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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

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)

Alison Baur, 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: 3/31/22

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.)

A copy of the notice transmitted to shareholders in reliance on Rule 30e-3 under the 1940 Act that contains disclosures specified by paragraph (c)(3) of that rule is included in the Annual Report.

Not Applicable

.

ANNUAL

REPORT

Franklin

ETF

Trust

March

31,

2022

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Annual

Report

1

Contents

Annual

Report

Franklin

Equity

Portfolio

Fund

2

Franklin

Fixed

Income

Portfolio

Fund

9

Financial

Highlights

and

Schedules

of

Investments

15

Financial

Statements

19

Notes

to

Financial

Statements

22

Report

of

Independent

Registered

Public

Accounting

Firm

29

Tax

Information

30

Board

Members

and

Officers

31

Shareholder

Information

34

Visit

franklintempleton.com

for

fund

updates

and

documents,

or

to

find

helpful

financial

planning

tools.

2

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Franklin

Equity

Portfolio

Fund

This

annual

report

for

Franklin

Equity

Portfolio

Fund

covers

the

fiscal

year

ended

March

31,

2022.

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

12-month

period,

the

Fund

posted

a

+8.93%

cumulative

total

return.

In

comparison,

the

MSCI

All

Country

World

Index

(ACWI)-NR,

which

measures

the

equity

market

performance

of

global

developed

and

emerging

markets,

posted

a

+7.28%

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

5

.

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

(net

of

tax

withholding

when

dividends

are

paid),

posted

a

+7.28%

total

return

for

the

12

months

ended

March

31,

2022.

1

Global

equities

benefited

from

ongoing

COVID-19

vaccination

programs,

easing

restrictions

in

certain

regions

and

continued

economic

recovery.

However,

the

Chinese

government’s

imposition

of

additional

restrictions

on

some

businesses

pressured

Asian

and

global

emerging

market

stocks.

Additionally,

the

spread

of

the

Delta

and

Omicron

variants

of

COVID-19

and

higher

inflation

in

an

environment

of

persistent

supply-chain

disruptions

hindered

global

equities

at

certain

points

during

the

12-month

period.

Russia’s

invasion

of

Ukraine

late

in

the

period

injected

further

uncertainty

into

financial

markets,

provoking

significant

volatility

in

commodity

and

equity

prices.

Rising

interest

rates

also

pressured

stocks,

as

borrowing

costs

began

to

rise

from

historically

low

levels.

In

the

U.S.,

gross

domestic

product

(GDP)

growth

was

robust

during

most

of

the

period,

as

strong

consumer

spending

and

business

investment

in

growing

inventories

supported

the

economy.

Both

exports

and

imports

increased

significantly

amid

a

recovery

in

industrial

production.

The

continued

growth

of

the

economy

helped

the

U.S.

to

surpass

its

pre-pandemic

output

in

2021’s

second

quarter.

However,

rising

prices

precipitated

a

notable

decline

in

consumer

confidence,

despite

high

spending

levels.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

to

a

range

of

0.25%–0.50%,

the

first

such

increase

since

2018.

The

Fed

noted

in

its

March

2022

meeting

that

strength

in

the

U.S.

job

market

and

continued

inflationary

pressure,

exacerbated

by

the

war

in

Ukraine,

meant

that

it

anticipated

making

further

increases

to

the

federal

funds

target

rate.

GDP

growth

resumed

in

the

eurozone

in

2021’s

second

quarter,

following

a

brief

recession,

but

quarter-over-quarter

growth

slowed

in

the

fourth

quarter

of

2021

as

the

spread

of

the

Omicron

variant

disrupted

labor

markets

and

led

to

renewed

restrictions.

The

European

Central

Bank

struck

a

less

accommodative

tone

at

its

March

2022

meeting

as

it

set

a

schedule

to

wind

down

its

asset

purchases

and

established

preconditions

for

possible

interest-rate

increases

later

in

2022.

Stocks

of

companies

with

exposure

to

Russia,

particularly

banks,

endured

further

declines

late

in

the

period.

In

this

environment,

European

developed

Portfolio

Composition

3/31/22

%

of

Total

Net

Assets

Domestic

Equity

65.4%

Foreign

Equity

33.7%

Short-Term

Investments

&

Other

Net

Assets

0.9%

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

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

16

.

Franklin

Equity

Portfolio

Fund

3

franklintempleton.com

Annual

Report

market

equities,

as

measured

by

the

MSCI

Europe

Index-

NR,

posted

a

+3.53%

total

return

for

the

12

months

under

review.

1

Asian

developed

and

emerging

market

equities,

as

measured

by

the

MSCI

All

Country

Asia

Index-NR,

posted

a

-11.56%

total

return

for

the

12-month

period.

1

While

many

Asian

countries

experienced

improving

economic

conditions,

Japan’s

quarterly

GDP

contracted

in

2021’s

third

quarter

before

returning

to

growth

in

the

fourth

quarter.

Although

China’s

economy

continued

to

grow,

it

was

pressured

by

COVID-19

restrictions

and

government

measures

to

limit

real

estate

speculation.

Unexpected

regulatory

changes

by

the

Chinese

government,

which

negatively

impacted

education-

and

technology-related

businesses,

and

investor

concerns

about

the

solvency

of

several

large

Chinese

property

developers

further

pressured

Asian

stocks

during

the

12-month

period.

Global

emerging

market

stocks,

as

measured

by

the

MSCI

Emerging

Markets

Index-NR,

posted

a

-11.37%

total

return

for

the

12

months

under

review.

1

Rising

interest

rates

and

elevated

inflation

dampened

investor

enthusiasm

in

global

emerging

market

equities.

Interest-rate

increases

to

curb

inflation

by

several

central

banks,

including

those

of

Brazil

and

Mexico,

as

well

as

the

international

sanctions

on

Russia,

raised

investor

concerns

about

a

slowdown

in

economic

growth.

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

65.4%

of

total

net

assets

to

domestic

equity

and

33.7%

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

65.4%.

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

11.9%.

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

Fund

Holdings

3/31/22

%

of

Total

Net

Assets

a

a

Franklin

U.S.

Core

Equity

(IU)

Fund

65.4%

Franklin

International

Core

Equity

(IU)

Fund

19.9%

Franklin

Emerging

Market

Core

Equity

(IU)

Fund

11.9%

Franklin

FTSE

Japan

ETF

1.9%

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

approximately

1,000

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.

Franklin

Equity

Portfolio

Fund

4

franklintempleton.com

Annual

Report

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

March

31,

2022,

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.

Performance

Summary

as

of

March

31,

2022

Franklin

Equity

Portfolio

Fund

5

franklintempleton.com

Annual

Report

The

performance

table

and

graph

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.

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

3/31/22

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

–

1-Year

+8.93%

+8.93%

Since

Inception

(7/15/20)

+30.30%

+16.74%

See

page

7

for

Performance

Summary

footnotes.

Franklin

Equity

Portfolio

Fund

Performance

Summary

6

franklintempleton.com

Annual

Report

See

page

7

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

is

calculated

at

net

asset

value

and

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

Fund

fees

and

expenses,

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

7/15/20–3/31/22

Franklin

Equity

Portfolio

Fund

Performance

Summary

7

franklintempleton.com

Annual

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.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

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.

Source:

Morningstar.

The

MSCI

ACWI-NR

is

a

free

float-adjusted,

market

capitalization-weighted

index

designed

to

measure

the

equity

market

performance

of

global

developed

and

emerging

markets.

Net

Returns

(NR)

include

income

net

of

tax

withholding

when

dividends

are

paid.

5.

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

(4/1/21–3/31/22)

Net

Investment

Income

Short-Term

Capital

Gain

Total

$0.5616

$0.0803

$0.6419

Total

Annual

Operating

Expenses

5

With

Fee

Waiver

Without

Fee

Waiver

0.50%

12.83%

Your

Fund’s

Expenses

Franklin

Equity

Portfolio

Fund

8

franklintempleton.com

Annual

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

182/365

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

10/1/21

Ending

Account

Value

3/31/22

Expenses

Paid

During

Period

10/1/21–3/31/22

1,2

Ending

Account

Value

3/31/22

Expenses

Paid

During

Period

10/1/21–3/31/22

1,2

a

Annualized

Expense

Ratio

2

$1,000

$1,016.80

$2.50

$1,022.45

$2.51

0.50%

9

franklintempleton.com

Annual

Report

Franklin

Fixed

Income

Portfolio

Fund

This

annual

report

for

Franklin

Fixed

Income

Portfolio

Fund

covers

the

fiscal

year

ended

March

31,

2022.

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

12-month

period,

the

Fund

posted

a

-3.91%

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

-4.15%

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

-6.40%

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

11

.

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

-4.15%

total

return

for

the

12

months

ended

March

31,

2022.

1

Growing

inflation

amid

supply

chain

disruptions

and

increased

consumer

spending

led

to

tighter

monetary

policy,

reducing

the

value

of

most

bonds.

Geopolitical

instability

disrupted

financial

markets

late

in

the

12-month

period

following

Russia’s

invasion

of

Ukraine,

contributing

to

significant

volatility

in

bond

markets.

The

yield

curve

flattened

notably

during

the

period,

reflecting

investors’

expectations

that

short-term

interest

rates

will

continue

to

rise,

while

the

outlook

for

long-term

economic

growth

is

uncertain.

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

target

rate

to

a

range

of

0.25%–0.50%,

the

first

such

increase

since

2018.

The

Fed

noted

in

its

March

2022

meeting

that

strength

in

the

U.S.

job

market

and

continued

inflationary

pressure,

exacerbated

by

the

war

in

Ukraine,

meant

it

anticipated

making

further

increases

to

the

federal

funds

target

rate.

Furthermore,

the

Fed

said

it

expected

to

begin

reducing

its

bond

holdings

at

a

future

meeting.

U.S.

Treasury

(UST)

bonds,

as

measured

by

the

Bloomberg

U.S.

Treasury

Index,

posted

a

-3.67%

total

return

for

the

12-month

period.

1

The

10-year

UST

yield

(which

moves

inversely

to

price)

increased,

particularly

later

in

the

period

amid

high

inflation

and

the

Fed’s

less

accommodative

stance.

Mortgage-backed

securities

(MBS),

as

measured

by

the

Bloomberg

U.S.

MBS

Index,

posted

a

-4.92%

total

return

for

the

period.

1

Corporate

bond

prices

also

declined

overall,

constrained

by

inflation

and

rising

interest

rates.

Furthermore,

corporate

yield

spreads,

a

measure

of

the

difference

in

yields

between

corporate

bonds

and

similarly-dated

USTs,

increased,

reflecting

investors’

increasing

risk-off

preferences.

However,

yield

spreads

rose

faster

for

investment-grade

bonds

than

high-yield

bonds,

and

high-yield

bonds

benefited

from

higher

coupon

payments.

In

this

environment,

high-yield

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

High

Yield

Bond

Index,

posted

a

-0.66%

total

return,

while

investment-grade

corporate

bonds,

as

represented

by

the

Bloomberg

U.S.

Corporate

Bond

Index,

posted

a

-4.20%

total

return.

1

Portfolio

Composition

3/31/22

%

of

Total

Net

Assets

Domestic

Fixed

Income

93.8%

Short-Term

Investments

&

Other

Net

Assets

6.2%

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

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

18

.

Franklin

Fixed

Income

Portfolio

Fund

10

franklintempleton.com

Annual

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

93.8%

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

57.5%.

Franklin

Liberty

Investment

Grade

Corporate

ETF

was

the

second

largest

position

with

an

allocation

of

9.4%,

and

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

was

the

third

largest

position

with

an

allocation

of

7.4%.

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

March

31,

2022,

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

3/31/22

%

of

Total

Net

Assets

a

a

Franklin

Liberty

U.S.

Core

Bond

ETF

57.5%

Franklin

Liberty

Investment

Grade

Corporate

ETF

9.4%

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

7.4%

Franklin

Liberty

Federal

Tax-Free

Bond

ETF

5.6%

Franklin

Liberty

U.S.

Treasury

Bond

ETF

4.7%

Schwab

U.S.

TIPS

ETF

4.6%

Franklin

Liberty

Senior

Loan

ETF

2.8%

Franklin

Liberty

High

Yield

Corporate

ETF

1.8%

Performance

Summary

as

of

March

31,

2022

Franklin

Fixed

Income

Portfolio

Fund

11

franklintempleton.com

Annual

Report

The

performance

table

and

graph

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.

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

3/31/22

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

–

1-Year

-3.91%

-3.91%

Since

Inception

(7/15/20)

-5.83%

-3.45%

See

page

13

for

Performance

Summary

footnotes.

Franklin

Fixed

Income

Portfolio

Fund

Performance

Summary

12

franklintempleton.com

Annual

Report

See

page

13

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

1

Total

return

is

calculated

at

net

asset

value

and

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

Fund

fees

and

expenses,

and

reinvested

distributions.

