878
	12,910		13,630
	23,132		24,540
	6,063		6,183
	60,140		62,964
	1,553		1,555

12

Semiannual Report franklintempleton.com

F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

			Principal Amount			Value
	Mortgage-Backed Securities (continued)
b Federal National Mortgage Association (FNMA) Adjustable Rate (continued)
	FNMA, 2.02%, (6-Month USD LIBOR +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .	$		27,554	$	27,889
	FNMA, 2.032%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			127,087		134,334
	FNMA, 2.032%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			399,765		422,597
	FNMA, 2.034%, (12-Month USD LIBOR +/- MBS Margin), 11/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .			120,907		127,477
	FNMA, 2.041%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/29 . . . . . . . . . . . . . . . . . . . . . . . . .			777		778
	FNMA, 2.043%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			43,841		46,002
	FNMA, 2.047%, (12-Month USD LIBOR +/- MBS Margin), 8/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			73,041		73,650
	FNMA, 2.053%, (12-Month USD LIBOR +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			115,415		120,389
	FNMA, 2.059%, (12-Month USD LIBOR +/- MBS Margin), 7/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,617,416		1,715,427
	FNMA, 2.065%, (12-Month USD LIBOR +/- MBS Margin), 12/01/39 . . . . . . . . . . . . . . . . . . . . . . . . .			21,195		22,388
	FNMA, 2.068%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			39,224		40,886
	FNMA, 2.068%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			26,626		27,960
	FNMA, 2.069%, (12-Month USD LIBOR +/- MBS Margin), 5/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,034,544		1,093,921
	FNMA, 2.076%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			4,761		5,033
	FNMA, 2.079%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			20,944		21,995
	FNMA, 2.083%, (12-Month USD LIBOR +/- MBS Margin), 9/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . .			57,920		61,434
	FNMA, 2.089%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			78,574		79,421
	FNMA, 2.091%, (12-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			16,347		17,259
	FNMA, 2.099%, (1 Year CMT +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			279,254		293,552
	FNMA, 2.102%, (12-Month USD LIBOR +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			5,210		5,498
	FNMA, 2.105%, (12-Month USD LIBOR +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			14,186		14,982
	FNMA, 2.113%, (12-Month USD LIBOR +/- MBS Margin), 8/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,575,900		1,666,340
	FNMA, 2.116%, (12-Month USD LIBOR +/- MBS Margin), 5/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			157,317		166,463
	FNMA, 2.116%, (12-Month USD LIBOR +/- MBS Margin), 4/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,812,632		1,918,794
	FNMA, 2.123%, (11th District COF +/- MBS Margin), 8/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			16,027		16,039
	FNMA, 2.123%, (12-Month USD LIBOR +/- MBS Margin), 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			51,277		52,379
	FNMA, 2.124%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . .			4,197		4,369
	FNMA, 2.125%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			53,308		55,780
	FNMA, 2.127%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			9,896		9,954
	FNMA, 2.132%, (12-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			144,385		147,874
	FNMA, 2.14%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			75,210		79,698
	FNMA, 2.142%, (12-Month USD LIBOR +/- MBS Margin), 9/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . .			823,421		872,271
	FNMA, 2.163%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			16,253		17,247
	FNMA, 2.171%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/33 . . . . . . . . . . . . . . . . . . . . . . . .			92,679		94,302
	FNMA, 2.177%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			66,604		70,173
	FNMA, 2.178%, (US 1 Year CMT T-Note +/- MBS Margin), 4/01/40 . . . . . . . . . . . . . . . . . . . . . . . . .			39,046		40,694
	FNMA, 2.182%, (12-Month USD LIBOR +/- MBS Margin), 10/01/40 . . . . . . . . . . . . . . . . . . . . . . . . .			403,167		427,449
	FNMA, 2.195%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .			6,336		6,346
	FNMA, 2.195%, (12-Month USD LIBOR +/- MBS Margin), 12/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			25,352		26,947
	FNMA, 2.202%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			5,024		5,057
	FNMA, 2.203%, (12-Month USD LIBOR +/- MBS Margin), 1/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . .			158,291		167,812
	FNMA, 2.213%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			83,250		88,369
	FNMA, 2.216%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .			18,289		18,361
	FNMA, 2.23%, (12-Month USD LIBOR +/- MBS Margin), 8/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			14,965		15,015
	FNMA, 2.239%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/37 . . . . . . . . . . . . . . . . . . . . . . . .			25,255		27,122
	FNMA, 2.25%, (12-Month USD LIBOR +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .			20,003		20,091
	FNMA, 2.257%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . .			55,692		59,517
	FNMA, 2.264%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			22,519		22,552
	FNMA, 2.272%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/39 . . . . . . . . . . . . . . . . . . . . . . . . .			986		985
	FNMA, 2.28%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . .			735		736
	FNMA, 2.288%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .			10,205		10,231
	FNMA, 2.29%, (1 Year CMT +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			29,400		31,144
	FNMA, 2.291%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . . .			17,028		17,165
	FNMA, 2.294%, (1 Year CMT +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			41,808		44,284
	FNMA, 2.296%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .			5,411		5,476
	FNMA, 2.30%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . .			45,012		48,118
	FNMA, 2.305%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . .			841,987		899,655

