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 811-23124
Franklin Templeton 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 E. 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: 03/31/22
The Registrant is filing this amendment (the “Amendment”) to its Form N-CSR for the period ended March 31, 2022, as originally filed with the U.S. Securities and Exchange Commission on May 27, 2022 (Accession Number 0001193125-22-162279) (the “Original Filing”), and as amended on June 21, 2022 (Accession Number 0001193125-22-176706) (the “Amended Filing”), for the sole purpose of amending Item 1 “Reports to Shareholders” to correct the name in the auditor’s opinion letter under the heading “Report of Independent Registered Public Accounting Firm” to include “PricewaterhouseCoopers LLP”. Except for the correction described above and the inclusion of new certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, this Amendment does not amend, update or modify any other items or disclosures found in the Original Filing or the Amended Filing. In addition, this amendment does not reflect events or transactions occurring after the filing of the Original Filing or the Amended Filing. As a result, such information continues to speak as of the date of the Original Filing.
| Item 1. | Reports to Stockholders. |
ANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
March 31, 2022
Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ U.S. Equity ETF | |
Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | |
Franklin LibertyQ Global Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | |
Franklin LibertyQ International Equity Hedged ETF |
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools.
| Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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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.
U.S. equities, as measured by the Standard & Poor’s® 500 Index, posted a +15.65% total return for the 12 months under review.1 Stocks benefited from the continued economic recovery, implementation of COVID-19 vaccination programs and easing pandemic restrictions. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor sentiment. However, elevated demand combined with supply chain disruptions led to the highest inflation since 1982. Russia’s invasion of Ukraine late in the 12-month 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 increase from historically low levels. U.S. gross domestic product (GDP) growth was robust during most of the period, as strong consumer spending, helped by higher wages and strong household balance sheets, and business investment in growing inventories supported the economy. 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 meant 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 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.
The foregoing information reflects our analysis and opinions as of March 31, 2022. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: Morningstar.
See www.franklintempletondatasources.com for additional data provider information.
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Franklin LibertyQ Emerging Markets ETF
This annual report for Franklin LibertyQ Emerging Markets ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Emerging Markets (EM) Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index includes stocks from emerging market countries that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI EM Index over the long term by selecting equity securities from the MSCI EM Index that have exposure to these investment-style factors.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -5.55% based on market price and -4.21% based on net asset value (NAV). In comparison, the LibertyQ EM Index-NR posted a -3.41% cumulative total return for the same period, while the MSCI EM Index-NR posted a -11.37% cumulative total return.2,3 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.
| Geographic Composition* | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Asia | 66.7% | |||
Middle East & Africa | 15.3% | |||
Latin America & Caribbean | 12.4% | |||
Europe | 3.5% | |||
Short-Term Investments & Other Net Assets | 2.1% | |||
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ EM Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 15.3% | |||
Metals & Mining | 11.0% | |||
Oil, Gas & Consumable Fuels | 8.6% | |||
Diversified Telecommunication Services | 5.9% | |||
IT Services | 5.5% | |||
Insurance | 4.8% | |||
Wireless Telecommunication Services | 3.7% | |||
Technology Hardware, Storage & Peripherals | 3.5% | |||
Chemicals | 3.4% | |||
Food Products | 3.3% | |||
1. The LibertyQ EM Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI EM Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI EM Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of global emerging markets.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
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 46.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Vale SA Metals & Mining, Brazil | 2.1% | |||
Petroleo Brasileiro SA Oil, Gas & Consumable Fuels, Brazil | 1.6% | |||
Grupo Mexico SAB de CV, B Metals & Mining, Mexico | 1.5% | |||
China Shenhua Energy Co. Ltd., A, H Oil, Gas & Consumable Fuels, China | 1.4% | |||
Emirates Telecommunications Group Co. PJSC Diversified Telecommunication Services, United Arab Emirates | 1.4% | |||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B Diversified Telecommunication Services, Indonesia | 1.3% | |||
Wal-Mart de Mexico SAB de CV Food & Staples Retailing, Mexico | 1.3% | |||
Impala Platinum Holdings Ltd. Metals & Mining, South Africa | 1.2% | |||
Industrial and Commercial Bank of China Ltd., H Banks, China | 1.2% | |||
China Construction Bank Corp., A, H Banks, China | 1.2% | |||
| Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
China | 25.8% | |||
Taiwan | 13.8% | |||
India | 13.7% | |||
Brazil | 9.1% | |||
South Korea | 8.1% | |||
South Africa | 7.0% | |||
Saudi Arabia | 4.5% | |||
Mexico | 3.6% | |||
Indonesia | 2.2% | |||
United Arab Emirates | 1.9% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that hindered the Fund’s absolute return included Russian companies Tatneft, MMC Norilsk Nickel and LUKOIL. International trading of Russian securities was severely restricted following Russia’s invasion of Ukraine in February 2022, preventing the Fund from selling out of its positions in Russian companies. As a result, the Fund fair valued all Russian securities to zero, which had a significant negative impact on Fund returns for the period. Individual holdings that lifted the Fund’s absolute return included Vale, Emirates Telecommunication Group (doing business as Etisalat) and Al-Rajhi Bank.
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low volatility. Of the four target-style factors, value and low volatility contributed to the Fund’s relative performance for the reporting period, while quality and momentum detracted.
Thank you for your participation in Franklin LibertyQ Emerging Markets ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
CFA® is a trademark owned by CFA Institute.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (6/3/16), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | -4.21% | -5.55% | -4.21% | -5.55% | ||||||||||||
5-Year | +17.36% | +15.38% | +3.25% | +2.90% | ||||||||||||
Since Inception (6/1/16) | +34.44% | +32.85% | +5.21% | +4.99% | ||||||||||||
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 7 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
PERFORMANCE SUMMARY
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 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.
6/1/16–3/31/22
See page 7 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.223913 |
Total Annual Operating Expenses7
0.45% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. The Fund is designed for the aggressive portion of a well-diversified portfolio. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. 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 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 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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s the ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ EM Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI EM Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Net Returns (NR) include income net of tax withholding when dividends are paid.
6. Source: Morningstar. The MSCI EM Index is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of global emerging markets. Net Returns (NR) include income net of tax withholding when dividends are paid.
7. 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 provider information.
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FRANKLIN LIBERTYQ EMERGING MARKETS ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 950.50 | $ | 2.19 | $ | 1,022.69 | $ | 2.27 | 0.45 | % | ||||||||||||
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.
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Franklin LibertyQ Global Dividend ETF
This annual report for Franklin LibertyQ Global Dividend ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Global Dividend Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index includes stocks from developed and emerging market countries with high and persistent dividend income that have favorable exposure to a quality investment-style factor, subject to a maximum 2% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI All Country World Index (ACWI) ex REITs Index over the long term by applying dividend persistence and yield screens and the quality factor selection process.
Performance Overview
For the 12-month period, the Fund posted cumulative total returns of +11.96% based on market price and +12.14% based on net asset value (NAV). In comparison, the LibertyQ Global Dividend Index-NR posted a +12.14% cumulative total return for the same period, while the MSCI ACWI ex REITs Index-NR posted a +7.03% 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 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.
| Geographic Composition* | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
North America | 51.0% | |||
Europe | 20.2% | |||
Asia | 13.3% | |||
Australia & New Zealand | 9.6% | |||
Middle East & Africa | 5.0% | |||
Short-Term Investments & Other Net Assets | 0.8% | |||
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of derivatives, unsettled trades or other factors.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Global Dividend Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 11.7% | |||
Pharmaceuticals | 10.5% | |||
Insurance | 10.1% | |||
Metals & Mining | 5.7% | |||
Tobacco | 5.0% | |||
Diversified Telecommunication Services | 4.9% | |||
IT Services | 4.6% | |||
Biotechnology | 4.0% | |||
Household Products | 3.8% | |||
Semiconductors & Semiconductor Equipment | 3.8% | |||
1. The LibertyQ Global Dividend Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI ACWI ex REITs Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI ACWI ex REITs Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding REIT securities.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
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 56.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Rio Tinto PLC Materials | 2.6% | |||
Altria Group Inc. Food, Beverage & Tobacco | 2.3% | |||
Amgen Inc. Pharmaceuticals, Biotechnology & Life Sciences | 2.3% | |||
Zurich Insurance Group AG Insurance | 2.3% | |||
Commonwealth Bank of Australia Banks | 2.2% | |||
The Coca-Cola Co. Food, Beverage & Tobacco | 2.2% | |||
International Business Machines Corp. Software & Services | 2.2% | |||
Al-Rajhi Bank Banks | 2.2% | |||
KDDI Corp. Telecommunication Services | 2.1% | |||
The Bank of Nova Scotia Banks | 2.1% | |||
| Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
United States | 42.8% | |||
Australia | 9.3% | |||
Japan | 8.6% | |||
Canada | 8.2% | |||
Switzerland | 8.1% | |||
United Kingdom | 5.7% | |||
Saudi Arabia | 3.0% | |||
Taiwan | 2.9% | |||
Germany | 2.7% | |||
Finland | 1.6% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that lifted the Fund’s absolute return included Rio Tinto, Al-Rajhi Bank and Nucor. Individual holdings that hindered the Fund’s absolute return included Kone, 3M and Tatneft. International trading of Russian securities was severely restricted following Russia’s invasion of Ukraine in February 2022, preventing the Fund from selling out of its positions in Russian companies. As a result, the Fund fair valued all Russian securities to zero, which hindered Fund returns for the period.
The Fund’s research-based selection process focuses on stocks with exposure to a quality investment style factor. The quality factor was a marginal detractor from the Fund’s relative performance for the reporting period. Other factors, to which the Fund does not actively seek exposure, had a larger effect on relative performance than quality. The value and low volatility factors contributed to the Fund’s relative return, while momentum detracted.
Thank you for your participation in Franklin LibertyQ Global Dividend ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 10 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (6/3/16), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | +12.14% | +11.96% | +12.14% | +11.96% | ||||||||||||
5-Year | +56.48% | +55.36% | +9.37% | +9.21% | ||||||||||||
Since Inception (6/1/16) | +71.81% | +71.49% | +9.73% | +9.69% | ||||||||||||
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 13 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
PERFORMANCE SUMMARY
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 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.
6/1/16–3/31/22
See page 13 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.004981 |
Total Annual Operating Expenses6
0.45% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Companies that have historically paid regular dividends to shareholders may decrease or eliminate dividend payments in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of the issuer’s stock and less available income for the Fund. There can be no assurance that the Fund’s quality factor stock selection process and dividend screens of the Underlying Index will enhance performance. Exposure to investment factors and the use of dividend screens may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. 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 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 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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s the ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ Global Dividend Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI ACWI ex REITs Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI ACWI ex REITs Index is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of developed and emerging markets, excluding REIT securities. Net Returns (NR) include income net of tax withholding when dividends are paid.
6. 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 provider information.
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FRANKLIN LIBERTYQ GLOBAL DIVIDEND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,069.80 | $ | 2.32 | $ | 1,022.69 | $ | 2.27 | 0.45 | % | ||||||||||||
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.
| 14 | Annual Report | franklintempleton.com | ||||||||
Franklin LibertyQ Global Equity ETF
This annual report for Franklin LibertyQ Global Equity ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Global Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index includes stocks from developed and emerging market countries that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI All Country World Index (ACWI) over the long term by selecting equity securities from the MSCI ACWI that have exposure to these investment-style factors.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +8.52% based on market price and +9.00% based on net asset value (NAV). In comparison, the LibertyQ Global Equity Index-NR posted a +9.04% cumulative total return for the same period, while the MSCI ACWI-NR posted a +7.28% cumulative total return.2,3 You can find more of the Fund’s performance data in the Performance Summary beginning on page 17.
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.
| Geographic Composition* | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
North America | 58.1% | |||
Asia | 16.1% | |||
Europe | 15.4% | |||
Australia & New Zealand | 5.4% | |||
Latin America & Caribbean | 1.8% | |||
Middle East & Africa | 1.7% | |||
Short-Term Investments & Other Net Assets | 1.6% | |||
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ Global Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Pharmaceuticals | 10.1% | |||
Semiconductors & Semiconductor Equipment | 7.8% | |||
Metals & Mining | 7.0% | |||
Biotechnology | 5.4% | |||
Software | 4.4% | |||
IT Services | 4.2% | |||
Diversified Telecommunication Services | 3.9% | |||
Food & Staples Retailing | 3.9% | |||
Banks | 3.8% | |||
Tobacco | 3.3% | |||
1. The LibertyQ Global Equity Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI ACWI using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI ACWI is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
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 61.
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FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
BHP Group Ltd. Metals & Mining, Australia | 1.7% | |||
AbbVie Inc. Biotechnology, United States | 1.4% | |||
Apple Inc. Technology Hardware, Storage & Peripherals, United States | 1.1% | |||
Eli Lilly & Co. Pharmaceuticals, United States | 1.1% | |||
Johnson & Johnson Pharmaceuticals, United States | 1.1% | |||
Novartis AG Pharmaceuticals, Switzerland | 1.1% | |||
Cisco Systems Inc. Communications Equipment, United States | 1.1% | |||
Bristol-Myers Squibb Co. Pharmaceuticals, United States | 1.1% | |||
The Procter & Gamble Co. Household Products, United States | 1.1% | |||
Walmart Inc. Food & Staples Retailing, United States | 1.1% | |||
| Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
United States | 54.8% | |||
Japan | 6.1% | |||
Australia | 5.3% | |||
United Kingdom | 4.6% | |||
Canada | 4.1% | |||
Switzerland | 4.1% | |||
China | 3.1% | |||
Taiwan | 2.2% | |||
India | 1.9% | |||
Denmark | 1.6% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that lifted the Fund’s absolute return included BHP Group, Novo Nordisk and AbbVie. Individual holdings that hindered the Fund’s absolute return included Gazprom, Intel and LUKOIL. International trading of Russian securities was severely restricted following Russia’s invasion of Ukraine in February 2022, preventing the Fund from selling out of its positions in Russian companies. As a result, the Fund fair valued all Russian securities to zero, which hindered Fund returns for the period.
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low volatility. Of the four target-style factors, value and low volatility contributed to the Fund’s relative performance for the reporting period, while momentum detracted. The quality factor detracted modestly from the Fund’s relative return.
Thank you for your participation in Franklin LibertyQ Global Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 16 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (6/3/16), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | +9.00% | +8.52% | +9.00% | +8.52% | ||||||||||||
5-Year | +69.30% | +68.06% | +11.10% | +10.94% | ||||||||||||
Since Inception (6/1/16) | +86.15% | +85.71% | +11.25% | +11.20% | ||||||||||||
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 19 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 17 | ||||||||
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
PERFORMANCE SUMMARY
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 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.
6/1/16–3/31/22
See page 19 for Performance Summary footnotes.
| 18 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.002606 |
Total Annual Operating Expenses7
0.35% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. 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 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 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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s the ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ Global Equity Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI ACWI Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Net Returns (NR) include income net of tax withholding when dividends are paid.
6. Source: Morningstar. The MSCI ACWI Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. Net Returns (NR) include income net of tax withholding when dividends are paid.
7. 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 provider information.
| franklintempleton.com | Annual Report | 19 | ||||||||
FRANKLIN LIBERTYQ GLOBAL EQUITY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,037.50 | $ | 1.78 | $ | 1,023.19 | $ | 1.77 | 0.35 | % | ||||||||||||
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.
| 20 | Annual Report | franklintempleton.com | ||||||||
Franklin LibertyQ International Equity Hedged ETF
This annual report for Franklin LibertyQ International Equity Hedged ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ International Equity Hedged Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index includes stocks from developed market countries in Europe, Australasia and the Far East (EAFE) that have favorable exposure to four investment-style factors: quality, value, momentum and low volatility, subject to a maximum 2% per company weighting. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the MSCI EAFE Index over the long term by selecting equity securities from the MSCI EAFE Index that have exposure to these investment-style factors. The Underlying Index incorporates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the Underlying Index.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +9.56% based on market price and +11.13% based on net asset value (NAV). In comparison, the LibertyQ International Equity Hedged Index-NR posted a +11.48% cumulative total return for the same period, while the MSCI EAFE 100% Hedged to USD Index-NR posted a +7.08% cumulative total return.2,3 You can find more of the Fund’s performance data in the Performance Summary beginning on page 23.
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.
| Geographic Composition | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Europe | 49.9% | |||
Asia | 29.1% | |||
Australia & New Zealand | 18.8% | |||
Middle East & Africa | 0.6% | |||
North America | 0.6% | |||
Short-Term Investments & Other Net Assets | 1.0% | |||
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ International Equity Hedged Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Metals & Mining | 14.4% | |||
Pharmaceuticals | 13.0% | |||
Diversified Telecommunication Services | 4.4% | |||
Tobacco | 4.2% | |||
Automobiles | 3.9% | |||
Semiconductors & Semiconductor Equipment | 3.6% | |||
Food & Staples Retailing | 3.5% | |||
Chemicals | 3.3% | |||
Trading Companies & Distributors | 2.7% | |||
Machinery | 2.7% | |||
1. The LibertyQ International Equity Hedged Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI EAFE Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI EAFE Index is a free float-adjusted market capitalization-weighted index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
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 78.
| franklintempleton.com | Annual Report | 21 | ||||||||
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
BHP Group Ltd. Metals & Mining, Australia | 5.8% | |||
Rio Tinto PLC Metals & Mining, Australia | 2.8% | |||
British American Tobacco PLC Tobacco, United Kingdom | 2.5% | |||
Novartis AG Pharmaceuticals, Switzerland | 2.2% | |||
GlaxoSmithKline PLC Pharmaceuticals, United Kingdom | 2.2% | |||
Sanofi Pharmaceuticals, France | 2.1% | |||
Nestle SA Food Products, Switzerland | 2.0% | |||
Toyota Motor Corp. Automobiles, Japan | 2.0% | |||
Tokyo Electron Ltd. Semiconductors & Semiconductor Equipment, Japan | 2.0% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 2.0% | |||
Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Japan | 26.5% | |||
Australia | 18.3% | |||
United Kingdom | 15.8% | |||
Switzerland | 9.8% | |||
France | 4.4% | |||
Denmark | 4.3% | |||
Netherlands | 4.1% | |||
Spain | 2.8% | |||
Sweden | 2.7% | |||
Germany | 2.3% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that lifted the Fund’s absolute return included BHP Group, Novo Nordisk and Rio Tinto. Individual holdings that hindered the Fund’s absolute return included Deutsche Post, KAO and Industria de Diseno Textil (doing business as Inditex). The Fund’s use of currency forward contracts—designed to offset the Fund’s exposure to the component currencies and replicate the hedge impact incorporated in the calculations of the Underlying Index—also contributed to the Fund’s absolute performance. However, one cannot expect the same result in future periods.
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low volatility. Of the four target-style factors, value, quality and low volatility contributed to the Fund’s relative performance for the reporting period, while momentum detracted marginally.
Thank you for your participation in Franklin LibertyQ International Equity Hedged ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 22 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (6/3/16), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | +11.13% | +9.56% | +11.13% | +9.56% | ||||||||||||
5-Year | +46.50% | +44.51% | +7.94% | +7.64% | ||||||||||||
Since Inception (6/1/16) | +58.66% | +57.86% | +8.24% | +8.15% | ||||||||||||
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 25 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 23 | ||||||||
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
PERFORMANCE SUMMARY
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 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.
6/1/16–3/31/22
See page 25 for Performance Summary footnotes.
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FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.796814 |
Total Annual Operating Expenses7
0.40% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. The Fund will attempt to hedge the currency exposure of non-U.S. dollar denominated securities held in its portfolio by investing in foreign currency forward contracts. Foreign currency forward contracts do not eliminate movements in the value of non-U.S. currencies and securities but rather allow the Fund to establish a fixed rate of exchange for a future point in time. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. Currency management strategies could result in losses to the Fund if currencies do not perform as the investment manager expects. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. 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 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 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 certain 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ International Equity Hedged Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. (MSCI). It is based on the MSCI EAFE Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Net Returns (NR) include income net of tax withholding when dividends are paid.
6. Source: Morningstar. The MSCI EAFE Index is a free float-adjusted market capitalization-weighted index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. Net Returns (NR) include income net of tax withholding when dividends are paid.
7. 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 provider information.
| franklintempleton.com | Annual Report | 25 | ||||||||
FRANKLIN LIBERTYQ INTERNATIONAL EQUITY HEDGED ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,051.30 | $ | 2.05 | $ | 1,022.94 | $ | 2.02 | 0.40 | % | ||||||||||||
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.
| 26 | Annual Report | franklintempleton.com | ||||||||
Franklin LibertyQ U.S. Equity ETF
This annual report for Franklin LibertyQ U.S. Equity ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Large Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000® Index that have favorable exposure to three investment style factors: quality, value and momentum.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +14.23% based on market price and +14.19% based on net asset value (NAV). In comparison, the LibertyQ U.S. Large Cap Equity Index posted a +14.32% cumulative total return for the same period, while the Russell 1000® Index posted a +13.27% cumulative total return.2,3 You can find more of the Fund’s performance data in the Performance Summary beginning on page 29.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Information Technology | 33.1% | |||
Health Care | 18.7% | |||
Consumer Discretionary | 12.1% | |||
Consumer Staples | 7.7% | |||
Industrials | 7.6% | |||
Energy | 6.1% | |||
Communication Services | 4.7% | |||
Financials | 4.6% | |||
Real Estate | 2.7% | |||
Materials | 1.5% | |||
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Large Cap Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. 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. The LibertyQ U.S. Large Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell 1000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell 1000® Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000® Index, which represents the majority of the U.S. market’s total capitalization.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 86.
| franklintempleton.com | Annual Report | 27 | ||||||||
FRANKLIN LIBERTYQ U.S. EQUITY ETF
Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Apple Inc. Information Technology | 7.3% | |||
Microsoft Corp. Information Technology | 6.0% | |||
Amazon.com Inc. Consumer Discretionary | 2.3% | |||
Alphabet Inc., A Information Technology | 2.0% | |||
Tesla Inc. Consumer Discretionary | 1.9% | |||
Alphabet Inc., C Information Technology | 1.9% | |||
Exxon Mobil Corp. Energy | 1.7% | |||
Chevron Corp. Energy | 1.7% | |||
The Procter & Gamble Co. Consumer Staples | 1.7% | |||
NVIDIA Corp. Information Technology | 1.7% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that lifted the Fund’s absolute return included NVIDIA, Apple and Costco Wholesale. Individual holdings that hindered the Fund’s absolute return included Home Depot, Zoom Video Communications and Intel.
The Fund’s research-based selection process focuses on three investment factors: value, quality, and momentum. Prior to March 18, 2022, the Fund also focused on the low volatility factor. Of the four target-style factors, quality and low volatility contributed to the Fund’s relative performance for the reporting period, while value was a modest contributor. The momentum factor had no significant impact on the Fund’s relative return.
Thank you for your participation in Franklin LibertyQ U.S. Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 28 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ U.S. EQUITY ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (4/28/17), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | +14.19% | +14.23% | +14.19% | +14.23% | ||||||||||||
3-Year | +51.86% | +51.99% | +14.94% | +14.98% | ||||||||||||
Since Inception (4/26/17) | +93.57% | +93.74% | +14.34% | +14.36% | ||||||||||||
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 31 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 29 | ||||||||
FRANKLIN LIBERTYQ U.S. EQUITY ETF
PERFORMANCE SUMMARY
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 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.
4/26/17–3/31/22
See page 31 for Performance Summary footnotes.
| 30 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ U.S. EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.840538 |
Total Annual Operating Expenses7
0.15% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. To the extent the Fund concentrates in a specific industry or group of industries, the Fund will carry much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries; there is also the risk that the Fund will perform poorly during a slump in demand for securities of companies in such industries. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. 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 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 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 certain 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ U.S. Large Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell 1000 Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy.
6. Source: Morningstar. Russell 1000 Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000 Index, which represents the majority of the U.S. market’s total capitalization.
7. 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.
| franklintempleton.com | Annual Report | 31 | ||||||||
FRANKLIN LIBERTYQ U.S. EQUITY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,073.70 | $ | 0.78 | $ | 1,024.18 | $ | 0.76 | 0.15 | % | ||||||||||||
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.
| 32 | Annual Report | franklintempleton.com | ||||||||
Franklin LibertyQ U.S. Mid Cap Equity ETF
This annual report for Franklin LibertyQ U.S. Mid Cap Equity ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Mid Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell Midcap® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell Midcap® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +11.24% based on market price and +11.18% based on net asset value (NAV). In comparison, the LibertyQ U.S. Mid Cap Equity Index posted a +11.49% cumulative total return for the same period, while the Russell Midcap® Index posted a +6.92% cumulative total return for the same period.2,3 You can find more of the Fund’s performance data in the Performance Summary beginning on page 35.
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.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Information Technology | 19.6% | |||
Industrials | 16.8% | |||
Consumer Discretionary | 14.4% | |||
Health Care | 11.0% | |||
Financials | 9.7% | |||
Real Estate | 7.6% | |||
Consumer Staples | 7.3% | |||
Utilities | 5.2% | |||
Materials | 5.0% | |||
Communication Services | 3.0% | |||
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Mid Cap Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. The LibertyQ U.S. Mid Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell). It is based on the Russell Midcap® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell Midcap® Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000® Index, which represents a modest amount of the Russell 1000® Index’s total market capitalization.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 92.
| franklintempleton.com | Annual Report | 33 | ||||||||
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry | % of Total Net Assets | |||
The Kroger Co. Consumer Staples | 1.4% | |||
Consolidated Edison Inc. Utilities | 1.3% | |||
The Hershey Co. Consumer Staples | 1.3% | |||
Paychex Inc. Information Technology | 1.2% | |||
AutoZone Inc. Consumer Discretionary | 1.2% | |||
Arista Networks Inc. Information Technology | 1.2% | |||
O’Reilly Automotive Inc. Consumer Discretionary | 1.1% | |||
AvalonBay Communities Inc. Real Estate | 1.1% | |||
Cerner Corp. Health Care | 1.1% | |||
Tractor Supply Co. Consumer Discretionary | 1.1% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that lifted the Fund’s absolute return included Fortinet, Kroger and Arista Networks. Individual holdings that hindered the Fund’s absolute return included Clorox, Boston Beer and Match Group.
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low volatility. Of the four target-style factors, low volatility contributed to the Fund’s relative performance for the reporting period, with modest contribution from the momentum factor. In contrast, quality detracted modestly. The value factor had no significant impact on the Fund’s relative return.
Thank you for your participation in Franklin LibertyQ U.S. Mid Cap Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 34 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (4/28/17), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based NAV3 | Based on market price4 | |||||||||||||
1-Year | +11.18% | +11.24% | +11.18% | +11.24% | ||||||||||||
3-Year | +53.83% | +54.03% | +15.44% | +15.49% | ||||||||||||
Since Inception (4/26/17) | +87.84% | +88.25% | +13.64% | +13.70% | ||||||||||||
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 37 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 35 | ||||||||
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
PERFORMANCE SUMMARY
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 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.
4/26/17–3/31/22
See page 37 for Performance Summary footnotes.
| 36 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.511592 |
Total Annual Operating Expenses7
0.30% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Historically, mid-size company securities have been more volatile in price than larger company securities, especially over the short term. Mid-size companies may be more susceptible to particular economic events or competitive factors than are larger, more broadly diversified companies. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. 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 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 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 certain 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ U.S. Mid Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell Midcap Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy.
6. Source: Morningstar. Russell Midcap Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000 Index, which represents a modest amount of the Russell 1000 Index’s total market capitalization.
7. 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.
| franklintempleton.com | Annual Report | 37 | ||||||||
FRANKLIN LIBERTYQ U.S. MID CAP EQUITY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,032.40 | $ | 1.52 | $ | 1,023.44 | $ | 1.51 | 0.30 | % | ||||||||||||
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.
| 38 | Annual Report | franklintempleton.com | ||||||||
Franklin LibertyQ U.S. Small Cap Equity ETF
This annual report for Franklin LibertyQ U.S. Small Cap Equity ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Small Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 2000® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 2000® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -0.09% based on market price and +0.02% based on net asset value (NAV). In comparison, the LibertyQ U.S. Small Cap Equity Index posted a +0.30% cumulative total return for the same period, while the Russell 2000® Index posted a -5.79% cumulative total return.2,3 You can find more of the Fund’s performance data in the Performance Summary beginning on page 41.
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.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Industrials | 20.0% | |||
Consumer Discretionary | 18.4% | |||
Information Technology | 15.6% | |||
Financials | 9.9% | |||
Health Care | 9.5% | |||
Consumer Staples | 6.6% | |||
Real Estate | 6.4% | |||
Utilities | 5.5% | |||
Communication Services | 3.6% | |||
Materials | 3.1% | |||
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Small Cap Equity Index. The investment manager seeks to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
1. The LibertyQ U.S. Small Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell). It is based on the Russell 2000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell 2000® Index is market capitalization weighted and measures performance of the approximately 2,000 smallest companies in the Russell 3000® Index, which represent a small amount of the total market capitalization of the Russell 3000® Index.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 98.
| franklintempleton.com | Annual Report | 39 | ||||||||
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry | % of Total Net Assets | |||
BJ’s Wholesale Club Holdings Inc. Consumer Staples | 1.0% | |||
Tetra Tech Inc. Industrials | 1.0% | |||
Macy’s Inc. Consumer Discretionary | 0.9% | |||
Texas Roadhouse Inc., A Consumer Discretionary | 0.9% | |||
Lattice Semiconductor Corp. Information Technology | 0.9% | |||
Exponent Inc. Industrials | 0.8% | |||
SAIA Inc. Industrials | 0.8% | |||
Qualys Inc. Information Technology | 0.8% | |||
AMN Healthcare Services Inc. Health Care | 0.7% | |||
Novanta Inc. Information Technology | 0.7% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, individual holdings that lifted the Fund’s absolute return included Stamps.com, Macy’s and Mimecast. Individual holdings that hindered the Fund’s absolute return included Sleep Number, Stitch Fix and Rent-A-Center.
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low volatility. Of the four target-style factors, value and quality contributed to the Fund’s relative performance for the reporting period. In addition, low volatility was a modest contributor. The momentum factor had no significant impact on the Fund’s relative return.
Thank you for your participation in Franklin LibertyQ U.S. Small Cap Equity ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 40 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (4/28/17), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | +0.02% | -0.09% | +0.02% | -0.09% | ||||||||||||
3-Year | +35.88% | +35.96% | +10.76% | +10.78% | ||||||||||||
Since Inception (4/26/17) | +51.78% | +51.99% | +8.83% | +8.87% | ||||||||||||
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 43 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 41 | ||||||||
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
PERFORMANCE SUMMARY
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 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.
4/26/17–3/31/22
See page 43 for Performance Summary footnotes.
| 42 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.394926 |
Total Annual Operating Expenses7
0.35% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Smaller, mid-sized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger company stocks, especially over the short term. Smaller companies may be more susceptible to particular events or economic conditions, less certain growth prospects, lack of depth of management and funds for growth and development and limited or less developed product lines and markets. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. 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 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 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 certain 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. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
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. Source: FactSet. The LibertyQ U.S. Small Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell) based on the Russell 2000 Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy.
6. Source: Morningstar. Russell 2000 Index is market capitalization weighted and measures performance of the approximately 2,000 smallest companies in the Russell 3000 Index, which represent a small amount of the total market capitalization of the Russell 3000 Index.