The

unmanaged

indexes

include

reinvestment

of

any

income

or

distributions.

They

differ

from

the

Fund

in

composition

and

do

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

7/15/20–3/31/22

Franklin

Fixed

Income

Portfolio

Fund

Performance

Summary

13

franklintempleton.com

Annual

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.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

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.

Source:

Morningstar.

The

Bloomberg

U.S.

Aggregate

Bond

Index

measures

the

performance

of

the

investment-grade,

U.S.

dollar-denominated,

fixed-rate

taxable

bond

market.

The

index

includes

Treasuries,

government-related

and

corporate

securities,

mortgage-backed

securities

(agency

fixed-rate

and

hybrid

adjustable-rate

mortgage

pass-throughs),

asset-backed

securities

and

commercial

mortgage-backed

securities

(agency

and

nonagency).

The

Bloomberg

Global

Aggregate

Bond

Index

measures

the

performance

of

the

global

investment-grade,

fixed-rate

bond

markets.

The

benchmark

includes

government,

government-related

and

corporate

bonds,

as

well

as

asset-backed,

mortgage-backed

and

commercial

mortgage-backed

securities

from

both

developed

and

emerging

markets

issuers.

5.

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

(4/1/21–3/31/22)

Net

Investment

Income

$0.2442

Total

Annual

Operating

Expenses

5

With

Fee

Waiver

Without

Fee

Waiver

0.57%

54.23%

Your

Fund’s

Expenses

Franklin

Fixed

Income

Portfolio

Fund

14

franklintempleton.com

Annual

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

182/365

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

10/1/21

Ending

Account

Value

3/31/22

Expenses

Paid

During

Period

10/1/21–3/31/22

1,2

Ending

Account

Value

3/31/22

Expenses

Paid

During

Period

10/1/21–3/31/22

1,2

a

Annua

lized

Expense

Ratio

2

$1,000

$945.40

$1.04

$1,023.86

$1.08

0.21%

Franklin

ETF

Trust

Financial

Highlights

Franklin

Equity

Portfolio

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

15

a

Year

Ended

March

31,

2022

Year

Ended

March

31,

2021

a

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$11.80

$10.00

Income

from

investment

operations

b

:

Net

investment

income

c,d

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

0.17

0.10

Net

realized

and

unrealized

gains

(losses)

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

0.91

1.85

Total

from

investment

operations

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

1.08

1.95

Less

distributions

from:

Net

investment

income

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

(0.56)

(0.15)

Net

realized

gains

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

(0.08)

—

Total

distributions

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

(0.64)

(0.15)

Net

asset

value,

end

of

year

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

$12.24

$11.80

Total

return

e

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

8.93%

19.61%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

g

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

27.59%

38.20%

Expenses

net

of

waiver

and

payments

by

affiliates

g

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

0.50%

0.50%

h

Net

investment

income

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

1.34%

1.30%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$487

$347

Portfolio

turnover

rate

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

21.75%

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

year

ended

March

31,

2022.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

ETF

Trust

Schedule

of

Investments,

March

31,

2022

Franklin

Equity

Portfolio

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

16

a

a

Shares

a

Value

a

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

99.1%

Domestic

Equity

65.4%

a

Franklin

U.S.

Core

Equity

(IU)

Fund

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

22,257

$

318,496

Foreign

Equity

33.7%

a

Franklin

Emerging

Market

Core

Equity

(IU)

Fund

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

5,492

57,999

a

Franklin

FTSE

Japan

ETF

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

346

9,376

a

Franklin

International

Core

Equity

(IU)

Fund

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

8,385

96,426

163,801

Total

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

(Cost

$438,734)

482,297

a

a

a

a

Short

Term

Investments

0.5%

a

Money

Market

Funds

0.5%

a,b

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

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

2,536

2,536

Total

Money

Market

Funds

(Cost

$2,536)

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

2,536

Total

Short

Term

Investments

(Cost

$2,536

)

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

2,536

a

Total

Investments

(Cost

$441,270)

99.6%

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

$484,833

Other

Assets,

less

Liabilities

0.4%

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

2,088

Net

Assets

100.0%

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

$486,921

See

Abbreviations

on

page

28

.

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

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

17

a

Year

Ended

March

31,

2022

Year

Ended

March

31,

2021

a

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

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

$9.66

$10.00

Income

from

investment

operations

b

:

Net

investment

income

c,d

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

0.18

0.17

Net

realized

and

unrealized

gains

(losses)

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

(0.55)

(0.37)

Total

from

investment

operations

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

(0.37)

(0.20)

Less

distributions

from:

Net

investment

income

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

(0.24)

(0.14)

Net

asset

value,

end

of

year

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

$9.05

$9.66

Total

return

e

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

(3.91)%

(2.00)%

Ratios

to

average

net

assets

f

Expenses

before

waiver

and

payments

by

affiliates

g

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

110.00%

165.29%

Expenses

net

of

waiver

and

payments

by

affiliates

g

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

0.21%

0.21%

h

Net

investment

income

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

1.85%

2.39%

Supplemental

data

Net

assets,

end

of

year

(000’s)

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

$75

$78

Portfolio

turnover

rate

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

34.24%

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

0.17

%

for

the

year

ended

March

31,

2022.

h

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

ETF

Trust

Schedule

of

Investments,

March

31,

2022

Franklin

Fixed

Income

Portfolio

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

a

Shares

a

Value

a

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

93.8%

Domestic

Fixed

Income

93.8%

a

Franklin

Liberty

Federal

Tax-Free

Bond

ETF

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

168

$

4,200

a

Franklin

Liberty

High

Yield

Corporate

ETF

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

55

1,359

a

Franklin

Liberty

Investment

Grade

Corporate

ETF

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

296

7,015

a

Franklin

Liberty

Senior

Loan

ETF

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

83

2,048

a

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

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

60

5,529

a

Franklin

Liberty

U.S.

Core

Bond

ETF

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

1,828

42,817

a

Franklin

Liberty

U.S.

Treasury

Bond

ETF

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

155

3,515

Schwab

U.S.

TIPS

ETF

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

56

3,400

69,883

Total

Investments

In

Underlying

Funds

and

Exchange

Traded

Funds

(Cost

$75,890)

69,883

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%

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

1,403

1,403

Total

Money

Market

Funds

(Cost

$1,403)

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

1,403

Total

Short

Term

Investments

(Cost

$1,403

)

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

1,403

a

Total

Investments

(Cost

$77,293)

95.7%

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

$71,286

Other

Assets,

less

Liabilities

4.3%

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

3,221

Net

Assets

100.0%

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

$74,507

See

Abbreviations

on

page

28

.

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

March

31,

2022

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

19

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

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

$—

$3,435

Cost

-

Non-controlled

affiliates

(Note

3

d

)

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

441,270

73,858

Value

-

Unaffiliated

issuers

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

$—

$3,400

Value

-

Non-controlled

affiliates

(Note

3

d

)

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

484,833

67,886

Receivables:

Affiliates

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

31,581

49,796

Total

assets

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

516,414

121,082

Liabilities:

Payables:

Investment

securities

purchased

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

1,021

1,137

Transfer

agent

fees

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

302

290

Reports

to

shareholders

fees

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

7,036

7,025

Registration

and

filing

fees

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

—

17,267

Professional

fees

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

20,536

20,461

Accrued

expenses

and

other

liabilities

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

598

395

Total

liabilities

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

29,493

46,575

Net

assets,

at

value

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

$486,921

$74,507

Net

assets

consist

of:

Paid-in

capital

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

$441,703

$82,745

Total

distributable

earnings

(losses)

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

45,218

(8,238)

Net

assets,

at

value

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

$486,921

$74,507

Shares

outstanding

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

39,797

8,232

Net

asset

value

per

share

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

$12.24

$9.05

Franklin

ETF

Trust

Financial

Statements

Statements

of

Operations

for

the

year

ended

March

31,

2022

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Investment

income:

Dividends:

Unaffiliated

issuers

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

$—

$189

Non-controlled

affiliates

(Note

3

d

)

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

7,767

1,504

Total

investment

income

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

7,767

1,693

Expenses:

Management

fees

(Note

3

a

)

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

1,057

206

Transfer

agent

fees

(Note

3

c

)

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

3,308

2,283

Reports

to

shareholders

fees

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

5,581

5,207

Registration

and

filing

fees

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

54,149

30,509

Professional

fees

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

24,009

24,026

Trustees'

fees

and

expenses

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

37

8

Organization

costs

(Note

1d)

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

494

2,084

Amortization

of

offering

costs

(No

te

1d)

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

28,952

27,186

Other

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

(945)

(1,149)

Total

expenses

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

116,642

90,360

Expenses

waived/paid

by

affiliates

(Note

3

d

and

3

e

)

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

(114,540)

(90,184)

Net

expenses

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

2,102

176

Net

investment

income

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

5,665

1,517

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

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

—

(24)

Non-controlled

affiliates

(Note

3

d

)

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

(5,293)

(1,598)

Capital

gain

distributions

from

Underlying

Funds:

Non-controlled

affiliates

(Note

3

d

)

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

24,751

125

Net

realized

gain

(loss)

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

19,458

(1,497)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

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

—

(22)

Non-controlled

affiliates

(Note

3

d

)

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

1,121

(3,448)

Net

change

in

unrealized

appreciation

(depreciation)

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

1,121

(3,470)

Net

realized

and

unrealized

gain

(loss)

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

20,579

(4,967)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

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

$26,244

$(3,450)

Franklin

ETF

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

21

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Year

Ended

March

31,

2022

Year

Ended

March

31,

2021

a

Year

Ended

March

31,

2022

Year

Ended

March

31,

2021

a

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

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

$5,665

$2,572

$1,517

$1,066

Net

realized

gain

(loss)

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

19,458

2,582

(1,497)

(371)

Net

change

in

unrealized

appreciation

(depreciation)

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

1,121

42,442

(3,470)

(2,537)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

26,244

47,596

(3,450)

(1,842)

Distributions

to

shareholders

.........

(23,531)

(4,147)

(2,052)

(999)

Capital

share

transactions

(Note

2

)

.....

137,114

303,645

2,049

80,801

Net

increase

(decrease)

in

net

assets

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

139,827

347,094

(3,453)

77,960

Net

assets:

Beginning

of

year

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

347,094

—

77,960

—

End

of

year

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

$486,921

$347,094

$74,507

$77,960

a

For

the

period

July

15,

2020

(effective

date)

to

March

31,

2021

.

Franklin

ETF

Trust

Notes

to

Financial

Statements

22

franklintempleton.com

Annual

Report

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.

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.

The

Funds

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

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

March

31,

2022, each

Fund

has

determined

that

no

tax

liability

is

required

in

their

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

Funds

invest. 

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

Franklin

ETF

Trust

Notes

to

Financial

Statements

23

franklintempleton.com

Annual

Report

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.

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

March

31,

2022,

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:

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Shares

Amount

Shares

Amount

Single

Class

Year

ended

March

31,

2022

Shares

sold

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

18,847

$240,971

3,644

$35,178

Shares

issued

in

reinvestment

of

distributions

..........

1,805

23,363

189

1,809

Shares

redeemed

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

(10,259)

(127,220)

(3,675)

(34,938)

Net

increase

(decrease)

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

10,393

$137,114

158

$2,049

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)

c.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

24

franklintempleton.com

Annual

Report

a.

Management

Fees

The

Funds

pay

an

investment

management

fee

to

Advisers,

calculated

daily

and

paid

monthly,

of

0.25%

per

year

of

the

average

daily

net

assets

of

each

of

the

Funds.

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

year

ended

March

31,

2022,

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 FT

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

FT

Underlying

Funds

for

the

purpose

of

exercising

a

controlling

influence

over

the

management

or

policies.

Management

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

year

ended

March

31,

2022,

were

as

follows:

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Transfer

agent

fees

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

$2,989

$2,085

3.

Transactions

with

Affiliates

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

25

franklintempleton.com

Annual

Report

a

Dividend

income

includes

capital

gain

distributions

received,

if

any,

from

underlying

funds,

and

are

presented

in

corresponding

line

item

in

the

Statement

of

Operations.

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

Franklin

Equity

Portfolio

Fund

and

Franklin

Fixed

Income

Portfolio

Fund

so

that

the

operating expenses

(excluding

interest

expense

and

certain

non-routine

expenses

or

costs,

including

those

relating

to

litigation,

indemnification,

reorganizations,

and

liquidations)

and

acquired

fund

fees

and

expenses

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

Year

Purchases

Sales

Realized

Gain

(Loss)

Net

Change

in

Unrealized

Appreciation

(Depreciation)

Value

at

End

of

Year

Number

of

Shares

Held

at

End

of

Year

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

$

33,376

$

(10,169)

$

(887)

$

(6,413)

$

57,999

5,492

$

1,434

Franklin

FTSE

Japan

ETF

.....