franklintempleton.com Semiannual Report

13

F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

				Principal Amount			Value
	Mortgage-Backed Securities (continued)
b Federal National Mortgage Association (FNMA) Adjustable Rate (continued)
	FNMA, 2.307%, (US 1 Year CMT T-Note +/- MBS Margin), 4/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .		$		32,567	$	32,605
	FNMA, 2.31%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .				10,720		10,734
	FNMA, 2.31%,	(12-Month USD LIBOR +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . .			28,082		28,635
	FNMA, 2.312%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/25 . . . . . . . . . . . . . . . . . . . . . . . . .				2,449		2,454
	FNMA, 2.316%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . .				57,470		61,431
	FNMA, 2.318%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .				1,441		1,447
	FNMA, 2.318%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .				25,968		27,597
	FNMA, 2.321%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . .				249,982		267,215
	FNMA, 2.322%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/28 . . . . . . . . . . . . . . . . . . . . . . . . .				591		595
	FNMA, 2.324%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . .				47,517		50,814
	FNMA, 2.325%, (12-Month USD LIBOR +/- MBS Margin), 8/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .				42,109		44,871
	FNMA, 2.328%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .				151,059		151,876
	FNMA, 2.329%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/39 . . . . . . . . . . . . . . . . . . . . . . . . .				3,942		3,992
	FNMA, 2.331%, (1 Year CMT +/- MBS Margin), 10/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				42,722		45,269
	FNMA, 2.336%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .				4,385		4,409
	FNMA, 2.336%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .				26,727		26,529
	FNMA, 2.338%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .				81,188		82,594
	FNMA, 2.348%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .				30,332		32,461
	FNMA, 2.349%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .				17,951		18,014
	FNMA, 2.357%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .				107,591		114,809
	FNMA, 2.368%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .				14,961		15,362
	FNMA, 2.403%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . .				13,092		13,977
	FNMA, 2.41%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .				1,959		2,086
	FNMA, 2.415%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .				25,932		27,586
	FNMA, 2.589%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/28 . . . . . . . . . . . . . . . . . . . . . . . . .				1,356		1,362
	FNMA, 2.592%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/28 . . . . . . . . . . . . . . . . . . . . . . . . .				1,138		1,140
	FNMA, 2.605%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .				9,569		10,156
	FNMA, 2.733%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .				18,809		20,134
	FNMA, 2.813%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/30 . . . . . . . . . . . . . . . . . . . . . . . .				2,701		2,704
	FNMA, 3.506%, (11th District COF +/- MBS Margin), 10/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				217		220
	FNMA, 4.09%, (11th District COF +/- MBS Margin), 8/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				16,193		16,581
	FNMA, 4.825%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .				51,569		52,033
							28,099,482
	Federal National Mortgage Association (FNMA) Fixed Rate 26.8%
	FNMA, 0.785%, 7/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				5,310,467		5,187,035
	FNMA, 1.75%, 1/25/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				1,375,125		1,404,735
	FNMA, 2.00%, 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				12,473,390		12,860,475
	FNMA, 2.00%, 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				3,230,482		3,330,733
c FNMA, 2.00%, 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					21,400,000		22,041,164
	FNMA, 2.50%, 1/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				26,051,622		26,901,134
	FNMA, 2.50%, 4/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				12,487,092		12,890,062
	FNMA, 2.50%, 7/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				6,196,888		6,396,867
	FNMA, 2.50%, 9/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				12,272,110		12,668,142
c FNMA, 2.50%, 10/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					9,300,000		9,589,535
	FNMA, 3.00%, 10/25/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				1,995,183		2,067,538
	FNMA, 3.00%, 7/01/50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				9,785,737		10,250,813
	FNMA, 3.50%, 9/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				37,971		40,534
	FNMA, 3.50%, 10/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				341,576		364,741
	FNMA, 3.50%, 3/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				292,446		312,136
	FNMA, 3.50%, 8/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				61,728		65,940
	FNMA, 3.50%, 8/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				26,495		28,289
	FNMA, 3.50%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				2,688		2,871
	FNMA, 3.50%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				1,634		1,746
	FNMA, 3.50%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				8,140		8,695
	FNMA, 3.50%, 1/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				392,530		419,232
	FNMA, 3.50%, 1/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				13,981		14,929
	FNMA, 3.50%, 1/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				6,059		6,499