7. 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.
| franklintempleton.com | Annual Report | 43 | ||||||||
FRANKLIN LIBERTYQ U.S. SMALL CAP EQUITY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 965.60 | $ | 1.72 | $ | 1,023.19 | $ | 1.77 | 0.35 | % | ||||||||||||
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.
| 44 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Franklin LibertyQ Emerging Markets ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 30.78 | $ | 22.20 | $ | 29.70 | $ | 33.41 | $ | 29.29 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsa: |
| |||||||||||||||||||
Net investment incomeb | 1.32 | 0.84 | 1.24 | 1.14 | 0.83 | |||||||||||||||
Net realized and unrealized gains (losses) | (2.55 | ) | 8.55 | (6.96 | ) | (3.76 | ) | 4.15 | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (1.23 | ) | 9.39 | (5.72 | ) | (2.62 | ) | 4.98 | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.22 | ) | (0.81 | ) | (1.78 | ) | (1.09 | ) | (0.86 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 28.33 | $ | 30.78 | $ | 22.20 | $ | 29.70 | $ | 33.41 | ||||||||||
|
| |||||||||||||||||||
Total returnc | (4.21)% | 42.57% | (20.55)% | (7.70)% | 17.20% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.45% | 0.45% | 0.49% | 0.55% | 0.69% | e | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.45% | 0.45% | 0.49% | 0.55% | 0.54% | e | ||||||||||||||
Net investment income | 4.28% | 3.15% | 4.26% | 3.75% | 2.61% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $17,000 | $24,627 | $57,711 | $344,484 | $400,908 | |||||||||||||||
Portfolio turnover ratef | 34.27% | g | 40.22% | g | 44.11% | g | 52.42% | 32.87% | ||||||||||||
aThe 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 and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal 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.
dRatios are annualized for periods less than one year.
eEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 34.27% | 36.91% | 41.78% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 45 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ Emerging Markets ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 97.1% | ||||||||||||||
| Brazil 6.8% | ||||||||||||||
Ambev SA | Beverages | 57,000 | $ | 184,724 | ||||||||||
B3 SA – Brasil Bolsa Balcao | Capital Markets | 41,400 | 136,869 | |||||||||||
Banco Bradesco SA | Banks | 9,600 | 36,909 | |||||||||||
Banco do Brasil SA | Banks | 6,400 | 46,734 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 13,200 | 71,001 | |||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 2,800 | 25,478 | |||||||||||
Petroleo Brasileiro SA | Oil, Gas & Consumable Fuels | 16,200 | 120,138 | |||||||||||
Telefonica Brasil SA | Diversified Telecommunication Services | 8,409 | 95,009 | |||||||||||
TIM SA | Wireless Telecommunication Services | 12,000 | 34,824 | |||||||||||
Vale SA | Metals & Mining | 17,472 | 351,503 | |||||||||||
Vibra Energia SA | Specialty Retail | 10,800 | 53,137 | |||||||||||
|
| |||||||||||||
| 1,156,326 | ||||||||||||||
|
| |||||||||||||
| Chile 0.3% | ||||||||||||||
Cencosud SA | Food & Staples Retailing | 9,450 | 18,613 | |||||||||||
Compania Cervecerias Unidas SA | Beverages | 2,028 | 15,177 | |||||||||||
Enel Chile SA | Electric Utilities | 440,766 | 13,163 | |||||||||||
|
| |||||||||||||
| 46,953 | ||||||||||||||
|
| |||||||||||||
| China 25.8% | ||||||||||||||
360 DigiTech Inc. | Consumer Finance | 1,002 | 15,421 | |||||||||||
| b | A-Living Services Co. Ltd., 144A | Commercial Services & Supplies | 7,000 | 9,796 | ||||||||||
Agile Group Holdings Ltd. | Real Estate Management & Development | 12,000 | 6,083 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 61,800 | 29,984 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 444,000 | 170,651 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 4,200 | 26,127 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 24,180 | 124,429 | |||||||||||
Anhui Gujing Distillery Co. Ltd., B | Beverages | 600 | 7,756 | |||||||||||
Apeloa Pharmaceutical Co. Ltd., A | Pharmaceuticals | 1,000 | 4,924 | |||||||||||
Bank of Beijing Co. Ltd., A | Banks | 19,800 | 14,285 | |||||||||||
Bank of Changsha Co. Ltd., A | Banks | 1,600 | 1,928 | |||||||||||
Bank of Chengdu Co. Ltd., A | Banks | 2,400 | 5,679 | |||||||||||
Bank of China Ltd., A | Banks | 10,600 | 5,460 | |||||||||||
Bank of China Ltd., H | Banks | 492,000 | 197,896 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 38,400 | 30,911 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 156,400 | 112,236 | |||||||||||
Bank of Jiangsu Co. Ltd., A | Banks | 9,000 | 9,995 | |||||||||||
Bank of Nanjing Co. Ltd., A | Banks | 8,200 | 13,783 | |||||||||||
Bank of Shanghai Co. Ltd., A | Banks | 6,000 | 6,276 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 18,600 | 19,778 | |||||||||||
Beijing Enterprises Holdings Ltd. | Gas Utilities | 6,000 | 19,039 | |||||||||||
By-health Co. Ltd., A | Personal Products | 1,000 | 3,354 | |||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 132,000 | 22,586 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 162,000 | 82,123 | |||||||||||
China Coal Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 16,000 | 12,034 | |||||||||||
China Communications Services Corp. Ltd., H | Construction & Engineering | 24,000 | 10,879 | |||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 24,000 | 70,179 | |||||||||||
China Construction Bank Corp., A | Banks | 600 | 595 | |||||||||||
China Construction Bank Corp., H | Banks | 270,000 | 203,067 | |||||||||||
China Everbright Bank Co. Ltd., A | Banks | 35,800 | 18,610 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 54,000 | 20,479 | |||||||||||
| b,c | China Feihe Ltd., 144A, Reg S | Food Products | 48,000 | 47,562 | ||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 33,000 | 44,076 | |||||||||||
China Jinmao Holdings Group Ltd. | Real Estate Management & Development | 36,000 | 10,711 | |||||||||||
China Life Insurance Co. Ltd., H | Insurance | 54,000 | 83,020 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 24,000 | 37,817 | |||||||||||
| 46 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 18,000 | $ | 32,638 | ||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 32,800 | 19,738 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 96,000 | 36,162 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 57,000 | 70,892 | |||||||||||
China Overseas Property Holdings Ltd. | Real Estate Management & Development | 18,800 | 22,374 | |||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 4,800 | 17,331 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 33,600 | 82,033 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 14,200 | 9,663 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 288,000 | 144,526 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 48,000 | 26,907 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 48,000 | 40,023 | |||||||||||
China Resources Power Holdings Co. Ltd. | Independent Power and Renewable Electricity Producers | 22,600 | 42,537 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 6,600 | 30,951 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 66,090 | 211,822 | |||||||||||
China State Construction Engineering Corp. Ltd., A | Construction & Engineering | 16,800 | 14,397 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 21,600 | 26,450 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 17,400 | 60,302 | |||||||||||
| a | Chongqing Brewery Co. Ltd., A | Beverages | 600 | 10,135 | ||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A | Banks | 4,200 | 2,633 | |||||||||||
CITIC Ltd. | Industrial Conglomerates | 40,000 | 44,488 | |||||||||||
| a | COSCO SHIPPING Holdings Co. Ltd., A | Marine | 4,800 | 11,720 | ||||||||||
| a | COSCO SHIPPING Holdings Co. Ltd., H | Marine | 27,000 | 47,095 | ||||||||||
CSPC Pharmaceutical Group Ltd. | Pharmaceuticals | 60,000 | 69,336 | |||||||||||
Daan Gene Co. Ltd. | Biotechnology | 1,460 | 4,289 | |||||||||||
| b | Dali Foods Group Co. Ltd., 144A | Food Products | 30,000 | 15,744 | ||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 42,000 | 31,588 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 12,400 | 11,935 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 3,000 | 41,313 | |||||||||||
| a | Fujian Sunner Development Co. Ltd. | Food Products | 1,000 | 3,122 | ||||||||||
G-bits Network Technology Xiamen Co. Ltd., A | Entertainment | 100 | 5,679 | |||||||||||
Greendland Holdings Corp. Ltd., A | Real Estate Management & Development | 5,840 | 4,959 | |||||||||||
Guangzhou R&F Properties Co. Ltd., H | Real Estate Management & Development | 21,600 | 7,668 | |||||||||||
Guangzhou Shiyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 600 | 6,060 | |||||||||||
Haitian International Holdings Ltd. | Machinery | 8,000 | 20,788 | |||||||||||
Haitong Securities Co. Ltd., H | Capital Markets | 20,800 | 15,883 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 600 | 2,759 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 1,600 | 3,816 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 3,000 | 13,733 | |||||||||||
Hengan International Group Co. Ltd. | Personal Products | 9,000 | 41,602 | |||||||||||
Hithink RoyalFlush Information Network Co. Ltd., A | Capital Markets | 600 | 9,055 | |||||||||||
Huaxia Bank Co. Ltd., A | Banks | 10,800 | 9,459 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 1,600 | 4,980 | |||||||||||
Hunan Valin Steel Co. Ltd., A | Metals & Mining | 6,400 | 5,545 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 17,400 | 13,074 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 312,000 | 191,629 | |||||||||||
Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | Chemicals | 7,600 | 5,495 | |||||||||||
| franklintempleton.com | Annual Report | 47 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 4,200 | $ | 24,407 | ||||||||||
| a | Inner Mongolia Yuan Xing Energy Co. Ltd., A | Chemicals | 1,600 | 2,468 | ||||||||||
Intco Medical Technology Co. Ltd. | Health Care Equipment & Supplies | 600 | 4,370 | |||||||||||
Jafron Biomedical Co. Ltd., A | Health Care Equipment & Supplies | 670 | 4,791 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 21,000 | 21,988 | |||||||||||
Jiangsu Yuyue Medical Equipment & Supply Co. Ltd., A | Health Care Equipment & Supplies | 400 | 1,754 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 1,800 | 4,820 | |||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 1,800 | 2,186 | |||||||||||
Jinke Properties Group Co. Ltd., A | Real Estate Management & Development | 1,800 | 1,392 | |||||||||||
Juewei Food Co. Ltd., A | Food Products | 400 | 2,655 | |||||||||||
Kingboard Holdings Ltd. | Electronic Equipment, Instruments & Components | 9,000 | 43,785 | |||||||||||
Kingfa Sci & Tech Co. Ltd., A | Chemicals | 1,800 | 2,762 | |||||||||||
Kunlun Tech Co. Ltd. | Entertainment | 1,000 | 2,653 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 660 | 178,721 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 18,000 | 9,401 | |||||||||||
Maxscend Microelectronics Co. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 6,614 | |||||||||||
Muyuan Foods Co. Ltd. | Food Products | 4,220 | 37,799 | |||||||||||
New China Life Insurance Co. Ltd., A | Insurance | 1,000 | 5,565 | |||||||||||
New China Life Insurance Co. Ltd., H | Insurance | 10,600 | 29,642 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 24,000 | 20,962 | |||||||||||
Ningxia Baofeng Energy Group Co. Ltd., A | Chemicals | 4,000 | 9,363 | |||||||||||
Ovctek China Inc., A | Health Care Equipment & Supplies | 689 | 3,965 | |||||||||||
Perfect World Co. Ltd. | Entertainment | 1,600 | 3,241 | |||||||||||
PetroChina Co. Ltd., A | Oil, Gas & Consumable Fuels | 9,000 | 7,826 | |||||||||||
PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 240,000 | 124,422 | |||||||||||
PICC Property and Casualty Co. Ltd., H | Insurance | 84,000 | 86,023 | |||||||||||
| b | Postal Savings Bank of China Co. Ltd., 144A | Banks | 108,000 | 87,571 | ||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 4,000 | 2,810 | |||||||||||
Seazen Group Ltd. | Real Estate Management & Development | 28,000 | 15,088 | |||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 1,600 | 8,108 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 9,600 | 24,877 | |||||||||||
Shandong Buchang Pharmaceuticals Co. Ltd., A | Pharmaceuticals | 600 | 2,247 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 1,800 | 9,235 | |||||||||||
Shandong Sun Paper Industry JSC Ltd., A | Paper & Forest Products | 1,800 | 3,232 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 8,200 | 15,811 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A | Banks | 19,800 | 24,952 | |||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,400 | 6,276 | |||||||||||
Shanxi Taigang Stainless Steel Co. Ltd., A | Metals & Mining | 2,800 | 2,955 | |||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,600 | 4,063 | |||||||||||
Shenzhen International Holdings Ltd. | Transportation Infrastructure | 14,000 | 14,802 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 973 | 47,093 | |||||||||||
| a | Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 600 | 2,077 | ||||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd., A | Pharmaceuticals | 600 | 3,166 | |||||||||||
Shimao Group Holdings Ltd. | Real Estate Management & Development | 9,000 | 5,080 | |||||||||||
Sichuan Chuantou Energy Co Ltd., A | Independent Power and Renewable Electricity Producers | 2,400 | 4,060 | |||||||||||
| 48 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| a | Sichuan Hebang Biotechnology Co. Ltd., A | Chemicals | 4,000 | $ | 2,212 | |||||||||
Sichuan Swellfun Co. Ltd., A | Beverages | 400 | 5,190 | |||||||||||
Sinotruk Hong Kong Ltd. | Machinery | 6,000 | 9,194 | |||||||||||
| b | Smoore International Holdings Ltd., 144A | Tobacco | 15,000 | 36,009 | ||||||||||
Sunac China Holdings Ltd. | Real Estate Management & Development | 18,000 | 10,527 | |||||||||||
The People’s Insurance Co. Group of China Ltd., H | Insurance | 114,000 | 37,411 | |||||||||||
Toly Bread Co. Ltd., A | Food Products | 920 | 2,916 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 1,800 | 4,956 | |||||||||||
| a | Topchoice Medical Investment Corp., A | Health Care Providers & Services | 400 | 9,016 | ||||||||||
Uni-President China Holdings Ltd. | Food Products | 12,000 | 10,466 | |||||||||||
| a | Vipshop Holdings Ltd., ADR | Internet & Direct Marketing Retail | 5,130 | 46,170 | ||||||||||
Want Want China Holdings Ltd. | Food Products | 60,000 | 55,469 | |||||||||||
Weihai Guangwei Composites Co. Ltd., A | Chemicals | 400 | 3,715 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 1,800 | 6,649 | |||||||||||
Xiamen C & D Inc., A | Trading Companies & Distributors | 2,400 | 4,809 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,800 | 10,871 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 24,000 | 71,252 | |||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 600 | 7,349 | |||||||||||
Yihai International Holding Ltd. | Food Products | 5,600 | 16,089 | |||||||||||
Yintai Gold Co. Ltd., A | Metals & Mining | 1,200 | 1,760 | |||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 22,800 | 22,679 | |||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 1,880 | 9,382 | |||||||||||
Zhejiang Semir Garment Co. Ltd. | Textiles, Apparel & Luxury Goods | 1,800 | 1,928 | |||||||||||
Zhejiang Supor Co. Ltd. | Household Durables | 600 | 4,729 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd., A | Building Products | 1,600 | 5,157 | |||||||||||
Zhuzhou Kibing Group Co. Ltd., A | Building Products | 1,200 | 2,508 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., A | Machinery | 3,000 | 3,138 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., H | Machinery | 9,600 | 6,117 | |||||||||||
|
| |||||||||||||
| 4,378,603 | ||||||||||||||
|
| |||||||||||||
| Czech Republic 0.4% | ||||||||||||||
CEZ AS | Electric Utilities | 1,698 | 71,625 | |||||||||||
|
| |||||||||||||
| Egypt 0.1% | ||||||||||||||
Eastern Co. SAE | Tobacco | 22,302 | 14,652 | |||||||||||
|
| |||||||||||||
| Greece 0.5% | ||||||||||||||
Hellenic Telecommunications Organization SA | Diversified Telecommunication Services | 3,234 | 59,013 | |||||||||||
JUMBO SA | Specialty Retail | 1,362 | 20,458 | |||||||||||
|
| |||||||||||||
| 79,471 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 0.1% | ||||||||||||||
Kingboard Laminates Holdings Ltd. | Electronic Equipment, Instruments & Components | 14,500 | 23,885 | |||||||||||
|
| |||||||||||||
| Hungary 0.4% | ||||||||||||||
MOL Hungarian Oil & Gas PLC | Oil, Gas & Consumable Fuels | 3,388 | 30,076 | |||||||||||
Richter Gedeon Nyrt | Pharmaceuticals | 1,470 | 31,265 | |||||||||||
|
| |||||||||||||
| 61,341 | ||||||||||||||
|
| |||||||||||||
| India 13.7% | ||||||||||||||
Adani Total Gas Ltd | Gas Utilities | 2,946 | 83,580 | |||||||||||
Ambuja Cements Ltd. | Construction Materials | 7,704 | 30,425 | |||||||||||
Asian Paints Ltd. | Chemicals | 4,170 | 169,494 | |||||||||||
Bajaj Auto Ltd. | Automobiles | 1,008 | 48,594 | |||||||||||
Bharat Electronics Ltd. | Aerospace & Defense | 8,256 | 22,968 | |||||||||||
| franklintempleton.com | Annual Report | 49 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 6,636 | $ | 31,470 | ||||||||||
Bharti Infratel Ltd. | Diversified Telecommunication Services | 7,434 | 21,784 | |||||||||||
Britannia Industries Ltd. | Food Products | 1,536 | 64,995 | |||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 28,104 | 67,891 | |||||||||||
Colgate-Palmolive (India) Ltd. | Personal Products | 2,016 | 41,032 | |||||||||||
Dabur India Ltd. | Personal Products | 7,926 | 56,086 | |||||||||||
GAIL India Ltd. | Gas Utilities | 23,694 | 48,670 | |||||||||||
HCL Technologies Ltd. | IT Services | 11,976 | 183,927 | |||||||||||
| b | HDFC Asset Management Co. Ltd., 144A | Capital Markets | 858 | 24,300 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 1,740 | 52,680 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 11,664 | 41,461 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 24,078 | 37,797 | |||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 3,376 | 16,625 | |||||||||||
Infosys Ltd. | IT Services | 7,536 | 189,641 | |||||||||||
ITC Ltd. | Tobacco | 49,890 | 165,027 | |||||||||||
| b,c | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | IT Services | 642 | 52,151 | ||||||||||
Marico Ltd. | Personal Products | 8,472 | 56,316 | |||||||||||
Mindtree Ltd. | IT Services | 522 | 29,642 | |||||||||||
Mphasis Ltd. | IT Services | 600 | 26,738 | |||||||||||
Nestle India Ltd. | Food Products | 552 | 126,613 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 84 | 47,877 | |||||||||||
Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 10,800 | 27,615 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 2,016 | 65,297 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 3,858 | 190,415 | |||||||||||
Tech Mahindra Ltd. | IT Services | 8,376 | 165,746 | |||||||||||
Vedanta Ltd. | Metals & Mining | 8,560 | 45,565 | |||||||||||
Wipro Ltd. | IT Services | 13,278 | 103,718 | |||||||||||
|
| |||||||||||||
| 2,336,140 | ||||||||||||||
|
| |||||||||||||
| Indonesia 2.2% | ||||||||||||||
Adaro Energy Tbk PT | Oil, Gas & Consumable Fuels | 202,600 | 37,946 | |||||||||||
Gudang Garam Tbk PT | Tobacco | 7,600 | 16,721 | |||||||||||
Indofood Sukses Makmur Tbk PT | Food Products | 52,800 | 21,874 | |||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 708,000 | 225,771 | |||||||||||
Unilever Indonesia Tbk PT | Household Products | 138,600 | 35,319 | |||||||||||
United Tractors Tbk PT | Oil, Gas & Consumable Fuels | 25,800 | 45,897 | |||||||||||
|
| |||||||||||||
| 383,528 | ||||||||||||||
|
| |||||||||||||
| Kuwait 0.3% | ||||||||||||||
Mobile Telecommunications Co. KSCP | Wireless Telecommunication Services | 26,064 | 53,878 | |||||||||||
|
| |||||||||||||
| Malaysia 1.8% | ||||||||||||||
Digi.com Bhd. | Wireless Telecommunication Services | 51,600 | 47,860 | |||||||||||
Hartalega Holdings Bhd. | Health Care Equipment & Supplies | 36,600 | 42,217 | |||||||||||
Inari Amertron Bhd | Electronic Equipment, Instruments & Components | 20,400 | 14,895 | |||||||||||
MISC Bhd. | Marine | 14,400 | 25,172 | |||||||||||
Nestle (Malaysia) Bhd. | Food Products | 1,200 | 38,128 | |||||||||||
Petronas Gas Bhd. | Gas Utilities | 12,000 | 47,546 | |||||||||||
Sime Darby Bhd. | Industrial Conglomerates | 30,600 | 17,466 | |||||||||||
Top Glove Corp. Bhd. | Health Care Equipment & Supplies | 115,200 | 52,603 | |||||||||||
Westports Holdings Bhd. | Transportation Infrastructure | 16,000 | 15,221 | |||||||||||
|
| |||||||||||||
| 301,108 | ||||||||||||||
|
| |||||||||||||
| Mexico 3.6% | ||||||||||||||
Arca Continental SAB de CV | Beverages | 3,090 | 20,957 | |||||||||||
Coca-Cola Femsa SAB de CV | Beverages | 4,122 | 22,640 | |||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs) | 39,030 | 45,602 | |||||||||||
| 50 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Mexico (continued) | ||||||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 43,332 | $ | 258,575 | ||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 24,690 | 34,642 | |||||||||||
Megacable Holdings SAB de CV | Media | 4,782 | 14,371 | |||||||||||
Wal-Mart de Mexico SAB de CV | Food & Staples Retailing | 52,026 | 213,718 | |||||||||||
|
| |||||||||||||
| 610,505 | ||||||||||||||
|
| |||||||||||||
| Philippines 0.5% | ||||||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 450 | 22,089 | |||||||||||
Manila Electric Co. | Electric Utilities | 3,400 | 24,548 | |||||||||||
PLDT Inc. | Wireless Telecommunication Services | 1,040 | 37,182 | |||||||||||
|
| |||||||||||||
| 83,819 | ||||||||||||||
|
| |||||||||||||
| Poland 1.0% | ||||||||||||||
CD Projekt SA | Entertainment | 552 | 23,014 | |||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 3,864 | 70,488 | |||||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | Oil, Gas & Consumable Fuels | 23,382 | 34,821 | |||||||||||
Powszechny Zaklad Ubezpieczen SA | Insurance | 4,872 | 39,575 | |||||||||||
|
| |||||||||||||
| 167,898 | ||||||||||||||
|
| |||||||||||||
| Qatar 1.5% | ||||||||||||||
Industries Qatar QSC | Industrial Conglomerates | 23,784 | 124,088 | |||||||||||
Masraf Al Rayan QSC | Banks | 46,410 | 65,886 | |||||||||||
Qatar Electricity & Water Co. QSC | Multi-Utilities | 6,720 | 33,768 | |||||||||||
Qatar Fuel QSC | Oil, Gas & Consumable Fuels | 6,328 | 31,069 | |||||||||||
|
| |||||||||||||
| 254,811 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| d | Alrosa PJSC | Metals & Mining | 54,971 | — | ||||||||||
| d | Gazprom PJSC | Oil, Gas & Consumable Fuels | 44,709 | — | ||||||||||
| d | Inter RAO UES PJSC | Electric Utilities | 811,741 | — | ||||||||||
| d | LUKOIL PJSC | Oil, Gas & Consumable Fuels | 2,268 | — | ||||||||||
| d | MMC Norilsk Nickel PJSC | Metals & Mining | 693 | — | ||||||||||
| d | Mobile TeleSystems PJSC, ADR | Wireless Telecommunication Services | 9,527 | — | ||||||||||
| d | Moscow Exchange MICEX | Capital Markets | 21,224 | — | ||||||||||
| d | NLMK PJSC | Metals & Mining | 35,119 | — | ||||||||||
| c,d | PhosAgro PJSC, GDR, Reg S | Chemicals | 3,241 | — | ||||||||||
| d | Polymetal International PLC | Metals & Mining | 7,294 | — | ||||||||||
| d | Polyus Gold OJSC | Metals & Mining | 756 | — | ||||||||||
| d | Rosneft PJSC | Oil, Gas & Consumable Fuels | 20,055 | — | ||||||||||
| d | Severstal PAO | Metals & Mining | 6,090 | — | ||||||||||
| d | Surgutneftegas PJSC | Oil, Gas & Consumable Fuels | 132,846 | — | ||||||||||
| d | Tatneft PAO | Oil, Gas & Consumable Fuels | 29,792 | — | ||||||||||
| d | TCS Group Holding PLC, GDR | Banks | 1,778 | — | ||||||||||
| a,d | United Co. RUSAL International PJSC | Metals & Mining | 24,749 | — | ||||||||||
|
| |||||||||||||
| — | ||||||||||||||
|
| |||||||||||||
| Saudi Arabia 4.5% | ||||||||||||||
Abdullah Al Othaim Markets Co. | Food & Staples Retailing | 564 | 17,590 | |||||||||||
Advanced Petrochemical Co. | Chemicals | 2,123 | 39,896 | |||||||||||
Al-Rajhi Bank | Banks | 4,704 | 201,376 | |||||||||||
Bupa Arabia for Cooperative Insurance Co. | Insurance | 790 | 37,694 | |||||||||||
Dr Sulaiman Al Habib Medical Services Group Co. | Health Care Providers & Services | 552 | 28,016 | |||||||||||
Jarir Marketing Co. | Specialty Retail | 1,098 | 57,659 | |||||||||||
Saudi Arabian Fertilizer Co. | Chemicals | 3,282 | 159,048 | |||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 5,880 | 168,963 | |||||||||||
Yanbu National Petrochemical Co. | Chemicals | 3,390 | 60,453 | |||||||||||
|
| |||||||||||||
| 770,695 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 51 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| South Africa 7.0% | ||||||||||||||
African Rainbow Minerals Ltd. | Metals & Mining | 2,034 | $ | 39,831 | ||||||||||
Anglo American Platinum Ltd. | Metals & Mining | 642 | 88,157 | |||||||||||
AngloGold Ashanti Ltd. | Metals & Mining | 6,204 | 148,811 | |||||||||||
Clicks Group Ltd. | Food & Staples Retailing | 3,282 | 69,413 | |||||||||||
Exxaro Resources Ltd. | Oil, Gas & Consumable Fuels | 4,836 | 73,315 | |||||||||||
Gold Fields Ltd. | Metals & Mining | 9,486 | 148,043 | |||||||||||
Harmony Gold Mining Co. Ltd. | Metals & Mining | 3,750 | 18,960 | |||||||||||
Impala Platinum Holdings Ltd. | Metals & Mining | 13,314 | 205,033 | |||||||||||
Kumba Iron Ore Ltd. | Metals & Mining | 1,572 | 70,504 | |||||||||||
Mr. Price Group Ltd. | Specialty Retail | 3,816 | 56,541 | |||||||||||
Sibanye Stillwater Ltd. | Metals & Mining | 32,106 | 131,390 | |||||||||||
Tiger Brands Ltd. | Food Products | 2,364 | 26,192 | |||||||||||
Vodacom Group Ltd. | Wireless Telecommunication Services | 10,530 | 115,299 | |||||||||||
|
| |||||||||||||
| 1,191,489 | ||||||||||||||
|
| |||||||||||||
| South Korea 7.9% | ||||||||||||||
Coway Co. Ltd. | Household Durables | 780 | 44,082 | |||||||||||
F&F Co. Ltd. | Textiles, Apparel & Luxury Goods | 24 | 14,752 | |||||||||||
GS Holdings Corp. | Oil, Gas & Consumable Fuels | 334 | 12,097 | |||||||||||
Hana Financial Group Inc. | Banks | 4,488 | 179,957 | |||||||||||
Industrial Bank of Korea | Banks | 4,404 | 39,424 | |||||||||||
KB Financial Group Inc. | Banks | 3,840 | 194,210 | |||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 102 | 49,231 | |||||||||||
KT&G Corp. | Tobacco | 1,860 | 123,841 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 288 | 36,830 | |||||||||||
| a | Pearl Abyss Corp. | Entertainment | 384 | 31,523 | ||||||||||
POSCO | Metals & Mining | 522 | �� | 126,188 | ||||||||||
S-1 Corp. | Commercial Services & Supplies | 246 | 14,471 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,610 | 149,875 | |||||||||||
SD Biosensor Inc. | Health Care Equipment & Supplies | 400 | 18,415 | |||||||||||
Seegene Inc. | Biotechnology | 570 | 24,031 | |||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 5,766 | 197,425 | |||||||||||
Woori Financial Group Inc. | Banks | 7,146 | 90,501 | |||||||||||
|
| |||||||||||||
| 1,346,853 | ||||||||||||||
|
| |||||||||||||
| Taiwan 13.8% | ||||||||||||||
Acer Inc. | Technology Hardware, Storage & Peripherals | 30,000 | 31,360 | |||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 4,835 | 62,354 | |||||||||||
Asia Cement Corp. | Construction Materials | 30,000 | 50,887 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 10,020 | 130,620 | |||||||||||
AU Optronics Corp. | Electronic Equipment, Instruments & Components | 54,000 | 37,412 | |||||||||||
Cathay Financial Holding Co. Ltd. | Insurance | 54,000 | 121,564 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 43,680 | 193,615 | |||||||||||
Compal Electronics Inc. | Technology Hardware, Storage & Peripherals | 42,000 | 39,286 | |||||||||||
Eclat Textile Co. Ltd. | Textiles, Apparel & Luxury Goods | 2,400 | 39,998 | |||||||||||
eMemory Technology Inc. | Semiconductors & Semiconductor Equipment | 526 | 33,963 | |||||||||||
Evergreen Marine Corp. Taiwan Ltd. | Marine | 19,500 | 91,880 | |||||||||||
Fubon Financial Holding Co. Ltd. | Insurance | 66,477 | 177,495 | |||||||||||
Innolux Corp. | Electronic Equipment, Instruments & Components | 66,000 | 38,700 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 1,380 | 90,791 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 30,000 | 71,305 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 9,000 | 40,836 | |||||||||||
momo.com Inc. | Internet & Direct Marketing Retail | 300 | 9,853 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 2,260 | 26,543 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 9,900 | 147,369 | |||||||||||
Ruentex Development Co. Ltd. | Real Estate Management & Development | 15,500 | 42,900 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 18,000 | 47,306 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 66,201 | 115,297 | |||||||||||
| 52 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Taiwan (continued) | ||||||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 22,060 | $ | 80,844 | ||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 8,220 | 171,277 | |||||||||||
United Microelectronics Corp. | Semiconductors & Semiconductor Equipment | 78,000 | 147,008 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 13,500 | 58,662 | |||||||||||
Wan Hai Lines Ltd. | Marine | 7,200 | 39,830 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 1,120 | 39,872 | |||||||||||
WPG Holdings Ltd. | Electronic Equipment, Instruments & Components | 18,000 | 35,181 | |||||||||||
| a | Yang Ming Marine Transport Corp. | Marine | 15,000 | 65,180 | ||||||||||
Yuanta Financial Holding Co. Ltd. | Diversified Financial Services | 66,000 | 60,814 | |||||||||||
|
| |||||||||||||
| 2,340,002 | ||||||||||||||
|
| |||||||||||||
| Thailand 1.7% | ||||||||||||||
Advanced Info Service PCL, NVDR | Wireless Telecommunication Services | 19,000 | 133,143 | |||||||||||
Bumrungrad Hospital PCL | Health Care Providers & Services | 400 | 1,883 | |||||||||||
Bumrungrad Hospital PCL, NVDR | Health Care Providers & Services | 5,400 | 25,416 | |||||||||||
Carabao Group PCL, NVDR | Beverages | 3,400 | 11,044 | |||||||||||
Intouch Holdings PCL, NVDR | Wireless Telecommunication Services | 28,600 | 66,877 | |||||||||||
Krung Thai Bank PCL, NVDR | Banks | 36,600 | 15,190 | |||||||||||
Osotspa PCL, NVDR | Beverages | 13,600 | 15,338 | |||||||||||
Sri Trang Gloves Thailand PCL, NVDR | Health Care Equipment & Supplies | 17,400 | 13,213 | |||||||||||
Thai Union Group PCL, NVDR | Food Products | 19,800 | 11,255 | |||||||||||
|
| |||||||||||||
| 293,359 | ||||||||||||||
|
| |||||||||||||
| Turkey 1.3% | ||||||||||||||
Aselsan Elektronik Sanayi Ve Ticaret A/S | Aerospace & Defense | 8,730 | 14,368 | |||||||||||
BIM Birlesik Magazalar A/S | Food & Staples Retailing | 7,914 | 45,673 | |||||||||||
Eregli Demir ve Celik Fabrikalari TAS | Metals & Mining | 27,084 | 59,900 | |||||||||||
Ford Otomotiv Sanayi AS | Automobiles | 1,428 | 29,080 | |||||||||||
Turkcell Iletisim Hizmetleri A/S | Wireless Telecommunication Services | 20,754 | 31,893 | |||||||||||
Turkiye Garanti Bankasi AS | Banks | 15,558 | 12,941 | |||||||||||
Turkiye Is Bankasi A/S, C | Banks | 25,384 | 15,281 | |||||||||||
Turkiye Sise ve Cam Fabrikalari AS | Industrial Conglomerates | 9,918 | 10,285 | |||||||||||
|
| |||||||||||||
| 219,421 | ||||||||||||||
|
| |||||||||||||
| United Arab Emirates 1.9% | ||||||||||||||
Abu Dhabi National Oil Co. for Distribution PJSC | Specialty Retail | 29,634 | 33,885 | |||||||||||
Dubai Islamic Bank PJSC | Banks | 29,160 | 48,983 | |||||||||||
Emirates Telecommunications Group Co. PJSC | Diversified Telecommunication Services | 23,712 | 238,602 | |||||||||||
|
| |||||||||||||
| 321,470 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks | 16,507,832 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 2.5% | ||||||||||||||
| Brazil 2.3% | ||||||||||||||
| e | Banco Bradesco SA, 4.514%, pfd. | Banks | 32,400 | 151,502 | ||||||||||
| e | Cia Energetica de Minas Gerais, 8.271%, pfd. | Electric Utilities | 12,000 | 38,409 | ||||||||||
| e | Gerdau SA, 10.191%, pfd. | Metals & Mining | 7,800 | 50,572 | ||||||||||
| e | Petroleo Brasileiro SA, 16.900%, pfd. | Oil, Gas & Consumable Fuels | 21,000 | 147,824 | ||||||||||
|
| |||||||||||||
| 388,307 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| d,e | Surgutneftegas PJSC, pfd. | Oil, Gas & Consumable Fuels | 162,582 | — | ||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 53 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Emerging Markets ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Preferred Stocks (continued) | ||||||||||||||
| South Korea 0.2% | ||||||||||||||
| e | LG Household & Health Care Ltd., 2.377%, pfd. | Personal Products | 28 | $ | 11,712 | |||||||||
| e | Samsung Electronics Co. Ltd., 1.721%, pfd. | Technology Hardware, Storage & Peripherals | 474 | 24,638 | ||||||||||
|
| |||||||||||||
| 36,350 | ||||||||||||||
|
| |||||||||||||
Total Preferred Stocks | 424,657 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $16,262,369) | 16,932,489 | |||||||||||||
|
| |||||||||||||
Total Investments | 16,932,489 | |||||||||||||
Other Assets, less Liabilities 0.4% | 67,019 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 16,999,508 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon income producing
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $273,133, representing 1.6% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $99,713, representing 0.6% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eVariable rate security. The rate shown represents the yield at period end.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
MSCI Emerging Markets Index | Long | 2 | $ | 112,550 | 6/17/22 | $ | 2,836 | |||||||||||||
*As of year end
See Note 8 regarding other derivative information.