6,508

5,957

(2,040)

(197)

(852)

9,376

346

193

Franklin

International

Core

Equity

(IU)

Fund

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

66,723

53,589

(16,905)

(763)

(6,218)

96,426

8,385

6,815

a

Franklin

U.S.

Core

Equity

(IU)

Fund

228,539

140,160

(61,361)

(3,446)

14,604

318,496

22,257

24,076

a

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

1,429

120,809

(119,702)

—

—

2,536

2,536

—

Total

Non-Controlled

Affiliates

$345,291

$353,891

$(210,177)

$(5,293)

$1,121

$484,833

$32,518

Total

Affiliated

Securities

....

$345,291

$353,891

$(210,177)

$(5,293)

$1,121

$484,833

$32,518

Franklin

Fixed

Income

Portfolio

Fund

Non-Controlled

Affiliates

Franklin

Liberty

Federal

Tax-Free

Bond

ETF

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

4,514

1,394

(1,381)

(38)

(289)

4,200

168

75

Franklin

Liberty

High

Yield

Corporate

ETF

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

1,471

605

(616)

(19)

(82)

1,359

55

76

a

Franklin

Liberty

Investment

Grade

Corporate

ETF

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

7,372

2,235

(1,990)

(166)

(436)

7,015

296

217

a

Franklin

Liberty

Senior

Loan

ETF

2,235

724

(894)

(10)

(7)

2,048

83

75

Franklin

Liberty

Short

Duration

U.S.

Government

ETF

...........

5,997

1,985

(2,242)

(56)

(155)

5,529

60

50

Franklin

Liberty

U.S.

Core

Bond

ETF

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

46,180

17,345

(17,131)

(1,206)

(2,371)

42,817

1,828

1,074

a

Franklin

Liberty

U.S.

Treasury

Bond

ETF

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

3,725

1,362

(1,361)

(103)

(108)

3,515

155

62

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

0.01%

.......

536

37,675

(36,808)

—

—

1,403

1,403

—

Total

Non-Controlled

Affiliates

$72,030

$63,325

$(62,423)

$(1,598)

$(3,448)

$67,886

$1,629

Total

Affiliated

Securities

....

$72,030

$63,325

$(62,423)

$(1,598)

$(3,448)

$67,886

$1,629

3.

Transactions

with

Affiliates

(continued)

d.

Investments

in

FT

Underlying

Funds

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

26

franklintempleton.com

Annual

Report

f.

Other

Affiliated

Transactions

At

March

31,

2022,

Templeton

International,

Inc.

owned

17.7%

of

Franklin

Fixed

Income

Portfolio

Fund

outstanding

shares.

4.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains.

At

March

31,

2022,

the

capital

loss

carryforwards

were

as

follows:

For

tax

purposes,

the

Funds

may

elect

to

defer

any

portion

of

a

post-October

capital

loss

or

late-year

ordinary

loss

to

the

first

day

of

the

following

fiscal

year.

At

March

31,

2022,

the

deferred

losses

were

as

follows:

The

tax

character

of

distributions

paid

during

the

years

ended

March

31,

2022

and

2021,

was

as

follows:

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

1

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

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

$

—

$

137

Long

term

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

—

1

Total

capital

loss

carryforwards

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

$—

$138

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Post-October

capital

losses

.........

$1,756

$936

Late-Year

ordinary

losses

..........

$712

$—

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

2022

2021

2022

2021

Distributions

paid

from:

Ordinary

income

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

$23,531

$4,147

$2,052

$999

3.

Transactions

with

Affiliates

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

27

franklintempleton.com

Annual

Report

At

March

31,

2022,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

ordinary

income

and

undistributed

long

term

capital

gains

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

non-deductible

expenses,

short

term

capital

gains

distributions

from

Underlying

Funds

and

wash

sales.

Franklin

Equity

Portfolio

Fund

utilized

a

tax

accounting

practice

to

treat

a

portion

of

the

proceeds

from

capital

shares

redeemed

as

a

distribution

from

net

investment

income

and

realized

capital

gains.

5.

Investment

Transactions

Purchases

and

sales

(excluding

short

term

securities)

for

the

year

ended

March

31,

2022,

were

as

follows:

6.

Geopolitical

Risk 

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Funds

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

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

a

a

a

Cost

of

investments

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

$445,391

$78,496

Unrealized

appreciation

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

$47,013

$—

Unrealized

depreciation

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

(7,571)

(7,210)

Net

unrealized

appreciation

(depreciation)

.......

$39,442

$(7,210)

Distributable

earnings:

Undistributed

ordinary

income

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

$—

$46

Undistributed

long

term

capital

gains

...........

8,244

—

Total

distributable

earnings

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

$8,244

$46

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Purchases

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

$233,083

$26,652

Sales

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

$90,475

$26,901

4.

Income

Taxes

(continued)

Franklin

ETF

Trust

Notes

to

Financial

Statements

28

franklintempleton.com

Annual

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

3,

2023.

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

year ended

March

31,

2022,

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

March

31,

2022,

all

of

the

Funds'

investments

in

financial

instruments

carried

at

fair

value

were

valued

using

Level

1

inputs.

For

detailed

categories,

see

the

accompanying

Schedules

of

Investments.

10.

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.

Abbreviations

Selected

Portfolio

ETF

Exchange-Traded

Fund

Franklin

ETF

Trust

29

franklintempleton.com

Annual

Report

Report

of

Independent

Registered

Public

Accounting

Firm

To

the

Board

of

Trustees

of

Franklin

ETF

Trust

and

Shareholders

of

Franklin

Equity

Portfolio

Fund

and

Franklin

Fixed

Income

Portfolio

Fund

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

schedules

of

investments,

of

Franklin

Equity

Portfolio

Fund

and

Franklin

Fixed

Income

Portfolio

Fund

(two

of

the

funds

constituting

Franklin

ETF

Trust,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

March

31,

2022,

the

related

statements

of

operations

for

the

year

ended

March

31,

2022

and

the

statements

of

changes

in

net

assets

and

the

financial

highlights

for

the

year

ended

March

31,

2022

and

the

period

July

15,

2020

(effective

date)

through

March

31,

2021,

including

the

related

notes

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

March

31,

2022,

the

results

of

each

of

their

operations

for

the

year

then

ended,

and

the

changes

in

each

of

their

net

assets

and

financial

highlights

for

the

year

ended

March

31,

2022

and

for

the

period

July

15,

2020

(effective

date)

through

March

31,

2021

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

March

31,

2022

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

the

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

May

25,

2022

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

funds

since

1948.

Franklin

ETF

Trust

Tax

Information

(unaudited)

30

franklintempleton.com

Annual

Report

By

mid-February,

tax

information

related

to

a

shareholder's

proportionate

share

of

distributions

paid

during

the

preceding

calendar

year

will

be

received,

if

applicable.

Please

also

refer

to

www.franklintempleton.com

for

per

share

tax

information

related

to

any

distributions

paid

during

the

preceding

calendar

year.

Shareholders

are

advised

to

consult

with

their

tax

advisors

for

further

information

on

the

treatment

of

these

amounts

on

their

tax

returns.

The

following

tax

information

for

the

Funds

is

required

to

be

furnished

to

shareholders

with

respect

to

income

earned

and

distributions

paid

during

their

fiscal

year.

The

Funds

hereby

report

the

following

amounts,

or

if

subsequently

determined

to

be

different,

the

maximum

allowable

amounts,

for

the

fiscal

year

ended

March

31,

2022:

Under

Section

853

of

the

Internal

Revenue

Code,

the

Funds

below

intend

to

elect

to

pass

through

to

their

shareholders

the

following

amounts,

or

amounts

as

finally

determined,

of

foreign

taxes

paid

and

foreign

source

income

earned

by

the

Funds

during

the

fiscal

year

ended

March

31,

2022:

Pursuant

to:

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Qualified

Dividend

Income

Earned

(QDI)

§854(b)(1)(B)

$6,603

—

Franklin

Equity

Portfolio

Fund

Franklin

Fixed

Income

Portfolio

Fund

Foreign

Taxes

Paid

$389

—

Foreign

Source

Income

Earned

$1,266

—

Franklin

ETF

Trust

Board

Members

and

Officers

31

franklintempleton.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton/Legg

Mason

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Rohit

Bhagat

(1964)

Lead

Independent

Trustee

Since

2017

59

AssetMark

Financial

Holdings,

Inc.

(investment

solutions)

(2018-present)

and

PhonePe

(2020-present)

(payment

and

financial

services);

formerly

,

Axis

Bank

(financial)

(2013-2021),

FlipKart

Limited

(2019-2020)

(eCommerce

company);

CapFloat

Financial

Services

Pvt.,

Ltd.

(non-banking

finance

company)

(2018)

and

Zentific

Investment

Management

(hedge

fund)

(2015-

2018).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Managing

Member,

Mukt

Capital,

LLC

(private

investment

firm)

(2014-present);

Advisor,

Optimal

Asset

Management

(investment

technology

and

advisory

services

company)

(2015-present);

Chief

Executive

Officer

and

Director,

FinTech

Evolution

Acquisition

(eCommerce

company)

(February

2021-present);

and

formerly

,

Chairman,

Asia

Pacific,

BlackRock

(2009-2012);

Global

Chief

Operating

Officer,

Barclays

Global

Investors

(investment

management)

(2005-2009);

and

Senior

Partner,

The

Boston

Consulting

Group

(management

consulting)

(1992-2005).

Deborah

D.

McWhinney

(1955)

Trustee

Since

2020

59

S&P

Global,

Inc.

(financial

information

services)

(February

2022),

Borg

Warner

(automotive)

(2018-present),

LegalShield

(consumer

services)

(2020-present);

and

formerly

,

IHS

Markit

(information

services)

(2015-2022),

Fluor

Corporation

(construction

and

engineering)

(2014-2020)

and

Focus

Financial

Partner,

LLC

(financial

services)

(2018-2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Board

Member,

Lloyds

Banking

Group

(2015-2018)

(financial

institution)

and

Fresenius

Medical

Group

(2016-2018)

(healthcare);

Chief

Executive

Officer

(2013-2014)

and

Chief

Operating

Officer

(2011-2013),

CitiGroup

Global

Enterprise

Payments

(financial

services);

and

President,

Citi’s

Personal

Banking

and

Wealth

Management

(2009-2011).

Anantha

K.

Pradeep

(1963)

Trustee

Since

2017

59

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Executive

Officer,

Smilable,

Inc.

(technology

company)

(2014-present);

Chief

Executive

Officer,

MachineVantage

(technology

company)

(2018-present);

Founder

and

Managing

Partner,

Consult

Meridian,

LLC

(consulting

company)

(2009-present);

and

formerly

,

Founder,

BoardVantage

(board

portal

solutions

provider

delivering

paperless

process

for

boards

and

leadership)

(2000-2002).

Franklin

ETF

Trust

32

franklintempleton.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Jennifer

M.

Johnson

(1964)

Trustee

and

Chairperson

of

the

Board

Since

2017

70

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Executive

Officer,

President

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Chief

Operating

Officer

and

Executive

Vice

President,

Franklin

Resources,

Inc.

(1994-2015);

Executive

Vice

President

of

Operations

and

Technology,

Franklin

Resources,

Inc.

(2005-2010);

and

Senior

Vice

President,

Franklin

Resources,

Inc.

(2003-2005).

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Fred

Jensen

(1963)

Chief

Compliance

Officer

Since

July

2021

Not

Applicable

Not

Applicable

620

Eighth

Avenue,

47th

Floor

New

York,

NY

10018

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

-

Global

Compliance

of

Franklin

Templeton;

Managing

Director

of

Legg

Mason

&

Co.;

Director

of

Compliance,

Legg

Mason

Office

of

the

Chief

Compliance

Officer;

Chief

Compliance

Officer,

Franklin

Advisory

Services,

LLC;

Compliance

Officer,

Franklin

Advisers,

Inc.;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

formerly

,

Chief

Compliance

Officer

of

Legg

Mason

Global

Asset

Allocation;

Chief

Compliance

Officer,

Legg

Mason

Private

Portfolio;

Chief

Compliance

Officer

to

The

Reserves

Funds

(investment

adviser,

funds

and

broker-dealer)

and

Ambac

Financial

Group

(investment

adviser,

funds

and

broker-dealer).

Steven

J.

Gray

(1955)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Distributors,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

–

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Susan

Kerr

(1949)

Vice

President

–

AML

Compliance

Since

July

2021

Not

Applicable

Not

Applicable

620

Eighth

Avenue

New

York,

NY

10018

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Compliance

Analyst,

Franklin

Templeton;

Chief

Anti-Money

Laundering

Compliance

Officer,

Legg

Mason

&

Co.,

or

its

affiliates;

Anti

Money

Laundering

Compliance

Officer;

Senior

Compliance

Officer,

LMIS;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Franklin

ETF

Trust

33

franklintempleton.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton/Legg

Mason

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Jennifer

M.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

her

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Note

1:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Rohit

Bhagat

as

its

audit

committee

financial

expert.