14

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F R A N K LI N E T F T R U S T

S T A T E M E N T O F I N V E S T M E N T S ( U N A U D I T E D )

Franklin Liberty Short Duration U.S. Government ETF (continued)

			Principal Amount			Value
	Mortgage-Backed Securities (continued)
	Federal National Mortgage Association (FNMA) Fixed Rate (continued)
	FNMA, 3.50%, 4/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 89,250		$		95,765
	FNMA, 3.50%, 7/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	402,566				429,402
	FNMA, 3.50%, 5/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	106,052				113,220
						127,492,232
b Government National Mortgage Association (GNMA) Adjustable Rate 1.2%
	GNMA, 0.387%, (1-Month USD LIBOR +/- MBS Margin), 4/20/37 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,823,994				1,827,402
	GNMA, 0.417%, (1-Month USD LIBOR +/- MBS Margin), 6/20/41 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,408,930				2,430,916
	GNMA, 0.685%, (1-Month USD LIBOR +/- MBS Margin), 1/16/40 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,318,304				1,335,216
						5,593,534
	Government National Mortgage Association (GNMA) Fixed Rate 2.5%
	GNMA, 2.50%, 9/20/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,087,741				1,108,938
c GNMA, 2.50%, 10/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6,300,000				6,504,012
	GNMA, 3.00%, 8/20/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,222,861				4,427,315
						12,040,265
	Total Mortgage-Backed Securities (Cost $345,842,657)
					345,365,949
	Total Investments before Short Term Investments (Cost $478,268,173) . .
						477,875,346
			Shares
	Short Term Investments (Cost $35,603,520) 7.5%
	Money Market Funds 7.5%
d,e Institutional Fiduciary Trust Money Market Portfolio, 0.01% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		35,603,520				35,603,520
	Total Investments (Cost $513,871,693) 107.9%
					513,478,866
	Other Assets, less Liabilities (7.9)% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					(37,454,665)
	Net Assets 100.0%
				$	476,024,201

aThe coupon rate shown represents the value inclusive of any caps or floors, if applicable, in effect at period end.

bAdjustable Rate Mortgage-Backed Security (ARM); the rate shown is the effective rate at period end. ARM rates are not based on a published reference rate and spread, but instead pass-through weighted average interest income inclusive of any caps or floors, if applicable, from the underlying mortgage loans pool in which the majority of mort- gages pay interest based on the index shown at their designated reset dates plus a spread, less the applicable servicing and guaranty fee (MBS margin).

cSecurity purchased on a to-be-announced (TBA) basis. See Note 1(b).

dThe rate shown is the annualized seven-day effective yield at period end.

eSee Note 3(c) regarding investments in affiliated management investment companies.

At September 30, 2021, the Fund had the following futures contracts outstanding. See Note 1(c).

Futures Contracts

								Value/Unrealized
				Number of	Notional		Expiration	Appreciation
Description		Type		Contracts	Value*		Date	(Depreciation)
Interest Rate Contracts
U.S. Treasury 5 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Long		118	$14,483,578		12/31/21	$ (79,988)
U.S. Treasury 10 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		245	32,244,297		12/21/21	318,649
U.S. Treasury 10 Yr. Ultra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		53	7,698,250		12/21/21	113,181
U.S. Treasury Long Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		104	16,558,750		12/21/21	343,630
U.S. Treasury Ultra Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		8	1,528,500		12/21/21	44,426
Total Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . .		. . . . . . . . . . . .		. . . . . . . . . . . . .	. .	. . . . . . . . . .	$739,898

*As of period end.

See Note 8 regarding other derivative information.