See Abbreviations on page 131.
| 54 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ Global Dividend ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 33.29 | $ | 23.32 | $ | 28.20 | $ | 28.22 | $ | 27.31 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsa: |
| |||||||||||||||||||
Net investment incomeb | 1.03 | 0.92 | 1.04 | 0.95 | 0.86 | |||||||||||||||
Net realized and unrealized gains (losses) | 2.98 | 9.95 | (4.90 | ) | (0.02 | ) | 1.03 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.01 | 10.87 | (3.86 | ) | 0.93 | 1.89 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.01 | ) | (0.90 | ) | (1.02 | ) | (0.95 | ) | (0.98 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 36.29 | $ | 33.29 | $ | 23.32 | $ | 28.20 | $ | 28.22 | ||||||||||
|
| |||||||||||||||||||
Total returnc | 12.14% | 47.20% | (14.34)% | 3.51% | 6.91% | |||||||||||||||
| Ratios to average net assetsd |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.45% | 0.45% | 0.45% | 0.45% | 0.75% | e | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.45% | 0.45% | 0.45% | 0.45% | 0.45% | e | ||||||||||||||
Net investment income | 2.92% | 3.21% | 3.60% | 3.43% | 3.05% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $30,851 | $26,632 | $18,653 | $16,920 | $16,933 | |||||||||||||||
Portfolio turnover ratef | 28.73% | g | 42.38% | g | 19.79% | g | 25.75% | 43.32% | ||||||||||||
aThe 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 and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal 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.
dRatios are annualized for periods less than one year.
eEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 27.86% | 42.38% | 19.79% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 55 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ Global Dividend ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.2% | ||||||||||||||
| Australia 9.3% | ||||||||||||||
Australian Stock Exchange Ltd. | Capital Markets | 4,097 | $ | 251,669 | ||||||||||
Commonwealth Bank of Australia | Banks | 8,517 | 676,488 | |||||||||||
Macquarie Group Ltd. | Capital Markets | 4,029 | 615,009 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 3,876 | 346,691 | |||||||||||
Rio Tinto PLC | Metals & Mining | 10,098 | 808,502 | |||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 6,018 | 160,342 | |||||||||||
|
| |||||||||||||
| 2,858,701 | ||||||||||||||
|
| |||||||||||||
| Belgium 0.1% | ||||||||||||||
Proximus SADP | Diversified Telecommunication Services | 2,125 | 39,840 | |||||||||||
|
| |||||||||||||
| Canada 8.2% | ||||||||||||||
IGM Financial Inc. | Capital Markets | 1,700 | 60,117 | |||||||||||
Royal Bank of Canada | Banks | 5,780 | 636,931 | |||||||||||
Sun Life Financial Inc. | Insurance | 7,446 | 416,101 | |||||||||||
TELUS Corp. | Diversified Telecommunication Services | 4,148 | 108,461 | |||||||||||
The Bank of Nova Scotia | Banks | 9,214 | 660,962 | |||||||||||
The Toronto-Dominion Bank | Banks | 8,262 | 656,105 | |||||||||||
|
| |||||||||||||
| 2,538,677 | ||||||||||||||
|
| |||||||||||||
| China 1.3% | ||||||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 17,000 | 26,787 | |||||||||||
China Merchants Bank Co. Ltd., A | Banks | 11,900 | 87,730 | |||||||||||
China Vanke Co. Ltd., A | Real Estate Management & Development | 8,500 | 25,642 | |||||||||||
China Vanke Co. Ltd., H | Real Estate Management & Development | 22,100 | 50,062 | |||||||||||
Logan Group Co. Ltd. | Real Estate Management & Development | 17,000 | 4,841 | |||||||||||
| a,b | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 26,560 | 136,676 | ||||||||||
SITC International Holdings Co. Ltd. | Marine | 17,000 | 60,238 | |||||||||||
|
| |||||||||||||
| 391,976 | ||||||||||||||
|
| |||||||||||||
| Finland 1.6% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 2,125 | 129,143 | |||||||||||
Kone OYJ, B | Machinery | 5,984 | 316,859 | |||||||||||
Orion OYJ | Pharmaceuticals | 1,122 | 51,371 | |||||||||||
|
| |||||||||||||
| 497,373 | ||||||||||||||
|
| |||||||||||||
| Germany 2.7% | ||||||||||||||
Allianz SE | Insurance | 2,584 | 622,600 | |||||||||||
Hannover Rueck SE | Insurance | 782 | 134,299 | |||||||||||
LEG Immobilien AG | Real Estate Management & Development | 582 | 66,861 | |||||||||||
|
| |||||||||||||
| 823,760 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 0.1% | ||||||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 34,000 | 44,110 | |||||||||||
|
| |||||||||||||
| Ireland 1.2% | ||||||||||||||
Seagate Technology Holdings PLC | Technology Hardware, Storage & Peripherals | 4,250 | 382,075 | |||||||||||
|
| |||||||||||||
| Japan 8.6% | ||||||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 1,806 | 193,285 | |||||||||||
Japan Tobacco Inc. | Tobacco | 12,530 | 215,500 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 20,181 | 665,911 | |||||||||||
Lawson Inc. | Food & Staples Retailing | 531 | 20,452 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 14,556 | 425,137 | |||||||||||
Nomura Real Estate Holdings Inc. | Real Estate Management & Development | 1,200 | 28,998 | |||||||||||
ORIX Corp. | Diversified Financial Services | 16,887 | 340,523 | |||||||||||
| �� | Sekisui House Ltd. | Household Durables | 6,350 | 124,044 | ||||||||||
Sompo Holdings Inc. | Insurance | 3,290 | 145,858 | |||||||||||
T&D Holdings Inc. | Insurance | 5,300 | 72,966 | |||||||||||
| 56 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Dividend ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Tokio Marine Holdings Inc. | Insurance | 7,293 | $ | 428,297 | ||||||||||
|
| |||||||||||||
| 2,660,971 | ||||||||||||||
|
| |||||||||||||
| Malaysia 0.1% | ||||||||||||||
Petronas Gas Bhd. | Gas Utilities | 10,200 | 40,414 | |||||||||||
|
| |||||||||||||
| New Zealand 0.4% | ||||||||||||||
Spark New Zealand Ltd. | Diversified Telecommunication Services | 34,918 | 111,235 | |||||||||||
|
| |||||||||||||
| Norway 0.4% | ||||||||||||||
Gjensidige Forsikring ASA | Insurance | 2,074 | 51,874 | |||||||||||
Orkla ASA | Food Products | 8,891 | 79,677 | |||||||||||
|
| |||||||||||||
| 131,551 | ||||||||||||||
|
| |||||||||||||
| Philippines 0.1% | ||||||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 315 | 15,462 | |||||||||||
|
| |||||||||||||
| Qatar 0.7% | ||||||||||||||
Masraf Al Rayan QSC | Banks | 55,709 | 79,087 | |||||||||||
Qatar International Islamic Bank QSC | Banks | 8,844 | 26,908 | |||||||||||
Qatar Islamic Bank SAQ | Banks | 16,558 | 108,394 | |||||||||||
|
| |||||||||||||
| 214,389 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| c | Polymetal International PLC | Metals & Mining | 4,860 | — | ||||||||||
| c | Tatneft PAO | Oil, Gas & Consumable Fuels | 15,990 | — | ||||||||||
|
| |||||||||||||
| — | ||||||||||||||
|
| |||||||||||||
| Saudi Arabia 3.0% | ||||||||||||||
Al-Rajhi Bank | Banks | 15,606 | 668,086 | |||||||||||
Jarir Marketing Co. | Specialty Retail | 1,275 | 66,953 | |||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 6,834 | 196,376 | |||||||||||
|
| |||||||||||||
| 931,415 | ||||||||||||||
|
| |||||||||||||
| Singapore 0.2% | ||||||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 4,143 | 53,787 | |||||||||||
|
| |||||||||||||
| South Africa 0.2% | ||||||||||||||
Mr. Price Group Ltd. | Specialty Retail | 4,475 | 66,305 | |||||||||||
|
| |||||||||||||
| Spain 0.3% | ||||||||||||||
Red Electrica Corp. SA | Electric Utilities | 4,658 | 96,450 | |||||||||||
|
| |||||||||||||
| Switzerland 8.1% | ||||||||||||||
EMS-Chemie Holding AG | Chemicals | 110 | 107,759 | |||||||||||
Novartis AG | Pharmaceuticals | 7,378 | 651,413 | |||||||||||
Roche Holding AG, Bearer | Pharmaceuticals | 46 | 20,244 | |||||||||||
Roche Holding AG, Non-Voting | Pharmaceuticals | 1,462 | 582,179 | |||||||||||
SGS SA | Professional Services | 93 | 260,329 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 289 | 174,295 | |||||||||||
Zurich Insurance Group AG | Insurance | 1,411 | 700,402 | |||||||||||
|
| |||||||||||||
| 2,496,621 | ||||||||||||||
|
| |||||||||||||
| Taiwan 2.9% | ||||||||||||||
Chailease Holding Co. Ltd. | Diversified Financial Services | 20,020 | 177,131 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 1,400 | 16,443 | |||||||||||
Realtek Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 3,718 | 55,864 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 27,370 | 570,298 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 14,870 | 64,615 | |||||||||||
|
| |||||||||||||
| 884,351 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 57 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Dividend ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Turkey 0.1% | ||||||||||||||
Ford Otomotiv Sanayi AS | Automobiles | 1,445 | $ | 29,427 | ||||||||||
|
| |||||||||||||
| United Arab Emirates 1.1% | ||||||||||||||
Emirates Telecommunications Group Co. PJSC | Diversified Telecommunication Services | 33,218 | 334,256 | |||||||||||
|
| |||||||||||||
| United Kingdom 5.7% | ||||||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 29,580 | 641,527 | |||||||||||
Legal & General Group PLC | Insurance | 81,005 | 290,102 | |||||||||||
Schroders PLC | Capital Markets | 1,717 | 73,043 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 4,437 | 84,855 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 6,664 | 127,094 | |||||||||||
Unilever PLC | Personal Products | 11,713 | 532,827 | |||||||||||
|
| |||||||||||||
| 1,749,448 | ||||||||||||||
|
| |||||||||||||
| United States 42.8% | ||||||||||||||
3M Co. | Industrial Conglomerates | 3,383 | 503,661 | |||||||||||
Altria Group Inc. | Tobacco | 13,702 | 715,929 | |||||||||||
Amgen Inc. | Biotechnology | 2,958 | 715,304 | |||||||||||
Cisco Systems Inc. | Communications Equipment | 11,254 | 627,523 | |||||||||||
Cummins Inc. | Machinery | 2,244 | 460,267 | |||||||||||
Eaton Corp. PLC | Electrical Equipment | 3,485 | 528,884 | |||||||||||
Emerson Electric Co. | Electrical Equipment | 6,375 | 625,069 | |||||||||||
Fidelity National Financial Inc. | Insurance | 5,270 | 257,387 | |||||||||||
Garmin Ltd. | Household Durables | 3,009 | 356,897 | |||||||||||
Gilead Sciences Inc. | Biotechnology | 8,891 | 528,570 | |||||||||||
International Business Machines Corp. | IT Services | 5,168 | 671,943 | |||||||||||
Johnson & Johnson | Pharmaceuticals | 3,723 | 659,827 | |||||||||||
Kimberly-Clark Corp. | Household Products | 4,539 | 559,023 | |||||||||||
LyondellBasell Industries NV, A | Chemicals | 3,077 | 316,377 | |||||||||||
Merck & Co. Inc. | Pharmaceuticals | 7,259 | 595,601 | |||||||||||
Nucor Corp. | Metals & Mining | 4,046 | 601,438 | |||||||||||
Packaging Corp. of America | Containers & Packaging | 1,309 | 204,348 | |||||||||||
Paychex Inc. | IT Services | 4,811 | 656,557 | |||||||||||
Philip Morris International Inc. | Tobacco | 6,596 | 619,628 | |||||||||||
QUALCOMM Inc. | Semiconductors & Semiconductor Equipment | 3,230 | 493,609 | |||||||||||
Target Corp. | Multiline Retail | 2,397 | 508,691 | |||||||||||
The Coca-Cola Co. | Beverages | 10,880 | 674,560 | |||||||||||
The Procter & Gamble Co. | Household Products | 4,097 | 626,022 | |||||||||||
United Parcel Service Inc., B | Air Freight & Logistics | 2,907 | 623,435 | |||||||||||
Western Union Co. | IT Services | 4,182 | 78,371 | |||||||||||
|
| |||||||||||||
| 13,208,921 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $26,082,580) | 30,601,515 | |||||||||||||
|
| |||||||||||||
Total Investments | 30,601,515 | |||||||||||||
Other Assets, less Liabilities 0.8% | 249,186 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 30,850,701 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $136,676, representing 0.4% of net assets.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the value of this security was $136,676, representing 0.4% of net assets.
cFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
| 58 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Dividend ETF (continued)
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
MSCI ALL Country World Index | Long | 5 | $ | 185,750 | 6/17/22 | $ | 10,033 | |||||||||||||
*As of year end.
See Note 8 regarding other derivative information.
See Abbreviations on page 131.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 59 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ Global Equity ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 37.65 | $ | 26.77 | $ | 30.90 | $ | 30.14 | $ | 27.18 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsa: |
| |||||||||||||||||||
Net investment incomeb | 1.05 | 0.81 | 0.90 | 0.89 | 0.74 | |||||||||||||||
Net realized and unrealized gains (losses) | 2.34 | 10.97 | (4.00 | ) | 0.67 | 3.01 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 3.39 | 11.78 | (3.10 | ) | 1.56 | 3.75 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.00 | ) | (0.90 | ) | (1.03 | ) | (0.80 | ) | (0.79 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 40.04 | $ | 37.65 | $ | 26.77 | $ | 30.90 | $ | 30.14 | ||||||||||
|
| |||||||||||||||||||
Total returnc | 9.00% | 44.55% | (10.53)% | 5.44% | 13.91% | |||||||||||||||
| Ratios to average net assetsd |
| |||||||||||||||||||
Total expenses | 0.35% | 0.35% | 0.35% | 0.35% | 0.90% | e | ||||||||||||||
Total expenses before waiver and payments by affiliates | 0.35% | 0.34% | 0.34% | 0.34% | 0.35% | e | ||||||||||||||
Net investment income | 2.63% | 2.45% | 2.86% | 2.99% | 2.53% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $16,014 | $15,059 | $16,059 | $24,721 | $18,082 | |||||||||||||||
Portfolio turnover ratef | 24.13% | g | 31.70% | g | 27.85% | g | 34.99% | 35.01% | ||||||||||||
aThe 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 and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal 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.
dRatios are annualized for periods less than one year.
eEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 24.13% | 31.70% | 27.85% |
| 60 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ Global Equity ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests 98.9% | ||||||||||||||
| Australia 5.3% | ||||||||||||||
Aurizon Holdings Ltd. | Road & Rail | 2,122 | $ | 5,880 | ||||||||||
Australian Stock Exchange Ltd. | Capital Markets | 114 | 7,003 | |||||||||||
BHP Group Ltd. | Metals & Mining | 7,144 | 277,628 | |||||||||||
BlueScope Steel Ltd. | Metals & Mining | 306 | 4,793 | |||||||||||
Brambles Ltd. | Commercial Services & Supplies | 1,642 | 12,220 | |||||||||||
Coles Group Ltd. | Food & Staples Retailing | �� | 1,436 | 19,313 | ||||||||||
CSL Ltd. | Biotechnology | 504 | 101,489 | |||||||||||
Dexus | Equity Real Estate Investment Trusts (REITs) | 626 | 5,147 | |||||||||||
Endeavour Group Ltd. | Food & Staples Retailing | 1,378 | 7,544 | |||||||||||
Evolution Mining Ltd. | Metals & Mining | 1,942 | 6,417 | |||||||||||
Fortescue Metals Group Ltd. | Metals & Mining | 3,408 | 52,874 | |||||||||||
Medibank Private Ltd. | Insurance | 3,386 | 7,832 | |||||||||||
Newcrest Mining Ltd. | Metals & Mining | 852 | 17,108 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 608 | 54,383 | |||||||||||
Rio Tinto PLC | Metals & Mining | 1,832 | 146,680 | |||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 508 | 13,535 | |||||||||||
Telstra Corp. Ltd. | Diversified Telecommunication Services | 5,042 | 14,994 | |||||||||||
Washington H. Soul Pattinson & Co. Ltd. | Oil, Gas & Consumable Fuels | 148 | 3,181 | |||||||||||
Wesfarmers Ltd. | Multiline Retail | 1,356 | 51,332 | |||||||||||
Woolworths Group Ltd. | Food & Staples Retailing | 1,408 | 39,396 | |||||||||||
|
| |||||||||||||
| 848,749 | ||||||||||||||
|
| |||||||||||||
| Austria 0.0%† | ||||||||||||||
OMV AG | Oil, Gas & Consumable Fuels | 144 | 6,952 | |||||||||||
|
| |||||||||||||
| Belgium 0.0%† | ||||||||||||||
Colruyt SA | Food & Staples Retailing | 67 | 2,795 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 200 | 3,750 | |||||||||||
|
| |||||||||||||
| 6,545 | ||||||||||||||
|
| |||||||||||||
| Brazil 1.2% | ||||||||||||||
Ambev SA | Beverages | 4,700 | 15,232 | |||||||||||
B3 SA – Brasil Bolsa Balcao | Capital Markets | 3,200 | 10,579 | |||||||||||
Banco Bradesco SA | Banks | 800 | 3,076 | |||||||||||
Banco do Brasil SA | Banks | 500 | 3,651 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 1,000 | 5,379 | |||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 200 | 1,820 | |||||||||||
Petroleo Brasileiro SA | Oil, Gas & Consumable Fuels | 2,400 | 17,798 | |||||||||||
Telefonica Brasil SA | Diversified Telecommunication Services | 600 | 6,779 | |||||||||||
TIM SA | Wireless Telecommunication Services | 800 | 2,322 | |||||||||||
Vale SA | Metals & Mining | 5,966 | 120,024 | |||||||||||
Vibra Energia SA | Specialty Retail | 800 | 3,936 | |||||||||||
|
| |||||||||||||
| 190,596 | ||||||||||||||
|
| |||||||||||||
| Canada 4.1% | ||||||||||||||
Agnico Eagle Mines Ltd. | Metals & Mining | 393 | 24,070 | |||||||||||
Algonquin Power & Utilities Corp. | Multi-Utilities | 598 | 9,283 | |||||||||||
Alimentation Couche-Tard Inc. | Food & Staples Retailing | 772 | 34,810 | |||||||||||
Barrick Gold Corp. | Metals & Mining | 906 | 22,239 | |||||||||||
BCE Inc. | Diversified Telecommunication Services | 112 | 6,214 | |||||||||||
Canadian Apartment Properties REIT | Equity Real Estate Investment Trusts (REITs) | 88 | 3,780 | |||||||||||
Canadian National Railway Co. | Road & Rail | 744 | 99,891 | |||||||||||
CCL Industries Inc., B | Containers & Packaging | 114 | 5,147 | |||||||||||
| a | CGI Inc. | IT Services | 216 | 17,222 | ||||||||||
Constellation Software Inc. | Software | 24 | 41,062 | |||||||||||
Dollarama Inc. | Multiline Retail | 304 | 17,256 | |||||||||||
Empire Co. Ltd., A | Food & Staples Retailing | 168 | 5,964 | |||||||||||
Fairfax Financial Holdings Ltd. | Insurance | 22 | 12,013 | |||||||||||
| franklintempleton.com | Annual Report | 61 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Canada (continued) | ||||||||||||||
Franco-Nevada Corp. | Metals & Mining | 202 | $ | 32,173 | ||||||||||
| b | Hydro One Ltd., 144A | Electric Utilities | 314 | 8,467 | ||||||||||
IGM Financial Inc. | Capital Markets | 82 | 2,900 | |||||||||||
Keyera Corp. | Oil, Gas & Consumable Fuels | 204 | 5,176 | |||||||||||
Kinross Gold Corp. | Metals & Mining | 702 | 4,125 | |||||||||||
Loblaw Cos. Ltd. | Food & Staples Retailing | 102 | 9,161 | |||||||||||
Magna International Inc. | Auto Components | 316 | 20,305 | |||||||||||
Metro Inc., A | Food & Staples Retailing | 256 | 14,749 | |||||||||||
Nutrien Ltd. | Chemicals | 300 | 31,036 | |||||||||||
Power Corp. of Canada | Insurance | 592 | 18,342 | |||||||||||
Quebecor Inc., B | Media | 180 | 4,294 | |||||||||||
RioCan Real Estate Investment Trust | Equity Real Estate Investment Trusts (REITs) | 194 | 3,919 | |||||||||||
Rogers Communications Inc., B | Wireless Telecommunication Services | 356 | 20,168 | |||||||||||
Shaw Communications Inc. | Media | 460 | 14,289 | |||||||||||
TC Energy Corp. | Oil, Gas & Consumable Fuels | 718 | 40,532 | |||||||||||
TELUS Corp. | Diversified Telecommunication Services | 452 | 11,819 | |||||||||||
The Bank of Nova Scotia | Banks | 928 | 66,570 | |||||||||||
Thomson Reuters Corp. | Professional Services | 96 | 10,432 | |||||||||||
Tourmaline Oil Corp. | Oil, Gas & Consumable Fuels | 190 | 8,762 | |||||||||||
West Fraser Timber Co. Ltd. | Paper & Forest Products | 92 | 7,576 | |||||||||||
Wheaton Precious Metals Corp. | Metals & Mining | 448 | 21,323 | |||||||||||
WSP Global Inc. | Construction & Engineering | 62 | 8,235 | |||||||||||
|
| |||||||||||||
| 663,304 | ||||||||||||||
|
| |||||||||||||
| Chile 0.1% | ||||||||||||||
Antofagasta PLC | Metals & Mining | 302 | 6,652 | |||||||||||
Cencosud SA | Food & Staples Retailing | 772 | 1,521 | |||||||||||
Compania Cervecerias Unidas SA | Beverages | 200 | 1,497 | |||||||||||
|
| |||||||||||||
| 9,670 | ||||||||||||||
|
| |||||||||||||
| China 3.1% | ||||||||||||||
360 DigiTech Inc. | Consumer Finance | 76 | 1,170 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 4,800 | 2,329 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 34,000 | 13,068 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 300 | 1,866 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 1,670 | 8,594 | |||||||||||
Anhui Gujing Distillery Co. Ltd., B | Beverages | 100 | 1,293 | |||||||||||
Apeloa Pharmaceutical Co. Ltd., A | Pharmaceuticals | 100 | 492 | |||||||||||
Bank of Beijing Co. Ltd., A | Banks | 1,400 | 1,010 | |||||||||||
Bank of Chengdu Co. Ltd., A | Banks | 200 | 473 | |||||||||||
Bank of China Ltd., A | Banks | 3,200 | 1,648 | |||||||||||
Bank of China Ltd., H | Banks | 108,000 | 43,440 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 2,800 | 2,254 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 12,000 | 8,611 | |||||||||||
Bank of Jiangsu Co. Ltd., A | Banks | 1,000 | 1,111 | |||||||||||
Bank of Nanjing Co. Ltd., A | Banks | 600 | 1,008 | |||||||||||
Bank of Shanghai Co. Ltd., A | Banks | 900 | 941 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 1,200 | 1,276 | |||||||||||
Beijing Enterprises Holdings Ltd. | Gas Utilities | 500 | 1,587 | |||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 12,000 | 2,053 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 12,000 | 6,083 | |||||||||||
China Coal Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 1,000 | 752 | |||||||||||
China Communications Services Corp. Ltd., H | Construction & Engineering | 2,000 | 907 | |||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 2,000 | 5,848 | |||||||||||
China Construction Bank Corp., A | Banks | 600 | 594 | |||||||||||
China Construction Bank Corp., H | Banks | 117,000 | 87,996 | |||||||||||
China Everbright Bank Co. Ltd., A | Banks | 2,400 | 1,248 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 4,000 | 1,517 | |||||||||||
| 62 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| b,c | China Feihe Ltd., 144A, Reg S | Food Products | 4,000 | $ | 3,964 | |||||||||
China Hongqiao Group Ltd. | Metals & Mining | 2,500 | 3,339 | |||||||||||
China Jinmao Holdings Group Ltd. | Real Estate Management & Development | 4,000 | 1,190 | |||||||||||
China Life Insurance Co. Ltd., H | Insurance | 4,000 | 6,150 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 2,000 | 3,151 | |||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 2,000 | 3,626 | |||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 2,400 | 1,444 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 8,000 | 3,013 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 4,000 | 4,975 | |||||||||||
China Overseas Land & Investment Ltd. | Real Estate Management & Development | 2,000 | 5,989 | |||||||||||
China Overseas Property Holdings Ltd. | Real Estate Management & Development | 1,000 | 1,190 | |||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 400 | 1,444 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 2,600 | 6,348 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 1,800 | 1,225 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 22,000 | 11,040 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 4,000 | 2,242 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 4,000 | 3,335 | |||||||||||
China Resources Power Holdings Co. Ltd. | Independent Power and Renewable Electricity Producers | 2,000 | 3,764 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 600 | 2,814 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 5,000 | 16,025 | |||||||||||
China State Construction Engineering Corp. Ltd., A | Construction & Engineering | 1,400 | 1,200 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 1,600 | 1,959 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 1,200 | 4,159 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A | Banks | 400 | 251 | |||||||||||
Chow Tai Fook Jewellery Co. Ltd. | Specialty Retail | 1,000 | 1,821 | |||||||||||
CITIC Ltd. | Industrial Conglomerates | 3,000 | 3,337 | |||||||||||
| a | COSCO SHIPPING Holdings Co. Ltd., A | Marine | 400 | 977 | ||||||||||
| a | COSCO SHIPPING Holdings Co. Ltd., H | Marine | 2,000 | 3,489 | ||||||||||
CSPC Pharmaceutical Group Ltd. | Pharmaceuticals | 6,000 | 6,934 | |||||||||||
Daan Gene Co. Ltd. | Biotechnology | 200 | 588 | |||||||||||
| b | Dali Foods Group Co. Ltd., 144A | Food Products | 3,000 | 1,574 | ||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 4,000 | 3,008 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 860 | 828 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 212 | 2,919 | |||||||||||
Greendland Holdings Corp. Ltd., A | Real Estate Management & Development | 630 | 535 | |||||||||||
Guangzhou R&F Properties Co. Ltd., H | Real Estate Management & Development | 1,600 | 568 | |||||||||||
Haitian International Holdings Ltd. | Machinery | 1,000 | 2,598 | |||||||||||
Haitong Securities Co. Ltd., H | Capital Markets | 1,600 | 1,222 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 100 | 460 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 200 | 477 | |||||||||||
Hello Group Inc., ADR | Interactive Media & Services | 122 | 705 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 200 | 916 | |||||||||||
Hengan International Group Co. Ltd. | Personal Products | 500 | 2,311 | |||||||||||
Huaxia Bank Co. Ltd., A | Banks | 600 | 525 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 200 | 623 | |||||||||||
Hunan Valin Steel Co. Ltd., A | Metals & Mining | 400 | 347 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 4,100 | 3,081 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 70,000 | 42,994 | |||||||||||
Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | Chemicals | 600 | 434 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 300 | 1,743 | |||||||||||
| franklintempleton.com | Annual Report | 63 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Intco Medical Technology Co. Ltd. | Health Care Equipment & Supplies | 100 | $ | 728 | ||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 2,000 | 2,094 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 100 | 268 | |||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 200 | 243 | |||||||||||
Kingboard Holdings Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 4,865 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 67 | 18,143 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 2,000 | 1,044 | |||||||||||
Muyuan Foods Co. Ltd. | Food Products | 278 | 2,490 | |||||||||||
New China Life Insurance Co. Ltd., A | Insurance | 100 | 557 | |||||||||||
New China Life Insurance Co. Ltd., H | Insurance | 800 | 2,237 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 2,000 | 1,747 | |||||||||||
Ningxia Baofeng Energy Group Co. Ltd., A | Chemicals | 200 | 468 | |||||||||||
Ovctek China Inc., A | Health Care Equipment & Supplies | 100 | 575 | |||||||||||
Perfect World Co. Ltd. | Entertainment | 100 | 203 | |||||||||||
PetroChina Co. Ltd., A | Oil, Gas & Consumable Fuels | 700 | 609 | |||||||||||
PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 18,000 | 9,332 | |||||||||||
PICC Property and Casualty Co. Ltd., H | Insurance | 6,000 | 6,144 | |||||||||||
| b | Postal Savings Bank of China Co. Ltd., 144A | Banks | 9,000 | 7,298 | ||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 300 | 211 | |||||||||||
| a | Seazen Group Ltd. | Real Estate Management & Development | 2,000 | 1,078 | ||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 100 | 507 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 800 | 2,073 | |||||||||||
Shandong Buchang Pharmaceuticals Co. Ltd., A | Pharmaceuticals | 200 | 749 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 160 | 821 | |||||||||||
Shandong Sun Paper Industry JSC Ltd., A | Paper & Forest Products | 200 | 359 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 800 | 1,542 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A | Banks | 2,000 | 2,520 | |||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 200 | 523 | |||||||||||
Shanxi Taigang Stainless Steel Co. Ltd., A | Metals & Mining | 400 | 422 | |||||||||||
Shenzhen International Holdings Ltd. | Transportation Infrastructure | 1,000 | 1,057 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 100 | 4,840 | |||||||||||
| a | Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 200 | 692 | ||||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd., A | Pharmaceuticals | 200 | 1,055 | |||||||||||
Sichuan Chuantou Energy Co Ltd., A | Independent Power and Renewable Electricity Producers | 200 | 338 | |||||||||||
Sinotruk Hong Kong Ltd. | Machinery | 1,000 | 1,532 | |||||||||||
SITC International Holdings Co. Ltd. | Marine | 1,000 | 3,543 | |||||||||||
Sunac China Holdings Ltd. | Real Estate Management & Development | 1,000 | 585 | |||||||||||
The People’s Insurance Co. Group of China Ltd., H | Insurance | 10,000 | 3,282 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 200 | 551 | |||||||||||
Uni-President China Holdings Ltd. | Food Products | 1,000 | 872 | |||||||||||
| a | Vipshop Holdings Ltd., ADR | Internet & Direct Marketing Retail | 388 | 3,492 | ||||||||||
Want Want China Holdings Ltd. | Food Products | 5,000 | 4,622 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 200 | 739 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 200 | 1,208 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 2,000 | 5,938 | |||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 100 | 1,225 | |||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 1,600 | 1,592 | |||||||||||
| 64 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Zhejiang Expressway Co. Ltd., H | Transportation Infrastructure | 2,000 | $ | 1,680 | ||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 140 | 699 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd., A | Building Products | 200 | 645 | |||||||||||
Zhuzhou Kibing Group Co. Ltd., A | Building Products | 200 | 418 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., H | Machinery | 800 | 510 | |||||||||||
|
| |||||||||||||
| 488,985 | ||||||||||||||
|
| |||||||||||||
| Czech Republic 0.0%† | ||||||||||||||
CEZ AS | Electric Utilities | 130 | 5,484 | |||||||||||
|
| |||||||||||||
| Denmark 1.6% | ||||||||||||||
AP Moller-Maersk A/S, A | Marine | 2 | 5,968 | |||||||||||
AP Moller-Maersk A/S, B | Marine | 5 | 15,235 | |||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 176 | 26,971 | |||||||||||
| a | Genmab A/S | Biotechnology | 52 | 19,173 | ||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 1,428 | 159,966 | |||||||||||
Novozymes AS | Chemicals | 206 | 14,267 | |||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 132 | 12,787 | |||||||||||
|
| |||||||||||||
| 254,367 | ||||||||||||||
|
| |||||||||||||
| Egypt 0.0%† | ||||||||||||||
Eastern Co. SAE | Tobacco | 1,624 | 1,067 | |||||||||||
|
| |||||||||||||
| Finland 0.2% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 166 | 10,088 | |||||||||||
Kone OYJ, B | Machinery | 340 | 18,004 | |||||||||||
Orion OYJ | Pharmaceuticals | 136 | 6,227 | |||||||||||
|
| |||||||||||||
| 34,319 | ||||||||||||||
|
| |||||||||||||
| France 0.6% | ||||||||||||||
Biomerieux | Health Care Equipment & Supplies | 36 | 3,875 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 35 | 50,295 | |||||||||||
Ipsen SA | Pharmaceuticals | 36 | 4,538 | |||||||||||
| a | Klepierre SA | Equity Real Estate Investment Trusts (REITs) | 192 | 5,165 | ||||||||||
| b | La Francaise des Jeux SAEM, 144A | Hotels, Restaurants & Leisure | 52 | 2,081 | ||||||||||
Orange SA | Diversified Telecommunication Services | 1,654 | 19,699 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 24 | 9,947 | |||||||||||
|
| |||||||||||||
| 95,600 | ||||||||||||||
|
| |||||||||||||
| Germany 0.2% | ||||||||||||||
| b | Covestro AG, 144A | Chemicals | 110 | 5,611 | ||||||||||
E.ON SE | Multi-Utilities | 1,242 | 14,568 | |||||||||||
| a | HelloFresh SE | Internet & Direct Marketing Retail | 152 | 6,927 | ||||||||||
|
| |||||||||||||
| 27,106 | ||||||||||||||
|
| |||||||||||||
| Greece 0.0%† | ||||||||||||||
Hellenic Telecommunications Organization SA | Diversified Telecommunication Services | 254 | 4,635 | |||||||||||
JUMBO SA | Specialty Retail | 112 | 1,682 | |||||||||||
|
| |||||||||||||
| 6,317 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 0.6% | ||||||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 2,500 | 17,142 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 500 | 3,349 | |||||||||||
CLP Holdings Ltd. | Electric Utilities | 1,500 | 14,624 | |||||||||||
Guangdong Investment Ltd. | Water Utilities | 2,000 | 2,738 | |||||||||||
Henderson Land Development Co. Ltd. | Real Estate Management & Development | 1,000 | 4,163 | |||||||||||
HKT Trust and HKT Ltd. | Diversified Telecommunication Services | 4,000 | 5,496 | |||||||||||
Kingboard Laminates Holdings Ltd. | Electronic Equipment, Instruments & Components | 1,000 | 1,647 | |||||||||||
| franklintempleton.com | Annual Report | 65 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Hong Kong (continued) | ||||||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 1,500 | $ | 9,778 | ||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 4,000 | 5,189 | |||||||||||
Sun Hung Kai Properties Ltd. | Real Estate Management & Development | 1,500 | 17,928 | |||||||||||
| b | WH Group Ltd., 144A | Food Products | 8,000 | 5,057 | ||||||||||
Xinyi Glass Holdings Ltd. | Building Products | 2,000 | 4,852 | |||||||||||
|
| |||||||||||||
| 91,963 | ||||||||||||||
|
| |||||||||||||
| Hungary 0.0%† | ||||||||||||||
MOL Hungarian Oil & Gas PLC | Oil, Gas & Consumable Fuels | 262 | 2,326 | |||||||||||
Richter Gedeon Nyrt | Pharmaceuticals | 116 | 2,467 | |||||||||||
|
| |||||||||||||
| 4,793 | ||||||||||||||
|
| |||||||||||||
| India 1.9% | ||||||||||||||
Adani Total Gas Ltd | Gas Utilities | 220 | 6,242 | |||||||||||
Ambuja Cements Ltd. | Construction Materials | 614 | 2,425 | |||||||||||
Asian Paints Ltd. | Chemicals | 360 | 14,633 | |||||||||||
Bajaj Auto Ltd. | Automobiles | 72 | 3,471 | |||||||||||
Bharat Electronics Ltd. | Aerospace & Defense | 680 | 1,892 | |||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 526 | 2,494 | |||||||||||
Britannia Industries Ltd. | Food Products | 124 | 5,247 | |||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 2,024 | 4,889 | |||||||||||
Colgate-Palmolive (India) Ltd. | Personal Products | 164 | 3,338 | |||||||||||
Dabur India Ltd. | Personal Products | 620 | 4,387 | |||||||||||
GAIL India Ltd. | Gas Utilities | 1,904 | 3,911 | |||||||||||
HCL Technologies Ltd. | IT Services | 1,172 | 18,000 | |||||||||||
| b | HDFC Asset Management Co. Ltd., 144A | Capital Markets | 60 | 1,699 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 134 | 4,057 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 924 | 3,284 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 1,898 | 2,979 | |||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 232 | 1,142 | |||||||||||
Infosys Ltd. | IT Services | 20 | 503 | |||||||||||
Infosys Ltd., ADR | IT Services | 3,736 | 92,989 | |||||||||||
ITC Ltd. | Tobacco | 3,838 | 12,695 | |||||||||||
| b | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | IT Services | 50 | 4,062 | ||||||||||
Marico Ltd. | Personal Products | 664 | 4,414 | |||||||||||
Mindtree Ltd. | IT Services | 42 | 2,385 | |||||||||||
Mphasis Ltd. | IT Services | 48 | 2,139 | |||||||||||
Nestle India Ltd. | Food Products | 42 | 9,634 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 6 | 3,420 | |||||||||||
Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 758 | 1,938 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 148 | 4,794 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 1,136 | 56,068 | |||||||||||
Tech Mahindra Ltd. | IT Services | 628 | 12,427 | |||||||||||
Vedanta Ltd. | Metals & Mining | 690 | 3,673 | |||||||||||
Wipro Ltd. | IT Services | 1,018 | 7,952 | |||||||||||
|
| |||||||||||||
| 303,183 | ||||||||||||||
|
| |||||||||||||
| Indonesia 0.2% | ||||||||||||||
Adaro Energy Tbk PT | Oil, Gas & Consumable Fuels | 18,400 | 3,446 | |||||||||||
Gudang Garam Tbk PT | Tobacco | 600 | 1,320 | |||||||||||
Indofood Sukses Makmur Tbk PT | Food Products | 5,600 | 2,320 | |||||||||||
Kalbe Farma Tbk PT | Pharmaceuticals | 25,200 | 2,825 | |||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 62,400 | 19,899 | |||||||||||