The

Board

believes

that

Mr.

Bhagat

qualifies

as

such

an

expert

in

view

of

his

extensive

business

background

and

experience,

including

extensive

experience

in

the

asset

management

and

financial

services

industries.

Mr.

Bhagat

has

been

a

Member

and

Chairman

of

the

Fund’s

Audit

Committee

since

2017.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Mr.

Bhagat

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Mr.

Bhagat

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Patrick

O’Connor

(1967)

President

and

Chief

Executive

Officer

–

Investment

Management

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

President

and

Chief

Investment

Officer,

Franklin

Advisory

Services,

LLC;

Senior

Vice

President,

Franklin

Advisers,

Inc.;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Vivek

Pai

(1970)

Treasurer,

Chief

Financial

Officer

and

Chief

Accounting

Officer

Since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Navid

J.

Tofigh

(1972)

Vice

President

and

Secretary

Vice

President

since

2015

and

Secretary

since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Craig

S.

Tyle

(1960)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Lori

A.

Weber

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

certain

funds

in

the

Franklin

Templeton/Legg

Mason

fund

complex.

Interested

Board

Members

and

Officers

(continued)

Franklin

ETF

Trust

Shareholder

Information

34

franklintempleton.com

Annual

Report

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.

Quarterly

Schedule

of

Investments

The

Trust

files

a

complete

schedule

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

A

05/22

©

2022

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.

Annual

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

ANNUAL REPORT

FRANKLIN LIBERTY SHORT DURATION U.S. GOVERNMENT ETF

A Series of Franklin ETF Trust

March 31, 2022

Contents
Annual Report
Franklin Liberty Short Duration U.S. Government ETF . .	2
Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Your Fund’s Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Financial Highlights and Schedule of Investments . . . . . . .	8
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .	20
Report of Independent Registered
Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Board Members and Officers . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32

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franklintempleton.com Annual Report

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ANNUAL REPORT

Franklin Liberty Short Duration U.S. Government ETF

This annual report for Franklin Liberty Short Duration U.S. Government ETF covers the fiscal year ended March 31, 2022.

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.

Portfolio Composition* 3/31/22

		% of Total
		Net Assets
MBS ARMs	41.2%
MBS Fixed Rate	28.7%
U.S. Agencies	2.7%
U.S. Treasuries	36.1%
Short-Term Investments & Other Assets, less Liabilities	-8.7%

*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.

Performance Overview

For the 12 months under review, the Fund posted cumulative total returns of -2.42% based on market price and -2.45% 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 -3.03% 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 -4.15% total return for the 12 months ended March 31, 2022.2 Growing inflation amid supply chain disruptions and increased consumer spending led to tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets late in the 12-month period following Russia’s invasion of Ukraine, contributing to significant volatility in bond markets.

The yield curve flattened notably during the period, reflecting investors’ expectations that short-term interest rates will con- tinue to rise, while the outlook for long-term economic growth is uncertain.

In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate to a range of 0.25%–0.50%, the first such increase since 2018. The Fed noted in its March 2022 meeting that strength in the U.S. job market and continued inflationary pressure, exacerbated by the war in Ukraine, meant it anticipated making further increases to the federal funds target rate. Furthermore, the Fed said it expected to begin reducing its bond holdings at a future meeting.

U.S. Treasury (UST) bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -3.67% total return for the 12-month period.2 The 10-year UST yield (which moves inversely to price) increased, particularly later in the period amid high inflation and the Fed’s less accommodative stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -4.92% total return for the period.2

Corporate bond prices also declined overall, constrained by inflation and rising interest rates. Furthermore, corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, increased,

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. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.

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 Schedule of Investments (SOI). The SOI begins on page 9.

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reflecting investors’ increasing risk-off preferences. However, yield spreads rose faster for investment-grade bonds than high-yield bonds, and high-yield bonds benefited from higher coupon payments. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -0.66% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -4.20% 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

Over the 12-month period ending March 31, 2022, as supply chain-induced inflation persisted, U.S. policymakers signaled a move away from their “transitory inflation” stance, leading to renewed market focus on the timing of a Fed taper and interest rate hikes. Amid ever-changing views around the tra- jectory of Fed tapering, UST yields experienced periods of volatility and rose across the curve. Yields moved up sharply on the front end of the yield curve, and the curve flattened as the market priced in the anticipated movement in the federal funds target rate. Spreads widened for all mortgage sectors, but most notably for agency fixed-rate MBS.

The Fund’s yield curve exposure was the primary contributor to outperformance versus the benchmark. The Fund was positioned with less duration than the benchmark overall, especially on the two-year part of the curve. The Fund’s exposure to MBS was the largest negative contributor to per- formance. MBS spreads widened as the market first responded to the expected end of Fed purchases in the sec- tor and subsequently to the expectation that the Fed would allow the size of the MBS holdings to decline. The Fund’s exposure to agency ARMs and agency CMOs also detracted from performance as spreads in the sectors widened in sym- pathy with MBS spreads.

The Fund invested in USTs, 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 UST futures and options on UST futures for duration and convexity management.

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 March 31, 2022, the end of the report- ing 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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Performance Summary as of March 31, 2022

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 and graph 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 3/31/221

			Cumulative Total Return2		Average Annual Total Return2
			Based on	Based on		Based on	Based on
			NAV3	market price4		NAV3	market price4
1-Year		-2.45%		-2.42%	-2.45%		-2.42%
5-Year	+4.91%			+4.78%	+0.96%		+0.94%
Since Inception (11/4/13)	+8.17%			+7.80%	+0.94%		+0.90%
Distribution Rate5			30-Day Standardized Yield6
0.73%				1.01%

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 6 for Performance Summary footnotes

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

Total Return Index Comparison for a Hypothetical $10,000 Investment1

Total return is calculated at net asset value and represents the change in value of an investment over the periods shown. It includes any Fund fees and expenses, and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.

11/4/13–3/31/22

$12,000

$11,000

$10,817

$10,785

$10,000
$9,000
11/13	3/14	3/15	3/16	3/17	3/18	3/19	3/20	3/21	3/22

Franklin Liberty Short Duration U.S. Government ETF

Bloomberg U.S. Government Index: 1-3 Year Component7

See page 6 for Performance Summary footnotes

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

Distributions (4/1/21–3/31/22)

Net Investment

Income

$0.756070

Total Annual Operating Expenses8

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.

Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of cer- tain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion.

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 5.6390 cent per share March dividend and the NAV of $92.17 per share on 3/31/22.

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.Source: Morningstar. The Bloomberg U.S. Government Index: 1-3 Year Component includes U.S. dollar-denominated, fixed-rate, nominal U.S. Treasuries and U.S. agency debentures (securities issued by U.S. government-owned or government-sponsored entities, and debt explicitly guaranteed by the U.S. government) with at least one year up to, but not including, three years to final maturity.

8.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.

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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, 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 com- pare 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 10/1/21		Value 3/31/22		10/1/21–3/31/221,2		Value 3/31/22		10/1/21–3/31/221,2		Expense Ratio2
$1,000	$976.40		$1.23		$1,023.68		$1.26		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 182/365 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

											Year
											Ended
				Year Ended March 31,							May 31,
	2022		2021		2020	2019			2018a	2017
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . .	$95.24		$94.84		$94.40	$95.18		$	96.75	$97.83
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . .	0.41		0.79		2.11	1.95			1.17	1.02
Net realized and unrealized gains (losses) . . . . . . . . . . . .	(2.72)		0.89		0.85	(0.03)			(0.89)	(0.08)
Total from investment operations . . . . . . . . . . . . . . . . . . . . .	(2.31)		1.68		2.96	1.92			0.28	0.94
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(0.76)		(1.28)		(2.52)	(2.70)			(1.85)	(2.02)
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . .	$92.17		$95.24		$94.84	$94.40		$	95.18	$96.75
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(2.45)%		1.77%		3.18%	2.04%			0.30%	0.97%
Ratios to average net assetse
Expenses before waiver and payments by affiliates . . . . .	0.30%		0.37%		0.43%	0.44%			0.50%	0.39%
Expenses net of waiver and payments by affiliates . . . . . .		0.25%f	0.24%		0.23%		0.25%f		0.27%f		0.30%f
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	0.43%		0.82%		2.23%	2.06%			1.47%	1.05%
Supplemental data
Net assets, end of year (000’s) . . . . . . . . . . . . . . . . . . . . . .	$359,566		$435,827		$187,395	$125,177		$	164,279	$169,406
Portfolio turnover rateg . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	156.78%		210.16%		169.35%	104.49%		103.43%		134.97%
Portfolio turnover rate excluding mortgage dollar
rollsg,h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84.03%		189.55%		105.08%	64.69%			68.15%	75.90%

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.

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Schedule of Investments, March 31, 2022

Franklin Liberty Short Duration U.S. Government ETF

		Principal Amount		Value
U.S. Government and Agency Securities 38.8%
Dragon 2012 LLC, secured bond, 1.972%, 3/12/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 18,762		$	18,694
Export-Import Bank of the U.S.,
senior secured note, 1.90%, 7/12/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,364,951			1,357,438
secured note, 2.628%, 11/12/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,298,396			1,291,037

aKE Export Leasing LLC, 2013-A, secured note, FRN, 0.738%, (3-Month USD LIBOR + 0.23%),

2/28/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	530,030	529,697
MSN 41079 and 41084 Ltd., 1.631%, 12/14/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,243,595	1,228,764
Petroleos Mexicanos, 2.378%, 4/15/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	490,000	488,228
Reliance Industries Ltd.,
2.512%, 1/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	750,000	745,868
senior secured note, 2.06%, 1/15/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,000,000	985,747
U.S. International Development Finance Corp.,
2.12%, 3/20/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	733,333	730,773
4.01%, 5/15/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,440,000	1,514,646
U.S. Treasury Note,
0.125%, 4/30/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,500,000	2,455,991
0.125%, 5/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,000,000	10,793,105
0.125%, 5/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,898,926
0.125%, 7/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,500,000	2,440,674
0.125%, 8/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,869,629
0.125%, 9/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,000,000	2,915,449
0.25%, 4/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,000,000	5,908,195
0.25%, 6/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,000,000	5,884,102
0.25%, 11/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,845,996
0.25%, 3/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,100,000	7,782,644
0.25%, 5/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,780,078
0.25%, 6/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,000,000	4,769,727
0.375%, 4/15/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25,000,000	24,018,555
0.875%, 1/31/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10,000,000	9,746,875
1.25%, 7/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,400,000	3,365,668
1.25%, 8/31/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,000,000	7,775,000
1.50%, 9/30/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,200,000	10,938,375
1.625%, 4/30/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,400,000	3,394,071
1.625%, 10/31/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,000,000	2,975,449
1.75%, 6/30/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,300,000	5,224,434
Ulani MSN 37894, senior bond, 2.184%, 12/20/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	956,522	952,532
Total U.S. Government and Agency Securities (Cost $143,150,770)
		139,626,367