See abbreviations on page 25.

franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report

15

F R A N K LI N E T F T R U S T

F I N A N C I A L S T A T E M E N T S

Statement of Assets and Liabilities

September 30, 2021 (unaudited)

Franklin Liberty Short Duration U.S. Government ETF

Assets:
Investments in securities:
Cost – Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	478,268,173
Cost – Non-controlled affiliates (Note 3c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		35,603,520
Value – Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	477,875,346
Value – Non-controlled affiliates (Note 3c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		35,603,520
Receivables:
Investment securities sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		275,849
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		556,959
Deposits with broker for:
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		817,376
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		515,129,050
Liabilities:
Payables:
Investment securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		38,515,202
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		89,236
Distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		358,655
Variation margin on futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		45,172
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		96,584
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		39,104,849
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	476,024,201
Net assets consist of:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	486,905,115
Total distributable earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(10,880,914)
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	476,024,201
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5,026,000
Net asset value per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	94.71

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F R A N K LI N E T F T R U S T

F I N A N C I A L S T A T E M E N T S

Statement of Operations

for the six months ended September 30, 2021 (unaudited)

Franklin Liberty Short Duration U.S. Government ETF

Investment income:

Dividends:
Non-controlled affiliates (Note 3c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	973
Interest:
Unaffiliated issuers:
Inflation principal adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13,778
Paydown gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(885,681)
Paid in casha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,478,631
Total investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,607,701
Expenses:
Management fees (Note 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		697,415
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6,747
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		32,764
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		28,993
Trustees fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		22,702
Pricing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		551
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		28,255
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		817,427
Expense reductions (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(7,311)
Expenses waived/paid by affiliates (Note 3c and 3d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(236,248)
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		573,868
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,033,833
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		388,379
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(1,510,790)
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(1,122,411)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(523,200)
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		88,225
Net change in unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(434,975)
Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(1,557,386)
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	(523,553)

aIncludes amortization of premium and accretion.

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17

F R A N K LI N E T F T R U S T

F I N A N C I A L S T A T E M E N T S

Statements of Changes in Net Assets

Franklin Liberty Short Duration U.S. Government ETF

		Six Months Ended
		September 30, 2021				Year Ended
			(unaudited)		March 31, 2021
Increase (decrease) in net assets:
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$		1,033,833	$		3,628,516
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			(1,122,411)			2,155,618
Net change in unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			(434,975)			(540,470)
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . .			(523,553)			5,243,664
Distributions to shareholders (Note 1f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			(2,175,298)			(5,978,409)
Capital share transactions (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			42,896,398			249,166,328
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			40,197,547			248,431,583
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			435,826,654			187,395,071
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$		476,024,201	$		435,826,654

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F R A N K LI N E T F T R U S T

F R A N K L I N L I B E R T Y S H O R T D U R AT I O N U . S . G O V E R N M E N T E T F

Notes to Financial Statements

1.Organization and Significant Accounting Policies

Franklin ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end manage- ment investment company, consisting of three separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Liberty Short Duration U.S. Govern- ment ETF (Fund) is included in this report. The Fund is an exchange traded fund (ETF) and is actively managed, thus it is not designed to track an index.

Subsequent to May 31, 2017, the Fund’s fiscal year end changed to March 31.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the mea- surement date. The Fund calculates the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securi- ties and financial instrument dealers, and other market sources to determine fair value.

Debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Fund’s pricing ser- vices use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to deter- mine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Derivative

financial instruments listed on an exchange are valued at the official closing price of the day.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of finan- cial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are dis- counted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncer- tainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

b. Securities Purchased on a TBA Basis

The Fund purchases securities on a to-be-announced (TBA) basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price.

c. Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement

of Operations.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or

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Franklin Liberty Short Duration U.S. Government ETF (continued)

1.Organization and Significant Accounting Policies (continued)

c. Derivative Financial Instruments (continued)

exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities.

The Fund entered into exchange traded futures contracts pri- marily to manage and/or gain exposure to interest rate risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as varia- tion margin payable or receivable in the Statement of Assets and Liabilities.

The Fund purchased or wrote exchange traded and/or OTC option contracts primarily to manage and/or gain exposure to interest rate risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying invest- ment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss.