Unilever Indonesia Tbk PT | Household Products | 10,600 | 2,701 | |||||||||||
United Tractors Tbk PT | Oil, Gas & Consumable Fuels | 2,000 | 3,558 | |||||||||||
|
| |||||||||||||
| 36,069 | ||||||||||||||
|
| |||||||||||||
| 66 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Ireland 0.2% | ||||||||||||||
Seagate Technology Holdings PLC | Technology Hardware, Storage & Peripherals | 308 | $ | 27,689 | ||||||||||
|
| |||||||||||||
| Israel 0.2% | ||||||||||||||
| a | Check Point Software Technologies Ltd. | Software | 130 | 17,974 | ||||||||||
ICL Group Ltd. | Chemicals | 694 | 8,314 | |||||||||||
|
| |||||||||||||
| 26,288 | ||||||||||||||
|
| |||||||||||||
| Italy 0.4% | ||||||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 32 | 5,052 | |||||||||||
Ferrari NV | Automobiles | 124 | 27,414 | |||||||||||
Moncler SpA | Textiles, Apparel & Luxury Goods | 208 | 11,743 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 120 | 6,094 | |||||||||||
Snam SpA | Gas Utilities | 2,036 | 11,852 | |||||||||||
Telecom Italia SpA | Diversified Telecommunication Services | 8,186 | 3,038 | |||||||||||
|
| |||||||||||||
| 65,193 | ||||||||||||||
|
| |||||||||||||
| Japan 6.1% | ||||||||||||||
Aisin Seiki Co. Ltd. | Auto Components | 100 | 3,456 | |||||||||||
Ajinomoto Co. Inc. | Food Products | 200 | 5,726 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 2,000 | 31,489 | |||||||||||
Benefit One Inc. | Professional Services | 100 | 2,134 | |||||||||||
Bridgestone Corp. | Auto Components | 600 | 23,520 | |||||||||||
Brother Industries Ltd. | Technology Hardware, Storage & Peripherals | 200 | 3,686 | |||||||||||
Capcom Co. Ltd. | Entertainment | 200 | 4,891 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 720 | 24,303 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 100 | 10,702 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 300 | 7,912 | |||||||||||
FUJIFILM Holdings Corp. | Technology Hardware, Storage & Peripherals | 200 | 12,362 | |||||||||||
Honda Motor Co. Ltd. | Automobiles | 900 | 25,856 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 430 | 49,705 | |||||||||||
Idemitsu Kosan Co. Ltd. | Oil, Gas & Consumable Fuels | 100 | 2,781 | |||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 200 | 3,485 | |||||||||||
Isuzu Motors Ltd. | Automobiles | 300 | 3,925 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 1,400 | 47,799 | |||||||||||
Japan Post Bank Co. Ltd. | Banks | 400 | 3,246 | |||||||||||
Japan Post Holdings Co. Ltd. | Insurance | 1,700 | 12,583 | |||||||||||
Japan Post Insurance Co. Ltd. | Insurance | 100 | 1,760 | |||||||||||
Japan Tobacco Inc. | Tobacco | 1,500 | 25,798 | |||||||||||
Kajima Corp. | Construction & Engineering | 400 | 4,914 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 200 | 4,543 | |||||||||||
KAO Corp. | Personal Products | 500 | 20,700 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 2,100 | 69,293 | |||||||||||
Koei Tecmo Holdings Co. Ltd. | Entertainment | 100 | 3,308 | |||||||||||
Meiji Holdings Co. Ltd. | Food Products | 100 | 5,446 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 200 | 3,429 | |||||||||||
Mitsui & Co. Ltd. | Trading Companies & Distributors | 800 | 21,935 | |||||||||||
Mitsui Chemicals Inc. | Chemicals | 100 | 2,546 | |||||||||||
Mizuho Financial Group Inc. | Banks | 1,800 | 23,239 | |||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 200 | 4,340 | |||||||||||
Murata Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 500 | 33,438 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 200 | 2,846 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 144 | 73,166 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 1,700 | 49,652 | |||||||||||
Nippon Yusen KK | Marine | 100 | 8,865 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 70 | 8,858 | |||||||||||
Nitto Denko Corp. | Chemicals | 100 | 7,267 | |||||||||||
Nomura Research Institute Ltd. | IT Services | 300 | 9,936 | |||||||||||
Obayashi Corp. | Construction & Engineering | 700 | 5,191 | |||||||||||
| franklintempleton.com | Annual Report | 67 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
OBIC Co. Ltd. | IT Services | 60 | $ | 9,106 | ||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 10,104 | |||||||||||
Oracle Corp. Japan | Software | 50 | 3,502 | |||||||||||
Sekisui House Ltd. | Household Durables | 700 | 13,674 | |||||||||||
Seven & i Holdings Co. Ltd. | Food & Staples Retailing | 600 | 28,736 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 300 | 5,715 | |||||||||||
SHIMANO Inc. | Leisure Products | 70 | 16,238 | |||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 300 | 18,612 | |||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 400 | 3,628 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 3,300 | 38,825 | |||||||||||
Sumitomo Mitsui Financial Group Inc. | Banks | 1,200 | 38,627 | |||||||||||
Taisei Corp. | Construction & Engineering | 200 | 5,825 | |||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 164 | 85,462 | |||||||||||
Tosoh Corp. | Chemicals | 300 | 4,484 | |||||||||||
Toyo Suisan Kaisha Ltd. | Food Products | 100 | 3,600 | |||||||||||
USS Co. Ltd. | Specialty Retail | 200 | 3,393 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 100 | 2,476 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 200 | 4,541 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 200 | 5,413 | |||||||||||
|
| |||||||||||||
| 971,992 | ||||||||||||||
|
| |||||||||||||
| Kuwait 0.0%† | ||||||||||||||
Mobile Telecommunications Co. KSCP | Wireless Telecommunication Services | 2,018 | 4,171 | |||||||||||
|
| |||||||||||||
| Malaysia 0.2% | ||||||||||||||
Digi.com Bhd. | Wireless Telecommunication Services | 3,800 | 3,524 | |||||||||||
Fraser & Neave Holdings Bhd. | Beverages | 400 | 1,998 | |||||||||||
Hartalega Holdings Bhd. | Health Care Equipment & Supplies | 2,200 | 2,538 | |||||||||||
Inari Amertron Bhd | Electronic Equipment, Instruments & Components | 1,700 | 1,241 | |||||||||||
MISC Bhd. | Marine | 1,100 | 1,923 | |||||||||||
Nestle (Malaysia) Bhd. | Food Products | 140 | 4,448 | |||||||||||
Petronas Gas Bhd. | Gas Utilities | 1,200 | 4,755 | |||||||||||
RHB Bank Bhd | Banks | 1,600 | 2,268 | |||||||||||
Sime Darby Bhd. | Industrial Conglomerates | 3,200 | 1,826 | |||||||||||
Top Glove Corp. Bhd. | Health Care Equipment & Supplies | 8,400 | 3,836 | |||||||||||
Westports Holdings Bhd. | Transportation Infrastructure | 1,000 | 951 | |||||||||||
|
| |||||||||||||
| 29,308 | ||||||||||||||
|
| |||||||||||||
| Mexico 0.4% | ||||||||||||||
Arca Continental SAB de CV | Beverages | 364 | 2,469 | |||||||||||
Coca-Cola Femsa SAB de CV | Beverages | 332 | 1,824 | |||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs) | 3,118 | 3,643 | |||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 3,266 | 19,489 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 1,869 | 2,622 | |||||||||||
Megacable Holdings SAB de CV | Media | 388 | 1,166 | |||||||||||
Wal-Mart de Mexico SAB de CV | Food & Staples Retailing | 5,812 | 23,875 | |||||||||||
|
| |||||||||||||
| 55,088 | ||||||||||||||
|
| |||||||||||||
| Netherlands 1.4% | ||||||||||||||
| a,b | Adyen NV, 144A | IT Services | 16 | 32,204 | ||||||||||
ASML Holding NV | Semiconductors & Semiconductor Equipment | 188 | 127,599 | |||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 1,200 | 38,874 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 2,736 | 9,568 | |||||||||||
NN Group NV | Insurance | 310 | 15,818 | |||||||||||
Randstad NV | Professional Services | 88 | 5,350 | |||||||||||
|
| |||||||||||||
| 229,413 | ||||||||||||||
|
| |||||||||||||
| 68 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| New Zealand 0.1% | ||||||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | Health Care Equipment & Supplies | 742 | $ | 12,567 | ||||||||||
Spark New Zealand Ltd. | Diversified Telecommunication Services | 2,332 | 7,429 | |||||||||||
|
| |||||||||||||
| 19,996 | ||||||||||||||
|
| |||||||||||||
| Norway 0.2% | ||||||||||||||
Orkla ASA | Food Products | 836 | 7,492 | |||||||||||
Telenor ASA | Diversified Telecommunication Services | 834 | 12,089 | |||||||||||
Yara International ASA | Chemicals | 172 | 8,695 | |||||||||||
|
| |||||||||||||
| 28,276 | ||||||||||||||
|
| |||||||||||||
| Philippines 0.0%† | ||||||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 30 | 1,472 | |||||||||||
Manila Electric Co. | Electric Utilities | 240 | 1,733 | |||||||||||
PLDT Inc. | Wireless Telecommunication Services | 70 | 2,503 | |||||||||||
|
| |||||||||||||
| 5,708 | ||||||||||||||
|
| |||||||||||||
| Poland 0.1% | ||||||||||||||
CD Projekt SA | Entertainment | 44 | 1,834 | |||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 300 | 5,473 | |||||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | Oil, Gas & Consumable Fuels | 1,846 | 2,749 | |||||||||||
Powszechny Zaklad Ubezpieczen SA | Insurance | 382 | 3,103 | |||||||||||
|
| |||||||||||||
| 13,159 | ||||||||||||||
|
| |||||||||||||
| Portugal 0.0%† | ||||||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 278 | 6,721 | |||||||||||
|
| |||||||||||||
| Qatar 0.1% | ||||||||||||||
Industries Qatar QSC | Industrial Conglomerates | 1,778 | 9,276 | |||||||||||
Masraf Al Rayan QSC | Banks | 3,596 | 5,105 | |||||||||||
Qatar Electricity & Water Co. QSC | Multi-Utilities | 490 | 2,462 | |||||||||||
Qatar Fuel QSC | Oil, Gas & Consumable Fuels | 450 | 2,210 | |||||||||||
|
| |||||||||||||
| 19,053 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| d | Alrosa PJSC | Metals & Mining | 3,584 | — | ||||||||||
| d | Gazprom PJSC | Oil, Gas & Consumable Fuels | 15,428 | — | ||||||||||
| d | Inter RAO UES PJSC | Electric Utilities | 53,546 | — | ||||||||||
| d | LUKOIL PJSC | Oil, Gas & Consumable Fuels | 516 | — | ||||||||||
| d | MMC Norilsk Nickel PJSC | Metals & Mining | 100 | — | ||||||||||
| d | Mobile TeleSystems PJSC, ADR | Wireless Telecommunication Services | 618 | — | ||||||||||
| d | NLMK PJSC | Metals & Mining | 2,272 | — | ||||||||||
| c,d | PhosAgro PJSC, GDR, Reg S | Chemicals | 220 | — | ||||||||||
| d | Polymetal International PLC | Metals & Mining | 470 | — | ||||||||||
| d | Polyus Gold OJSC | Metals & Mining | 50 | — | ||||||||||
| d | Rosneft PJSC | Oil, Gas & Consumable Fuels | 1,154 | — | ||||||||||
| d | Severstal PAO | Metals & Mining | 392 | — | ||||||||||
| d | Surgutneftegas PJSC | Oil, Gas & Consumable Fuels | 8,286 | — | ||||||||||
| d | Tatneft PAO | Oil, Gas & Consumable Fuels | 1,974 | — | ||||||||||
| d | TCS Group Holding PLC, GDR | Banks | 118 | — | ||||||||||
| a,d | United Co. RUSAL International PJSC | Metals & Mining | 1,714 | — | ||||||||||
|
| |||||||||||||
| 0 | ||||||||||||||
|
| |||||||||||||
| Saudi Arabia 0.6% | ||||||||||||||
Abdullah Al Othaim Markets Co. | Food & Staples Retailing | 40 | 1,248 | |||||||||||
Advanced Petrochemical Co. | Chemicals | 154 | 2,894 | |||||||||||
Al-Rajhi Bank | Banks | 1,160 | 49,659 | |||||||||||
Bupa Arabia for Cooperative Insurance Co. | Insurance | 52 | 2,481 | |||||||||||
Dr Sulaiman Al Habib Medical Services Group Co. | Health Care Providers & Services | 42 | 2,132 | |||||||||||
Jarir Marketing Co. | Specialty Retail | 81 | 4,253 | |||||||||||
| franklintempleton.com | Annual Report | 69 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Saudi Arabia (continued) | ||||||||||||||
Saudi Arabian Fertilizer Co. | Chemicals | 250 | $ | 12,115 | ||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 650 | 18,678 | |||||||||||
Yanbu National Petrochemical Co. | Chemicals | 274 | 4,886 | |||||||||||
|
| |||||||||||||
| 98,346 | ||||||||||||||
|
| |||||||||||||
| Singapore 0.2% | ||||||||||||||
Singapore Exchange Ltd. | Capital Markets | 1,100 | 8,103 | |||||||||||
Singapore Technologies Engineering Ltd. | Aerospace & Defense | 1,300 | 3,958 | |||||||||||
Singapore Telecommunications Ltd. | Diversified Telecommunication Services | 8,400 | 16,386 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 300 | 3,895 | |||||||||||
|
| |||||||||||||
| 32,342 | ||||||||||||||
|
| |||||||||||||
| South Africa 0.5% | ||||||||||||||
African Rainbow Minerals Ltd. | Metals & Mining | 158 | 3,094 | |||||||||||
Anglo American Platinum Ltd. | Metals & Mining | 50 | 6,866 | |||||||||||
AngloGold Ashanti Ltd. | Metals & Mining | 470 | 11,274 | |||||||||||
Exxaro Resources Ltd. | Oil, Gas & Consumable Fuels | 379 | 5,746 | |||||||||||
Gold Fields Ltd. | Metals & Mining | 726 | 11,330 | |||||||||||
Impala Platinum Holdings Ltd. | Metals & Mining | 1,046 | 16,108 | |||||||||||
Kumba Iron Ore Ltd. | Metals & Mining | 114 | 5,113 | |||||||||||
Mr. Price Group Ltd. | Specialty Retail | 278 | 4,119 | |||||||||||
Sibanye Stillwater Ltd. | Metals & Mining | 2,438 | 9,977 | |||||||||||
Tiger Brands Ltd. | Food Products | 167 | 1,850 | |||||||||||
Vodacom Group Ltd. | Wireless Telecommunication Services | 792 | 8,672 | |||||||||||
|
| |||||||||||||
| 84,149 | ||||||||||||||
|
| |||||||||||||
| South Korea 1.4% | ||||||||||||||
Coway Co. Ltd. | Household Durables | 62 | 3,504 | |||||||||||
F&F Co. Ltd. | Textiles, Apparel & Luxury Goods | 2 | 1,229 | |||||||||||
GS Holdings Corp. | Oil, Gas & Consumable Fuels | 26 | 942 | |||||||||||
Hana Financial Group Inc. | Banks | 336 | 13,473 | |||||||||||
Industrial Bank of Korea | Banks | 310 | 2,775 | |||||||||||
KB Financial Group Inc. | Banks | 394 | 19,927 | |||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 8 | 3,861 | |||||||||||
KT&G Corp. | Tobacco | 144 | 9,588 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 22 | 2,813 | |||||||||||
POSCO | Metals & Mining | 40 | 9,670 | |||||||||||
S-1 Corp. | Commercial Services & Supplies | 20 | 1,177 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,356 | 135,289 | |||||||||||
SD Biosensor Inc. | Health Care Equipment & Supplies | 36 | 1,657 | |||||||||||
Seegene Inc. | Biotechnology | 48 | 2,024 | |||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 452 | 15,476 | |||||||||||
Woori Financial Group Inc. | Banks | 528 | 6,687 | |||||||||||
|
| |||||||||||||
| 230,092 | ||||||||||||||
|
| |||||||||||||
| Spain 1.1% | ||||||||||||||
Banco Bilbao Vizcaya Argentaria SA | Banks | 4,916 | 28,498 | |||||||||||
Banco Santander SA | Banks | 15,228 | 52,525 | |||||||||||
CaixaBank SA | Banks | 4,036 | 13,818 | |||||||||||
Enagas SA | Gas Utilities | 260 | 5,829 | |||||||||||
Endesa SA | Electric Utilities | 350 | 7,701 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 1,084 | 23,857 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 482 | 9,980 | |||||||||||
Telefonica SA | Diversified Telecommunication Services | 5,460 | 26,660 | |||||||||||
|
| |||||||||||||
| 168,868 | ||||||||||||||
|
| |||||||||||||
| 70 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Sweden 0.4% | ||||||||||||||
Boliden AB | Metals & Mining | 312 | $ | 16,006 | ||||||||||
Electrolux AB | Household Durables | 128 | 1,965 | |||||||||||
Epiroc AB, A | Machinery | 596 | 12,931 | |||||||||||
Epiroc AB, B | Machinery | 360 | 6,588 | |||||||||||
Husqvarna AB, B | Household Durables | 312 | 3,303 | |||||||||||
Sagax AB, B | Real Estate Management & Development | 100 | 3,080 | |||||||||||
Swedish Match AB | Tobacco | 1,482 | 11,272 | |||||||||||
Tele2 AB, B | Wireless Telecommunication Services | 298 | 4,550 | |||||||||||
|
| |||||||||||||
| 59,695 | ||||||||||||||
|
| |||||||||||||
| Switzerland 4.1% | ||||||||||||||
EMS-Chemie Holding AG | Chemicals | 9 | 8,817 | |||||||||||
Geberit AG | Building Products | 44 | 27,359 | |||||||||||
Kuehne + Nagel International AG | Marine | 58 | 16,582 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 212 | 15,942 | |||||||||||
Nestle SA | Food Products | 1,232 | 160,920 | |||||||||||
Novartis AG | Pharmaceuticals | 2,004 | 176,935 | |||||||||||
Partners Group Holding AG | Capital Markets | 31 | 38,857 | |||||||||||
Roche Holding AG, Bearer | Pharmaceuticals | 13 | 5,721 | |||||||||||
Roche Holding AG, Non-Voting | Pharmaceuticals | 396 | 157,690 | |||||||||||
SGS SA | Professional Services | 6 | 16,795 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 28 | 16,887 | |||||||||||
| b | VAT Group AG, 144A | Machinery | 15 | 5,777 | ||||||||||
|
| |||||||||||||
| 648,282 | ||||||||||||||
|
| |||||||||||||
| Taiwan 2.2% | ||||||||||||||
Acer Inc. | Technology Hardware, Storage & Peripherals | 2,000 | 2,091 | |||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 373 | 4,810 | |||||||||||
Asia Cement Corp. | Construction Materials | 2,000 | 3,392 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 660 | 8,604 | |||||||||||
AU Optronics Corp. | Electronic Equipment, Instruments & Components | 4,000 | 2,771 | |||||||||||
Cathay Financial Holding Co. Ltd. | Insurance | 4,000 | 9,005 | |||||||||||
China Development Financial Holding Corp. | Insurance | 13,000 | 8,712 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 4,000 | 17,730 | |||||||||||
Compal Electronics Inc. | Technology Hardware, Storage & Peripherals | 3,000 | 2,806 | |||||||||||
eMemory Technology Inc. | Semiconductors & Semiconductor Equipment | 40 | 2,583 | |||||||||||
Evergreen Marine Corp. Taiwan Ltd. | Marine | 2,000 | 9,424 | |||||||||||
Fubon Financial Holding Co. Ltd. | Insurance | 6,552 | 17,494 | |||||||||||
Innolux Corp. | Electronic Equipment, Instruments & Components | 5,000 | 2,932 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 120 | 7,895 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 3,000 | 7,131 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 1,000 | 4,537 | |||||||||||
momo.com Inc. | Internet & Direct Marketing Retail | 20 | 657 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 190 | 2,231 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 670 | 9,973 | |||||||||||
Quanta Computer Inc. | Technology Hardware, Storage & Peripherals | 2,000 | 6,164 | |||||||||||
Ruentex Development Co. Ltd. | Real Estate Management & Development | 1,400 | 3,875 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 1,000 | 2,628 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 5,000 | 8,708 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 2,000 | 7,329 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 7,390 | 153,983 | |||||||||||
United Microelectronics Corp. | Semiconductors & Semiconductor Equipment | 11,000 | 20,732 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 1,000 | 4,345 | |||||||||||
Wan Hai Lines Ltd. | Marine | 680 | 3,762 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 80 | 2,848 | |||||||||||
WPG Holdings Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 3,909 | |||||||||||
| a | Yang Ming Marine Transport Corp. | Marine | 1,000 | 4,345 | ||||||||||
Yuanta Financial Holding Co. Ltd. | Diversified Financial Services | 5,000 | 4,607 | |||||||||||
|
| |||||||||||||
| 352,013 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 71 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Thailand 0.2% | ||||||||||||||
Advanced Info Service PCL, NVDR | Wireless Telecommunication Services | 1,300 | $ | 9,110 | ||||||||||
Bumrungrad Hospital PCL, NVDR | Health Care Providers & Services | 500 | 2,353 | |||||||||||
Carabao Group PCL, NVDR | Beverages | 200 | 650 | |||||||||||
Intouch Holdings PCL, NVDR | Wireless Telecommunication Services | 2,100 | 4,911 | |||||||||||
Krung Thai Bank PCL, NVDR | Banks | 2,600 | 1,079 | |||||||||||
Osotspa PCL, NVDR | Beverages | 1,000 | 1,128 | |||||||||||
Sri Trang Gloves Thailand PCL, NVDR | Health Care Equipment & Supplies | 1,400 | 1,063 | |||||||||||
Thai Union Group PCL, NVDR | Food Products | 2,400 | 1,364 | |||||||||||
The Siam Cement PCL, NVDR | Construction Materials | 800 | 9,215 | |||||||||||
|
| |||||||||||||
| 30,873 | ||||||||||||||
|
| |||||||||||||
| Turkey 0.1% | ||||||||||||||
Aselsan Elektronik Sanayi Ve Ticaret A/S | Aerospace & Defense | 666 | 1,096 | |||||||||||
BIM Birlesik Magazalar A/S | Food & Staples Retailing | 594 | 3,428 | |||||||||||
Eregli Demir ve Celik Fabrikalari TAS | Metals & Mining | 2,050 | 4,534 | |||||||||||
Ford Otomotiv Sanayi AS | Automobiles | 103 | 2,097 | |||||||||||
Turkcell Iletisim Hizmetleri A/S | Wireless Telecommunication Services | 1,520 | 2,336 | |||||||||||
Turkiye Garanti Bankasi AS | Banks | 1,238 | 1,030 | |||||||||||
Turkiye Is Bankasi A/S, C | Banks | 1,710 | 1,029 | |||||||||||
Turkiye Sise ve Cam Fabrikalari AS | Industrial Conglomerates | 828 | 859 | |||||||||||
|
| |||||||||||||
| 16,409 | ||||||||||||||
|
| |||||||||||||
| United Arab Emirates 0.2% | ||||||||||||||
Abu Dhabi National Oil Co. for Distribution PJSC | Specialty Retail | 2,330 | 2,664 | |||||||||||
Dubai Islamic Bank PJSC | Banks | 2,252 | 3,783 | |||||||||||
Emirates Telecommunications Group Co. PJSC | Diversified Telecommunication Services | 2,928 | 29,463 | |||||||||||
|
| |||||||||||||
| 35,910 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 4.6% | ||||||||||||||
Admiral Group PLC | Insurance | 308 | 10,394 | |||||||||||
Anglo American PLC | Metals & Mining | 1,584 | 82,849 | |||||||||||
| b | Auto Trader Group PLC, 144A | Interactive Media & Services | 1,060 | 8,832 | ||||||||||
BAE Systems PLC | Aerospace & Defense | 2,874 | 27,147 | |||||||||||
Barratt Developments PLC | Household Durables | 580 | 3,989 | |||||||||||
Berkeley Group Holdings PLC | Household Durables | 110 | 5,417 | |||||||||||
British American Tobacco PLC | Tobacco | 2,684 | 112,890 | |||||||||||
Croda International PLC | Chemicals | 134 | 13,903 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 204 | 27,880 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 6,168 | 133,771 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 487 | 6,463 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 168 | 4,559 | |||||||||||
Imperial Brands PLC | Tobacco | 1,526 | 32,358 | |||||||||||
Intertek Group PLC | Professional Services | 168 | 11,555 | |||||||||||
Kingfisher PLC | Specialty Retail | 2,228 | 7,492 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs) | 706 | 7,303 | |||||||||||
Mondi PLC | Paper & Forest Products | 508 | 9,976 | |||||||||||
Next PLC | Multiline Retail | 68 | 5,401 | |||||||||||
Persimmon PLC | Household Durables | 428 | 12,121 | |||||||||||
RELX PLC | Professional Services | 2,100 | 65,889 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 66 | 10,893 | |||||||||||
Unilever PLC | Personal Products | 2,896 | 131,740 | |||||||||||
|
| |||||||||||||
| 732,822 | ||||||||||||||
|
| |||||||||||||
| United States 54.8% | ||||||||||||||
3M Co. | Industrial Conglomerates | 592 | 88,137 | |||||||||||
A O Smith Corp. | Building Products | 138 | 8,817 | |||||||||||
AbbVie Inc. | Biotechnology | 1,396 | 226,306 | |||||||||||
| a | ABIOMED Inc. | Health Care Equipment & Supplies | 44 | 14,575 | ||||||||||
| 72 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
Accenture PLC, A | IT Services | 444 | $ | 149,730 | ||||||||||
| a | Adobe Inc. | Software | 244 | 111,171 | ||||||||||
Air Products and Chemicals Inc. | Chemicals | 212 | 52,981 | |||||||||||
| a | Alphabet Inc., A | Interactive Media & Services | 28 | 77,878 | ||||||||||
| a | Alphabet Inc., C | Interactive Media & Services | 27 | 75,411 | ||||||||||
Altria Group Inc. | Tobacco | 2,936 | 153,406 | |||||||||||
American Tower Corp. | Equity Real Estate Investment Trusts (REITs) | 484 | 121,591 | |||||||||||
AmerisourceBergen Corp. | Health Care Providers & Services | 88 | 13,614 | |||||||||||
Amgen Inc. | Biotechnology | 668 | 161,536 | |||||||||||
Annaly Capital Management Inc. | Mortgage Real Estate Investment Trusts (REITs) | 762 | 5,364 | |||||||||||
Apple Inc. | Technology Hardware, Storage & Peripherals | 1,044 | 182,293 | |||||||||||
Applied Materials Inc. | Semiconductors & Semiconductor Equipment | 988 | 130,218 | |||||||||||
| a | Arista Networks Inc. | Communications Equipment | 222 | 30,854 | ||||||||||
AT&T Inc. | Diversified Telecommunication Services | 6,712 | 158,605 | |||||||||||
Best Buy Co. Inc. | Specialty Retail | 276 | 25,088 | |||||||||||
| a | Bio-Rad Laboratories Inc., A | Life Sciences Tools & Services | 20 | 11,265 | ||||||||||
| a | Biogen Inc. | Biotechnology | 188 | 39,593 | ||||||||||
Blackstone Inc. | Capital Markets | 360 | 45,698 | |||||||||||
BorgWarner Inc. | Auto Components | 214 | 8,325 | |||||||||||
Bristol-Myers Squibb Co. | Pharmaceuticals | 2,336 | 170,598 | |||||||||||
C.H. Robinson Worldwide Inc. | Air Freight & Logistics | 138 | 14,864 | |||||||||||
| a | Cadence Design Systems Inc. | Software | 312 | 51,312 | ||||||||||
Campbell Soup Co. | Food Products | 208 | 9,271 | |||||||||||
Cardinal Health Inc. | Health Care Providers & Services | 158 | 8,959 | |||||||||||
Cboe Global Markets Inc. | Capital Markets | 58 | 6,636 | |||||||||||
Celanese Corp. | Chemicals | 114 | 16,287 | |||||||||||
Cerner Corp. | Health Care Technology | 280 | 26,197 | |||||||||||
Church & Dwight Co. Inc. | Household Products | 240 | 23,851 | |||||||||||
Cisco Systems Inc. | Communications Equipment | 3,064 | 170,849 | |||||||||||
Citrix Systems Inc. | Software | 128 | 12,915 | |||||||||||
Clorox Co. | Household Products | 166 | 23,079 | |||||||||||
Cognizant Technology Solutions Corp., A | IT Services | 560 | 50,215 | |||||||||||
| a | Coinbase Global Inc., A | Capital Markets | 20 | 3,797 | ||||||||||
Colgate-Palmolive Co. | Household Products | 968 | 73,403 | |||||||||||
Conagra Brands Inc. | Food Products | 444 | 14,905 | |||||||||||
| a | Copart Inc. | Commercial Services & Supplies | 224 | 28,105 | ||||||||||
Costco Wholesale Corp. | Food & Staples Retailing | 232 | 133,597 | |||||||||||
Coterra Energy Inc., A | Oil, Gas & Consumable Fuels | 472 | 12,730 | |||||||||||
Cummins Inc. | Machinery | 156 | 31,997 | |||||||||||
D.R. Horton Inc. | Household Durables | 368 | 27,420 | |||||||||||
Dollar General Corp. | Multiline Retail | 232 | 51,650 | |||||||||||
Dominos Pizza Inc. | Hotels, Restaurants & Leisure | 34 | 13,838 | |||||||||||
eBay Inc. | Internet & Direct Marketing Retail | 636 | 36,417 | |||||||||||
Electronic Arts Inc. | Entertainment | 288 | 36,435 | |||||||||||
Eli Lilly & Co. | Pharmaceuticals | 628 | 179,840 | |||||||||||
EOG Resources Inc. | Oil, Gas & Consumable Fuels | 308 | 36,723 | |||||||||||
| a | EPAM Systems Inc. | IT Services | 30 | 8,898 | ||||||||||
Expeditors International of Washington Inc. | Air Freight & Logistics | 186 | 19,188 | |||||||||||
Extra Space Storage Inc. | Equity Real Estate Investment Trusts (REITs) | 144 | 29,606 | |||||||||||
| a | F5 Networks Inc. | Communications Equipment | 60 | 12,537 | ||||||||||
FactSet Research Systems Inc. | Capital Markets | 44 | 19,103 | |||||||||||
Fastenal Co. | Trading Companies & Distributors | 716 | 42,530 | |||||||||||
| a | Fortinet Inc. | Software | 136 | 46,477 | ||||||||||
| d | Fox Corp., A | Media | 346 | 13,650 | ||||||||||
Fox Corp., B | Media | 162 | 5,877 | |||||||||||
Garmin Ltd. | Household Durables | 176 | 20,875 | |||||||||||
General Mills Inc. | Food Products | 684 | 46,321 | |||||||||||
Gilead Sciences Inc. | Biotechnology | 1,516 | 90,126 | |||||||||||
| franklintempleton.com | Annual Report | 73 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| d | Hewlett Packard Enterprise Co. | Technology Hardware, Storage & Peripherals | 1,158 | $ | 19,350 | |||||||||
Hormel Foods Corp. | Food Products | 328 | 16,905 | |||||||||||
HP Inc. | Technology Hardware, Storage & Peripherals | 1,248 | 45,302 | |||||||||||
Huntington Ingalls Industries Inc. | Aerospace & Defense | 32 | 6,382 | |||||||||||
| a | IDEXX Laboratories Inc. | Health Care Equipment & Supplies | 90 | 49,235 | ||||||||||
Illinois Tool Works Inc. | Machinery | 316 | 66,170 | |||||||||||
Intel Corp. | Semiconductors & Semiconductor Equipment | 3,296 | 163,350 | |||||||||||
International Business Machines Corp. | IT Services | 968 | 125,859 | |||||||||||
International Paper Co. | Containers & Packaging | 194 | 8,953 | |||||||||||
Intuit Inc. | Software | 260 | 125,018 | |||||||||||
Iron Mountain Inc. | Equity Real Estate Investment Trusts (REITs) | 288 | 15,958 | |||||||||||
Jack Henry & Associates Inc. | IT Services | 80 | 15,764 | |||||||||||
| a | Jazz Pharmaceuticals PLC | Pharmaceuticals | 58 | 9,029 | ||||||||||
JB Hunt Transport Services Inc. | Road & Rail | 86 | 17,268 | |||||||||||
Johnson & Johnson | Pharmaceuticals | 1,008 | 178,648 | |||||||||||
Kellogg Co. | Food Products | 268 | 17,283 | |||||||||||
Kimberly-Clark Corp. | Household Products | 448 | 55,176 | |||||||||||
KLA Corp. | Semiconductors & Semiconductor Equipment | 164 | 60,034 | |||||||||||
Knight-Swift Transportation Holdings Inc. | Road & Rail | 86 | 4,340 | |||||||||||
Kraft Heinz Co. | Food Products | 506 | 19,931 | |||||||||||
Lam Research Corp. | Semiconductors & Semiconductor Equipment | 144 | 77,416 | |||||||||||
Lennar Corp., A | Household Durables | 228 | 18,507 | |||||||||||
Lockheed Martin Corp. | Aerospace & Defense | 296 | 130,654 | |||||||||||
LyondellBasell Industries NV, A | Chemicals | 312 | 32,080 | |||||||||||
MarketAxess Holdings Inc. | Capital Markets | 40 | 13,608 | |||||||||||
Merck & Co. Inc. | Pharmaceuticals | 1,972 | 161,803 | |||||||||||
| a | Meta Platforms Inc., A | Interactive Media & Services | 484 | 107,622 | ||||||||||
| a | Mettler-Toledo International Inc. | Life Sciences Tools & Services | 27 | 37,076 | ||||||||||
Micron Technology Inc. | Semiconductors & Semiconductor Equipment | 640 | 49,850 | |||||||||||
Microsoft Corp. | Software | 480 | 147,989 | |||||||||||
| a | Moderna Inc. | Biotechnology | 348 | 59,947 | ||||||||||
Monolithic Power Systems | Semiconductors & Semiconductor Equipment | 40 | 19,427 | |||||||||||
| a | Monster Beverage Corp. | Beverages | 428 | 34,197 | ||||||||||
Moody’s Corp. | Capital Markets | 196 | 66,132 | |||||||||||
NetApp Inc. | Technology Hardware, Storage & Peripherals | 254 | 21,082 | |||||||||||
Newmont Corp. | Metals & Mining | 416 | 33,051 | |||||||||||
NRG Energy Inc. | Electric Utilities | 234 | 8,976 | |||||||||||
Nucor Corp. | Metals & Mining | 372 | 55,298 | |||||||||||
| a | NVR Inc. | Household Durables | 4 | 17,869 | ||||||||||
| a | O’Reilly Automotive Inc. | Specialty Retail | 84 | 57,537 | ||||||||||
Old Dominion Freight Line Inc. | Road & Rail | 116 | 34,647 | |||||||||||
Omnicom Group Inc. | Media | 218 | 18,504 | |||||||||||
Oracle Corp. | Software | 1,736 | 143,619 | |||||||||||
PACCAR Inc. | Machinery | 328 | 28,887 | |||||||||||
Packaging Corp. of America | Containers & Packaging | 102 | 15,923 | |||||||||||
Paychex Inc. | IT Services | 340 | 46,400 | |||||||||||
PepsiCo Inc. | Beverages | 1,000 | 167,380 | |||||||||||
Pfizer Inc. | Pharmaceuticals | 3,180 | 164,629 | |||||||||||
Philip Morris International Inc. | Tobacco | 1,772 | 166,462 | |||||||||||
Pool Corp. | Distributors | 38 | 16,068 | |||||||||||
Public Storage | Equity Real Estate Investment Trusts (REITs) | 232 | 90,545 | |||||||||||
PulteGroup Inc. | Household Durables | 288 | 12,067 | |||||||||||
QUALCOMM Inc. | Semiconductors & Semiconductor Equipment | 884 | 135,093 | |||||||||||
Quest Diagnostics Inc. | Health Care Providers & Services | 108 | 14,781 | |||||||||||
| a | Regeneron Pharmaceuticals Inc. | Biotechnology | 128 | 89,398 | ||||||||||
Robert Half International Inc. | Professional Services | 136 | 15,528 | |||||||||||
Rollins Inc. | Commercial Services & Supplies | 232 | 8,132 | |||||||||||
S&P Global Inc. | Capital Markets | 328 | 134,539 | |||||||||||
| 74 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
Sealed Air Corp. | Containers & Packaging | 128 | $ | 8,571 | ||||||||||
SEI Investments Co. | Capital Markets | 108 | 6,503 | |||||||||||
Simon Property Group Inc. | Equity Real Estate Investment Trusts (REITs) | 360 | 47,362 | |||||||||||
Skyworks Solutions Inc. | Semiconductors & Semiconductor Equipment | 204 | 27,189 | |||||||||||
Snap-on Inc. | Machinery | 60 | 12,329 | |||||||||||
Steel Dynamics Inc. | Metals & Mining | 252 | 21,024 | |||||||||||
Stellantis NV | Automobiles | 1,574 | 25,919 | |||||||||||
T. Rowe Price Group Inc. | Capital Markets | 240 | 36,286 | |||||||||||
| a | Take-Two Interactive Software Inc. | Entertainment | 106 | 16,296 | ||||||||||
Target Corp. | Multiline Retail | 588 | 124,785 | |||||||||||
Teradyne Inc. | Semiconductors & Semiconductor Equipment | 160 | 18,917 | |||||||||||
Texas Instruments Inc. | Semiconductors & Semiconductor Equipment | 848 | 155,591 | |||||||||||
The Cooper Cos Inc. | Health Care Equipment & Supplies | 40 | 16,704 | |||||||||||
The Hershey Co. | Food Products | 170 | 36,827 | |||||||||||
The Home Depot Inc. | Specialty Retail | 404 | 120,929 | |||||||||||
The J.M. Smucker Co. | Food Products | 118 | 15,978 | |||||||||||
The Kroger Co. | Food & Staples Retailing | 804 | 46,125 | |||||||||||
The Procter & Gamble Co. | Household Products | 1,116 | 170,525 | |||||||||||
The Progressive Corp. | Insurance | 588 | 67,026 | |||||||||||
Tractor Supply Co. | Specialty Retail | 122 | 28,471 | |||||||||||
Tyson Foods Inc. | Food Products | 326 | 29,219 | |||||||||||
United Parcel Service Inc., B | Air Freight & Logistics | 788 | 168,995 | |||||||||||
| a | Veeva Systems Inc. | Health Care Technology | 122 | 25,920 | ||||||||||
Verizon Communications Inc. | Diversified Telecommunication Services | 3,196 | 162,804 | |||||||||||
| a | Vertex Pharmaceuticals Inc. | Biotechnology | 284 | 74,116 | ||||||||||
ViacomCBS Inc., B | Media | 564 | 21,325 | |||||||||||
W.W. Grainger Inc. | Trading Companies & Distributors | 46 | 23,726 | |||||||||||
Walgreens Boots Alliance Inc. | Food & Staples Retailing | 780 | 34,921 | |||||||||||
Walmart Inc. | Food & Staples Retailing | 1,144 | 170,365 | |||||||||||
| a | Waters Corp. | Life Sciences Tools & Services | 56 | 17,382 | ||||||||||
West Pharmaceutical Services Inc. | Health Care Equipment & Supplies | 76 | 31,214 | |||||||||||
Western Union Co. | IT Services | 502 | 9,407 | |||||||||||
Whirlpool Corp. | Household Durables | 60 | 10,367 | |||||||||||
|
| |||||||||||||
| �� | 8,769,330 | |||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $12,866,560) | 15,836,255 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 0.5% | ||||||||||||||
| Brazil 0.3% | ||||||||||||||
| e | Banco Bradesco SA, 4.514%, pfd. | Banks | 2,600 | 12,157 | ||||||||||
| e | Cia Energetica de Minas Gerais, 8.271%, pfd. | Electric Utilities | 1,000 | 3,201 | ||||||||||
| e | Gerdau SA, 10.191%, pfd. | Metals & Mining | 600 | 3,890 | ||||||||||
| e | Petroleo Brasileiro SA, 16.900%, pfd. | Oil, Gas & Consumable Fuels | 3,000 | 21,118 | ||||||||||
|
| |||||||||||||
| 40,366 | ||||||||||||||
|
| |||||||||||||
| Germany 0.1% | ||||||||||||||
| e | Bayerische Motoren Werke AG, 2.731%, pfd. | Automobiles | 32 | 2,503 | ||||||||||
| e | Fuchs Petrolub SE, 3.020%, pfd. | Chemicals | 74 | 2,699 | ||||||||||
| e | Porsche Automobil Holding SE, 2.514%, pfd. | Automobiles | 188 | 18,387 | ||||||||||
|
| |||||||||||||
| 23,589 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| d,e | Surgutneftegas PJSC, pfd. | Oil, Gas & Consumable Fuels | 10,688 | — | ||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 75 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ Global Equity ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Preferred Stocks (continued) | ||||||||||||||
| South Korea 0.1% | ||||||||||||||
| e | LG Household & Health Care Ltd., 2.377%, pfd. | Personal Products | 2 | $ | 836 | |||||||||
| e | Samsung Electronics Co. Ltd., 1.721%, pfd. | Technology Hardware, Storage & Peripherals | 420 | 21,831 | ||||||||||
|
| |||||||||||||
| 22,667 | ||||||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $67,171) | 86,622 | |||||||||||||
|
| |||||||||||||
Total Investments | 15,922,877 | |||||||||||||
Other Assets, less Liabilities 0.6% | 91,158 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 16,014,035 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $86,626, representing 0.5% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $3,964, representing 0.0% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eVariable rate security. The rate shown represents the yield at period end
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
Mini Bovespa Index | Long | 1 | $ | 37,150 | 6/17/22 | $ | 414 | |||||||||||||
*As of period end.