Mortgage-Backed Securities 69.9%

bFederal Home Loan Mortgage Corp. (FHLMC) Adjustable Rate 33.2%

FHLMC, 0.25%, (SOFR +/- MBS Margin), 12/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,757,344	1,742,995
FHLMC, 0.25%, (SOFR +/- MBS Margin), 1/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,033,177	3,993,819
FHLMC, 0.25%, (SOFR +/- MBS Margin), 1/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,368,827	3,371,446
FHLMC, 0.26%, (SOFR +/- MBS Margin), 12/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,999,832	2,981,041
FHLMC, 0.28%, (SOFR +/- MBS Margin), 5/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,160,215	4,162,849
FHLMC, 0.28%, (SOFR +/- MBS Margin), 4/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,500,000	2,502,302
FHLMC, 0.29%, (SOFR +/- MBS Margin), 1/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,490,517	4,494,729
FHLMC, 0.356%, (SOFR +/- MBS Margin), 1/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,000,000	3,984,902
FHLMC, 0.396%, (SOFR +/- MBS Margin), 1/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,000,000	2,991,569
FHLMC, 0.411%, (1-Month USD LIBOR +/- MBS Margin), 12/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	999,473	1,000,237
FHLMC, 0.42%, (SOFR +/- MBS Margin), 2/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,250,000	2,245,063
FHLMC, 0.431%, (1-Month USD LIBOR +/- MBS Margin), 2/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	200,550	200,447
FHLMC, 0.436%, (SOFR +/- MBS Margin), 1/25/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,000,000	2,996,090
FHLMC, 0.44%, (SOFR +/- MBS Margin), 2/25/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,821,000	1,823,333
FHLMC, 0.451%, (1-Month USD LIBOR +/- MBS Margin), 3/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	484,596	484,736
FHLMC, 0.461%, (1-Month USD LIBOR +/- MBS Margin), 3/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . .	452,886	453,151
FHLMC, 0.471%, (1-Month USD LIBOR +/- MBS Margin), 5/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	283,075	283,169
FHLMC, 0.481%, (1-Month USD LIBOR +/- MBS Margin), 1/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . .	540,385	540,725

franklintempleton.com Annual Report

9

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

S C H E D U LE O F I N V E S T M E N T S

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, 0.491%, (1-Month USD LIBOR +/- MBS Margin), 12/25/24 . . . . . . . . . . . . . . . . . . . . . . . . .	$ 234,248		$	234,437
	FHLMC, 0.501%, (1-Month USD LIBOR +/- MBS Margin), 11/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	3,561,131			3,554,305
	FHLMC, 0.501%, (1-Month USD LIBOR +/- MBS Margin), 12/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	2,667,411			2,670,024
	FHLMC, 0.531%, (1-Month USD LIBOR +/- MBS Margin), 8/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,792,652			1,793,070
	FHLMC, 0.531%, (1-Month USD LIBOR +/- MBS Margin), 6/25/28 . . . . . . . . . . . . . . . . . . . . . . . . . .	411,834			410,781
	FHLMC, 0.541%, (1-Month USD LIBOR +/- MBS Margin), 11/25/24 . . . . . . . . . . . . . . . . . . . . . . . . .	93,189			93,381
	FHLMC, 0.541%, (1-Month USD LIBOR +/- MBS Margin), 7/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,809,699			2,802,477
	FHLMC, 0.541%, (1-Month USD LIBOR +/- MBS Margin), 8/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,609,712			1,607,952
	FHLMC, 0.541%, (1-Month USD LIBOR +/- MBS Margin), 11/25/30 . . . . . . . . . . . . . . . . . . . . . . . . .	1,314,383			1,315,870
	FHLMC, 0.561%, (1-Month USD LIBOR +/- MBS Margin), 9/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,810,308			1,812,317
	FHLMC, 0.571%, (1-Month USD LIBOR +/- MBS Margin), 9/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	392,934			393,343
	FHLMC, 0.571%, (1-Month USD LIBOR +/- MBS Margin), 9/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,185,934			1,184,586
	FHLMC, 0.581%, (1-Month USD LIBOR +/- MBS Margin), 8/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	571,160			571,349
	FHLMC, 0.581%, (1-Month USD LIBOR +/- MBS Margin), 11/25/27 . . . . . . . . . . . . . . . . . . . . . . . . .	332,089			332,823
	FHLMC, 0.591%, (1-Month USD LIBOR +/- MBS Margin), 8/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	471,172			471,260
	FHLMC, 0.591%, (1-Month USD LIBOR +/- MBS Margin), 8/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	4,357,341			4,389,797
	FHLMC, 0.601%, (1-Month USD LIBOR +/- MBS Margin), 8/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,621,173			1,623,435
	FHLMC, 0.601%, (1-Month USD LIBOR +/- MBS Margin), 6/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,427,730			1,430,529
	FHLMC, 0.601%, (1-Month USD LIBOR +/- MBS Margin), 6/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,348,994			1,346,354
	FHLMC, 0.611%, (1-Month USD LIBOR +/- MBS Margin), 5/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,148,385			1,148,700
	FHLMC, 0.611%, (1-Month USD LIBOR +/- MBS Margin), 3/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	61,685			61,723
	FHLMC, 0.611%, (1-Month USD LIBOR +/- MBS Margin), 6/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,314,091			1,315,500
	FHLMC, 0.641%, (1-Month USD LIBOR +/- MBS Margin), 8/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . .	573,388			574,516
	FHLMC, 0.661%, (1-Month USD LIBOR +/- MBS Margin), 12/25/26 . . . . . . . . . . . . . . . . . . . . . . . . .	317,969			318,168
	FHLMC, 0.681%, (1-Month USD LIBOR +/- MBS Margin), 6/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,951,030			1,955,228
	FHLMC, 0.681%, (1-Month USD LIBOR +/- MBS Margin), 5/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,390,574			1,395,407
	FHLMC, 0.681%, (1-Month USD LIBOR +/- MBS Margin), 6/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	3,188,584			3,187,400
	FHLMC, 0.697%, (1-Month USD LIBOR +/- MBS Margin), 12/15/48 . . . . . . . . . . . . . . . . . . . . . . . . .	884,075			882,891
	FHLMC, 0.711%, (1-Month USD LIBOR +/- MBS Margin), 5/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,773,264			1,777,620
	FHLMC, 0.721%, (1-Month USD LIBOR +/- MBS Margin), 4/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,723,897			1,729,801
	FHLMC, 0.731%, (1-Month USD LIBOR +/- MBS Margin), 2/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,026,796			2,030,941
	FHLMC, 0.731%, (1-Month USD LIBOR +/- MBS Margin), 7/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,537,562			1,540,836
	FHLMC, 0.741%, (1-Month USD LIBOR +/- MBS Margin), 1/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . .	675,433			677,884
	FHLMC, 0.741%, (1-Month USD LIBOR +/- MBS Margin), 10/25/26 . . . . . . . . . . . . . . . . . . . . . . . . .	2,494,968			2,491,873
	FHLMC, 0.751%, (1-Month USD LIBOR +/- MBS Margin), 11/25/25 . . . . . . . . . . . . . . . . . . . . . . . . .	2,212,796			2,220,632
	FHLMC, 0.751%, (1-Month USD LIBOR +/- MBS Margin), 12/25/29 . . . . . . . . . . . . . . . . . . . . . . . . .	3,365,293			3,382,565
	FHLMC, 0.761%, (1-Month USD LIBOR +/- MBS Margin), 7/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,335,090			1,336,389
	FHLMC, 0.761%, (1-Month USD LIBOR +/- MBS Margin), 8/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,487,406			1,493,651
	FHLMC, 0.761%, (1-Month USD LIBOR +/- MBS Margin), 9/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	889,626			894,021
	FHLMC, 0.771%, (1-Month USD LIBOR +/- MBS Margin), 3/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,579,370			2,589,764
	FHLMC, 0.781%, (1-Month USD LIBOR +/- MBS Margin), 12/25/28 . . . . . . . . . . . . . . . . . . . . . . . . .	2,290,288			2,292,439
	FHLMC, 0.781%, (1-Month USD LIBOR +/- MBS Margin), 2/25/29 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,018,443			1,020,027
	FHLMC, 0.797%, (1-Month USD LIBOR +/- MBS Margin), 12/15/39 . . . . . . . . . . . . . . . . . . . . . . . . .	592,793			593,530
	FHLMC, 0.801%, (1-Month USD LIBOR +/- MBS Margin), 11/25/28 . . . . . . . . . . . . . . . . . . . . . . . . .	1,460,007			1,464,819
	FHLMC, 0.847%, (1-Month USD LIBOR +/- MBS Margin), 10/15/40 . . . . . . . . . . . . . . . . . . . . . . . . .	1,429,700			1,437,781
	FHLMC, 0.941%, (1-Month USD LIBOR +/- MBS Margin), 2/25/27 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,129,233			1,137,612
	FHLMC, 1.041%, (1-Month USD LIBOR +/- MBS Margin), 3/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,838,355			1,853,578
	FHLMC, 1.739%, (12-Month USD LIBOR +/- MBS Margin), 8/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .	117,615			121,988
	FHLMC, 1.771%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	118,768			121,679
	FHLMC, 1.775%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/29 . . . . . . . . . . . . . . . . . . . . . . . .	22,021			22,026
	FHLMC, 1.84%, (12-Month USD LIBOR +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,538			1,538
	FHLMC, 1.871%, (12-Month USD LIBOR +/- MBS Margin), 12/01/36 . . . . . . . . . . . . . . . . . . . . . . . .	37,656			39,088
	FHLMC, 1.875%, (12-Month USD LIBOR +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	30,347			30,453
	FHLMC, 1.877%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	1,022			1,066
	FHLMC, 1.887%, (12-Month USD LIBOR +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	8,359			8,707
	FHLMC, 1.888%, (12-Month USD LIBOR +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	8,872			8,905
	FHLMC, 1.895%, (12-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	62,833			64,967
	FHLMC, 1.928%, (12-Month USD LIBOR +/- MBS Margin), 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	44,598			45,571

10

Annual Report franklintempleton.com

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

S C H E D U LE O F I N V E S T M E N T S

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, 1.95%, (12-Month USD LIBOR +/- MBS Margin), 12/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	$ 101,182		$	104,626
	FHLMC, 1.954%, (12-Month USD LIBOR +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	8,158			8,469
	FHLMC, 1.958%, (12-Month USD LIBOR +/- MBS Margin), 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .	19,505			20,224
	FHLMC, 1.975%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/33 . . . . . . . . . . . . . . . . . . . . . . . .	32,903			33,019
	FHLMC, 1.983%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . .	29,159			30,485
	FHLMC, 1.986%, (12-Month USD LIBOR +/- MBS Margin), 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	1,907			1,909
	FHLMC, 2.006%, (12-Month USD LIBOR +/- MBS Margin), 10/01/36 . . . . . . . . . . . . . . . . . . . . . . . .	10,070			10,552
	FHLMC, 2.007%, (12-Month USD LIBOR +/- MBS Margin), 1/01/42 . . . . . . . . . . . . . . . . . . . . . . . . .	63,111			65,646
	FHLMC, 2.011%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	2,434			2,450
	FHLMC, 2.032%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	5,712			5,864
	FHLMC, 2.042%, (12-Month USD LIBOR +/- MBS Margin), 5/01/42 . . . . . . . . . . . . . . . . . . . . . . . . .	414,621			432,126
	FHLMC, 2.051%, (12-Month USD LIBOR +/- MBS Margin), 4/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .	4,137			4,167
	FHLMC, 2.055%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	177,382			184,942
	FHLMC, 2.055%, (12-Month USD LIBOR +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	1,792			1,828
	FHLMC, 2.071%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	452,596			471,820
	FHLMC, 2.08%, (6-Month USD LIBOR +/- MBS Margin), 1/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . .	200			202
	FHLMC, 2.084%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	32,079			33,391
	FHLMC, 2.086%, (12-Month USD LIBOR +/- MBS Margin), 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . .	1,288,148			1,340,254
	FHLMC, 2.107%, (12-Month USD LIBOR +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	11,977			12,002
	FHLMC, 2.111%, (12-Month USD LIBOR +/- MBS Margin), 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	1,250			1,281
	FHLMC, 2.114%, (12-Month USD LIBOR +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	4,870			5,043
	FHLMC, 2.114%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	32,752			34,373
	FHLMC, 2.12%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .	5,318			5,475
	FHLMC, 2.134%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	209,132			218,338
	FHLMC, 2.141%, (12-Month USD LIBOR +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	97,010			97,035
	FHLMC, 2.147%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	4,960			5,114
	FHLMC, 2.153%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	172,910			179,552
	FHLMC, 2.159%, (12-Month USD LIBOR +/- MBS Margin), 11/01/42 . . . . . . . . . . . . . . . . . . . . . . . .	322,424			335,558
	FHLMC, 2.181%, (12-Month USD LIBOR +/- MBS Margin), 4/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	23,385			23,647
	FHLMC, 2.23%, (12-Month USD LIBOR +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .	11,901			12,069
	FHLMC, 2.25%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .	98,545			103,988
	FHLMC, 2.25%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .	6,389			6,399
	FHLMC, 2.262%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . .	28,432			30,154
	FHLMC, 2.287%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/27 . . . . . . . . . . . . . . . . . . . . . . . .	200			200
	FHLMC, 2.289%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . .	8,568			9,012
	FHLMC, 2.317%, (US 1 Year CMT T-Note +/- MBS Margin), 4/01/29 . . . . . . . . . . . . . . . . . . . . . . . .	892			892
	FHLMC, 2.32%, (6-Month USD LIBOR +/- MBS Margin), 9/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,436			1,439
	FHLMC, 2.34%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	3,818			3,974
	FHLMC, 2.34%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	263,979			276,882
	FHLMC, 2.343%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . .	12,478			13,080
	FHLMC, 2.343%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . .	80,864			84,922
	FHLMC, 2.344%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . .	66,474			69,468
	FHLMC, 2.35%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . .	98,684			103,021
	FHLMC, 2.35%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	1,209,382			1,274,760
	FHLMC, 2.36%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	72,285			72,343
	FHLMC, 2.37%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	9,529			9,974
	FHLMC, 2.37%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/38 . . . . . . . . . . . . . . . . . . . . . . . .	64,236			64,223
	FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/32 . . . . . . . . . . . . . . . . . . . . . . . .	995			997
	FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . .	12,754			13,360
	FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . .	15,094			15,168
	FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . .	27,922			29,168
	FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . .	30,180			31,526
	FHLMC, 2.375%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . .	581,545			607,438
	FHLMC, 2.382%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . .	20,263			20,902
	FHLMC, 2.389%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/30 . . . . . . . . . . . . . . . . . . . . . . . .	22			22
	FHLMC, 2.401%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/36 . . . . . . . . . . . . . . . . . . . . . . .	10,539			11,038
	FHLMC, 2.411%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/29 . . . . . . . . . . . . . . . . . . . . . . . .	133,756			134,044
	FHLMC, 2.415%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . .	886,678			928,981