See Note 8 regarding other derivative information.

d. Mortgage Dollar Rolls

The Fund enters into mortgage dollar rolls, typically on a TBA basis. Mortgage dollar rolls are agreements between the Fund and a financial institution where the Fund sells (or buys) mortgage-backed securities for delivery on a specified date and simultaneously contracts to repurchase (or sell) substantially similar (same type, coupon, and maturity) secu- rities at a future date and at a predetermined price. Gains or losses are realized on the initial sale, and the difference between the repurchase price and the sale price is recorded as an unrealized gain or loss to the Fund upon entering into the mortgage dollar roll. In addition, the Fund may invest the cash proceeds that are received from the initial sale. During

the period between the sale and repurchase, the Fund is not entitled to principal and interest paid on the mortgage-backed securities. Transactions in mortgage dollar rolls are accounted for as purchases and sales and may result in an increase to the Fund’s portfolio turnover rate. The risks of mortgage dollar roll transactions include the potential inability of the counterparty to fulfill its obligations.

e. Income Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sus- tained upon examination by the tax authorities based on its technical merits. As of September 30, 2021, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

f. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Real- ized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Paydown gains and losses are recorded separately in the Statement of Operations. Dividend income is recorded on ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Perma- nent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in sub- sequent periods.

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Franklin Liberty Short Duration U.S. Government ETF (continued)

1.Organization and Significant Accounting Policies (continued)

f. Security Transactions, Investment Income, Expenses and Distributions (continued)

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as inflation princi- pal adjustments in the Statement of Operations.

g. Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

h. Guarantees and Indemnifications

Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain gen- eral indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.

2. Shares of Beneficial Interest

Shares of the Fund are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Fund. Once created, shares of the Fund generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Fund ‘s shares will be based on the price in the secondary mar- ket which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed for cash and/or in-kind. For the period ended September 30, 2021 and year ended March 31, 2021, all Creations Unit transactions were made in cash.

Authorized participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Cre- ation Units of the Fund regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Fund.

In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.

At September 30, 2021, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

		Six Months Ended				Year Ended
		September 30, 2021				March 31, 2021
		Shares		Amount		Shares		Amount
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	650,000		$ 61,878,509		3,900,000		$ 373,194,517
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(200,000)		(18,982,111)		(1,300,000)		(124,028,189)
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	450,000		$ 42,896,398		2,600,000		$ 249,166,328

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Franklin Liberty Short Duration U.S. Government ETF (continued)

3. Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Distributors, LLC (Distributors)
(formerly Franklin Templeton Distributors, Inc.)	Principal underwriter

a. Management Fees

The Fund pays an investment management fee to Advisers of 0.30% per year of the average daily net assets of the Fund.

b. Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c. Investments in Affiliated Management Investment Companies

The Fund invests in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Fund does not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2021, the Fund held investments in affiliated management investment companies as follows:

							Number of
					Net Change		Shares
	Value at				in Unrealized	Value at	Held at
	Beginning			Realized	Appreciation	End of	End	Dividend
	of Period	Purchases	Sales	Gain (Loss)	(Depreciation)	Period	of Period	Income
Non-Controlled Affiliates
Institutional Fiduciary Trust
Money Market Portfolio,
0.01% . . . . . . . . . . . . . . . . . . . . . $6,687,494		$89,736,484	$(60,820,458)	$ —	$ —	$35,603,520	35,603,520	$973

d. Waiver and Expense Reimbursements

Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the expenses (including acquired fund fees and expenses) of the Fund do not exceed 0.25% based on the average net assets (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until July 31, 2022. Total expenses waived or paid are not subject to recap- ture subsequent to the Fund’s fiscal year end.

e. Other Affiliated Transactions

At September 30, 2021, Franklin Resources Inc. owned 0.04% of the Fund’s outstanding shares.

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Franklin Liberty Short Duration U.S. Government ETF (continued)

4. Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended September 30, 2021, the custodian fees were reduced as noted in the Statement of Operations.

5. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2021, the capital loss carryforwards were as follows:

Capital loss carryforwards:
Short term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$3,223,368
Long term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,810,925
Total capital loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$8,034,293

At September 30, 2021, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	515,148,036
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	852,434
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(1,780,988)
Net unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	(928,554)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of paydown losses and bond discounts and premiums.

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended September 30, 2021, aggregated $280,994,510 and $230,131,950, respectively.

7. Novel Coronavirus Pandemic

The global outbreak of a novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the market in general, and may continue for an unpredictable duration. The effects of this pan- demic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations and its ability to achieve its investment objectives.