See Abbreviations on page 131.
| 76 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ International Equity Hedged ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 26.52 | $ | 22.55 | $ | 24.70 | $ | 24.25 | $ | 24.70 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsa: |
| |||||||||||||||||||
Net investment incomeb | 1.00 | 0.73 | 0.89 | 0.93 | 0.77 | |||||||||||||||
Net realized and unrealized gains (losses) | 1.93 | 5.27 | (2.61 | ) | 0.79 | 0.10 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.93 | 6.00 | (1.72 | ) | 1.72 | 0.87 | ||||||||||||||
|
| |||||||||||||||||||
| Less distributions from: |
| |||||||||||||||||||
Net investment income and net foreign currency gains | (0.80 | ) | (0.91 | ) | (0.19 | ) | (0.30 | ) | (1.32 | ) | ||||||||||
Net realized gains | — | (1.12 | ) | (0.24 | ) | (0.97 | ) | — | ||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.80 | ) | (2.03 | ) | (0.43 | ) | (1.27 | ) | (1.32 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 28.65 | $ | 26.52 | $ | 22.55 | $ | 24.70 | $ | 24.25 | ||||||||||
|
| |||||||||||||||||||
Total returnc | 11.13% | 27.54% | (7.12)% | 7.53% | 3.47% | |||||||||||||||
| Ratios to average net assetsd |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.40% | 0.40% | 0.40% | 0.40% | 1.42% | e | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.40% | 0.40% | 0.40% | 0.40% | 0.40% | e | ||||||||||||||
Net investment income | 3.54% | 2.97% | 3.44% | 3.75% | 3.07% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $17,192 | $13,260 | $9,021 | $7,410 | $9,702 | |||||||||||||||
Portfolio turnover ratef | 30.20% | g | 42.33% | g | 26.82% | g | 39.24% | 32.55% | ||||||||||||
aThe 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 and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal 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.
dRatios are annualized for periods less than one year.
eEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 30.20% | 41.62% | 26.82% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 77 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ International Equity Hedged ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests 98.5% | ||||||||||||||
| Australia 18.3% | ||||||||||||||
Aurizon Holdings Ltd. | Road & Rail | 8,994 | $ | 24,922 | ||||||||||
Australian Stock Exchange Ltd. | Capital Markets | 450 | 27,643 | |||||||||||
BHP Group Ltd. | Metals & Mining | 25,698 | 998,667 | |||||||||||
BlueScope Steel Ltd. | Metals & Mining | 1,188 | 18,610 | |||||||||||
Brambles Ltd. | Commercial Services & Supplies | 6,954 | 51,751 | |||||||||||
Coles Group Ltd. | Food & Staples Retailing | 6,204 | 83,441 | |||||||||||
CSL Ltd. | Biotechnology | 1,548 | 311,716 | |||||||||||
Dexus | Equity Real Estate Investment Trusts (REITs) | 2,472 | 20,327 | |||||||||||
Domino’s Pizza Enterprises Ltd. | Hotels, Restaurants & Leisure | 132 | 8,708 | |||||||||||
Endeavour Group Ltd. | Food & Staples Retailing | 5,388 | 29,496 | |||||||||||
Evolution Mining Ltd. | Metals & Mining | 7,998 | 26,427 | |||||||||||
Fortescue Metals Group Ltd. | Metals & Mining | 14,346 | 222,573 | |||||||||||
Medibank Private Ltd. | Insurance | 13,896 | 32,140 | |||||||||||
Newcrest Mining Ltd. | Metals & Mining | 3,426 | 68,795 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 2,574 | 230,233 | |||||||||||
Rio Tinto PLC | Metals & Mining | 5,958 | 477,030 | |||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 2,124 | 56,591 | |||||||||||
Telstra Corp. Ltd. | Diversified Telecommunication Services | 20,904 | 62,164 | |||||||||||
Washington H. Soul Pattinson & Co. Ltd. | Oil, Gas & Consumable Fuels | 576 | 12,380 | |||||||||||
Wesfarmers Ltd. | Multiline Retail | 5,736 | 217,138 | |||||||||||
Woolworths Group Ltd. | Food & Staples Retailing | 5,814 | 162,678 | |||||||||||
|
| |||||||||||||
| 3,143,430 | ||||||||||||||
|
| |||||||||||||
| Austria 0.2% | ||||||||||||||
OMV AG | Oil, Gas & Consumable Fuels | 582 | 28,098 | |||||||||||
|
| |||||||||||||
| Belgium 0.1% | ||||||||||||||
Colruyt SA | Food & Staples Retailing | 270 | 11,266 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 798 | 14,961 | |||||||||||
|
| |||||||||||||
| 26,227 | ||||||||||||||
|
| |||||||||||||
| Chile 0.1% | ||||||||||||||
Antofagasta PLC | Metals & Mining | 1,164 | 25,640 | |||||||||||
|
| |||||||||||||
| China 0.1% | ||||||||||||||
| a | Chow Tai Fook Jewellery Co. Ltd. | Specialty Retail | 4,800 | 8,740 | ||||||||||
SITC International Holdings Co. Ltd. | Marine | 5,000 | 17,717 | |||||||||||
|
| |||||||||||||
| 26,457 | ||||||||||||||
|
| |||||||||||||
| Denmark 4.3% | ||||||||||||||
AP Moller-Maersk A/S, A | Marine | 7 | 20,889 | |||||||||||
AP Moller-Maersk A/S, B | Marine | 21 | 63,986 | |||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 720 | 110,337 | |||||||||||
| a | Genmab A/S | Biotechnology | 246 | 90,704 | ||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 3,060 | 342,784 | |||||||||||
Novozymes AS | Chemicals | 924 | 63,993 | |||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 546 | 52,890 | |||||||||||
|
| |||||||||||||
| 745,583 | ||||||||||||||
|
| |||||||||||||
| Finland 0.9% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 696 | 42,298 | |||||||||||
Kone OYJ, B | Machinery | 1,518 | 80,380 | |||||||||||
Orion OYJ | Pharmaceuticals | 564 | 25,823 | |||||||||||
|
| |||||||||||||
| 148,501 | ||||||||||||||
|
| |||||||||||||
| France 4.4% | ||||||||||||||
Biomerieux | Health Care Equipment & Supplies | 150 | 16,146 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 143 | 205,489 | |||||||||||
Ipsen SA | Pharmaceuticals | 156 | 19,666 | |||||||||||
| 78 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ International Equity Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| France (continued) | ||||||||||||||
| a | Klepierre SA | Equity Real Estate Investment Trusts (REITs) | 798 | $ | 21,469 | |||||||||
| b | La Francaise des Jeux SAEM, 144A | Hotels, Restaurants & Leisure | 306 | 12,244 | ||||||||||
Orange SA | Diversified Telecommunication Services | 6,696 | 79,748 | |||||||||||
Sanofi | Pharmaceuticals | 3,504 | 360,671 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 102 | 42,275 | |||||||||||
|
| |||||||||||||
| 757,708 | ||||||||||||||
|
| |||||||||||||
| Germany 1.7% | ||||||||||||||
| b | Covestro AG, 144A | Chemicals | 426 | 21,728 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 3,078 | 149,147 | |||||||||||
E.ON SE | Multi-Utilities | 5,100 | 59,821 | |||||||||||
| a | HelloFresh SE | Internet & Direct Marketing Retail | 624 | 28,438 | ||||||||||
Knorr-Bremse AG | Machinery | 258 | 19,991 | |||||||||||
Lanxess AG | Chemicals | 252 | 11,185 | |||||||||||
|
| |||||||||||||
| 290,310 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 2.0% | ||||||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 9,200 | 63,085 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 2,900 | 19,422 | |||||||||||
CLP Holdings Ltd. | Electric Utilities | 5,000 | 48,746 | |||||||||||
Henderson Land Development Co. Ltd. | Real Estate Management & Development | 5,000 | 20,814 | |||||||||||
HKT Trust and HKT Ltd. | Diversified Telecommunication Services | 16,600 | 22,808 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 7,000 | 45,630 | |||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 15,400 | 19,979 | |||||||||||
Sun Hung Kai Properties Ltd. | Real Estate Management & Development | 5,100 | 60,955 | |||||||||||
| b | WH Group Ltd., 144A | Food Products | 33,000 | 20,858 | ||||||||||
Xinyi Glass Holdings Ltd. | Building Products | 8,800 | 21,350 | |||||||||||
|
| |||||||||||||
| 343,647 | ||||||||||||||
|
| |||||||||||||
| Ireland 0.2% | ||||||||||||||
James Hardie Industries PLC, CDI | Construction Materials | 978 | 29,818 | |||||||||||
|
| |||||||||||||
| Israel 0.6% | ||||||||||||||
| a | Check Point Software Technologies Ltd. | Software | 546 | 75,490 | ||||||||||
ICL Group Ltd. | Chemicals | 2,832 | 33,926 | |||||||||||
|
| |||||||||||||
| 109,416 | ||||||||||||||
|
| |||||||||||||
| Italy 1.6% | ||||||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 132 | 20,841 | |||||||||||
Ferrari NV | Automobiles | 522 | 115,406 | |||||||||||
Moncler SpA | Textiles, Apparel & Luxury Goods | 864 | 48,778 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 498 | 25,289 | |||||||||||
Snam SpA | Gas Utilities | 8,274 | 48,166 | |||||||||||
Telecom Italia SpA | Diversified Telecommunication Services | 32,628 | 12,107 | |||||||||||
|
| |||||||||||||
| 270,587 | ||||||||||||||
|
| |||||||||||||
| Japan 26.5% | ||||||||||||||
Aisin Seiki Co. Ltd. | Auto Components | 300 | 10,369 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 7,980 | 125,642 | |||||||||||
Benefit One Inc. | Professional Services | 200 | 4,268 | |||||||||||
Bridgestone Corp. | Auto Components | 2,580 | 101,138 | |||||||||||
Brother Industries Ltd. | Technology Hardware, Storage & Peripherals | 960 | 17,693 | |||||||||||
Capcom Co. Ltd. | Entertainment | 708 | 17,313 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 3,100 | 104,640 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 410 | 43,880 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 1,300 | 34,285 | |||||||||||
FUJIFILM Holdings Corp. | Technology Hardware, Storage & Peripherals | 800 | 49,447 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 1,800 | 208,066 | |||||||||||
Idemitsu Kosan Co. Ltd. | Oil, Gas & Consumable Fuels | 500 | 13,903 | |||||||||||
| franklintempleton.com | Annual Report | 79 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ International Equity Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 700 | $ | 12,198 | ||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 5,680 | 193,927 | |||||||||||
Japan Post Bank Co. Ltd. | Banks | 1,800 | 14,608 | |||||||||||
Japan Post Holdings Co. Ltd. | Insurance | 6,900 | 51,073 | |||||||||||
Japan Tobacco Inc. | Tobacco | 6,320 | 108,696 | |||||||||||
Kajima Corp. | Construction & Engineering | 2,080 | 25,551 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 720 | 16,355 | |||||||||||
KAO Corp. | Personal Products | 1,920 | 79,489 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 8,580 | 283,114 | |||||||||||
Koei Tecmo Holdings Co. Ltd. | Entertainment | 216 | 7,145 | |||||||||||
Meiji Holdings Co. Ltd. | Food Products | 460 | 25,051 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 600 | 10,287 | |||||||||||
Mitsui & Co. Ltd. | Trading Companies & Distributors | 3,400 | 93,225 | |||||||||||
Mitsui Chemicals Inc. | Chemicals | 400 | 10,183 | |||||||||||
Mizuho Financial Group Inc. | Banks | 7,400 | 95,537 | |||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 1,040 | 22,569 | |||||||||||
Murata Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 2,100 | 140,438 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 1,160 | 16,505 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 588 | 298,760 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 7,020 | 205,033 | |||||||||||
Nippon Yusen KK | Marine | 500 | 44,326 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 328 | 41,508 | |||||||||||
Nitto Denko Corp. | Chemicals | 530 | 38,514 | |||||||||||
Nomura Research Institute Ltd. | IT Services | 1,320 | 43,719 | |||||||||||
OBIC Co. Ltd. | IT Services | 270 | 40,976 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,460 | 36,880 | |||||||||||
Oracle Corp. Japan | Software | 165 | 11,555 | |||||||||||
ORIX Corp. | Diversified Financial Services | 4,840 | 97,598 | |||||||||||
Resona Holdings Inc. | Banks | 6,000 | 25,908 | |||||||||||
SCSK Corp. | IT Services | 520 | 9,001 | |||||||||||
Sekisui House Ltd. | Household Durables | 2,900 | 56,650 | |||||||||||
Seven & i Holdings Co. Ltd. | Food & Staples Retailing | 2,200 | 105,364 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 1,300 | 24,763 | |||||||||||
SHIMANO Inc. | Leisure Products | �� | 285 | 66,111 | ||||||||||
Shin-Etsu Chemical Co. Ltd. | Chemicals | 1,380 | 213,637 | |||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 1,200 | 74,447 | |||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 1,604 | 14,550 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 14,260 | 167,772 | |||||||||||
Sumitomo Mitsui Financial Group Inc. | Banks | 4,700 | 151,291 | |||||||||||
Sysmex Corp. | Health Care Equipment & Supplies | 580 | 42,639 | |||||||||||
Taisei Corp. | Construction & Engineering | 780 | 22,717 | |||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 660 | 343,934 | |||||||||||
Tosoh Corp. | Chemicals | 1,300 | 19,429 | |||||||||||
Toyo Suisan Kaisha Ltd. | Food Products | 380 | 13,682 | |||||||||||
Toyota Motor Corp. | Automobiles | 18,800 | 344,247 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 130 | 8,311 | |||||||||||
USS Co. Ltd. | Specialty Retail | 1,000 | 16,964 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 400 | 9,903 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 600 | 13,624 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 700 | 18,945 | |||||||||||
|
| |||||||||||||
| 4,559,353 | ||||||||||||||
|
| |||||||||||||
| Netherlands 4.1% | ||||||||||||||
| a,b | Adyen NV, 144A | IT Services | 66 | 132,844 | ||||||||||
ASML Holding NV | Semiconductors & Semiconductor Equipment | 402 | 272,844 | |||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 4,968 | 160,937 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 12,630 | 44,168 | |||||||||||
NN Group NV | Insurance | 1,284 | 65,518 | |||||||||||
| 80 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ International Equity Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Netherlands (continued) | ||||||||||||||
Randstad NV | Professional Services | 366 | $ | 22,251 | ||||||||||
|
| |||||||||||||
| 698,562 | ||||||||||||||
|
| |||||||||||||
| New Zealand 0.5% | ||||||||||||||
Fisher & Paykel Healthcare Corp. Ltd. | Health Care Equipment & Supplies | 3,174 | 53,757 | |||||||||||
Spark New Zealand Ltd. | Diversified Telecommunication Services | 10,110 | 32,207 | |||||||||||
|
| |||||||||||||
| 85,964 | ||||||||||||||
|
| |||||||||||||
| Norway 0.7% | ||||||||||||||
Orkla ASA | Food Products | 3,372 | 30,218 | |||||||||||
Telenor ASA | Diversified Telecommunication Services | 3,522 | 51,054 | |||||||||||
Yara International ASA | Chemicals | 696 | 35,182 | |||||||||||
|
| |||||||||||||
| 116,454 | ||||||||||||||
|
| |||||||||||||
| Portugal 0.1% | ||||||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 1,110 | 26,837 | |||||||||||
|
| |||||||||||||
| Singapore 0.4% | ||||||||||||||
Singapore Exchange Ltd. | Capital Markets | 4,620 | 34,035 | |||||||||||
Singapore Technologies Engineering Ltd. | Aerospace & Defense | 6,000 | 18,266 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 1,300 | 16,877 | |||||||||||
|
| |||||||||||||
| 69,178 | ||||||||||||||
|
| |||||||||||||
| Spain 2.8% | ||||||||||||||
Banco Bilbao Vizcaya Argentaria SA | Banks | 20,028 | 116,101 | |||||||||||
CaixaBank SA | Banks | 16,062 | 54,990 | |||||||||||
Enagas SA | Gas Utilities | 1,068 | 23,944 | |||||||||||
Endesa SA | Electric Utilities | 1,452 | 31,948 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 4,512 | 99,301 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 2,046 | 42,365 | |||||||||||
Telefonica SA | Diversified Telecommunication Services | 22,482 | 109,777 | |||||||||||
|
| |||||||||||||
| 478,426 | ||||||||||||||
|
| |||||||||||||
| Sweden 2.7% | ||||||||||||||
Atlas Copco AB | Machinery | 1,656 | 76,320 | |||||||||||
Atlas Copco AB, A | Machinery | 2,604 | 137,389 | |||||||||||
Boliden AB | Metals & Mining | 1,284 | 65,871 | |||||||||||
Electrolux AB | Household Durables | 510 | 7,831 | |||||||||||
Epiroc AB, A | Machinery | 2,664 | 57,800 | |||||||||||
Epiroc AB, B | Machinery | 1,548 | 28,329 | |||||||||||
Husqvarna AB, B | Household Durables | 1,236 | 13,085 | |||||||||||
Sagax AB, B | Real Estate Management & Development | 390 | 12,010 | |||||||||||
Swedish Match AB | Tobacco | 5,814 | 44,219 | |||||||||||
Tele2 AB, B | Wireless Telecommunication Services | 1,194 | 18,232 | |||||||||||
|
| |||||||||||||
| 461,086 | ||||||||||||||
|
| |||||||||||||
| Switzerland 9.8% | ||||||||||||||
EMS-Chemie Holding AG | Chemicals | 38 | 37,226 | |||||||||||
Geberit AG | Building Products | 186 | 115,652 | |||||||||||
Kuehne + Nagel International AG | Marine | 234 | 66,901 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 876 | 65,873 | |||||||||||
Nestle SA | Food Products | 2,640 | 344,828 | |||||||||||
Novartis AG | Pharmaceuticals | 4,296 | 379,299 | |||||||||||
Partners Group Holding AG | Capital Markets | 128 | 160,443 | |||||||||||
Roche Holding AG, Bearer | Pharmaceuticals | 30 | 13,203 | |||||||||||
Roche Holding AG, Non-Voting | Pharmaceuticals | 852 | 339,272 | |||||||||||
SGS SA | Professional Services | 25 | 69,981 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 120 | 72,372 | |||||||||||
| franklintempleton.com | Annual Report | 81 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ International Equity Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Switzerland (continued) | ||||||||||||||
| b | VAT Group AG, 144A | Machinery | 60 | $ | 23,107 | |||||||||
|
| |||||||||||||
| 1,688,157 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 15.8% | ||||||||||||||
Admiral Group PLC | Insurance | 1,248 | 42,115 | |||||||||||
Anglo American PLC | Metals & Mining | 6,462 | 337,988 | |||||||||||
| b | Auto Trader Group PLC, 144A | Interactive Media & Services | 4,512 | 37,593 | ||||||||||
BAE Systems PLC | Aerospace & Defense | 13,950 | 131,767 | |||||||||||
Barratt Developments PLC | Household Durables | 2,304 | 15,847 | |||||||||||
Berkeley Group Holdings PLC | Household Durables | 459 | 22,602 | |||||||||||
British American Tobacco PLC | Tobacco | 10,158 | 427,250 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 1,170 | 45,721 | |||||||||||
Croda International PLC | Chemicals | 552 | 57,271 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 852 | 116,441 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 17,232 | 373,725 | |||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 1,362 | 45,011 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 2,040 | 27,075 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 702 | 19,050 | |||||||||||
Imperial Brands PLC | Tobacco | 6,306 | 133,717 | |||||||||||
Intertek Group PLC | Professional Services | 702 | 48,285 | |||||||||||
Kingfisher PLC | Specialty Retail | 8,994 | 30,244 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs) | 2,940 | 30,410 | |||||||||||
Mondi PLC | Paper & Forest Products | 2,076 | 40,768 | |||||||||||
Next PLC | Multiline Retail | 594 | 47,176 | |||||||||||
Persimmon PLC | Household Durables | 1,752 | 49,619 | |||||||||||
RELX PLC | Professional Services | 8,676 | 272,216 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 288 | 47,532 | |||||||||||
Unilever PLC | Personal Products | 6,816 | 310,062 | |||||||||||
|
| |||||||||||||
| 2,709,485 | ||||||||||||||
|
| |||||||||||||
| United States 0.6% | ||||||||||||||
Stellantis NV | Automobiles | 6,426 | 105,818 | |||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $14,982,284) | 16,944,742 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 0.6% | ||||||||||||||
| Germany 0.6% | ||||||||||||||
| c | Bayerische Motoren Werke AG, 2.731%, pfd. | Automobiles | 132 | 10,325 | ||||||||||
| c | Fuchs Petrolub SE, 3.020%, pfd. | Chemicals | 306 | 11,161 | ||||||||||
| c | Porsche Automobil Holding SE, 2.514%, pfd. | Automobiles | 768 | 75,112 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks | 96,598 | |||||||||||||
|
| |||||||||||||
Total Investments | 17,041,340 | |||||||||||||
Other Assets, less Liabilities 0.9% | 150,958 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 17,192,298 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $248,374, representing 1.4% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
| 82 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ International Equity Hedged ETF (continued)
At March 31, 2022, the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
| OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar | DBAB | Buy | 3,269,400 | $ | 2,453,031 | 4/04/22 | $ | 2,124 | $ | — | ||||||||||||||||||
Australian Dollar | DBAB | Sell | 3,269,400 | 2,374,336 | 4/04/22 | — | (80,819 | ) | ||||||||||||||||||||
Danish Krone | BOFA | Buy | 4,571,400 | 683,783 | 4/04/22 | 10 | — | |||||||||||||||||||||
Danish Krone | BOFA | Sell | 4,571,400 | 690,938 | 4/04/22 | 7,144 | — | |||||||||||||||||||||
Euro | BOFA | Buy | 2,629,400 | 2,925,560 | 4/04/22 | 43 | — | |||||||||||||||||||||
Euro | BOFA | Sell | 2,629,400 | 2,957,019 | 4/04/22 | 31,416 | — | |||||||||||||||||||||
Great British Pound | BOFA | Buy | 798,499 | 1,051,329 | 4/04/22 | 16 | — | |||||||||||||||||||||
Great British Pound | HSBK | Buy | 798,499 | 1,051,328 | 4/04/22 | 16 | — | |||||||||||||||||||||
Great British Pound | UBSW | Buy | 798,499 | 1,051,333 | 4/04/22 | 11 | — | |||||||||||||||||||||
Great British Pound | BOFA | Sell | 798,499 | 1,071,468 | 4/04/22 | 20,124 | — | |||||||||||||||||||||
Great British Pound | HSBK | Sell | 798,499 | 1,071,582 | 4/04/22 | 20,238 | — | |||||||||||||||||||||
Great British Pound | UBSW | Sell | 798,499 | 1,071,666 | 4/04/22 | 20,321 | — | |||||||||||||||||||||
Hong Kong Dollar | MSCO | Buy | 2,861,600 | 365,383 | 4/04/22 | 18 | — | |||||||||||||||||||||
Hong Kong Dollar | MSCO | Sell | 2,861,600 | 366,215 | 4/04/22 | 814 | — | |||||||||||||||||||||
Israeli Shekel | BOFA | Buy | 96,700 | 30,301 | 4/04/22 | 1 | — | |||||||||||||||||||||
Israeli Shekel | BOFA | Sell | 96,700 | 30,177 | 4/04/22 | — | (125 | ) | ||||||||||||||||||||
Japanese Yen | BOFA | Buy | 523,457,000 | 4,312,661 | 4/04/22 | 64 | — | |||||||||||||||||||||
Japanese Yen | BOFA | Sell | 523,457,000 | 4,548,054 | 4/04/22 | 235,329 | — | |||||||||||||||||||||
New Zealand Dollar | BOFA | Buy | 132,200 | 91,953 | 4/04/22 | — | (1 | ) | ||||||||||||||||||||
New Zealand Dollar | BOFA | Sell | 132,200 | 89,403 | 4/04/22 | — | (2,549 | ) | ||||||||||||||||||||
Norwegian Krone | BOFA | Buy | 1,022,000 | 116,878 | 4/04/22 | 2 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 1,022,000 | 116,132 | 4/04/22 | — | (748 | ) | ||||||||||||||||||||
Singapore Dollar | BOFA | Buy | 88,500 | 65,392 | 4/04/22 | 1 | — | |||||||||||||||||||||
Singapore Dollar | BOFA | Sell | 88,500 | 65,178 | 4/04/22 | — | (215 | ) | ||||||||||||||||||||
Swedish Krona | BOFA | Buy | 4,103,800 | 440,344 | 4/04/22 | 7 | — | |||||||||||||||||||||
Swedish Krona | BOFA | Sell | 4,103,800 | 435,149 | 4/04/22 | — | (5,202 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Buy | 1,512,600 | 1,643,643 | 4/04/22 | 41 | — | |||||||||||||||||||||
Swiss Franc | MSCO | Sell | 1,512,600 | 1,650,995 | 4/04/22 | 7,312 | — | |||||||||||||||||||||
Australian Dollar | DBAB | Sell | 3,600,200 | 2,702,094 | 5/03/22 | — | (2,404 | ) | ||||||||||||||||||||
Danish Krone | BOFA | Sell | 5,073,100 | 759,404 | 5/03/22 | — | (78 | ) | ||||||||||||||||||||
Euro | BOFA | Sell | 2,716,800 | 3,025,331 | 5/03/22 | — | (110 | ) | ||||||||||||||||||||
Israeli Shekel | BOFA | Sell | 109,400 | 34,292 | 5/03/22 | — | (5 | ) | ||||||||||||||||||||
New Zealand Dollar | BOFA | Sell | 127,600 | 88,706 | 5/03/22 | — | (7 | ) | ||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 1,073,600 | 122,721 | 5/03/22 | — | (13 | ) | ||||||||||||||||||||
Swedish Krona | BOFA | Sell | 4,368,800 | 469,001 | 5/03/22 | — | (31 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Sell | 1,584,100 | 1,722,998 | 5/03/22 | — | (75 | ) | ||||||||||||||||||||
Great British Pound | BOFA | Sell | 830,629 | 1,093,399 | 5/04/22 | — | (44 | ) | ||||||||||||||||||||
Great British Pound | HSBK | Sell | 830,629 | 1,093,419 | 5/04/22 | — | (25 | ) | ||||||||||||||||||||
Great British Pound | UBSW | Sell | 830,629 | 1,093,429 | 5/04/22 | — | (15 | ) | ||||||||||||||||||||
Hong Kong Dollar | MSCO | Sell | 2,953,600 | 377,226 | 5/04/22 | — | (23 | ) | ||||||||||||||||||||
Singapore Dollar | BOFA | Sell | 94,900 | 70,109 | 5/05/22 | — | (4 | ) | ||||||||||||||||||||
Japanese Yen | BOFA | Sell | 561,029,400 | 4,624,804 | 5/06/22 | — | (166 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 345,052 | $ | (92,659 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 252,393 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
| franklintempleton.com | Annual Report | 83 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ International Equity Hedged ETF (continued)
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
MSCI EAFE | Long | 1 | $ | 107,220 | 6/17/22 | $ | 7,068 | |||||||||||||
*As of year end.