franklintempleton.com Annual Report

11

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

S C H E D U LE O F I N V E S T M E N T S

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, 2.429%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . .	$	9,371	$	9,824
FHLMC, 2.454%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/28 . . . . . . . . . . . . . . . . . . . . . . . .		466		467
FHLMC, 2.463%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . .		25,134		25,151
FHLMC, 2.478%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . .		19,946		20,770
FHLMC, 2.478%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . .		28,302		29,523
FHLMC, 2.534%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . .		30,742		31,384
FHLMC, 2.598%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/35 . . . . . . . . . . . . . . . . . . . . . . .		183,279		192,883
FHLMC, 2.642%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . .		34,575		35,880
FHLMC, 2.847%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/29 . . . . . . . . . . . . . . . . . . . . . . . .		3,827		3,832
FHLMC, 2.899%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/29 . . . . . . . . . . . . . . . . . . . . . . .		4,062		4,073
FHLMC, 5.467%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/24 . . . . . . . . . . . . . . . . . . . . . . . .		466		468
				119,515,068
Federal Home Loan Mortgage Corp. (FHLMC) Fixed Rate 8.1%
FHLMC, 0.75%, 5/25/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,090,593		1,871,850
FHLMC, 0.799%, 5/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,466,370		2,242,199
FHLMC, 0.826%, 2/25/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		913,111		822,167
FHLMC, 1.054%, 8/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,959,482		1,877,926
FHLMC, 2.00%, 11/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11,559,790		11,243,844
FHLMC, 2.00%, 2/25/50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,124,339		1,058,343
FHLMC, 2.745%, 1/25/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,500,000		1,498,938
FHLMC, 2.995%, 12/25/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,500,000		1,511,639
FHLMC, 3.062%, 12/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,500,000		1,512,872
FHLMC, 3.458%, 8/25/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,000,000		2,027,354
FHLMC, 3.49%, 1/25/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,000,000		2,026,677
FHLMC, 3.50%, 6/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		201,725		206,212
FHLMC, 3.50%, 3/15/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		70,772		71,071
FHLMC, 4.00%, 3/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,066,666		1,104,465
				29,075,557

bFederal National Mortgage Association (FNMA) Adjustable Rate 6.6%

FNMA, 0.807%, (1-Month USD LIBOR +/- MBS Margin), 10/25/58 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,619,807	1,621,318
FNMA, 0.857%, (1-Month USD LIBOR +/- MBS Margin), 5/25/40 . . . . . . . . . . . . . . . . . . . . . . . . . . .	528,032	529,255
FNMA, 0.857%, (1-Month USD LIBOR +/- MBS Margin), 9/25/46 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,079,136	1,082,177
FNMA, 0.857%, (1-Month USD LIBOR +/- MBS Margin), 10/25/46 . . . . . . . . . . . . . . . . . . . . . . . . . .	951,941	954,571
FNMA, 0.907%, (1-Month USD LIBOR +/- MBS Margin), 9/25/22 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,591,962	1,592,191
FNMA, 0.907%, (1-Month USD LIBOR +/- MBS Margin), 10/25/41 . . . . . . . . . . . . . . . . . . . . . . . . . .	2,058,852	2,067,770
FNMA, 0.907%, (1-Month USD LIBOR +/- MBS Margin), 7/25/49 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,941,805	1,952,613
FNMA, 0.97%, (6-Month USD LIBOR +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	311	311
FNMA, 1.05%, (6-Month USD LIBOR +/- MBS Margin), 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . .	644	645
FNMA, 1.304%, (6-Month USD LIBOR +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .	1,941	1,945
FNMA, 1.355%, (6-Month USD LIBOR +/- MBS Margin), 3/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,527	1,531
FNMA, 1.499%, (1 Year CMT +/- MBS Margin), 1/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16,588	16,723
FNMA, 1.504%, (1 Year CMT +/- MBS Margin), 6/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33,220	34,131
FNMA, 1.504%, (1 Year CMT +/- MBS Margin), 11/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,211	11,410
FNMA, 1.526%, (6-Month USD LIBOR +/- MBS Margin), 5/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,434	1,435
FNMA, 1.571%, (12-Month USD LIBOR +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .	29,352	30,087
FNMA, 1.583%, (12-Month USD LIBOR +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .	37,650	38,884
FNMA, 1.615%, (12-Month USD LIBOR +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	3,285	3,289
FNMA, 1.628%, (6-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .	7,024	7,270
FNMA, 1.643%, (6-Month USD LIBOR +/- MBS Margin), 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .	4,990	4,999
FNMA, 1.643%, (6-Month USD LIBOR +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .	217,189	224,500
FNMA, 1.658%, (6-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,535	2,602
FNMA, 1.675%, (6-Month USD LIBOR +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	7,300	7,349
FNMA, 1.675%, (6-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,178	1,217
FNMA, 1.679%, (6-Month USD LIBOR +/- MBS Margin), 9/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,012	2,016
FNMA, 1.682%, (6-Month USD LIBOR +/- MBS Margin), 8/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,316	3,409
FNMA, 1.69%, (12-Month USD LIBOR +/- MBS Margin), 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .	215	216

12

Annual Report franklintempleton.com

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

S C H E D U LE O F I N V E S T M E N T S

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, 1.69%, (6-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$		2,424	$	2,509
	FNMA, 1.695%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			41,721		43,010
	FNMA, 1.695%, (6-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			5,252		5,404
	FNMA, 1.716%, (12-Month USD LIBOR +/- MBS Margin), 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			16,466		17,074
	FNMA, 1.723%, (6-Month USD LIBOR +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			9,432		9,796
	FNMA, 1.74%, (6-Month USD LIBOR +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . .			11,527		11,936
	FNMA, 1.753%, (6-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .			3,023		3,154
	FNMA, 1.757%, (6-Month USD LIBOR +/- MBS Margin), 12/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . .			255		256
	FNMA, 1.765%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			5,725		5,962
	FNMA, 1.781%, (6-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .			2,243		2,326
	FNMA, 1.782%, (6-Month USD LIBOR +/- MBS Margin), 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .			93,262		96,602
	FNMA, 1.782%, (6-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			77,766		80,438
	FNMA, 1.788%, (12-Month USD LIBOR +/- MBS Margin), 12/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .			1,213		1,212
	FNMA, 1.795%, (6-Month USD LIBOR +/- MBS Margin), 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . .			6,104		6,313
	FNMA, 1.799%, (6-Month USD LIBOR +/- MBS Margin), 2/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .			106,520		109,608
	FNMA, 1.809%, (6-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			9,132		9,478
	FNMA, 1.828%, (6-Month USD LIBOR +/- MBS Margin), 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .			4,648		4,820
	FNMA, 1.83%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			14,163		14,748
	FNMA, 1.854%, (6-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			300,016		311,038
	FNMA, 1.855%, (12-Month USD LIBOR +/- MBS Margin), 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			30,331		30,378
	FNMA, 1.858%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			14,187		14,786
	FNMA, 1.865%, (6-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .			7,394		7,398
	FNMA, 1.867%, (12-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			6,656		6,894
	FNMA, 1.876%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			14,133		14,767
	FNMA, 1.877%, (6-Month USD LIBOR +/- MBS Margin), 1/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . .			712		713
	FNMA, 1.883%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			23,046		23,785
	FNMA, 1.89%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			5,841		5,878
	FNMA, 1.89%, (12-Month USD LIBOR +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			37,949		38,030
	FNMA, 1.894%, (12-Month USD LIBOR +/- MBS Margin), 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .			98,142		100,845
	FNMA, 1.895%, (6-Month USD LIBOR +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .			16,483		16,599
	FNMA, 1.90%, (12-Month USD LIBOR +/- MBS Margin), 4/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .			203		204
	FNMA, 1.90%, (12-Month USD LIBOR +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . .			4,275		4,439
	FNMA, 1.925%, (1 Year CMT +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			99,020		103,403
	FNMA, 1.927%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			45,858		46,206
	FNMA, 1.933%, (12-Month USD LIBOR +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			153,312		159,593
	FNMA, 1.934%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			18,873		19,629
	FNMA, 1.935%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			15,249		15,776
	FNMA, 1.938%, (12-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			13,259		13,765
	FNMA, 1.938%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			22,727		22,993
	FNMA, 1.939%, (12-Month USD LIBOR +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			90,415		91,165
	FNMA, 1.94%, (12-Month USD LIBOR +/- MBS Margin), 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . .			74,217		77,223
	FNMA, 1.94%, (12-Month USD LIBOR +/- MBS Margin), 12/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . .			17,962		18,606
	FNMA, 1.95%, (12-Month USD LIBOR +/- MBS Margin), 11/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			23,215		24,212
	FNMA, 1.952%, (12-Month USD LIBOR +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			4,780		4,782
	FNMA, 1.954%, (12-Month USD LIBOR +/- MBS Margin), 4/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . .			210,597		217,344
	FNMA, 1.962%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			117,488		117,951
	FNMA, 1.965%, (12-Month USD LIBOR +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			11,163		11,562
	FNMA, 1.972%, (12-Month USD LIBOR +/- MBS Margin), 8/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . .			277,555		289,333
	FNMA, 1.973%, (12-Month USD LIBOR +/- MBS Margin), 1/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .			16,161		16,193
	FNMA, 1.981%, (12-Month USD LIBOR +/- MBS Margin), 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			35,990		36,992
	FNMA, 1.986%, (12-Month USD LIBOR +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			3,303		3,322
	FNMA, 1.986%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			349,787		364,920
	FNMA, 2.00%, (12-Month USD LIBOR +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .			19,297		19,305
	FNMA, 2.00%, (12-Month USD LIBOR +/- MBS Margin), 6/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . .			22,329		23,470
	FNMA, 2.00%, (12-Month USD LIBOR +/- MBS Margin), 3/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . .			218,763		227,734
	FNMA, 2.002%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/25 . . . . . . . . . . . . . . . . . . . . . . . . .			2,723		2,723
	FNMA, 2.01%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			43,262		45,261
	FNMA, 2.012%, (12-Month USD LIBOR +/- MBS Margin), 7/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,378,376		1,441,599