8. Other Derivative Information

At September 30, 2021, the Fund’s investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

	Asset Derivatives		Liability Derivatives
Derivative Contracts
Not Accounted for as	Statement of Assets and		Statement of Assets and
Hedging Instruments	Liabilities Location	Fair Value	Liabilities Location	Fair Value
Interest rate contracts . . . . . . . . . . . . . .	Variation margin	$819,886a	Variation margin	$79,988a

aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

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Franklin Liberty Short Duration U.S. Government ETF (continued)

8. Other Derivative Information (continued)

For the period ended September 30, 2021, the effect of derivative contracts in the Fund’s Statement of Operations was as follows:

						Net Change in
						Unrealized
Derivative Contracts			Net Realized			Appreciation
Not Accounted for as	Statement of		Gain (Loss)	Statement of		(Depreciation)
Hedging Instruments	Operations Locations		for the Period	Operations Locations		for the Period
	Net realized gain (loss) from:			Net change in unrealized
				appreciation (depreciation) on:
Interest rate contracts . . . . . . .	Investments		$ (127,223)a	Investments		$(48,002)a
	Futures contracts	(1,510,790)		Futures contracts	88,225

aPurchased option contracts are included in net realized gain (loss) from investments and net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the period ended September 30, 2021, the average month end notional amount of options and futures contracts repre- sented 60,286 shares/units and $68,360,638, respectively.

See Note 1(c) regarding derivative financial instruments.

9. Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observ- able inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

•Level 1 – quoted prices in active markets for identical financial instruments

•Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, pre- payment speed, credit risk, etc.)

•Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The inputs levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of September 30, 2021, in valuing the Fund’s assets carried at fair value, is as follows:

		Level 1		Level 2	Level 3		Total
Assets:
Investments in Securities:
U.S. Government and Agency Securities . . . . . . . . . . . . . . . . . . . . . .	$	—	$	132,509,397	$ —	$	132,509,397
Mortgage-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		—		345,365,949	—		345,365,949
Short Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		35,603,520		—	—		35,603,520
Total Investments in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	35,603,520	$	477,875,346	$ —	$	513,478,866
Other Financial Instruments:
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	819,886	$	—	$ —	$	819,886
Liabilities:
Other Financial Instruments:
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	79,988	$	—	$ —	$	79,988

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Franklin Liberty Short Duration U.S. Government ETF (continued)

10. New Accounting Pronouncement

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021 and 2023. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.

11. Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations

Selected Portfolio

CMT Constant Maturity Treasury Index

COF Cost of Funds

FRN Floating Rate Note

LIBOR London InterBank Offered Rate

MBS Mortgage-Backed Security

SOFR Secured Overnight Financing Rate

USD United States Dollar

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Shareholder Information

Board Approval of Investment

Management Agreements

FRANKLIN ETF TRUST

Franklin Liberty Short Duration U.S.

Government ETF

(Fund)

At a meeting held on May 26, 2021 (Meeting), the Board of Trustees (Board) of the Franklin ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Inde- pendent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of the Fund (Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of the Management Agreement.

In considering the continuation of the Management Agree- ment, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees, including a number of special meetings during the pandemic to enhance Board oversight of Fund-related matters during this period. The Board also reviewed and considered information pro- vided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees con- ferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of the Management Agreement, including, but not limited to:

(i)the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of the Fund;

(iii)the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with the Fund; (iv) the extent to which economies of scale are realized as the Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.

In approving the continuance of the Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the Management Agreement are

fair and reasonable and that the continuance of such Management Agreement is in the best interests of the Fund and its shareholders. While attention was given to all informa- tion furnished, the following discusses some primary factors relevant to the Board’s determination.

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; as well as information on succession planning where appropri- ate; the structure of investment personnel compensation; oversight of third-party service providers; investment perfor- mance reports and related financial information for the Fund; reports on expenses; legal and compliance matters; risk con- trols; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity in the current work-from-home environ- ment and liquidity risk management.

The Board also reviewed and considered the benefits pro- vided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Fund by the FT organization. The Board specifically noted FT’s com- mitment to enhancing services and controlling costs, as reflected in its outsourcing of certain administrative functions, and growth opportunities, as evidenced by its recent acquisi- tion of the Legg Mason companies. The Board also noted FT’s attention focused on expanding the distribution opportu- nities for all funds in the FT family of funds.