See Note 8 regarding other derivative information.
See Abbreviations on page 131.
| 84 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ U.S. Equity ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance |
| |||||||||||||||||||
| (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 40.04 | $ | 27.61 | $ | 31.41 | $ | 28.51 | $ | 25.44 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.77 | 0.72 | 0.76 | 0.66 | 0.53 | |||||||||||||||
Net realized and unrealized gains (losses) | 4.89 | 12.49 | (3.89 | ) | 2.71 | 2.98 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 5.66 | 13.21 | (3.13 | ) | 3.37 | 3.51 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.84 | ) | (0.78 | ) | (0.67 | ) | (0.47 | ) | (0.44 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $44.86 | $40.04 | $27.61 | $31.41 | $28.51 | |||||||||||||||
|
| |||||||||||||||||||
Total returnd | 14.19% | 48.22% | (10.27)% | 11.97% | 13.84% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.15% | 0.15% | 0.18% | 0.25% | 0.32% | f | ||||||||||||||
Total expenses before waiver and payments by affiliates | 0.15% | 0.15% | 0.18% | 0.25% | 0.25% | f | ||||||||||||||
Net investment income | 1.77% | 2.06% | 2.32% | 2.20% | 2.10% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $966,737 | $1,353,407 | $1,311,583 | $1,008,255 | $108,326 | |||||||||||||||
Portfolio turnover rateg | 68.37% | h | 25.05% | h | 19.44% | h | 18.04% | 20.80% | ||||||||||||
aFor the period April 26, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 68.37% | 25.05% | 19.44% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 85 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ U.S. Equity ETF
| Shares | Value | |||||||||
| Common Stocks 99.8% | ||||||||||
| Communication Services 4.7% | ||||||||||
| a | Alphabet Inc., A | 7,101 | $ | 19,750,366 | ||||||
Lumen Technologies Inc. | 90,079 | 1,015,190 | ||||||||
| a | Meta Platforms Inc., A | 37,066 | 8,241,996 | |||||||
Nexstar Media Group Inc., A | 5,172 | 974,819 | ||||||||
Omnicom Group Inc. | 14,654 | 1,243,832 | ||||||||
The Interpublic Group of Cos. Inc. | 26,722 | 947,295 | ||||||||
Verizon Communications Inc. | 243,946 | 12,426,609 | ||||||||
World Wrestling Entertainment Inc., A | 15,516 | 968,819 | ||||||||
|
| |||||||||
| 45,568,926 | ||||||||||
|
| |||||||||
| Consumer Discretionary 12.1% | ||||||||||
Advance Auto Parts Inc. | 4,741 | 981,197 | ||||||||
| a | Amazon.com Inc. | 6,838 | 22,291,538 | |||||||
| a | AutoNation Inc. | 8,189 | 815,461 | |||||||
| a | AutoZone Inc. | 1,544 | 3,156,832 | |||||||
Best Buy Co. Inc. | 15,085 | 1,371,227 | ||||||||
| a | Capri Holdings Ltd. | 13,792 | 708,771 | |||||||
Carter’s Inc. | 9,482 | 872,249 | ||||||||
Choice Hotels International Inc. | 6,465 | 916,478 | ||||||||
D.R. Horton Inc. | 19,395 | 1,445,122 | ||||||||
Dick’s Sporting Goods Inc. | 9,051 | 905,281 | ||||||||
| a | Dollar Tree Inc. | 12,499 | 2,001,715 | |||||||
Dominos Pizza Inc. | 2,155 | 877,107 | ||||||||
Foot Locker Inc. | 29,308 | 869,275 | ||||||||
Ford Motor Co. | 289,632 | 4,897,677 | ||||||||
Genuine Parts Co. | 8,189 | 1,031,978 | ||||||||
H&R Block Inc. | 37,497 | 976,422 | ||||||||
Harley-Davidson Inc. | 22,412 | 883,033 | ||||||||
Lennar Corp., A | 15,085 | 1,224,449 | ||||||||
Lowe’s Cos Inc. | 45,686 | 9,237,252 | ||||||||
| a | Mattel Inc. | 37,497 | 832,808 | |||||||
McDonald’s Corp. | 46,979 | 11,616,967 | ||||||||
| a | NVR Inc. | 191 | 853,249 | |||||||
| a | O’Reilly Automotive Inc. | 4,765 | 3,263,834 | |||||||
Penske Automotive Group Inc. | 9,482 | 888,653 | ||||||||
Pool Corp. | 2,319 | 980,589 | ||||||||
PulteGroup Inc. | 18,964 | 794,592 | ||||||||
Ralph Lauren Corp. | 6,896 | 782,282 | ||||||||
Service Corp. International/US | 15,516 | 1,021,263 | ||||||||
Tapestry Inc. | 22,843 | 848,617 | ||||||||
| a | Tesla Inc. | 16,925 | 18,238,380 | |||||||
The Home Depot Inc. | 50,427 | 15,094,314 | ||||||||
Toll Brothers Inc. | 17,240 | 810,625 | ||||||||
Tractor Supply Co. | 7,327 | 1,709,902 | ||||||||
Whirlpool Corp. | 4,741 | 819,150 | ||||||||
Williams-Sonoma Inc. | 6,465 | 937,425 | ||||||||
Yum! Brands Inc. | 18,102 | 2,145,630 | ||||||||
|
| |||||||||
| 117,101,344 | ||||||||||
|
| |||||||||
| Consumer Staples 7.7% | ||||||||||
Altria Group Inc. | 132,748 | 6,936,083 | ||||||||
Archer-Daniels-Midland Co. | 37,928 | 3,423,381 | ||||||||
Bunge Ltd. | 9,051 | 1,002,941 | ||||||||
Costco Wholesale Corp. | 27,419 | 15,789,231 | ||||||||
General Mills Inc. | 35,773 | 2,422,548 | ||||||||
Philip Morris International Inc. | 99,992 | 9,393,249 | ||||||||
The Coca-Cola Co. | 221,534 | 13,735,108 | ||||||||
The Hershey Co. | 9,051 | 1,960,718 | ||||||||
| 86 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Consumer Staples (continued) | ||||||||||
The Procter & Gamble Co. | 108,612 | $ | 16,595,914 | |||||||
Tyson Foods Inc. | 18,102 | 1,622,482 | ||||||||
Walgreens Boots Alliance Inc. | 41,807 | 1,871,699 | ||||||||
|
| |||||||||
| 74,753,354 | ||||||||||
|
| |||||||||
| Energy 6.1% | ||||||||||
APA Corp. | 26,291 | 1,086,607 | ||||||||
Chevron Corp. | 103,009 | 16,772,956 | ||||||||
ConocoPhillips | 92,665 | 9,266,500 | ||||||||
Continental Resources Inc. | 16,809 | 1,030,896 | ||||||||
Coterra Energy Inc., A | 49,565 | 1,336,768 | ||||||||
Devon Energy Corp. | 44,824 | 2,650,443 | ||||||||
Diamondback Energy Inc. | 11,637 | 1,595,200 | ||||||||
EOG Resources Inc. | 40,083 | 4,779,096 | ||||||||
Exxon Mobil Corp. | 203,863 | 16,837,045 | ||||||||
Pioneer Natural Resources Co. | 13,792 | 3,448,414 | ||||||||
|
| |||||||||
| 58,803,925 | ||||||||||
|
| |||||||||
| Financials 4.6% | ||||||||||
American Express Co. | 37,066 | 6,931,342 | ||||||||
Assured Guaranty Ltd. | 15,085 | 960,311 | ||||||||
| a | Berkshire Hathaway Inc., B | 41,376 | 14,602,004 | |||||||
Blackstone Inc. | 49,996 | 6,346,492 | ||||||||
Brown & Brown Inc. | 14,223 | 1,027,896 | ||||||||
Capital One Financial Corp. | 25,429 | 3,338,574 | ||||||||
FactSet Research Systems Inc. | 2,299 | 998,111 | ||||||||
First Horizon Corp. | 39,652 | 931,426 | ||||||||
JPMorgan Chase & Co. | 36,635 | 4,994,083 | ||||||||
Old Republic International Corp. | 35,342 | 914,298 | ||||||||
Synchrony Financial | 32,756 | 1,140,236 | ||||||||
Unum Group | 33,618 | 1,059,303 | ||||||||
Virtu Financial Inc., A | 26,722 | 994,593 | ||||||||
|
| |||||||||
| 44,238,669 | ||||||||||
|
| |||||||||
| Health Care 18.7% | ||||||||||
AbbVie Inc. | 97,837 | 15,860,356 | ||||||||
AmerisourceBergen Corp. | 9,051 | 1,400,280 | ||||||||
Amgen Inc. | 34,049 | 8,233,729 | ||||||||
Anthem Inc. | 17,394 | 8,544,281 | ||||||||
Baxter International Inc. | 29,308 | 2,272,542 | ||||||||
Becton Dickinson and Co. | 16,809 | 4,471,194 | ||||||||
Bristol-Myers Squibb Co. | 146,109 | 10,670,340 | ||||||||
Cardinal Health Inc. | 17,240 | 977,508 | ||||||||
| a | Centene Corp. | 37,928 | 3,193,158 | |||||||
Cerner Corp. | 21,550 | 2,016,218 | ||||||||
Chemed Corp. | 1,954 | 989,799 | ||||||||
Cigna Corp. | 20,688 | 4,957,052 | ||||||||
CVS Health Corp. | 85,769 | 8,680,681 | ||||||||
| a | Edwards Lifesciences Corp. | 37,928 | 4,464,884 | |||||||
Eli Lilly & Co. | 53,013 | 15,181,333 | ||||||||
HCA Healthcare Inc. | 15,516 | 3,888,620 | ||||||||
| a | Henry Schein Inc. | 10,775 | 939,472 | |||||||
| a | ICU Medical Inc. | 3,879 | 863,621 | |||||||
Johnson & Johnson | 61,202 | 10,846,831 | ||||||||
McKesson Corp. | 9,913 | 3,034,667 | ||||||||
Merck & Co. Inc. | 176,279 | 14,463,692 | ||||||||
| a | Moderna Inc. | 19,826 | 3,415,227 | |||||||
| a | Molina Healthcare Inc. | 3,448 | 1,150,218 | |||||||
| franklintempleton.com | Annual Report | 87 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Health Care (continued) | ||||||||||
Organon & Co. | 24,998 | $ | 873,180 | |||||||
PerkinElmer Inc. | 7,327 | 1,278,268 | ||||||||
Pfizer Inc. | 308,596 | 15,976,015 | ||||||||
Premier Inc., A | 25,860 | 920,357 | ||||||||
Quest Diagnostics Inc. | 7,327 | 1,002,773 | ||||||||
| a | Regeneron Pharmaceuticals Inc. | 7,139 | 4,986,020 | |||||||
STERIS PLC | 5,603 | 1,354,637 | ||||||||
UnitedHealth Group Inc. | 25,306 | 12,905,301 | ||||||||
| a | Vertex Pharmaceuticals Inc. | 15,947 | 4,161,689 | |||||||
West Pharmaceutical Services Inc. | 4,299 | 1,765,642 | ||||||||
Zoetis Inc. | 27,584 | 5,202,067 | ||||||||
|
| |||||||||
| 180,941,652 | ||||||||||
|
| |||||||||
| Industrials 7.6% | ||||||||||
A O Smith Corp. | 13,792 | 881,171 | ||||||||
Acuity Brands Inc. | 5,172 | 979,060 | ||||||||
Allison Transmission Holdings Inc. | 23,274 | 913,737 | ||||||||
| a | Builders FirstSource Inc. | 12,930 | 834,502 | |||||||
Carlisle Companies Inc. | 3,879 | 953,924 | ||||||||
Crane Co. | 9,051 | 980,042 | ||||||||
Curtiss-Wright Corp. | 6,465 | 970,784 | ||||||||
General Dynamics Corp. | 18,102 | 4,365,840 | ||||||||
Huntington Ingalls Industries Inc. | 4,741 | 945,545 | ||||||||
JB Hunt Transport Services Inc. | 5,603 | 1,125,026 | ||||||||
Knight-Swift Transportation Holdings Inc. | 17,240 | 869,930 | ||||||||
L3Harris Technologies Inc. | 12,499 | 3,105,627 | ||||||||
Leidos Holdings Inc. | 9,051 | 977,689 | ||||||||
Lockheed Martin Corp. | 19,302 | 8,519,903 | ||||||||
Northrop Grumman Corp. | 11,206 | 5,011,547 | ||||||||
Old Dominion Freight Line Inc. | 6,896 | 2,059,697 | ||||||||
Owens Corning | 9,913 | 907,040 | ||||||||
PACCAR Inc. | 21,119 | 1,859,950 | ||||||||
Raytheon Technologies Corp. | 91,372 | 9,052,224 | ||||||||
Robert Half International Inc. | 8,189 | 935,020 | ||||||||
Ryder System Inc. | 11,637 | 923,163 | ||||||||
Schneider National Inc., B | 35,773 | 912,212 | ||||||||
Union Pacific Corp. | 39,221 | 10,715,569 | ||||||||
United Parcel Service Inc., B | 53,875 | 11,554,033 | ||||||||
W.W. Grainger Inc. | 2,944 | 1,518,486 | ||||||||
Watsco Inc. | 3,448 | 1,050,399 | ||||||||
|
| |||||||||
| 72,922,120 | ||||||||||
|
| |||||||||
| Information Technology 33.1% | ||||||||||
Accenture PLC, A | 37,928 | 12,790,459 | ||||||||
| a | Advanced Micro Devices Inc. | 107,319 | 11,734,259 | |||||||
| a | Alphabet Inc., C | 6,495 | 18,140,470 | |||||||
Amdocs Ltd. | 11,637 | 956,678 | ||||||||
Amphenol Corp., A | 33,187 | 2,500,640 | ||||||||
Apple Inc. | 404,278 | 70,590,982 | ||||||||
Applied Materials Inc. | 54,737 | 7,214,337 | ||||||||
| a | Arista Networks Inc. | 17,671 | 2,455,916 | |||||||
| a | Arrow Electronics Inc. | 7,758 | 920,332 | |||||||
| a | Aspen Technology Inc. | 6,034 | 997,843 | |||||||
Avnet Inc. | 21,981 | 892,209 | ||||||||
Broadcom Inc. | 23,705 | 14,926,564 | ||||||||
| a | CACI International Inc., A | 3,448 | 1,038,744 | |||||||
CDK Global Inc. | 20,688 | 1,007,092 | ||||||||
| a | Ciena Corp. | 13,792 | 836,209 | |||||||
| 88 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Information Technology (continued) | ||||||||||
| a | Cirrus Logic Inc. | 10,775 | $ | 913,612 | ||||||
Cisco Systems Inc. | 249,549 | 13,914,852 | ||||||||
Cognizant Technology Solutions Corp., A | 34,480 | 3,091,822 | ||||||||
Corning Inc. | 46,979 | 1,733,995 | ||||||||
| a | Dell Technologies Inc., C | 18,964 | 951,803 | |||||||
Entegris Inc. | 7,758 | 1,018,315 | ||||||||
| a | Fortinet Inc. | 9,482 | 3,240,379 | |||||||
| a | GoDaddy Inc., A | 11,206 | 937,942 | |||||||
Hewlett Packard Enterprise Co. | 91,372 | 1,526,826 | ||||||||
HP Inc. | 80,597 | 2,925,671 | ||||||||
Intel Corp. | 240,498 | 11,919,081 | ||||||||
International Business Machines Corp. | 53,013 | 6,892,750 | ||||||||
Jabil Inc. | 15,947 | 984,408 | ||||||||
Juniper Networks Inc. | 27,584 | 1,025,021 | ||||||||
KLA Corp. | 9,913 | 3,628,753 | ||||||||
Lam Research Corp. | 8,300 | 4,462,163 | ||||||||
Micron Technology Inc. | 69,391 | 5,404,865 | ||||||||
Microsoft Corp. | 188,347 | 58,069,264 | ||||||||
NetApp Inc. | 14,223 | 1,180,509 | ||||||||
NortonLifeLock Inc. | 32,325 | 857,259 | ||||||||
NVIDIA Corp. | 60,771 | 16,581,975 | ||||||||
| a | ON Semiconductor Corp. | 27,584 | 1,727,034 | |||||||
| a | Palo Alto Networks Inc. | 6,220 | 3,872,012 | |||||||
Paychex Inc. | 21,119 | 2,882,110 | ||||||||
QUALCOMM Inc. | 75,856 | 11,592,314 | ||||||||
Science Applications International Corp. | 10,775 | 993,132 | ||||||||
Texas Instruments Inc. | 59,909 | 10,992,103 | ||||||||
|
| |||||||||
| 320,322,704 | ||||||||||
|
| |||||||||
| Materials 1.5% | ||||||||||
CF Industries Holdings Inc. | 12,930 | 1,332,566 | ||||||||
| a | Cleveland-Cliffs Inc. | 41,807 | 1,346,604 | |||||||
Huntsman Corp. | 23,274 | 873,008 | ||||||||
Louisiana-Pacific Corp. | 12,930 | 803,212 | ||||||||
LyondellBasell Industries NV, A | 14,654 | 1,506,724 | ||||||||
Mosaic Co. | 21,981 | 1,461,737 | ||||||||
Nucor Corp. | 15,516 | 2,306,453 | ||||||||
Packaging Corp. of America | 6,465 | 1,009,251 | ||||||||
Reliance Steel & Aluminum Co. | 4,741 | 869,262 | ||||||||
Sealed Air Corp. | 13,792 | 923,512 | ||||||||
Steel Dynamics Inc. | 13,361 | 1,114,708 | ||||||||
United States Steel Corp. | 34,480 | 1,301,275 | ||||||||
|
| |||||||||
| 14,848,312 | ||||||||||
|
| |||||||||
| Real Estate 2.7% | ||||||||||
Camden Property Trust | 6,034 | 1,002,851 | ||||||||
Cousins Properties Inc. | 24,136 | 972,440 | ||||||||
Extra Space Storage Inc. | 7,327 | 1,506,431 | ||||||||
Kilroy Realty Corp. | 12,930 | 988,111 | ||||||||
Kimco Realty Corp. | 39,652 | 979,404 | ||||||||
Life Storage Inc. | 7,327 | 1,028,931 | ||||||||
Medical Properties Trust Inc. | 45,686 | 965,802 | ||||||||
Mid-America Apartment Communities Inc. | 6,465 | 1,354,094 | ||||||||
Omega Healthcare Investors Inc. | 33,187 | 1,034,107 | ||||||||
Prologis Inc. | 42,238 | 6,820,592 | ||||||||
Public Storage | 10,775 | 4,205,267 | ||||||||
Rexford Industrial Realty Inc. | 13,361 | 996,597 | ||||||||
SL Green Realty Corp. | 11,637 | 944,692 | ||||||||
| franklintempleton.com | Annual Report | 89 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Real Estate (continued) | ||||||||||
VICI Properties Inc. | 37,066 | $ | 1,054,898 | |||||||
Weyerhaeuser Co. | 42,669 | 1,617,155 | ||||||||
WP Carey Inc. | 12,068 | 975,577 | ||||||||
|
| |||||||||
| 26,446,949 | ||||||||||
|
| |||||||||
| Utilities 1.0% | ||||||||||
Consolidated Edison Inc. | 21,550 | 2,040,354 | ||||||||
Exelon Corp. | 66,805 | 3,181,922 | ||||||||
National Fuel Gas Co. | 15,085 | 1,036,340 | ||||||||
NiSource Inc. | 32,325 | 1,027,935 | ||||||||
NRG Energy Inc. | 24,567 | 942,390 | ||||||||
OGE Energy Corp. | 24,998 | 1,019,418 | ||||||||
|
| |||||||||
| 9,248,359 | ||||||||||
|
| |||||||||
Total Investments (Cost $874,581,749) 99.8% | 965,196,314 | |||||||||
Other Assets, less Liabilities 0.2% | 1,541,074 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 966,737,388 | ||||||||
|
| |||||||||
aNon-income producing.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
S&P 500 E-Mini | Long | 5 | $ | 1,132,688 | 6/17/22 | $ | 70,591 | |||||||||||||
*As of period end.
See Abbreviations on page 131.
| 90 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ U.S. Mid Cap Equity ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 40.84 | $ | 24.94 | $ | 30.32 | $ | 27.70 | $ | 25.51 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.54 | 0.45 | 0.50 | 0.47 | 0.38 | |||||||||||||||
Net realized and unrealized gains (losses) | 4.03 | 15.86 | (5.41 | ) | 2.53 | 2.18 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.57 | 16.31 | (4.91 | ) | 3.00 | 2.56 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.51 | ) | (0.41 | ) | (0.47 | ) | (0.38 | ) | (0.37 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 44.90 | $ | 40.84 | $ | 24.94 | $ | 30.32 | $ | 27.70 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 11.18% | 65.69% | (16.50)% | 10.92% | 10.09% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | 0.99% | f | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | f | ||||||||||||||
Net investment income | 1.21% | 1.30% | 1.60% | 1.65% | 1.58% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $62,855 | $36,759 | $13,718 | $10,612 | $2,770 | |||||||||||||||
Portfolio turnover rateg | 22.76% | h | 25.02% | h | 24.20% | h | 23.49% | 36.21% | ||||||||||||
aFor the period April 26, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 22.76% | 25.02% | 24.20% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 91 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ U.S. Mid Cap Equity ETF
| Shares | Value | |||||||||
| Common Stocks 99.9% | ||||||||||
| Communication Services 3.0% | ||||||||||
Lumen Technologies Inc. | 25,508 | $ | 287,475 | |||||||
| a | Match Group Inc. | 5,012 | 545,005 | |||||||
Omnicom Group Inc. | 5,824 | 494,341 | ||||||||
| a | Playtika Holding Corp. | 1,932 | 37,345 | |||||||
| a,b | Skillz Inc. | 4,200 | 12,600 | |||||||
ViacomCBS Inc., A | 168 | 6,789 | ||||||||
ViacomCBS Inc., B | 10,948 | 413,944 | ||||||||
World Wrestling Entertainment Inc., A | 1,064 | 66,436 | ||||||||
|
| |||||||||
| 1,863,935 | ||||||||||
|
| |||||||||
| Consumer Discretionary 14.4% | ||||||||||
Advance Auto Parts Inc. | 1,316 | 272,359 | ||||||||
| a | AutoNation Inc. | 756 | 75,283 | |||||||
| a | AutoZone Inc. | 358 | 731,960 | |||||||
Bath & Body Works Inc. | 5,544 | 265,003 | ||||||||
Best Buy Co. Inc. | 6,132 | 557,399 | ||||||||
Brunswick Corp. | 1,260 | 101,921 | ||||||||
Carter’s Inc. | 1,232 | 113,332 | ||||||||
Columbia Sportswear Co. | 756 | 68,441 | ||||||||
Dick’s Sporting Goods Inc. | 1,820 | 182,036 | ||||||||
| a | Dollar Tree Inc. | 3,892 | 623,304 | |||||||
Dominos Pizza Inc. | 420 | 170,944 | ||||||||
| a | Etsy Inc. | 2,184 | 271,428 | |||||||
Foot Locker Inc. | 2,604 | 77,235 | ||||||||
Garmin Ltd. | 3,612 | 428,419 | ||||||||
Gentex Corp. | 5,264 | 153,551 | ||||||||
Genuine Parts Co. | 3,500 | 441,070 | ||||||||
H&R Block Inc. | 5,544 | 144,366 | ||||||||
Hanesbrands Inc. | 9,296 | 138,417 | ||||||||
Hasbro Inc. | 2,912 | 238,551 | ||||||||
| a | Leslie’s Inc. | 2,408 | 46,619 | |||||||
LKQ Corp. | 5,096 | 231,409 | ||||||||
| a | Mattel Inc. | 6,104 | 135,570 | |||||||
Newell Brands Inc. | 6,496 | 139,079 | ||||||||
| a | O’Reilly Automotive Inc. | 1,022 | 700,029 | |||||||
| a | Ollie’s Bargain Outlet Holdings Inc. | 1,456 | 62,550 | |||||||
Penske Automotive Group Inc. | 840 | 78,725 | ||||||||
Polaris Inc. | 1,232 | 129,754 | ||||||||
Pool Corp. | 1,178 | 498,117 | ||||||||
Qurate Retail Inc., A | 7,532 | 35,852 | ||||||||
| a | RH | 278 | 90,653 | |||||||
Tapestry Inc. | 7,168 | 266,291 | ||||||||
Tempur Sealy International Inc. | 5,040 | 140,717 | ||||||||
Tractor Supply Co. | 2,912 | 679,573 | ||||||||
| a | Victoria’s Secret & Co. | 1,960 | 100,666 | |||||||
Whirlpool Corp. | 1,484 | 256,406 | ||||||||
Williams-Sonoma Inc. | 2,268 | 328,860 | ||||||||
| a | YETI Holdings Inc. | 1,484 | 89,010 | |||||||
|
| |||||||||
| 9,064,899 | ||||||||||
|
| |||||||||
| Consumer Staples 7.3% | ||||||||||
Albertsons Cos Inc. | 3,556 | 118,237 | ||||||||
| a | Boston Beer Inc., A | 203 | 78,859 | |||||||
Bunge Ltd. | 2,380 | 263,728 | ||||||||
Campbell Soup Co. | 4,732 | 210,905 | ||||||||
Casey’s General Stores Inc. | 588 | 116,524 | ||||||||
Church & Dwight Co. Inc. | 6,440 | 640,007 | ||||||||
Clorox Co. | 3,220 | 447,677 | ||||||||
| 92 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Consumer Staples (continued) | ||||||||||
Flowers Foods Inc. | 6,076 | $ | 156,214 | |||||||
| a | Herbalife Nutrition Ltd. | 2,436 | 73,957 | |||||||
Kellogg Co. | 6,552 | 422,538 | ||||||||
The Hershey Co. | 3,668 | 794,599 | ||||||||
The J.M. Smucker Co. | 2,772 | 375,357 | ||||||||
The Kroger Co. | 15,708 | 901,168 | ||||||||
|
| |||||||||
| 4,599,770 | ||||||||||
|
| |||||||||
| Energy 0.3% | ||||||||||
Antero Midstream Corp. | 5,796 | 63,003 | ||||||||
Texas Pacific Land Corp. | 92 | 124,394 | ||||||||
|
| |||||||||
| 187,397 | ||||||||||
|
| |||||||||
| Financials 9.7% | ||||||||||
Affiliated Managers Group Inc. | 1,148 | 161,811 | ||||||||
Ally Financial Inc. | 8,232 | 357,927 | ||||||||
Brown & Brown Inc. | 6,356 | 459,348 | ||||||||
Cboe Global Markets Inc. | 1,148 | 131,354 | ||||||||
Cincinnati Financial Corp. | 4,620 | 628,135 | ||||||||
CNA Financial Corp. | 700 | 34,034 | ||||||||
| a | Credit Acceptance Corp. | 264 | 145,298 | |||||||
Discover Financial Services | 5,908 | 651,002 | ||||||||
Erie Indemnity Co., A | 588 | 103,564 | ||||||||
Evercore Inc. | 1,008 | 112,211 | ||||||||
FactSet Research Systems Inc. | 1,120 | 486,248 | ||||||||
First American Financial Corp. | 2,604 | 168,791 | ||||||||
Globe Life Inc. | 2,352 | 236,611 | ||||||||
Hanover Insurance Group Inc. | 728 | 108,851 | ||||||||
Janus Henderson Group PLC | 2,912 | 101,978 | ||||||||
MarketAxess Holdings Inc. | 859 | 292,232 | ||||||||
Mercury General Corp. | 700 | 38,500 | ||||||||
MSCI Inc. | 1,037 | 521,487 | ||||||||
Nasdaq Inc. | 2,996 | 533,887 | ||||||||
Prosperity Bancshares Inc. | 2,128 | 147,641 | ||||||||
SEI Investments Co. | 3,388 | 203,991 | ||||||||
Synchrony Financial | 13,076 | 455,176 | ||||||||
|
| |||||||||
| 6,080,077 | ||||||||||
|
| |||||||||
| Health Care 11.0% | ||||||||||
| a | ABIOMED Inc. | 980 | 324,615 | |||||||
| a | Amedisys Inc. | 728 | 125,427 | |||||||
Bio-Techne Corp. | 794 | 343,834 | ||||||||
Cardinal Health Inc. | 6,636 | 376,261 | ||||||||
Cerner Corp. | 7,280 | 681,117 | ||||||||
Chemed Corp. | 336 | 170,201 | ||||||||
Encompass Health Corp. | 2,996 | 213,046 | ||||||||
| a | Hologic Inc. | 4,144 | 318,342 | |||||||
| a | IDEXX Laboratories Inc. | 1,073 | 586,995 | |||||||
| a | Incyte Corp. | 3,332 | 264,627 | |||||||
| a | Masimo Corp. | 1,260 | 183,380 | |||||||
| a | Mettler-Toledo International Inc. | 431 | 591,845 | |||||||
| a | Molina Healthcare Inc. | 1,316 | 439,004 | |||||||
| a | Neurocrine Biosciences Inc. | 1,596 | 149,625 | |||||||
Organon & Co. | 3,304 | 115,409 | ||||||||
| a | Quidel Corp. | 980 | 110,211 | |||||||
ResMed Inc. | 2,548 | 617,915 | ||||||||
Royalty Pharma PLC | 6,076 | 236,721 | ||||||||
| a | United Therapeutics Corp. | 924 | 165,775 | |||||||
| franklintempleton.com | Annual Report | 93 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Health Care (continued) | ||||||||||
Universal Health Services Inc., B | 1,988 | $ | 288,161 | |||||||
| a | Waters Corp. | 1,904 | 590,983 | |||||||
|
| |||||||||
| 6,893,494 | ||||||||||
|
| |||||||||
| Industrials 16.8% | ||||||||||
A O Smith Corp. | 2,632 | 168,158 | ||||||||
Allegion PLC | 2,520 | 276,646 | ||||||||
Allison Transmission Holdings Inc. | 2,716 | 106,630 | ||||||||
| a | Builders FirstSource Inc. | 2,100 | 135,534 | |||||||
C.H. Robinson Worldwide Inc. | 3,528 | 380,001 | ||||||||
Carrier Global Corp. | 12,068 | 553,559 | ||||||||
Cintas Corp. | 1,540 | 655,101 | ||||||||
Curtiss-Wright Corp. | 840 | 126,134 | ||||||||
Donaldson Co. Inc. | 3,248 | 168,669 | ||||||||
Dover Corp. | 3,668 | 575,509 | ||||||||
Expeditors International of Washington Inc. | 4,704 | 485,265 | ||||||||
Fastenal Co. | 11,032 | 655,301 | ||||||||
Fortune Brands Home & Security Inc. | 2,240 | 166,387 | ||||||||
Graco Inc. | 4,620 | 322,106 | ||||||||
Landstar System Inc. | 980 | 147,813 | ||||||||
Lennox International Inc. | 868 | 223,822 | ||||||||
Lincoln Electric Holdings Inc. | 1,456 | 200,651 | ||||||||
ManpowerGroup Inc. | 1,428 | 134,118 | ||||||||
MSA Safety Inc. | 784 | 104,037 | ||||||||
MSC Industrial Direct Co. Inc., A | 1,260 | 107,365 | ||||||||
Nordson Corp. | 1,400 | 317,912 | ||||||||
Old Dominion Freight Line Inc. | 1,848 | 551,961 | ||||||||
Otis Worldwide Corp. | 8,120 | 624,834 | ||||||||
Robert Half International Inc. | 3,444 | 393,236 | ||||||||
Rockwell Automation Inc. | 1,932 | 541,018 | ||||||||
Rollins Inc. | 7,000 | 245,350 | ||||||||
Ryder System Inc. | 868 | 68,858 | ||||||||
Schneider National Inc., B | 1,540 | 39,270 | ||||||||
Snap-on Inc. | 1,568 | 322,193 | ||||||||
Toro Co. | 2,604 | 222,616 | ||||||||
Trane Technologies PLC | 3,472 | 530,174 | ||||||||
W.W. Grainger Inc. | 1,288 | 664,338 | ||||||||
Watsco Inc. | 1,064 | 324,137 | ||||||||
|
| |||||||||
| 10,538,703 | ||||||||||
|
| |||||||||
| Information Technology 19.6% | ||||||||||
| a | Akamai Technologies Inc. | 2,996 | 357,692 | |||||||
Amdocs Ltd. | 3,332 | 273,924 | ||||||||
| a | Arista Networks Inc. | 5,264 | 731,591 | |||||||
| a | Aspen Technology Inc. | 1,904 | 314,865 | |||||||
Bentley Systems Inc., B | 2,380 | 105,148 | ||||||||
Booz Allen Hamilton Holding Corp. | 4,564 | 400,902 | ||||||||
| a | Cadence Design Systems Inc. | 3,528 | 580,215 | |||||||
CDW Corp. | 3,444 | 616,097 | ||||||||
Citrix Systems Inc. | 3,864 | 389,878 | ||||||||
Dolby Laboratories Inc., A | 1,288 | 100,747 | ||||||||
| a | F5 Networks Inc. | 1,708 | 356,887 | |||||||
| a | Fair Isaac Corp. | 756 | 352,644 | |||||||
| a | Fortinet Inc. | 1,960 | 669,810 | |||||||
| a | Gartner Inc. | 924 | 274,853 | |||||||
Hewlett Packard Enterprise Co. | 22,344 | 373,368 | ||||||||
HP Inc. | 18,508 | 671,840 | ||||||||
Juniper Networks Inc. | 7,924 | 294,456 | ||||||||
| 94 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Information Technology (continued) | ||||||||||
| a | Manhattan Associates Inc. | 1,596 | $ | 221,381 | ||||||
Monolithic Power Systems | 1,099 | 533,762 | ||||||||
Motorola Solutions Inc. | 2,576 | 623,907 | ||||||||
National Instruments Corp. | 3,276 | 132,973 | ||||||||
NetApp Inc. | 7,196 | 597,268 | ||||||||
NortonLifeLock Inc. | 8,988 | 238,362 | ||||||||
Paychex Inc. | 5,488 | 748,947 | ||||||||
| a | Paycom Software Inc. | 1,090 | 377,554 | |||||||
| a | Synopsys Inc. | 1,904 | 634,546 | |||||||
Teradyne Inc. | 3,276 | 387,322 | ||||||||
Ubiquiti Inc. | 196 | 57,067 | ||||||||
| a | VeriSign Inc. | 2,464 | 548,141 | |||||||
Vontier Corp. | 3,640 | 92,420 | ||||||||
Western Union Co. | 12,152 | 227,729 | ||||||||
Xerox Holdings Corp. | 2,380 | 48,005 | ||||||||
|
| |||||||||
| 12,334,301 | ||||||||||
|
| |||||||||
| Materials 5.0% | ||||||||||
AptarGroup Inc. | 1,232 | 144,760 | ||||||||
Avery Dennison Corp. | 2,296 | 399,435 | ||||||||
| a | Cleveland-Cliffs Inc. | 4,956 | 159,633 | |||||||
Element Solutions Inc. | 4,116 | 90,140 | ||||||||
International Paper Co. | 6,384 | 294,622 | ||||||||
Louisiana-Pacific Corp. | 1,932 | 120,016 | ||||||||
LyondellBasell Industries NV, A | 2,940 | 302,291 | ||||||||
NewMarket Corp. | 140 | 45,413 | ||||||||
Nucor Corp. | 3,276 | 486,977 | ||||||||
Reliance Steel & Aluminum Co. | 1,484 | 272,091 | ||||||||
RPM International Inc. | 2,968 | 241,714 | ||||||||
Scotts Miracle-Gro Co., A | 924 | 113,615 | ||||||||
Sealed Air Corp. | 1,708 | 114,368 | ||||||||
Sonoco Products Co. | 2,240 | 140,134 | ||||||||
Steel Dynamics Inc. | 2,240 | 186,883 | ||||||||
| a | Sylvamo Corp. | 616 | 20,501 | |||||||
|
| |||||||||
| 3,132,593 | ||||||||||
|
| |||||||||
| Real Estate 7.6% | ||||||||||
AvalonBay Communities Inc. | 2,744 | 681,527 | ||||||||
Camden Property Trust | 2,296 | 381,595 | ||||||||
CubeSmart | 5,012 | 260,774 | ||||||||
Duke Realty Corp. | 8,596 | 499,084 | ||||||||
Extra Space Storage Inc. | 2,576 | 529,626 | ||||||||
First Industrial Realty Trust Inc. | 2,828 | 175,081 | ||||||||
Healthcare Trust of America Inc., A | 3,640 | 114,078 | ||||||||
Highwoods Properties Inc. | 2,604 | 119,107 | ||||||||
Kimco Realty Corp. | 8,988 | 222,004 | ||||||||
Life Storage Inc. | 1,456 | 204,466 | ||||||||
National Retail Properties Inc. | 4,732 | 212,656 | ||||||||
Realty Income Corp. | 9,604 | 665,557 | ||||||||
STORE Capital Corp. | 5,152 | 150,593 | ||||||||
Ventas Inc. | 9,184 | 567,204 | ||||||||
|
| |||||||||
| 4,783,352 | ||||||||||
|
| |||||||||
| Utilities 5.2% | ||||||||||
Ameren Corp. | 6,076 | 569,686 | ||||||||
American Water Works Co. Inc. | 3,864 | 639,608 | ||||||||
Consolidated Edison Inc. | 8,400 | 795,312 | ||||||||
FirstEnergy Corp. | 10,864 | 498,223 | ||||||||
| franklintempleton.com | Annual Report | 95 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Mid Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Utilities (continued) | ||||||||||
National Fuel Gas Co. | 1,540 | $ | 105,798 | |||||||
NRG Energy Inc. | 2,800 | 107,408 | ||||||||
PPL Corp. | 19,600 | 559,776 | ||||||||
|
| |||||||||
| 3,275,811 | ||||||||||
|
| |||||||||
Total Investments before Short-Term Investments (Cost $55,300,717) | 62,754,332 | |||||||||
|
| |||||||||
| Short-Term Investments 0.0%† | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.0%† | ||||||||||
| Money Market Funds 0.0%† | ||||||||||
| c,d | Institutional Fiduciary Trust Portfolio, 0.01% | 10,850 | 10,850 | |||||||
|
| |||||||||
Total Short-Term Investments (Cost $10,850) | 10,850 | |||||||||
|
| |||||||||
Total Investments (Cost $ 55,311,567) 99.9% | 62,765,182 | |||||||||
Other Assets, less Liabilities 0.1% | 89,998 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 62,855,180 | ||||||||
|
| |||||||||
See Abbreviations on page 131.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bA portion or all of the security is on loan at March 31, 2022.