franklintempleton.com Annual Report

13

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

S C H E D U LE O F I N V E S T M E N T S

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, 2.013%, (12-Month USD LIBOR +/- MBS Margin), 8/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .	$		69,847	$	69,904
	FNMA, 2.017%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/29 . . . . . . . . . . . . . . . . . . . . . . . . .			487		487
	FNMA, 2.018%, (12-Month USD LIBOR +/- MBS Margin), 12/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .			1,459		1,458
	FNMA, 2.024%, (12-Month USD LIBOR +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			107,079		110,638
	FNMA, 2.032%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			34,894		36,562
	FNMA, 2.033%, (12-Month USD LIBOR +/- MBS Margin), 11/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .			94,630		98,561
	FNMA, 2.033%, (12-Month USD LIBOR +/- MBS Margin), 5/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . .			905,881		945,554
	FNMA, 2.034%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,829		1,832
	FNMA, 2.035%, (12-Month USD LIBOR +/- MBS Margin), 8/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,468,631		1,525,943
	FNMA, 2.047%, (12-Month USD LIBOR +/- MBS Margin), 4/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . .			1,598,068		1,664,045
	FNMA, 2.05%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			18,671		19,566
	FNMA, 2.059%, (12-Month USD LIBOR +/- MBS Margin), 10/01/40 . . . . . . . . . . . . . . . . . . . . . . . . .			345,012		360,181
	FNMA, 2.062%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			107,483		111,772
	FNMA, 2.062%, (12-Month USD LIBOR +/- MBS Margin), 1/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . .			140,072		145,607
	FNMA, 2.063%, (6-Month USD LIBOR +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			9,775		9,778
	FNMA, 2.064%, (11th District COF +/- MBS Margin), 8/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			14,355		14,392
	FNMA, 2.065%, (12-Month USD LIBOR +/- MBS Margin), 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			292		296
	FNMA, 2.072%, (12-Month USD LIBOR +/- MBS Margin), 9/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . .			724,943		755,297
	FNMA, 2.075%, (12-Month USD LIBOR +/- MBS Margin), 9/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . .			52,920		55,385
	FNMA, 2.081%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			21,755		22,831
	FNMA, 2.084%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			4,243		4,407
	FNMA, 2.089%, (1 Year CMT +/- MBS Margin), 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			76,222		77,002
	FNMA, 2.105%, (12-Month USD LIBOR +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			11,112		11,624
	FNMA, 2.108%, (1 Year CMT +/- MBS Margin), 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			249,426		262,018
	FNMA, 2.109%, (12-Month USD LIBOR +/- MBS Margin), 5/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			127,109		132,971
	FNMA, 2.124%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . .			3,756		3,863
	FNMA, 2.127%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			9,423		9,438
	FNMA, 2.131%, (12-Month USD LIBOR +/- MBS Margin), 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			44,853		45,486
	FNMA, 2.14%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			70,477		74,070
	FNMA, 2.143%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .			11,957		12,326
	FNMA, 2.171%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/33 . . . . . . . . . . . . . . . . . . . . . . . .			74,132		74,589
	FNMA, 2.177%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			57,903		60,543
	FNMA, 2.178%, (US 1 Year CMT T-Note +/- MBS Margin), 4/01/40 . . . . . . . . . . . . . . . . . . . . . . . . .			35,837		37,004
	FNMA, 2.19%, (12-Month USD LIBOR +/- MBS Margin), 4/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . .			5,448		5,447
	FNMA, 2.195%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .			5,856		5,861
	FNMA, 2.195%, (12-Month USD LIBOR +/- MBS Margin), 12/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			22,844		23,848
	FNMA, 2.211%, (12-Month USD LIBOR +/- MBS Margin), 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			36,197		37,344
	FNMA, 2.216%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .			17,475		17,493
	FNMA, 2.218%, (12-Month USD LIBOR +/- MBS Margin), 8/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			38,293		40,208
	FNMA, 2.228%, (12-Month USD LIBOR +/- MBS Margin), 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . .			27,226		27,404
	FNMA, 2.23%, (12-Month USD LIBOR +/- MBS Margin), 8/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . .			3,132		3,135
	FNMA, 2.242%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/37 . . . . . . . . . . . . . . . . . . . . . . . .			23,560		24,891
	FNMA, 2.259%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .			20,629		20,652
	FNMA, 2.265%, (12-Month USD LIBOR +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . .			76,706		79,912
	FNMA, 2.269%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . .			47,338		49,605
	FNMA, 2.28%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . .			8,316		8,319
	FNMA, 2.291%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .			456		456
	FNMA, 2.296%, (1 Year CMT +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			36,328		38,521
	FNMA, 2.297%, (US 1 Year CMT T-Note +/- MBS Margin), 11/01/34 . . . . . . . . . . . . . . . . . . . . . . . .			12,860		12,890
	FNMA, 2.302%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/39 . . . . . . . . . . . . . . . . . . . . . . . . .			858		858
	FNMA, 2.304%, (US 1 Year CMT T-Note +/- MBS Margin), 4/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			28,712		28,795
	FNMA, 2.305%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/39 . . . . . . . . . . . . . . . . . . . . . . . . .			38,980		40,873
	FNMA, 2.308%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/25 . . . . . . . . . . . . . . . . . . . . . . . . .			1,592		1,593
	FNMA, 2.31%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . . .			729,091		765,779
	FNMA, 2.312%, (1 Year CMT +/- MBS Margin), 10/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			34,275		36,255
	FNMA, 2.316%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . .			53,630		56,359
	FNMA, 2.317%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .			139,154		139,562
	FNMA, 2.32%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/34 . . . . . . . . . . . . . . . . . . . . . . . . .			42,452		44,461

14

Annual Report franklintempleton.com

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

S C H E D U LE O F I N V E S T M E N T S

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

Principal Amount Value

Mortgage-Backed Securities (continued)

bFederal National Mortgage Association (FNMA) Adjustable Rate (continued)

FNMA, 2.323%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . .	$ 218,505	$	229,631
FNMA, 2.327%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/38 . . . . . . . . . . . . . . . . . . . . . . . . .	4,812		4,831
FNMA, 2.332%, (1 Year CMT +/- MBS Margin), 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23,417		24,818
FNMA, 2.333%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	10,383		10,426
FNMA, 2.335%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/39 . . . . . . . . . . . . . . . . . . . . . . . . .	3,382		3,410
FNMA, 2.336%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/28 . . . . . . . . . . . . . . . . . . . . . . . . .	445		445
FNMA, 2.348%, (US 1 Year CMT T-Note +/- MBS Margin), 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	24,759		25,786
FNMA, 2.351%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	927		927
FNMA, 2.356%, (US 1 Year CMT T-Note +/- MBS Margin), 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . .	97,276		101,965
FNMA, 2.359%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	67,465		67,981
FNMA, 2.364%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/37 . . . . . . . . . . . . . . . . . . . . . . . . .	25,118		25,140
FNMA, 2.366%, (US 1 Year CMT T-Note +/- MBS Margin), 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	3,545		3,551
FNMA, 2.378%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	11,871		11,875
FNMA, 2.386%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/32 . . . . . . . . . . . . . . . . . . . . . . . . .	11,722		11,921
FNMA, 2.401%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . .	12,627		13,238
FNMA, 2.409%, (US 1 Year CMT T-Note +/- MBS Margin), 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . .	1,762		1,843
FNMA, 2.415%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	24,885		26,125
FNMA, 2.419%, (US 1 Year CMT T-Note +/- MBS Margin), 2/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	24,209		25,088
FNMA, 2.588%, (US 1 Year CMT T-Note +/- MBS Margin), 1/01/28 . . . . . . . . . . . . . . . . . . . . . . . . .	1,176		1,177
FNMA, 2.606%, (US 1 Year CMT T-Note +/- MBS Margin), 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . .	9,145		9,598
FNMA, 2.621%, (US 1 Year CMT T-Note +/- MBS Margin), 7/01/28 . . . . . . . . . . . . . . . . . . . . . . . . .	978		979
FNMA, 2.725%, (12-Month USD LIBOR +/- MBS Margin), 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . .	14,284		15,024
FNMA, 2.829%, (US 1 Year CMT T-Note +/- MBS Margin), 12/01/30 . . . . . . . . . . . . . . . . . . . . . . . .	2,330		2,330
FNMA, 3.436%, (11th District COF +/- MBS Margin), 10/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	188		191
FNMA, 4.079%, (11th District COF +/- MBS Margin), 8/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15,037		15,375
FNMA, 4.825%, (US 1 Year CMT T-Note +/- MBS Margin), 3/01/33 . . . . . . . . . . . . . . . . . . . . . . . . .	45,606		45,689
			23,554,641
Federal National Mortgage Association (FNMA) Fixed Rate 20.4%
FNMA, 0.785%, 7/25/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,619,884		4,241,808
FNMA, 1.75%, 1/25/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,175,975		1,105,286
FNMA, 2.00%, 2/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17,031,098		16,566,775
c FNMA, 2.50%, 4/15/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19,063,000		18,841,840
FNMA, 2.50%, 9/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7,795,070		7,449,804
FNMA, 3.00%, 10/25/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,529,243		1,513,496
c FNMA, 3.00%, 4/01/52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9,106,000		8,908,229
FNMA, 3.50%, 9/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28,757		29,372
FNMA, 3.50%, 10/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	262,804		268,501
FNMA, 3.50%, 3/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	231,535		236,657
FNMA, 3.50%, 8/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45,163		46,142
FNMA, 3.50%, 8/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20,105		20,544
FNMA, 3.50%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,178		2,227
FNMA, 3.50%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,546		6,692
FNMA, 3.50%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,357		1,387
FNMA, 3.50%, 1/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4,972		5,107
FNMA, 3.50%, 1/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11,249		11,499
FNMA, 3.50%, 1/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	304,679		311,293
FNMA, 3.50%, 4/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	75,896		77,969
FNMA, 3.50%, 7/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	312,167		318,921
FNMA, 3.50%, 5/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84,492		86,357
c FNMA, 3.50%, 4/01/52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13,167,000		13,193,746
			73,243,652

bGovernment National Mortgage Association (GNMA) Adjustable Rate 1.4%

GNMA, 0.749%, (1-Month USD LIBOR +/- MBS Margin), 4/20/37 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,635,639	1,635,204
GNMA, 0.779%, (1-Month USD LIBOR +/- MBS Margin), 6/20/41 . . . . . . . . . . . . . . . . . . . . . . . . . . .	2,145,842	2,146,837
GNMA, 1.031%, (1-Month USD LIBOR +/- MBS Margin), 1/16/40 . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,148,986	1,161,061
		4,943,102

franklintempleton.com Annual Report

15

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

S C H E D U LE O F I N V E S T M E N T S

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

			Principal Amount			Value
	Mortgage-Backed Securities (continued)
	Government National Mortgage Association (GNMA) Fixed Rate 0.2%
	GNMA, 2.50%, 9/20/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 770,071		$		770,350
	Total Mortgage-Backed Securities (Cost $255,844,374)
					251,102,370
	Total Investments before Short Term Investments (Cost $398,995,144) . .
						390,728,737
			Shares
	Short Term Investments (Cost $8,708,845) 2.4%
	Money Market Funds 2.4%
d,e Institutional Fiduciary Trust Money Market Portfolio, 0.01% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8,708,845				8,708,845
	Total Investments (Cost $407,703,989) 111.1%
					399,437,582
	Other Assets, less Liabilities (11.1)% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .					(39,871,415)
	Net Assets 100.0%
				$	359,566,167

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 March 31, 2022, 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 2 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Long		30	$	6,357,656		6/30/22	$	7,463
U.S. Treasury 5 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Long		31		3,555,312		6/30/22		(97,028)
U.S. Treasury 10 Yr. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		164		20,151,500		6/21/22		537,900
U.S. Treasury 10 Yr. Ultra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		56		7,586,250		6/21/22		217,873
U.S. Treasury Long Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		Short		45		6,752,813		6/21/22		171,458
Total Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . .		. . . . . . . . . . . .		. . . . . . . . . . . . .		. .	. . . . . . . . . .	$	837,666

*As of year end.

See Note 9 regarding other derivative information.

See abbreviations on page 26.

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

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

March 31, 2022

Franklin Liberty Short Duration U.S. Government ETF

Assets:
Investments in securities:
Cost – Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	398,995,144
Cost – Non-controlled affiliates (Note 3c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8,708,845
Value – Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	390,728,737
Value – Non-controlled affiliates (Note 3c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8,708,845
Receivables:
Investment securities sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,155,590
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		453,248
Deposits with broker for:
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,676,556
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		403,722,976
Liabilities:
Payables:
Investment securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		43,988,986
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		85,231
Variation margin on futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		82,592
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		44,156,809
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	359,566,167
Net assets consist of:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	381,433,121
Total distributable earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(21,866,954)
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	359,566,167
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3,901,000
Net asset value per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	92.17

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

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

Statement of Operations

for the year ended March 31, 2022

Franklin Liberty Short Duration U.S. Government ETF

Investment income:
Dividends:
Non-controlled affiliates (Note 3c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	2,237
Interest:
Unaffiliated issuers:
Inflation principal adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13,778
Paydown gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(1,448,581)
Paid in casha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4,406,316
Total investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2,973,750
Expenses:
Management fees (Note 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,215,058
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6,154
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		22,496
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		42,308
Trustees fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		24,650
Pricing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		551
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17,942
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,329,159
Expense reductions (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(16,868)
Expenses waived/paid by affiliates (Note 3c and 3d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(230,282)
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,082,009
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1,891,741
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(4,610,205)
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		814,958
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(3,795,247)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(8,396,780)
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		185,993
Net change in unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(8,210,787)
Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(12,006,034)
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		$(10,114,293)

aIncludes amortization of premium and accretion.

18

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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

Statements of Changes in Net Assets

Franklin Liberty Short Duration U.S. Government ETF

		Year Ended March 31,
		2022		2021
Increase (decrease) in net assets:
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	1,891,741	$	3,628,516
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(3,795,247)		2,155,618
Net change in unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(8,210,787)		(540,470)
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . . .		(10,114,293)		5,243,664
Distributions to shareholders (Note 1f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(3,570,598)		(5,978,409)
Capital share transactions (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(62,575,596)		249,166,328
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(76,260,487)		248,431,583
Net assets:
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		435,826,654		187,395,071
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	359,566,167	$	435,826,654

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

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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

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)

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 9 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 March 31, 2022, the Fund has deter- mined 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.

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

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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)

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 years ended March 31, 2022 and 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 March 31, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

			Year Ended March 31,
		2022				2021
	Shares		Amount		Shares		Amount
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	850,000	$	80,571,449	3,900,000		$ 373,194,517
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(1,525,000)		(143,147,045)	(1,300,000)		(124,028,189)
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(675,000)	$	(62,575,596)	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)	Principal underwriter

a. Management Fees

For the period April 1, 2021 to September 30, 2021, the Fund pays an investment management fee, calculated daily and paid monthly, to Advisers of 0.30% per year of the average daily net assets of the Fund.