Following consideration of such information, the Board was satisfied with the nature, extent and quality of services pro- vided by the Manager and its affiliates to the Fund and

its shareholders.

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Fund Performance

The Board reviewed and considered the performance results of the Fund for various time periods ended February 28, 2021. The Board considered the performance returns for the Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the regis- tered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports pro- vided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with the Manager about the perfor- mance of the Fund to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Fund in periods of volatility. In addition, the Board acknowledged information provided regarding the Manager’s strategy behind the overall product line up, the sources of asset growth, the nature of the Manager’s research, potential use of innovative data and technology, and investments in mar- keting and distribution. Finally, the Board noted the Manager’s high level of client engagement and the strength of its compliance program. A summary of the Fund’s perfor- mance results is below.

The Performance Universe for the Fund included the Fund and all retail and institutional short US government funds and exchange-traded funds. The Fund commenced opera- tions on November 4, 2013, and thus has been in operation for less than ten years. The Board noted that the Fund’s annualized total return for the three-year period was below the median of its Performance Universe, but for the one- and five-year periods was above the median of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.

Comparative Fees and Expenses

The Board reviewed and considered information regarding the Fund’s actual total expense ratio and its various compo- nents, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, with- out the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded

funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates gen- erally increase as assets decline and decrease as assets grow, the Board believed the independent analysis con- ducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Manage- ment Rate includes administrative charges. The Board received a description of the methodology used by Broad- ridge to select the exchange-traded funds included in an Expense Group.

The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund, eight ultra-short obligation funds, five short investment-grade debt funds, and one short-intermediate investment-grade debt fund. The Board noted that the Management Rate for the Fund was only one basis point above the median of its Expense Group, and that its actual total expense ratio was below the median of its Expense Group. The Board also noted that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rate charged to the Fund is reasonable.

Profitability

The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in con- nection with the operation of the Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2020, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Fund’s profitability report presentations from prior years. The Board further noted management’s representation that the profitability analysis excluded the impact of the recent acqui- sition of the Legg Mason companies and that management expects to incorporate the legacy Legg Mason companies into the profitability analysis beginning next year. The Board also noted that PricewaterhouseCoopers LLP, auditor

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to FRI and certain FT funds, has been engaged to periodi- cally review and assess the allocation methodologies to be used solely by the Fund’s Board with respect to the profit- ability analysis.

The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this eval- uation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up- front expenditures by the Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Fund, as well as the need to imple- ment systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.

The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and sys- tems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund.

Economies of Scale

The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee struc- ture reflects any economies of scale for the benefit of shareholders. The Board considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board noted that the Fund commenced operations on November 4, 2013 and that, as of December 31, 2020, the Fund’s net assets were approximately $541 million. The Board recognized that there would not likely be any economies of scale until the Fund’s assets grow.

Conclusion

Based on its review, consideration and evaluation of all fac- tors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of the Management Agreement for an addi- tional one-year period.

Liquidity Risk Management Program – Funds no HLIM

Franklin Liberty Short Duration U.S. Government ETF

Each Fund has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and man- age each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not pri- marily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Invest- ment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, includ- ing reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).

The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Adminis- trator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Invest- ment Operations, Valuation Committee, Product Management and Global Product Strategy.

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F R A N K LI N E T F T R U S T S H A R E H O LD E R I N F O R M A T I O N

In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projec- tions; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without signifi- cantly changing the investment’s market value.

Each Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash signifi- cantly changing the market value of the investment.

At meetings of the Funds’ Board of Trustees held in May 2021, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2020. The Pro- gram Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining invest- ors’ interests in the Fund.

Proxy Voting Policies and Procedures

The Fund’s investment manager has established Proxy Vot- ing Policies and Procedures (Policies) that the Fund uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Fund’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Fund’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Trust, on behalf of the Fund, files a complete statement of investments with the U.S. Securities and Exchange Com- mission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling

(800) SEC-0330.

Premium/Discount Information

Information about the differences between the daily market price on the secondary market for the shares of the Fund and the Fund’s net asset value may be found on the Fund’s web- site at franklintempleton.com.

franklintempleton.com Semiannual Report

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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.

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Semiannual Report

Franklin Liberty Short Duration U.S. Government ETF

Investment Manager	Distributor	Investor Services
Franklin Advisers, Inc.	Franklin Distributors, LLC	Transfer Agent
	(800) DIAL BEN®/342-5236	BNY Mellon
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