cSee Note 3(c) regarding investments in affiliated management investment companies.
dThe rate shown is the annualized seven-day effective yield at period end.
| 96 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin LibertyQ U.S. Small Cap Equity ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 36.53 | $ | 20.48 | $ | 27.66 | $ | 26.66 | $ | 25.36 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.38 | 0.28 | 0.39 | 0.47 | 0.33 | |||||||||||||||
Net realized and unrealized gains (losses) | (0.36 | ) | 16.15 | (7.15 | ) | 0.87 | 1.27 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.02 | 16.43 | (6.76 | ) | 1.34 | 1.60 | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.39 | ) | (0.38 | ) | (0.42 | ) | (0.34 | ) | (0.30 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 36.16 | $ | 36.53 | $ | 20.48 | $ | 27.66 | $ | 26.66 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 0.02% | 80.74% | (24.83)% | 5.05% | 6.34% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 0.35% | 1.15% | f | ||||||||||||||
Expenses net of waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 0.35% | 0.35% | f | ||||||||||||||
Net investment income | 1.00% | 0.99% | 1.41% | 1.69% | 1.40% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $16,273 | $14,613 | $13,310 | $17,979 | $2,666 | |||||||||||||||
Portfolio turnover rateg | 27.64% | h | 34.77% | h | 23.83% | h | 22.17% | 23.99% | ||||||||||||
aFor the period April 26, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 27.64% | 34.77% | 23.83% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 97 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin LibertyQ U.S. Small Cap Equity ETF
| Shares | Value | |||||||||
| Common Stocks 99.8% | ||||||||||
| Communication Services 3.6% | ||||||||||
| a | AMC Networks Inc., A | 648 | $ | 26,328 | ||||||
| a | CarGurus Inc. | 2,223 | 94,389 | |||||||
Cogent Communications Holdings Inc. | 963 | 63,895 | ||||||||
Entravision Communications Corp., A | 1,026 | 6,577 | ||||||||
| a | EverQuote Inc., A | 270 | 4,369 | |||||||
| a | IDT Corp., B | 423 | 14,420 | |||||||
John Wiley & Sons Inc., A | 738 | 39,136 | ||||||||
| a | Liberty Latin America Ltd. | 3,159 | 30,295 | |||||||
| a | Liberty Latin America Ltd., A | 900 | 8,730 | |||||||
| a | Media Alpha Inc. | 360 | 5,958 | |||||||
Scholastic Corp. | 567 | 22,839 | ||||||||
| a | TechTarget Inc. | 504 | 40,965 | |||||||
TEGNA Inc. | 4,545 | 101,808 | ||||||||
Telephone and Data Systems Inc. | 1,737 | 32,794 | ||||||||
| a | Thryv Holdings Inc. | 126 | 3,543 | |||||||
| a | TrueCar Inc. | 2,304 | 9,101 | |||||||
| a | United States Cellular Corp. | 252 | 7,618 | |||||||
| a | WideOpenWest Inc. | 1,134 | 19,777 | |||||||
| a | Yelp Inc. | 1,647 | 56,179 | |||||||
|
| |||||||||
| 588,721 | ||||||||||
|
| |||||||||
| Consumer Discretionary 18.4% | ||||||||||
| a | 1-800-FLOWERS.Com Inc. | 693 | 8,843 | |||||||
| a | 1stdibs.com Inc. | 90 | 719 | |||||||
| a | Abercrombie & Fitch Co., A | 1,548 | 49,520 | |||||||
Academy Sports & Outdoors Inc. | 1,098 | 43,261 | ||||||||
Acushnet Holdings Corp. | 810 | 32,611 | ||||||||
| a | America’s Car-Mart Inc. | 144 | 11,601 | |||||||
American Eagle Outfitters Inc. | 3,258 | 54,734 | ||||||||
| a | American Public Education Inc. | 360 | 7,646 | |||||||
| a | Asbury Automotive Group Inc. | 495 | 79,299 | |||||||
Bassett Furniture Industries Inc. | 180 | 2,981 | ||||||||
| b | Big 5 Sporting Goods Corp. | 378 | 6,483 | |||||||
Big Lots Inc. | 1,053 | 36,434 | ||||||||
Bloomin’ Brands Inc. | 2,115 | 46,403 | ||||||||
Buckle Inc. | 927 | 30,628 | ||||||||
| b | Camping World Holdings Inc., A | 405 | 11,320 | |||||||
| a | Carparts.com Inc. | 783 | 5,246 | |||||||
Cato Corp., A | 189 | 2,771 | ||||||||
| a | Century Casinos Inc. | 261 | 3,119 | |||||||
| a | Citi Trends Inc. | 252 | 7,717 | |||||||
Cracker Barrel Old Country Store Inc. | 630 | 74,800 | ||||||||
| a | Crocs Inc. | 1,062 | 81,137 | |||||||
Dillard’s Inc., A | 153 | 41,064 | ||||||||
| a | Dorman Products Inc. | 540 | 51,316 | |||||||
| a | Duluth Holdings Inc. | 234 | 2,862 | |||||||
Escalade Inc. | 198 | 2,614 | ||||||||
Ethan Allen Interiors Inc. | 639 | 16,659 | ||||||||
| a,b | F45 Training Holdings Inc. | 198 | 2,119 | |||||||
| a | Fiesta Restaurant Group Inc. | 360 | 2,691 | |||||||
Franchise Group Inc. | 432 | 17,898 | ||||||||
| a | Funko Inc., A | 387 | 6,676 | |||||||
| a | Genesco Inc. | 315 | 20,037 | |||||||
| a | GoPro Inc., A | 1,260 | 10,748 | |||||||
| a | Green Brick Partners Inc. | 486 | 9,603 | |||||||
Group 1 Automotive Inc. | 378 | 63,440 | ||||||||
Hamilton Beach Brands Holding Co., A | 189 | 2,198 | ||||||||
Haverty Furniture Cos. Inc. | 477 | 13,079 | ||||||||
| 98 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Consumer Discretionary (continued) | ||||||||||
| a | Helen of Troy Ltd. | 522 | $ | 102,228 | ||||||
Hibbett Sports Inc. | 369 | 16,361 | ||||||||
Hooker Furniture Corp. | 268 | 5,076 | ||||||||
Installed Building Products Inc. | 432 | 36,500 | ||||||||
| a | iRobot Corp. | 585 | 37,089 | |||||||
| b | JOANN Inc. | 243 | 2,773 | |||||||
Johnson Outdoors Inc., A | 126 | 9,794 | ||||||||
| a | Kirkland’s Inc. | 225 | 2,090 | |||||||
Kontoor Brands Inc. | 1,332 | 55,078 | ||||||||
La-Z-Boy Inc. | 990 | 26,106 | ||||||||
| a,b | Lazydays Holdings Inc. | 135 | 2,724 | |||||||
LCI Industries | 513 | 53,255 | ||||||||
| a | LGI Homes Inc. | 432 | 42,198 | |||||||
Lifetime Brands Inc. | 252 | 3,236 | ||||||||
| a | Liquidity Services Inc. | 504 | 8,628 | |||||||
| a | Lumber Liquidators Holdings Inc. | 477 | 6,688 | |||||||
Macy’s Inc. | 6,147 | 149,741 | ||||||||
| a | Malibu Boats Inc., A | 369 | 21,406 | |||||||
Marine Products Corp. | 208 | 2,402 | ||||||||
| a | MarineMax Inc. | 423 | 17,030 | |||||||
| a | MasterCraft Boat Holdings Inc. | 180 | 4,430 | |||||||
Monro Inc. | 657 | 29,131 | ||||||||
Movado Group Inc. | 450 | 17,572 | ||||||||
Murphy USA Inc. | 558 | 111,578 | ||||||||
Nathan’s Famous Inc. | 45 | 2,438 | ||||||||
| a | National Vision Holdings Inc. | 1,658 | 72,239 | |||||||
| a | Nautilus Inc. | 576 | 2,373 | |||||||
| a | ONE Group Hospitality Inc. | 216 | 2,270 | |||||||
OneWater Marine Inc., A | 207 | 7,131 | ||||||||
Oxford Industries Inc. | 423 | 38,281 | ||||||||
Papa John’s International Inc. | 666 | 70,116 | ||||||||
| a | Perdoceo Education Corp. | 1,638 | 18,804 | |||||||
PetMed Express Inc. | 468 | 12,074 | ||||||||
| a,b | Portillo’s Inc., A | 252 | 6,189 | |||||||
| a | Purple Innovation Inc. | 792 | 4,633 | |||||||
Rent-A-Center Inc. | 1,701 | 42,848 | ||||||||
| a | Revolve Group Inc. | 585 | 31,409 | |||||||
Rocky Brands Inc. | 144 | 5,989 | ||||||||
| a | Sally Beauty Holdings Inc. | 2,727 | 42,623 | |||||||
Shoe Carnival Inc. | 432 | 12,597 | ||||||||
Shutterstock Inc. | 585 | 54,452 | ||||||||
Signet Jewelers Ltd. | 1,170 | 85,059 | ||||||||
| a | Sleep Number Corp. | 540 | 27,383 | |||||||
Smith & Wesson Brands Inc. | 1,098 | 16,613 | ||||||||
Sonic Automotive Inc. | 558 | 23,721 | ||||||||
| a | Sonos Inc. | 2,421 | 68,321 | |||||||
| a | Sportsman’s Warehouse Holdings Inc. | 1,215 | 12,988 | |||||||
Standard Motor Products Inc. | 504 | 21,743 | ||||||||
Steven Madden Ltd. | 1,863 | 71,986 | ||||||||
| a | Stitch Fix Inc., A | 1,458 | 14,682 | |||||||
Strategic Education Inc. | 513 | 34,053 | ||||||||
| a | Stride Inc. | 846 | 30,735 | |||||||
Sturm Ruger & Co. Inc. | 441 | 30,702 | ||||||||
Superior Group of Cos. Inc. | 288 | 5,141 | ||||||||
Texas Roadhouse Inc., A | 1,701 | 142,425 | ||||||||
| a | The Cheesecake Factory Inc. | 1,125 | 44,764 | |||||||
| a | The Container Store Group Inc. | 684 | 5,588 | |||||||
| franklintempleton.com | Annual Report | 99 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Consumer Discretionary (continued) | ||||||||||
| a | The Lovesac Co. | 234 | $ | 12,650 | ||||||
| a | The ODP Corp. | 1,053 | 48,259 | |||||||
Tilly’s Inc., A | 486 | 4,549 | ||||||||
| a | Tupperware Brands Corp. | 1,215 | 23,632 | |||||||
| a | Turtle Beach Corp. | 270 | 5,748 | |||||||
| a | Udemy Inc. | 135 | 1,682 | |||||||
| a | Vera Bradley Inc. | 594 | 4,556 | |||||||
| a | Vista Outdoor Inc. | 1,107 | 39,509 | |||||||
Weber Inc., A | 171 | 1,681 | ||||||||
Wingstop Inc. | 657 | 77,099 | ||||||||
Winmark Corp. | 81 | 17,820 | ||||||||
Wolverine World Wide Inc. | 1,647 | 37,156 | ||||||||
| a | XPEL Inc. | 369 | 19,413 | |||||||
| a | Zumiez Inc. | 432 | 16,507 | |||||||
|
| |||||||||
| 2,996,022 | ||||||||||
|
| |||||||||
| Consumer Staples 6.6% | ||||||||||
| b | B&G Foods Inc., A | 1,260 | 33,995 | |||||||
| a | BellRing Brands Inc. | 753 | 17,379 | |||||||
| a | BJ’s Wholesale Club Holdings Inc. | 2,340 | 158,207 | |||||||
| a | Celsius Holdings Inc. | 810 | 44,696 | |||||||
| a | Central Garden & Pet Co. | 225 | 9,891 | |||||||
| a | Central Garden & Pet Co., A | 909 | 37,069 | |||||||
Coca-Cola Consolidated Inc. | 115 | 57,138 | ||||||||
Edgewell Personal Care Co. | 522 | 19,142 | ||||||||
Energizer Holdings Inc. | 666 | 20,486 | ||||||||
Ingles Markets Inc., A | 387 | 34,462 | ||||||||
Inter Parfums Inc. | 432 | 38,038 | ||||||||
John B. Sanfilippo & Son Inc. | 207 | 17,272 | ||||||||
Lancaster Colony Corp. | 432 | 64,433 | ||||||||
Medifast Inc. | 315 | 53,796 | ||||||||
National Beverage Corp. | 594 | 25,839 | ||||||||
Natural Grocers by Vitamin Cottage Inc. | 248 | 4,861 | ||||||||
| a | Natures Sunshine Products Inc. | 252 | 4,239 | |||||||
Nu Skin Enterprises Inc., A | 963 | 46,108 | ||||||||
Oil-Dri Corp. of America | 99 | 2,836 | ||||||||
PriceSmart Inc. | 522 | 41,170 | ||||||||
SpartanNash Co. | 963 | 31,769 | ||||||||
| a | Sprouts Farmers Market Inc. | 1,971 | 63,033 | |||||||
Tootsie Roll Industries Inc. | 324 | 11,343 | ||||||||
| a | United Natural Foods Inc. | 873 | 36,099 | |||||||
Universal Corp. | 558 | 32,403 | ||||||||
| a | USANA Health Sciences Inc. | 279 | 22,167 | |||||||
Vector Group Ltd. | 3,438 | 41,393 | ||||||||
Village Super Market Inc., A | 243 | 5,953 | ||||||||
WD-40 Co. | 378 | 69,261 | ||||||||
Weis Markets Inc. | 396 | 28,282 | ||||||||
|
| |||||||||
| 1,072,760 | ||||||||||
|
| |||||||||
| Energy 1.1% | ||||||||||
| a | CONSOL Energy Inc. | 765 | 28,787 | |||||||
DHT Holdings Inc. | 2,619 | 15,190 | ||||||||
Equitrans Midstream Corp. | 5,994 | 50,590 | ||||||||
SFL Corp. Ltd. | 1,179 | 12,002 | ||||||||
| a | Southwestern Energy Co. | 9,684 | 69,434 | |||||||
|
| |||||||||
| 176,003 | ||||||||||
|
| |||||||||
| 100 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Financials 9.9% | ||||||||||
1st Source Corp. | 324 | $ | 14,985 | |||||||
A-Mark Precious Metals Inc. | 153 | 11,833 | ||||||||
Allegiance Bancshares Inc. | 279 | 12,466 | ||||||||
American National Group Inc. | 135 | 25,527 | ||||||||
Arrow Financial Corp. | 315 | 10,212 | ||||||||
Associated Banc-Corp | 2,259 | 51,415 | ||||||||
Banco Latinoamericano de Comercio Exterior SA | 630 | 9,815 | ||||||||
Blackstone Mortgage Trust Inc., A | 2,205 | 70,097 | ||||||||
Brookline Bancorp Inc. | 1,116 | 17,655 | ||||||||
Cadence Bank | 2,610 | 76,369 | ||||||||
Central Pacific Financial Corp. | 504 | 14,062 | ||||||||
Citizens & Northern Corp. | 297 | 7,241 | ||||||||
City Holding Co. | 225 | 17,707 | ||||||||
Community Trust Bancorp Inc. | 306 | 12,607 | ||||||||
CVB Financial Corp. | 1,206 | 27,991 | ||||||||
Diamond Hill Investment Group Inc. | 63 | 11,800 | ||||||||
Donegal Group Inc. | 351 | 4,707 | ||||||||
| a | Donnelley Financial Solutions Inc. | 558 | 18,559 | |||||||
| b | Enact Holdings Inc. | 180 | 4,005 | |||||||
| a | Enova International Inc. | 549 | 20,845 | |||||||
Enterprise Bancorp Inc. | 180 | 7,222 | ||||||||
Essent Group Ltd. | 2,295 | 94,577 | ||||||||
| a | EZCORP Inc., A | 1,044 | 6,306 | |||||||
Farmers National Banc Corp. | 432 | 7,370 | ||||||||
Federated Hermes Inc., B | 2,133 | 72,650 | ||||||||
Financial Institutions Inc. | 306 | 9,220 | ||||||||
First Bancorp Inc. | 171 | 5,144 | ||||||||
First Community Bankshares Inc. | 243 | 6,855 | ||||||||
First Merchants Corp. | 828 | 34,445 | ||||||||
First of Long Island Corp. | 351 | 6,830 | ||||||||
| a | Genworth Financial Inc., A | 11,583 | 43,784 | |||||||
German American Bancorp Inc. | 468 | 17,779 | ||||||||
Guaranty Bancshares Inc. | 126 | 4,410 | ||||||||
Hanmi Financial Corp. | 567 | 13,954 | ||||||||
Heritage Financial Corp. | 729 | 18,269 | ||||||||
Heritage Insurance Holdings Inc. | 504 | 3,599 | ||||||||
Hope Bancorp Inc. | 2,061 | 33,141 | ||||||||
Houlihan Lokey Inc. | 1,134 | 99,565 | ||||||||
Invesco Mortgage Capital Inc. | 4,068 | 9,275 | ||||||||
Investors Title Co. | 27 | 5,487 | ||||||||
Kinsale Capital Group Inc. | 414 | 94,400 | ||||||||
Lakeland Bancorp Inc. | 720 | 12,024 | ||||||||
MFA Financial Inc. | 7,542 | 30,394 | ||||||||
National Western Life Group Inc., A | 72 | 15,149 | ||||||||
NBT Bancorp Inc. | 882 | 31,867 | ||||||||
Nelnet Inc., A | 369 | 31,361 | ||||||||
Northfield Bancorp Inc. | 1,134 | 16,284 | ||||||||
Northwest Bancshares Inc. | 2,583 | 34,896 | ||||||||
Peoples Bancorp Inc. | 602 | 18,849 | ||||||||
ProAssurance Corp. | 1,017 | 27,337 | ||||||||
Pzena Investment Management Inc., A | 396 | 3,176 | ||||||||
RLI Corp. | 747 | 82,641 | ||||||||
Safety Insurance Group Inc. | 234 | 21,259 | ||||||||
| a | Selectquote Inc. | 1,998 | 5,574 | |||||||
Southern Missouri Bancorp Inc. | 179 | 8,941 | ||||||||
StepStone Group Inc. | 666 | 22,018 | ||||||||
Stewart Information Services Corp. | 531 | 32,184 | ||||||||
| franklintempleton.com | Annual Report | 101 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Financials (continued) | ||||||||||
The Hingham Institution for Savings | 27 | $ | 9,266 | |||||||
Tompkins Financial Corp. | 333 | 26,064 | ||||||||
TPG RE Finance Trust Inc. | 981 | 11,586 | ||||||||
TrustCo Bank Corp. | 432 | 13,794 | ||||||||
UMB Financial Corp. | 657 | 63,834 | ||||||||
United Insurance Holdings Corp. | 268 | 887 | ||||||||
West Bancorp Inc. | 360 | 9,796 | ||||||||
Westamerica BanCorp | 549 | 33,214 | ||||||||
| a | World Acceptance Corp. | 72 | 13,812 | |||||||
|
| |||||||||
| 1,610,387 | ||||||||||
|
| |||||||||
| Health Care 9.5% | ||||||||||
| a | AMN Healthcare Services Inc. | 1,152 | 120,188 | |||||||
| a | AtriCure Inc. | 981 | 64,422 | |||||||
Atrion Corp. | 31 | 22,103 | ||||||||
| a | Bioventus Inc., A | 333 | 4,695 | |||||||
| a | Blueprint Medicines Corp. | 972 | 62,091 | |||||||
| a | Brooklyn ImmunoTherapeutics Inc. | 405 | 830 | |||||||
| a | Cardiovascular Systems Inc. | 855 | 19,323 | |||||||
| a | Catalyst Pharmaceuticals Inc. | 2,160 | 17,906 | |||||||
| a | Community Health Systems Inc. | 2,781 | 33,011 | |||||||
| a | Computer Programs and Systems Inc. | 207 | 7,131 | |||||||
CONMED Corp. | 612 | 90,913 | ||||||||
| a | Convey Health Solutions Holdings Inc. | 198 | 1,295 | |||||||
| a | Corcept Therapeutics Inc. | 2,250 | 50,670 | |||||||
| a | CorVel Corp. | 189 | 31,835 | |||||||
| a | Cross Country Healthcare Inc. | 819 | 17,748 | |||||||
| a | Eagle Pharmaceuticals Inc. | 248 | 12,274 | |||||||
| a | Emergent BioSolutions Inc. | 864 | 35,476 | |||||||
| a | Enanta Pharmaceuticals Inc. | 405 | 28,828 | |||||||
| a | Fulgent Genetics Inc. | 369 | 23,029 | |||||||
| a | Hanger Inc. | 972 | 17,817 | |||||||
| a | Inari Medical Inc. | 513 | 46,498 | |||||||
| a,b | InfuSystem Holdings Inc. | 324 | 3,175 | |||||||
| a | Innoviva Inc. | 1,071 | 20,724 | |||||||
iRadimed Corp. | 129 | 5,784 | ||||||||
| a | Ironwood Pharmaceuticals Inc. | 3,186 | 40,080 | |||||||
LeMaitre Vascular Inc. | 387 | 17,984 | ||||||||
| a | LHC Group Inc. | 594 | 100,148 | |||||||
| a | MaxCyte Inc. | 954 | 6,668 | |||||||
| a | Mednax Inc. | 1,530 | 35,924 | |||||||
| a | Meridian Bioscience Inc. | 1,035 | 26,869 | |||||||
| a | Merit Medical Systems Inc. | 1,044 | 69,447 | |||||||
| a | MiMedx Group Inc. | 1,089 | 5,129 | |||||||
National Healthcare Corp. | 315 | 22,122 | ||||||||
National Research Corp., A | 306 | 12,133 | ||||||||
| a | Neogen Corp. | 2,223 | 68,557 | |||||||
| a | NeuroPace Inc. | 72 | 591 | |||||||
| a,b | Omeros Corp. | 963 | 5,788 | |||||||
| a | Organogenesis Holdings Inc. | 639 | 4,869 | |||||||
| a | Orthofix International N.V. | 378 | 12,361 | |||||||
Owens & Minor Inc. | 1,368 | 60,219 | ||||||||
| a | Paragon 28 Inc. | 90 | 1,507 | |||||||
Patterson Cos. Inc. | 1,926 | 62,345 | ||||||||
Phibro Animal Health Corp. | 531 | 10,593 | ||||||||
| a | Prestige Consumer Healthcare Inc. | 1,071 | 56,699 | |||||||
| a | Retractable Technologies Inc. | 180 | 855 | |||||||
| a | Sharps Compliance Corp. | 238 | 1,404 | |||||||
| 102 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Health Care (continued) | ||||||||||
| a | SIGA Technologies Inc. | 873 | $ | 6,190 | ||||||
Simulations Plus Inc. | 297 | 15,141 | ||||||||
| a | STAAR Surgical Co. | 999 | 79,830 | |||||||
| a | Supernus Pharmaceuticals Inc. | 1,035 | 33,451 | |||||||
| a | Surmodics Inc. | 281 | 12,738 | |||||||
| a | Tactile Systems Technology Inc. | 486 | 9,798 | |||||||
| a | The Joint Corp. | 333 | 11,785 | |||||||
| a | Treace Medical Concepts Inc. | 333 | 6,297 | |||||||
Utah Medical Products Inc. | 81 | 7,279 | ||||||||
| a | Viemed Healthcare Inc. | 774 | 3,855 | |||||||
| b | Zynex Inc. | 366 | 2,280 | |||||||
|
| |||||||||
| 1,548,702 | ||||||||||
|
| |||||||||
| Industrials 20.0% | ||||||||||
ABM Industries Inc. | 1,332 | 61,325 | ||||||||
Acco Brands Corp. | 1,890 | 15,120 | ||||||||
| a | Air Transport Services Group Inc. | 1,089 | 36,427 | |||||||
Alamo Group Inc. | 189 | 27,176 | ||||||||
Allied Motion Technologies Inc. | 270 | 8,057 | ||||||||
Applied Industrial Technologies Inc. | 882 | 90,546 | ||||||||
| a | Atkore Inc. | 459 | 45,184 | |||||||
| a | Atlas Air Worldwide Holdings Inc. | 531 | 45,862 | |||||||
| a | Atlas Technical Consultants Inc. | 252 | 3,034 | |||||||
| a | BlueLinx Holdings Inc. | 144 | 10,351 | |||||||
Boise Cascade Co. | 765 | 53,145 | ||||||||
Brady Corp., A | 1,260 | 58,300 | ||||||||
| a | Casella Waste Systems Inc., A | 972 | 85,196 | |||||||
| a | Cimpress PLC | 360 | 22,892 | |||||||
Comfort Systems USA Inc. | 648 | 57,679 | ||||||||
CompX International Inc. | 40 | 941 | ||||||||
Costamare Inc. | 1,107 | 18,874 | ||||||||
Covenant Logistics Group Inc. | 327 | 7,040 | ||||||||
CRA International Inc. | 135 | 11,375 | ||||||||
CSW Industrials Inc. | 279 | 32,808 | ||||||||
| a | Daseke Inc. | 387 | 3,897 | |||||||
Deluxe Corp. | 1,071 | 32,387 | ||||||||
| a | DXP Enterprises Inc. | 279 | 7,558 | |||||||
| a | Energy Recovery Inc. | 630 | 12,688 | |||||||
Ennis Inc. | 558 | 10,306 | ||||||||
Exponent Inc. | 1,269 | 137,115 | ||||||||
Federal Signal Corp. | 927 | 31,286 | ||||||||
Forward Air Corp. | 603 | 58,961 | ||||||||
| a | Franklin Covey Co. | 270 | 12,209 | |||||||
Franklin Electric Co. Inc. | 999 | 82,957 | ||||||||
Global Industrial Co. | 306 | 9,862 | ||||||||
| a | GMS Inc. | 873 | 43,449 | |||||||
GrafTech International Ltd. | 2,673 | 25,714 | ||||||||
Griffon Corp. | 684 | 13,701 | ||||||||
H&E Equipment Services Inc. | 657 | 28,593 | ||||||||
Healthcare Services Group Inc. | 1,665 | 30,919 | ||||||||
Heartland Express Inc. | 1,107 | 15,576 | ||||||||
Heidrick & Struggles International Inc. | 558 | 22,086 | ||||||||
Helios Technologies Inc. | 306 | 24,557 | ||||||||
| a | Heritage-Crystal Clean Inc. | 423 | 12,525 | |||||||
Herman Miller Inc. | 1,674 | 57,853 | ||||||||
Hillenbrand Inc. | 1,422 | 62,810 | ||||||||
HireQuest Inc. | 54 | 1,032 | ||||||||
HNI Corp. | 1,107 | 41,014 | ||||||||
| franklintempleton.com | Annual Report | 103 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Industrials (continued) | ||||||||||
Hyster-Yale Materials Handling Inc. | 189 | $ | 6,277 | |||||||
| a | IBEX Ltd. | 108 | 1,722 | |||||||
ICF International Inc. | 405 | 38,127 | ||||||||
| a | IES Holdings Inc. | 144 | 5,789 | |||||||
Insperity Inc. | 783 | 78,629 | ||||||||
Interface Inc. | 1,125 | 15,266 | ||||||||
John Bean Technologies Corp. | 567 | 67,173 | ||||||||
Kadant Inc. | 243 | 47,188 | ||||||||
| a | Karat Packaging Inc. | 54 | 1,072 | |||||||
Kelly Services Inc., A | 738 | 16,007 | ||||||||
Kforce Inc. | 558 | 41,275 | ||||||||
Kimball International Inc., B | 864 | 7,301 | ||||||||
Korn Ferry | 1,494 | 97,020 | ||||||||
| a | Lawson Products Inc. | 99 | 3,815 | |||||||
Luxfer Holdings PLC | 531 | 8,921 | ||||||||
Marten Transport Ltd. | 1,197 | 21,259 | ||||||||
Matson Inc. | 657 | 79,247 | ||||||||
Matthews International Corp., A | 441 | 14,271 | ||||||||
McGrath RentCorp | 495 | 42,065 | ||||||||
Miller Industries Inc. | 216 | 6,083 | ||||||||
Mueller Industries Inc. | 558 | 30,227 | ||||||||
Mueller Water Products Inc., A | 2,286 | 29,535 | ||||||||
National Presto Industries Inc. | 117 | 9,003 | ||||||||
NL Industries Inc. | 99 | 712 | ||||||||
| a | NV5 Global Inc. | 198 | 26,393 | |||||||
Omega Flex Inc. | 81 | 10,519 | ||||||||
| a | P.A.M. Transportation Services Inc. | 162 | 5,630 | |||||||
Preformed Line Products Co. | 70 | 4,439 | ||||||||
| a | Radiant Logistics Inc. | 837 | 5,332 | |||||||
Rush Enterprises Inc., A | 648 | 32,990 | ||||||||
Rush Enterprises Inc., B | 162 | 7,833 | ||||||||
| a | SAIA Inc. | 531 | 129,468 | |||||||
Simpson Manufacturing Co. Inc. | 990 | 107,950 | ||||||||
Standex International Corp. | 243 | 24,281 | ||||||||
Steelcase Inc., A | 1,908 | 22,801 | ||||||||
Tennant Co. | 405 | 31,914 | ||||||||
Tetra Tech Inc. | 945 | 155,868 | ||||||||
| a | Titan Machinery Inc. | 297 | 8,393 | |||||||
| a | Transcat Inc. | 144 | 11,684 | |||||||
Triton International Ltd. | 1,179 | 82,742 | ||||||||
| a | TrueBlue Inc. | 522 | 15,081 | |||||||
UFP Industries Inc. | 1,233 | 95,138 | ||||||||
UniFirst Corp. | 297 | 54,731 | ||||||||
Universal Logistics Holdings Inc. | 198 | 3,990 | ||||||||
| a | US Xpress Enterprises Inc., A | 684 | 2,654 | |||||||
| a | Vectrus Inc. | 207 | 7,423 | |||||||
| a | Veritiv Corp. | 270 | 36,069 | |||||||
| a | Vicor Corp. | 432 | 30,478 | |||||||
Watts Water Technologies Inc., A | 657 | 91,711 | ||||||||
Werner Enterprises Inc. | 1,737 | 71,217 | ||||||||
Zurn Water Solutions Corp. | 1,224 | 43,330 | ||||||||
|
| |||||||||
| 3,258,430 | ||||||||||
|
| |||||||||
| Information Technology 15.6% | ||||||||||
A10 Networks Inc. | 1,575 | 21,971 | ||||||||
ADTRAN Inc. | 702 | 12,952 | ||||||||
| a | Alarm.com Holdings Inc. | 1,188 | 78,954 | |||||||
| a | Altair Engineering Inc. | 954 | 61,438 | |||||||
| 104 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Information Technology (continued) | ||||||||||
American Software Inc., A | 648 | $ | 13,504 | |||||||
| a | Appfolio Inc. | 369 | 41,774 | |||||||
| a | Aviat Networks Inc. | 180 | 5,539 | |||||||
| a | Avid Technology Inc. | 810 | 28,245 | |||||||
Badger Meter Inc. | 684 | 68,202 | ||||||||
| a | BigCommerce Holdings Inc., Series 1 | 720 | 15,775 | |||||||
| a | Blackbaud Inc. | 765 | 45,801 | |||||||
| a | Brightcove Inc. | 684 | 5,335 | |||||||
| a | Calix Inc. | 1,125 | 48,274 | |||||||
| a | Cambium Networks Corp. | 198 | 4,681 | |||||||
| a | CEVA Inc. | 450 | 18,293 | |||||||
| a | ChannelAdvisor Corp. | 657 | 10,886 | |||||||
| a | Clearfield Inc. | 216 | 14,088 | |||||||
| a | CommVault Systems Inc. | 999 | 66,284 | |||||||
| a | Consensus Cloud Solutions Inc. | 378 | 22,729 | |||||||
| a | Couchbase Inc. | 108 | 1,881 | |||||||
CSG Systems International Inc. | 765 | 48,631 | ||||||||
| a | Daktronics Inc. | 693 | 2,661 | |||||||
| a | eGain Corp. | 369 | 4,273 | |||||||
| a | Envestnet Inc. | 864 | 64,316 | |||||||
| a | ePlus Inc. | 531 | 29,768 | |||||||
EVERTEC Inc. | 1,188 | 48,625 | ||||||||
| a | ExlService Holdings Inc. | 315 | 45,130 | |||||||
| a | Extreme Networks Inc. | 1,260 | 15,385 | |||||||
| a | FARO Technologies Inc. | 270 | 14,018 | |||||||
Hackett Group Inc. | 540 | 12,452 | ||||||||
| a | Insight Enterprises Inc. | 702 | 75,339 | |||||||
| a | International Money Express Inc. | 540 | 11,129 | |||||||
| a | J2 Global Inc. | 981 | 94,941 | |||||||
Kulicke & Soffa Industries Inc. | 1,125 | 63,023 | ||||||||
| a | Lattice Semiconductor Corp. | 2,304 | 140,429 | |||||||
ManTech International Corp., A | 612 | 52,748 | ||||||||
MAXIMUS Inc. | 1,233 | 92,413 | ||||||||
Methode Electronics Inc. | 783 | 33,865 | ||||||||
| a,b | MicroStrategy Inc. | 180 | 87,538 | |||||||
| a | Mimecast Ltd. | 1,323 | 105,258 | |||||||
| a | Napco Security Technologies Inc. | 614 | 12,599 | |||||||
| a | NETGEAR Inc. | 414 | 10,218 | |||||||
| a | NetScout Systems Inc. | 1,080 | 34,646 | |||||||
| a | Novanta Inc. | 837 | 119,097 | |||||||
NVE Corp. | 129 | 7,027 | ||||||||
| a | ON24 Inc. | 315 | 4,142 | |||||||
| a | OneSpan Inc. | 522 | 7,538 | |||||||
| a | OSI Systems Inc. | 333 | 28,345 | |||||||
| a | PagerDuty Inc. | 1,179 | 40,310 | |||||||
PC Connection Inc. | 216 | 11,316 | ||||||||
Power Integrations Inc. | 1,280 | 118,630 | ||||||||
Progress Software Corp. | 1,008 | 47,467 | ||||||||
| a | Qualys Inc. | 864 | 123,042 | |||||||
| a | Quantum Corp. | 819 | 1,859 | |||||||
| a | Rapid7 Inc. | 576 | 64,074 | |||||||
| a | Rimini Street Inc. | 1,026 | 5,951 | |||||||
| a | Smith Micro Software Inc. | 810 | 3,054 | |||||||
| a | SPS Commerce Inc. | 882 | 115,718 | |||||||
TTEC Holdings Inc. | 270 | 22,280 | ||||||||
Vishay Intertechnology Inc. | 2,529 | 49,568 | ||||||||
| a | Workiva Inc. | 738 | 87,084 | |||||||
|
| |||||||||
| 2,542,513 | ||||||||||
|
| |||||||||
| franklintempleton.com | Annual Report | 105 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Materials 3.1% | ||||||||||
Balchem Corp. | 531 | $ | 72,588 | |||||||
Commercial Metals Co. | 1,728 | 71,919 | ||||||||
Compass Minerals International Inc. | 558 | 35,037 | ||||||||
Greif Inc., A | 612 | 39,817 | ||||||||
Greif Inc., B | 135 | 8,608 | ||||||||
Kronos Worldwide Inc. | 360 | 5,587 | ||||||||
Myers Industries Inc. | 783 | 16,913 | ||||||||
Olympic Steel Inc. | 144 | 5,538 | ||||||||
Quaker Chemical Corp. | 252 | 43,548 | ||||||||
Ryerson Holding Corp. | 171 | 5,988 | ||||||||
Schnitzer Steel Industries Inc., A | 423 | 21,971 | ||||||||
Schweitzer-Mauduit International Inc. | 675 | 18,562 | ||||||||
Sensient Technologies Corp. | 918 | 77,066 | ||||||||
Stepan Co. | 405 | 40,018 | ||||||||
SunCoke Energy Inc. | 1,206 | 10,745 | ||||||||
Tredegar Corp. | 405 | 4,856 | ||||||||
Worthington Industries Inc. | 558 | 28,687 | ||||||||
|
| |||||||||
| 507,448 | ||||||||||
|
| |||||||||
| Professional Services 0.1% | ||||||||||
Resources Connection Inc. | 873 | 14,963 | ||||||||
|
| |||||||||
| Real Estate 6.4% | ||||||||||
American Assets Trust Inc. | 936 | 35,465 | ||||||||
American Finance Trust Inc. | 1,890 | 14,950 | ||||||||
Brandywine Realty Trust | 2,592 | 36,651 | ||||||||
Broadstone Net Lease Inc. | 2,682 | 58,414 | ||||||||
CareTrust REIT Inc. | 1,458 | 28,139 | ||||||||
Community Healthcare Trust Inc. | 360 | 15,196 | ||||||||
Corporate Office Properties Trust | 1,800 | 51,372 | ||||||||
Douglas Elliman Inc. | 1,719 | 12,549 | ||||||||
Franklin Street Properties Corp. | 2,515 | 14,838 | ||||||||
| a,b | GEO Group Inc. | 1,917 | 12,671 | |||||||
Gladstone Commercial Corp. | 549 | 12,089 | ||||||||
Healthcare Realty Trust Inc. | 2,817 | 77,411 | ||||||||
Lexington Realty Trust | 6,516 | 102,301 | ||||||||
Marcus & Millichap Inc. | 468 | 24,654 | ||||||||
National Storage Affiliates Trust | 1,287 | 80,772 | ||||||||
Phillips Edison & Co. Inc. | 189 | 6,500 | ||||||||
Physicians Realty Trust | 3,690 | 64,723 | ||||||||
Piedmont Office Realty Trust Inc., A | 2,709 | 46,649 | ||||||||
PotlatchDeltic Corp. | 990 | 52,203 | ||||||||
Preferred Apartment Communities Inc., A | 1,089 | 27,160 | ||||||||
PS Business Parks Inc. | 441 | 74,123 | ||||||||
RE/MAX Holdings Inc., A | 486 | 13,477 | ||||||||
Retail Value Inc. | 180 | 551 | ||||||||
Tanger Factory Outlet Centers Inc. | 2,025 | 34,810 | ||||||||
Terreno Realty Corp. | 1,125 | 83,306 | ||||||||
The RMR Group Inc., A | 297 | 9,237 | ||||||||
Washington Real Estate Investment Trust | 1,323 | 33,736 | ||||||||
Whitestone REIT | 999 | 13,237 | ||||||||
|
| |||||||||
| 1,037,184 | ||||||||||
|
| |||||||||
| Utilities 5.5% | ||||||||||
American States Water Co. | 909 | 80,919 | ||||||||
Artesian Resources Corp., A | 162 | 7,865 | ||||||||
Avista Corp. | 1,692 | 76,394 | ||||||||
Black Hills Corp. | 1,368 | 105,363 | ||||||||
| 106 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin LibertyQ U.S. Small Cap Equity ETF (continued)
| Shares | Value | |||||||||
| Common Stocks (continued) | ||||||||||
| Utilities (continued) | ||||||||||
California Water Service Group | 1,242 | $ | 73,626 | |||||||