Effective October 1, 2021, the Fund pays Advisers a unified management fee for managing the Fund’s assets, as approved by the Board. Pursuant to the investment management agreement with the Trust on behalf of the Fund effective October 1, 2021, Advisers reimburses the Fund for all acquired fund fees and expenses (such as those associated with the Fund’s investment in a Franklin Templeton money fund) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s man- agement fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses. The Fund pays 0.25% 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 year ended March 31, 2022, 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 Year	Purchases	Sales	Gain (Loss)	(Depreciation)	Year	of Year	Income
Non-Controlled Affiliates
Institutional Fiduciary Trust
Money Market Portfolio,
0.01% . . . . . . . . . . . . . . . . . . . . $6,687,494		$207,633,031	$(205,611,680)	$ —	$ —	$8,708,845	8,708,845	$2,237

d. Waiver and Expense Reimbursements

Prior to October 1, 2021, 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

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

3. Transactions with Affiliates (continued)

d. Waiver and Expense Reimbursements (continued)

the Fund did 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 recapture subsequent to the Fund’s fiscal year end.

e. Other Affiliated Transactions

At March 31, 2022, Franklin Resources Inc. owned 0.05% of the Fund’s outstanding shares.

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 year ended March 31, 2022, 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, 2022, the capital loss carryforwards were as follows:

Capital loss carryforwards:
Short term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	7,784,277
Long term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		5,549,816
Total capital loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	13,334,093

The tax character of distributions paid during the years ended March 31, 2022 and 2021 was as follows:

March 31,

2022 2021

Distributions paid from ordinary income . . . . . . . . . . . . . . . . . . $3,570,598 $5,978,409

At March 31, 2022, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:

Cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	409,172,316
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	—
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		(8,896,627)
Net unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	(8,896,627)
Distributable earnings – undistributed ordinary income . . . . . . . . . . . . . . . . .	$	363,766

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 year ended March 31, 2022, aggregated $697,530,194 and $720,143,770, respectively.

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

7. Geopolitical Risk

On February 24, 2022, Russia engaged in military actions in the sovereign territory of Ukraine. The current political and finan- cial uncertainty surrounding Russia and Ukraine may increase market volatility and the economic risk of investing in securities in these countries and may also cause uncertainty for the global economy and broader financial markets. The ultimate fallout and long-term impact from these events are not known. The Fund will continue to assess the impact on valuations and liquidity and will take any potential actions needed in accordance with procedures approved by the Board of Trustees.

8. 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.

9. Other Derivative Information

At March 31, 2022, 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	$934,694a	Variation margin	$97,028a

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

For the year ended March 31, 2022, 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 Year	Operations Locations		for the Year
	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	814,958		Futures contracts	185,993

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 year ended March 31, 2022, the average month end notional amount of options and futures contracts represented 32,462 shares/units and $64,154,525, respectively.

See Note 1(c) regarding derivative financial instruments.

10. 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:

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

10.Fair Value Measurements (continued)

•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 March 31, 2022, 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 . . . . . . . . . . . . . . . . . . . . . . .	$	—	$	139,626,367	$ —	$	139,626,367
Mortgage-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		—		251,102,370	—		251,102,370
Short Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8,708,845		—	—		8,708,845
Total Investments in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	8,708,845	$	390,728,737	$ —	$	399,437,582
Other Financial Instruments:
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	934,694	$	—	$ —	$	934,694
Liabilities:
Other Financial Instruments:
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	97,028	$	—	$ —	$	97,028

11. 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.

12. 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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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Franklin ETF Trust and Shareholders of Franklin Liberty Short Duration U.S. Government ETF

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Franklin Liberty Short Duration U.S. Government ETF (one of the funds constituting Franklin ETF Trust, referred to hereafter as the “Fund”) as of March 31, 2022, the related statement of operations for the year ended March 31, 2022, the statement of changes in net assets for each of the two years in the period ended March 31, 2022, including the related notes, and the financial highlights for each of the four years in the period ended March 31, 2022, the period June 1, 2017 to March 31, 2018 and the year ended May 31, 2017 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2022 and the financial highlights for each of the four years in the period ended March 31, 2022, the period June 1, 2017 to

March 31, 2018 and the year ended May 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2022 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

May 19, 2022

We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.

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Tax Information (unaudited)

Under section 871(k)(1)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $3,549,450 as interest related dividends for purposes of the tax imposed under Section 871(a)(1)(A) of the Internal Revenue Code for the fiscal year ended March 31, 2022.

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

Board Members and Officers

The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.

Independent Board Members

			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held During
and Address	Position	Time Served	by Board Member*	at Least the Past 5 Years
Rohit Bhagat (1964)	Lead	Since 2017	61	AssetMark Financial Holdings, Inc.
One Franklin Parkway	Independent			(investment solutions) (2018-present)
San Mateo, CA 94403-1906	Trustee and			and PhonePe (2020-present)
	Trustee			(payment and financial services);
				formerly, Axis Bank (financial) (2013-
				2021), FlipKart Limited (2019—2020)
				(eCommerce company); CapFloat
				Financial Services Pvt., Ltd.
				(non-banking finance
				company) (2018) and Zentific
				Investment Management (hedge fund)
				(2015-2018).

Principal Occupation During at Least the Past 5 Years:

Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005).

Deborah D. McWhinney (1955)	Trustee	Since 2020	61	S&P Global, Inc. (financial information
One Franklin Parkway				services) (February 2022), Borg
San Mateo, CA 94403-1906				Warner (automotive) (2018-present),
				LegalShield (consumer services)
				(2020-present); and formerly, IHS
				Markit (information services) (2015-
				2022), Fluor Corporation (construction
				and engineering) (2014-2020) and
				Focus Financial Partner, LLC
				(financial services) (2018-2020).

Principal Occupation During at Least the Past 5 Years:

Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011).

Anantha K. Pradeep (1963) Trustee Since 2017 61None

One Franklin Parkway

San Mateo, CA 94403-1906

Principal Occupation During at Least the Past 5 Years:

Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002).

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

Interested Board Members and Officers

			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held During
and Address	Position	Time Served	by Board Member*	at Least the Past 5 Years
**Jennifer M. Johnson (1964)	Trustee and	Since 2017	72	None
One Franklin Parkway	Chairperson
San Mateo, CA 94403-1906	of the Board

Principal Occupation During at Least the Past 5 Years:

Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005).

Alison E. Baur (1964)	Vice	Since 2012	Not Applicable	Not Applicable
One Franklin Parkway	President
San Mateo, CA 94403-1906

Principal Occupation During at Least the Past 5 Years:

Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex.

Steven J. Gray (1955)	Vice	Since 2012	Not Applicable	Not Applicable
One Franklin Parkway	President
San Mateo, CA 94403-1906

Principal Occupation During at Least the Past 5 Years:

Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.

Matthew T. Hinkle (1971)	Chief	Since 2017	Not Applicable	Not Applicable
One Franklin Parkway	Executive
San Mateo, CA 94403-1906	Officer –
	Finance and
	Administration

Principal Occupation During at Least the Past 5 Years:

Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).

Fred Jensen (1963)	Chief	Since July 2021	Not Applicable	Not Applicable
620 Eighth Avenue, 47th Floor	Compliance
New York, NY 10018	Officer

Principal Occupation During at Least the Past 5 Years:

Director – Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer).

Susan Kerr (1949)	Vice	Since	Not Applicable	Not Applicable
620 Eighth Avenue	President –	September 2021
New York, NY 10018	AML
	Compliance

Principal Occupation During at Least the Past 5 Years:

Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex

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				F R A N K LI N E T F T R U S T
Interested Board Members and Officers (continued)
			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held During
and Address	Position	Time Served	by Board Member*	at Least the Past 5 Years
Patrick O’Connor (1967)	President and	Since 2017	Not Applicable	Not Applicable
One Franklin Parkway	Chief
San Mateo, CA 94403-1906	Executive
	Officer –
	Investment
	Management

Principal Occupation During at Least the Past 5 Years:

President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.

Vivek Pai (1970)	Treasurer,	Since 2019	Not Applicable	Not Applicable
300 S.E. 2nd Street	Chief
Fort Lauderdale,	Financial
FL 33301-1923	Officer and
	Chief
	Accounting
	Officer

Principal Occupation During at Least the Past 5 Years:

Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.

Navid J. Tofigh (1972)	Vice	Vice President	Not Applicable	Not Applicable
One Franklin Parkway	President and	since 2015 and
San Mateo, CA 94403-1906	Secretary	Secretary since
		2017

Principal Occupation During at Least the Past 5 Years:

Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.

Lori A. Weber (1964)	Vice	Since 2012	Not Applicable	Not Applicable
300 S.E. 2nd Street	President
Fort Lauderdale, FL 33301-1923

Principal Occupation During at Least the Past 5 Years:

Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.

*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton/Legg Mason fund complex. These port- folios have a common investment manager or affiliated investment managers.

**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.

Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.

The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Commit- tee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat as its audit committee financial expert. The Board believes that Mr. Bhagat qualifies as such an expert in view of his extensive business background and experience, including extensive experience in the asset manage- ment and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. As a result of such background and experience, the Board believes that Mr. Bhagat has acquired an understanding of generally accepted accounting principles and financial statements, the gen- eral application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat is an independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.

The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Share- holders may call (800) DIAL BEN/342-5236 to request the SAI.

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

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 September 8, 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 (Independent Trustees), reviewed and approved an amended and restated investment management agreement to adopt a unified management fee (Unified Fee) between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of the Fund (Amended Management Agreement) for an initial two-year period effective October 1, 2021. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the Amended Management Agreement.

In considering the approval of the Amended Management Agreement, 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 all of the factors it deemed relevant in approving the Amended Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by the Manager; and (ii) the costs of the services to be provided by the Man- ager and its affiliates from the relationship with the Fund. The Board further reviewed and considered the form of Amended Management Agreement and the terms of the Amended Management Agreement, which were explained at the Meet- ing, noting that, with the exception of the proposed Unified Fee structure, the form of Amended Management Agreement was substantially the same as the current investment man- agement agreement for the Fund, and that the Unified Fee is consistent with the Unified Fee structure currently in place for other passively managed exchange-traded funds in the fund complex. The Board noted management’s reasons for pro- posing the approval of the Amended Management Agreement, including that the Unitary Fee would help pro- mote sales of the Fund and that many competitor funds already have implemented a unitary fee structure. The Board noted management’s explanation that it was relying on and had complied with the conditions of prior no-action relief that had been granted to another fund complex and investment

adviser confirming that the Securities Exchange Commission would not recommend enforcement action if an investment advisory agreement was amended without a shareholder vote to establish a unified fee.

In approving the Amended Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the Amended Management Agreement are fair and reasonable and that such Amended Management Agreement is in the best interests of the Fund and its shareholders. While attention was given to all infor- mation 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 to be provided by the Manager and its affiliates to the Fund and its shareholders. This information included, among other things, management’s representation that the Amended Management Agreement will not reduce or modify in any way the nature, extent and quality of the services cur- rently provided to the Fund. Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by the Manager and its affiliates to the Fund and its shareholders under the Fund’s Amended Management Agreement.

Fund Performance

The Board noted its review and consideration of and conclu- sions made regarding the performance results of the Fund in connection with the May 2021 annual contract renewal (Annual Contract Renewal) of the Fund’s investment man- agement agreement and at regular Board meetings throughout the year.

Comparative Fees and Expenses

The Board reviewed and considered information regarding the proposed Unified Fee. In particular, the Board noted manage- ment’s representation that changing to the Unified Fee would not result in any increase to the Manager’s management fee.

The Board also noted management’s representation that the Fund’s net operating expenses under the Unified Fee are expected to be the same as such Fund’s current net operating expenses after expense waivers and reimbursements because, under the Unified Fee, the Manager’s obligation under the current fee waiver and expense reimbursement agreements to cap ordinary expenses at the same rate as the Fund’s management fee would become part of the Amended Management Agreement. The Board considered that pursuant

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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

to the Fund’s Amended Management Agreement, the Man- ager shall (1) reimburse the Fund for all of its acquired fund fees and expenses (if any), and (2) pay all of the ordinary operating expenses of the Fund, except for (i) the Fund’s investment management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (such arrangement, the Unified Fee). The Board concluded that the proposed Unified Fee for each Fund is reasonable.

Management Profitability and Economies of Scale

The Board noted management’s representation that chang- ing to the Unified Fee would not result in any increase to the Manager’s management fee. The Board determined that its conclusions regarding profitability and economies of scale reached in connection with the Annual Contract Renewal of the investment management agreement with the Manager had not changed as a result of the proposal to approve the Amended Management Agreement.

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 Amended Management Agreement for an initial two-year period.

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 writ- ten 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 Schedule of Investments

The Trust, on behalf of the Fund, files a complete schedule of investments with the U.S. Securities and Exchange Commis- sion 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 website at franklintempleton.com.

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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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Annual 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
	franklintempleton.com	(855) 231-1706
		111 Sanders Creek Parkway
		East Syracuse, NY 13057

© 2022 Franklin Templeton Investments. All rights reserved. FTSD A 05/22