Clearway Energy Inc., A | 702 | 23,391 | ||||||||
Clearway Energy Inc., C | 1,629 | 59,475 | ||||||||
Global Water Resources Inc. | 278 | 4,626 | ||||||||
MGE Energy Inc. | 819 | 65,348 | ||||||||
Northwest Natural Holding Co. | 450 | 23,274 | ||||||||
NorthWestern Corp. | 1,044 | 63,152 | ||||||||
Otter Tail Corp. | 648 | 40,500 | ||||||||
PNM Resources Inc. | 1,944 | 92,670 | ||||||||
SJW Group | 558 | 38,826 | ||||||||
| a | Southwest Gas Holdings Inc. | 1,359 | 106,396 | |||||||
Unitil Corp. | 324 | 16,161 | ||||||||
Via Renewables Inc. | 327 | 2,694 | ||||||||
York Water Co. | 270 | 12,142 | ||||||||
|
| |||||||||
| 892,822 | ||||||||||
|
| |||||||||
| Rights 0.0%† | ||||||||||
| Information Technology 0.0%† | ||||||||||
| a | Quantum Corp. | 819 | 7 | |||||||
|
| |||||||||
Total Investments before Short-Term Investments (Cost $15,066,080) | 16,245,962 | |||||||||
|
| |||||||||
| Short-Term Investments (Cost $113,498) 0.7% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.7% | ||||||||||
| Money Market Funds 0.7% | ||||||||||
| c,d | Institutional Fiduciary Trust Portfolio, 0.01% | 113,498 | 113,498 | |||||||
|
| |||||||||
Total Short-Term Investments | 113,498 | |||||||||
|
| |||||||||
Total Investments (Cost $15,179,578) 100.5% | 16,359,460 | |||||||||
Other Assets, less Liabilities (0.5)% | (86,570 | ) | ||||||||
|
| |||||||||
Net Assets 100.0% | $ | 16,272,890 | ||||||||
|
| |||||||||
See Abbreviations on page 131.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bA portion or all of the security is on loan at March 31, 2022.
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 107 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
March 31, 2022
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin Hedged ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 16,262,369 | $ | 26,082,580 | $ | 12,933,731 | $ | 15,065,841 | ||||||||
Value – Unaffiliated issuers | $ | 16,932,489 | $ | 30,601,515 | $ | 15,922,877 | $ | 17,041,340 | ||||||||
Cash | — | 18,859 | — | — | ||||||||||||
Foreign currency, at value (cost $28,462, $38,923, 12,905 and $101,721) | 36,480 | 26,694 | 38,192 | 102,020 | ||||||||||||
Receivables: | ||||||||||||||||
Dividends and interest | 97,221 | 202,306 | 61,622 | 148,074 | ||||||||||||
Investment securities sold | 30,023 | — | 2,491 | — | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | 7,348 | 13,481 | 2,696 | 5,915 | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | — | — | 345,052 | ||||||||||||
Other assets | — | — | 15 | — | ||||||||||||
|
|
|
|
|
| |||||||||||
Total assets | 17,103,561 | 30,862,855 | 16,027,893 | 17,642,401 | ||||||||||||
|
|
|
|
|
| |||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | — | — | — | 308,878 | ||||||||||||
Management fees | 6,989 | 11,114 | 4,634 | 5,649 | ||||||||||||
Variation margin on futures contracts | 4,845 | 1,040 | 178 | 1,744 | ||||||||||||
Funds advanced by custodian | 10,082 | — | 5,571 | 41,173 | ||||||||||||
Deferred tax | 82,137 | — | 3,475 | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | — | — | 92,659 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total liabilities | 104,053 | 12,154 | 13,858 | 450,103 | ||||||||||||
|
|
|
|
|
| |||||||||||
Net assets, at value | $ | 16,999,508 | $ | 30,850,701 | $ | 16,014,035 | $ | 17,192,298 | ||||||||
|
|
|
|
|
| |||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 46,176,534 | $ | 26,701,555 | $ | 12,986,976 | $ | 15,123,405 | ||||||||
Total distributable earnings (loss) | (29,177,026 | ) | 4,149,146 | 3,027,059 | 2,068,893 | |||||||||||
|
|
|
|
|
| |||||||||||
Net assets, at value | $ | 16,999,508 | $ | 30,850,701 | $ | 16,014,035 | $ | 17,192,298 | ||||||||
|
|
|
|
|
| |||||||||||
Shares outstanding | 600,000 | 850,000 | 400,000 | 600,000 | ||||||||||||
|
|
|
|
|
| |||||||||||
Net asset value per share | $ | 28.33 | $ | 36.29 | $ | 40.04 | $ | 28.65 | ||||||||
|
|
|
|
|
| |||||||||||
| 108 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost – Unaffiliated issuers | $ | 874,581,749 | $ | 55,300,717 | $ | 15,066,080 | ||||||
Cost – Non-controlled affiliates (Note 3c) | — | 10,850 | 113,498 | |||||||||
Value – Unaffiliated issuers+ | $ | 965,196,314 | $ | 62,754,332 | $ | 16,245,962 | ||||||
Value – Non-controlled affiliates (Note 3c) | — | 10,850 | 113,498 | |||||||||
Cash | 660,345 | 46,749 | 14,240 | |||||||||
Receivables: | ||||||||||||
Dividends | 957,930 | 69,547 | 17,490 | |||||||||
Investment securities sold | 660 | — | — | |||||||||
Futures contracts | 60,000 | — | — | |||||||||
|
|
|
| |||||||||
Total assets | 966,875,249 | 62,881,478 | 16,391,190 | |||||||||
|
|
|
| |||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Management fees | 121,527 | 15,448 | 4,802 | |||||||||
Variation margin on futures contracts | 16,334 | — | — | |||||||||
Payable upon return of securities loaned | — | 10,850 | 113,498 | |||||||||
|
|
|
| |||||||||
Total liabilities | 137,861 | 26,298 | 118,300 | |||||||||
|
|
|
| |||||||||
Net assets, at value | $ | 966,737,388 | $ | 62,855,180 | $ | 16,272,890 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 927,826,390 | $ | 56,084,846 | $ | 16,676,552 | ||||||
Total distributable earnings (loss) | 38,910,998 | 6,770,334 | (403,662 | ) | ||||||||
|
|
|
| |||||||||
Net assets, at value | $ | 966,737,388 | $ | 62,855,180 | $ | 16,272,890 | ||||||
|
|
|
| |||||||||
Shares outstanding | 21,550,000 | 1,400,000 | 450,000 | |||||||||
|
|
|
| |||||||||
Net asset value per share | $ | 44.86 | $ | 44.90 | $ | 36.16 | ||||||
|
|
|
| |||||||||
+Includes securities loaned | — | 9,889 | 110,957 | |||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 109 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the year ended March 31, 2022
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin Hedged ETF | |||||||||||||
Investment income: |
| |||||||||||||||
Dividends: (net of foreign taxes)a |
| |||||||||||||||
Unaffiliated issuers | $ | 1,121,114 | $ | 948,431 | $ | 477,099 | $ | 608,536 | ||||||||
Non-cash dividends | $ | — | $ | — | $ | — | $ | 39,663 | ||||||||
Interest: |
| |||||||||||||||
Unaffiliated issuers | — | 182 | 151 | — | ||||||||||||
Interest from securities loaned (Note 1d): |
| |||||||||||||||
Unaffiliated issuers (net of fees and rebates) | 13 | 7 | 25 | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 1,121,127 | 948,620 | 477,275 | 648,199 | ||||||||||||
|
| |||||||||||||||
Expenses: |
| |||||||||||||||
Management fees (Note 3a) | 106,698 | 126,614 | 56,185 | 65,854 | ||||||||||||
Other | — | 55 | — | — | ||||||||||||
|
| |||||||||||||||
Total expenses | 106,698 | 126,669 | 56,185 | 65,854 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (8 | ) | — | (465 | ) | — | ||||||||||
|
| |||||||||||||||
Net expenses | 106,690 | 126,669 | 55,720 | 65,854 | ||||||||||||
|
| |||||||||||||||
Net investment income | 1,014,437 | 821,951 | 421,555 | 582,345 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): |
| |||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 1,571,760 | 974,550 | 733,173 | 157,738 | ||||||||||||
In-kind redemptions | 177,452 | 458,877 | — | — | ||||||||||||
Foreign currency transactions | (11,814 | ) | (5,971 | ) | (2,042 | ) | (4,758 | ) | ||||||||
Forwards exchange contracts | — | — | — | 1,052,440 | ||||||||||||
Futures contracts | (22,512 | ) | 1,698 | 1,457 | (11,657 | ) | ||||||||||
|
| |||||||||||||||
Net realized gain (loss) | 1,714,886 | 1,429,154 | 732,588 | 1,193,763 | ||||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (3,570,006 | ) | 1,229,082 | 202,932 | (40,786 | ) | ||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 2,134 | 1,094 | 1,096 | 1,578 | ||||||||||||
Futures contracts | 2,663 | 10,716 | 755 | 7,068 | ||||||||||||
Forward exchange contracts | — | — | — | (85,308 | ) | |||||||||||
Change in deferred taxes on unrealized appreciation | (21,378 | ) | — | (3,235 | ) | — | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (3,586,587 | ) | 1,240,892 | 201,548 | (117,448 | ) | ||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (1,871,701 | ) | 2,670,046 | 934,136 | 1,076,315 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (857,264 | ) | $ | 3,491,997 | $ | 1,355,691 | $ | 1,658,660 | |||||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 147,247 | $ | 51,491 | $ | 24,012 | $ | 39,039 | ||||||||
|
| |||||||||||||||
| 110 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin LibertyQ U.S. Equity ETF | Franklin Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Investment income: | ||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||
Unaffiliated issuers | $ | 21,768,531 | $ | 756,812 | $ | 241,373 | ||||||
Interest from securities loaned (Note 1d): | ||||||||||||
Unaffiliated issuers (net of fees and rebates) | 9,986 | 239 | 1,206 | |||||||||
Non-Controlled affiliates (Note 3c) | — | 11 | — | |||||||||
|
| |||||||||||
Total investment income | 21,778,517 | 757,062 | 242,579 | |||||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 1,704,940 | 150,257 | 62,874 | |||||||||
|
| |||||||||||
Total expenses | 1,704,940 | 150,257 | 62,874 | |||||||||
Expenses waived/paid by affiliates (Note 3c) | (614 | ) | (98 | ) | (287 | ) | ||||||
|
| |||||||||||
Net expenses | 1,704,326 | 150,159 | 62,587 | |||||||||
|
| |||||||||||
Net investment income | 20,074,191 | 606,903 | 179,992 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 40,364,929 | (98,223 | ) | 12,476 | ||||||||
In-kind redemptions | 213,337,193 | 4,401,356 | 1,200,075 | |||||||||
Futures contracts | 118,014 | — | — | |||||||||
|
| |||||||||||
Net realized gain (loss) | 253,820,136 | 4,303,133 | 1,212,551 | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | (111,389,103 | ) | (533,996 | ) | (1,328,181 | ) | ||||||
Futures contracts | 55,081 | — | — | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | (111,334,022 | ) | (533,996 | ) | (1,328,181 | ) | ||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 142,486,114 | 3,769,137 | (115,630 | ) | ||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 162,560,305 | $ | 4,376,040 | $ | 64,362 | ||||||
|
| |||||||||||
aForeign taxes withheld on dividends | $ | 15 | $ | 35 | $ | 32 | ||||||
|
| |||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 111 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 1,014,437 | $ | 792,672 | $ | 821,951 | $ | 739,346 | ||||||||
Net realized gain (loss) | 1,714,886 | (7,009,559 | ) | 1,429,154 | (889,558 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | (3,586,587 | ) | 15,802,995 | 1,240,892 | 8,845,282 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | (857,264 | ) | 9,586,108 | 3,491,997 | 8,695,070 | |||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders | (972,933 | ) | (652,807 | ) | (803,985 | ) | (716,542 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | (5,797,086 | ) | (42,017,238 | ) | 1,530,803 | — | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | (7,627,283 | ) | (33,083,937 | ) | 4,218,815 | 7,978,528 | ||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 24,626,791 | 57,710,728 | 26,631,886 | 18,653,358 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 16,999,508 | $ | 24,626,791 | $ | 30,850,701 | $ | 26,631,886 | ||||||||
|
| |||||||||||||||
| 112 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 421,555 | $ | 332,509 | $ | 582,345 | $ | 303,092 | ||||||||
Net realized gain (loss) | 732,588 | (403,151 | ) | 1,193,763 | (1,457,748 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 201,548 | 5,088,079 | (117,448 | ) | 3,621,768 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,355,691 | 5,017,437 | 1,658,660 | 2,467,112 | ||||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders | (401,042 | ) | (359,864 | ) | (478,088 | ) | (813,573 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | — | (5,657,628 | ) | 2,752,200 | 2,584,649 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 954,649 | (1,000,055 | ) | 3,932,772 | 4,238,188 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 15,059,386 | 16,059,441 | 13,259,526 | 9,021,338 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 16,014,035 | $ | 15,059,386 | $ | 17,192,298 | $ | 13,259,526 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 113 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 20,074,191 | $ | 28,048,990 | $ | 606,903 | $ | 326,764 | ||||||||
Net realized gain (loss) | 253,820,136 | 77,407,315 | 4,303,133 | 161,368 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (111,334,022 | ) | 419,757,126 | (533,996 | ) | 10,818,121 | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 162,560,305 | 525,213,431 | 4,376,040 | 11,306,253 | ||||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders | (21,142,944 | ) | (29,458,618 | ) | (586,728 | ) | (316,682 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | (528,086,490 | ) | (453,931,621 | ) | 22,306,734 | 12,051,367 | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | (386,669,129 | ) | 41,823,192 | 26,096,046 | 23,040,938 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 1,353,406,517 | 1,311,583,325 | 36,759,134 | 13,718,196 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 966,737,388 | $ | 1,353,406,517 | $ | 62,855,180 | $ | 36,759,134 | ||||||||
|
| |||||||||||||||
| 114 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||
Increase (decrease) in net assets: |
| |||||||
Operations: |
| |||||||
Net investment income | $ | 179,992 | $ | 134,659 | ||||
Net realized gain (loss) | 1,212,551 | 255,383 | ||||||
Net change in unrealized appreciation (depreciation) | (1,328,181 | ) | 7,366,599 | |||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 64,362 | 7,756,641 | ||||||
|
| |||||||
Distributions to shareholders | (184,173 | ) | (167,502 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | 1,779,654 | (6,285,768 | ) | |||||
|
| |||||||
Net increase (decrease) in net assets | 1,659,843 | 1,303,371 | ||||||
Net assets: |
| |||||||
Beginning of year | 14,613,047 | 13,309,676 | ||||||
|
| |||||||
End of year | $ | 16,272,890 | $ | 14,613,047 | ||||
|
| |||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 115 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-five separate funds, seven 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). Each of the Funds are an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of each Fund’s corresponding underlying index.
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.
Equity securities, exchange trade funds and derivative financial instruments 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. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds’ pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ 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 discounted 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 uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time on March 31, 2022. At March 31, 2022, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”).
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differ-
| 116 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
ences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds 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 Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.
Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at the close of Fund business each day and any additional
| franklintempleton.com | Annual Report | 117 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price 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 a variation margin payable or receivable in the Statements of Assets and Liabilities.
Certain or all Funds entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
See Note 8 regarding other derivative information.
d. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Funds. These securities received as collateral are held in segregated accounts with the Funds’ custodian. The Fund cannot
repledge or resell these securities received as collateral. As such, the non-cash collateral is excluded from the Statements of Assets and Liabilities. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.
e. Income and Deferred 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 be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each 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 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 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.
| 118 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
f. 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. Dividend income is 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. These expenses are paid by the Funds or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
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 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
Shares of the Funds 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 Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds 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 Funds.
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.
| franklintempleton.com | Annual Report | 119 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
At March 31, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
| Franklin LibertyQ Emerging Markets ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | 12,197 | — | $ | 34,086 | ||||||||||||||
Shares redeemed | (200,000 | ) | (5,809,283 | ) | (1,800,000 | ) | (42,051,324 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (200,000 | ) | $ | (5,797,086 | ) | (1,800,000 | ) | $ | (42,017,238 | ) | ||||||||||
|
| |||||||||||||||||||
| Franklin LibertyQ Global Dividend ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 3,403,231 | — | $ | — | ||||||||||||||
Shares redeemed | (50,000 | ) | (1,872,428 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 50,000 | $ | 1,530,803 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
| Franklin LibertyQ Global Equity ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares redeemed | — | $ | — | (200,000 | ) | $ | (5,657,628 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | (200,000 | ) | $ | (5,657,628 | ) | ||||||||||||
|
| |||||||||||||||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 2,752,200 | 100,000 | $ | 2,584,649 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 100,000 | $ | 2,752,200 | 100,000 | $ | 2,584,649 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin LibertyQ U.S. Equity ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 7,250,000 | $ | 315,466,656 | 11,400,000 | $ | 412,925,317 | ||||||||||||||
Shares redeemed | (19,500,000 | ) | (843,553,146 | ) | (25,100,000 | ) | (866,856,938 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (12,250,000 | ) | $ | (528,086,490 | ) | (13,700,000 | ) | $ | (453,931,621 | ) | ||||||||||
|
| |||||||||||||||||||
| Franklin LibertyQ U.S. Mid Cap Equity ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 800,000 | $ | 35,769,669 | 400,000 | $ | 13,938,821 | ||||||||||||||
Shares redeemed | (300,000 | ) | (13,462,935 | ) | (50,000 | ) | (1,887,454 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 500,000 | $ | 22,306,734 | 350,000 | $ | 12,051,367 | ||||||||||||||
|
| |||||||||||||||||||
| 120 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 150,000 | $ | 5,610,619 | 100,000 | $ | 2,973,184 | ||||||||||||||
Shares redeemed | (100,000 | ) | (3,830,965 | ) | (350,000 | ) | (9,258,952 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 50,000 | $ | 1,779,654 | (250,000 | ) | $ | (6,285,768 | ) | ||||||||||||
|
| |||||||||||||||||||
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:
| Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Distributors, LLC (Distributors) | Principal underwriter | |
a. Management Fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fees are based on the average daily net assets of each of the Funds as follows:
| Annualized Fee Rate | ||
Franklin LibertyQ Emerging Markets ETF | 0.45% | |
Franklin LibertyQ Global Dividend ETF | 0.45% | |
Franklin LibertyQ Global Equity ETF | 0.35% | |
Franklin LibertyQ International Equity Hedged ETF | 0.40% | |
Franklin LibertyQ U.S. Equity ETF | 0.15% | |
Franklin LibertyQ U.S. Mid Cap Equity ETF | 0.30% | |
Franklin LibertyQ U.S. Small Cap Equity ETF | 0.35% | |
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. Investments in Affiliated Management Investment Companies
Certain or all Funds invest 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 Funds
| franklintempleton.com | Annual Report | 121 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
c. Investments in Affiliated Management Investment Companies (continued)
do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements 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, investments in affiliated management investment companies were as follows:
Value at of Year | Purchases | Sales | Realized Gain | Net Change in (Depreciation) | Value at Year | Number of Shares Held at End of Year | Investment Income | |||||||||||||||||||||||||
Franklin LibertyQ U.S. Mid Cap Equity ETF | Income from securities loaned | |||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 6,075 | $ | 6,204,978 | $ | (6,200,203 | ) | $ | — | $ | — | $ | 10,850 | 10,850 | $ | 11 | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
| Franklin LibertyQ U.S. Small Cap Equity ETF | Income from securities loaned | |||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 206,840 | $ | 9,529,348 | $ | (9,622,690 | ) | $ | — | $ | — | $ | 113,498 | 113,498 | $ | — | ||||||||||||||||
|
| |||||||||||||||||||||||||||||||
d. Other Affiliated Transactions
At March 31, 2022, the shares of Franklin LibertyQ U.S. Equity ETF were owned by the following entities:
| Shares | Percentage of Outstanding Sharesa | |||||||
| Franklin LibertyQ U.S. Equity ETF | ||||||||
Franklin Moderate Allocation Fund | 1,291,717 | 6.0% | ||||||
Franklin Growth Allocation Fund | 1,604,251 | 7.4% | ||||||
Franklin 529 Portfolios | 6,897,827 | 32.0% | ||||||
|
| |||||||
| 9,793,795 | 45.4% | |||||||
|
| |||||||
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. 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:
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Short term | $ | 16,928,227 | $ | 99,040 | $ | 44,445 | $ | 26,833 | ||||||||
Long term | 12,605,720 | 417,975 | — | 268,225 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 29,533,947 | $ | 517,015 | $ | 44,445 | $ | 295,058 | ||||||||
|
| |||||||||||||||
| 122 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin LibertyQ U.S Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Short term | $ | 40,847,511 | $ | 384,287 | $ | 605,954 | ||||||||||
Long term | 12,219,026 | 315,556 | 956,591 | |||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 53,066,537 | $ | 699,843 | $ | 1,562,545 | ||||||||||
|
| |||||||||||||||
The tax character of distributions paid during the years ended March 31, 2022 and 2021, were as follows:
| Franklin LibertyQ Emerging Markets ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 972,933 | $ | 652,807 | ||||
|
| |||||||
| Franklin LibertyQ Global Dividend ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 803,985 | $ | 716,542 | ||||
|
| |||||||
| Franklin LibertyQ Global Equity ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 401,042 | $ | 359,864 | ||||
|
| |||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 478,088 | $ | 583,704 | ||||
Long-term Capital Gain | $ | — | $ | 229,869 | ||||
|
| |||||||
| $ | 478,088 | $ | 813,573 | |||||
|
| |||||||
| Franklin LibertyQ U.S. Equity ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 21,142,944 | $ | 29,458,618 | ||||
|
| |||||||
| Franklin LibertyQ U.S. Mid Cap Equity ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 586,728 | $ | 316,682 | ||||
|
| |||||||
| Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 184,173 | $ | 167,502 | ||||
|
| |||||||
| franklintempleton.com | Annual Report | 123 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2022, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
| Cost of investments | $ | 16,679,650 | $ | 26,217,992 | $ | 12,981,031 | $ | 15,251,950 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 3,623,703 | $ | 5,328,563 | $ | 3,694,990 | $ | 2,479,551 | ||||||||
Unrealized depreciation | (3,370,864 | ) | (945,040 | ) | (753,144 | ) | (690,161 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 252,839 | $ | 4,383,523 | $ | 2,941,846 | $ | 1,789,390 | ||||||||
|
| |||||||||||||||
Distributable earnings – undistributed ordinary income | $ | 106,439 | $ | 281,424 | $ | 129,549 | $ | 573,411 | ||||||||
|
| |||||||||||||||
| Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||||||
Cost of investments | $ | 874,846,596 | $ | 55,355,794 | $ | 15,200,577 | ||||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 104,460,225 | $ | 9,036,054 | $ | 2,396,211 | ||||||||||
Unrealized depreciation | (14,110,507 | ) | (1,626,666 | ) | (1,237,328 | ) | ||||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 90,349,718 | $ | 7,409,388 | $ | 1,158,883 | ||||||||||
|
| |||||||||||||||
Distributable earnings – undistributed ordinary income | $ | 1,627,817 | $ | 60,789 | $ | — | ||||||||||
|
| |||||||||||||||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2022, were as follows:
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Purchases | $ | 7,968,741 | $ | 8,047,803 | $ | 3,840,458 | $ | 5,898,254 | ||||||||
Sales | $ | 11,513,842 | $ | 8,004,503 | $ | 3,857,425 | $ | 4,909,478 | ||||||||
Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ ETF | Franklin LibertyQ ETF | ||||||||||||||
Purchases | $ | 768,441,316 | $ | 11,468,226 | $ | 4,985,156 | ||||||||||
Sales | $ | 768,655,008 | $ | 11,370,983 | $ | 4,912,461 | ||||||||||
| 124 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
In-kind transactions associated with creation and redemptions for the year ended March 31, 2022, were as follows:
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | 3,067,064 | $ | — | $ | 2,722,375 | ||||||||
Value of Securities Delivereda | $ | 2,348,427 | $ | 1,711,227 | $ | — | $ | — | ||||||||
Franklin LibertyQ ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ Equity ETF | ||||||||||||||
Cost of Securities Received | $ | 308,708,189 | $ | 35,620,648 | $ | 5,602,158 | ||||||||||
Value of Securities Delivereda | $ | 835,522,079 | $ | 13,413,335 | $ | 3,852,188 | ||||||||||
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
At March 31, 2022, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
Franklin LibertyQ Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | |||||||
Securities lending transactionsa: | ||||||||
Equity investmentsb | $ | 10,850 | $ | 113,498 | ||||
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Political and financial uncertainty in many foreign regions may increase market volatility and the economic risk of investing in foreign securities. In addition, certain foreign securities may not be as liquid as U.S. securities.
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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Funds have exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments was impaired. The Funds could determine at any time that certain of the most affected securities have little or no value. In addition, any exposure that the Funds may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively
| franklintempleton.com | Annual Report | 125 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
6. Concentration of Risk (continued)
affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Funds, even beyond any direct exposure the Funds may have to Russian issuers or issuers in other countries affected by the invasion.
Beginning on February 28, 2022, the Moscow Exchange, where Russian equity securities are traded, closed for an extended holiday. The Valuation Committee determined that based on their analysis of the market and access to market participants, the Russian equity securities held by the Franklin LibertyQ Emerging Markets ETF, Franklin LibertyQ Global Equity ETF and Franklin LibertyQ Global Dividend ETF had little or no value at March 31, 2022.
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.
8. Other Derivative Information
At March 31, 2022, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
| Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
| Franklin LibertyQ Emerging Markets ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 2,836 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
| Franklin LibertyQ Global Dividend ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 10,033 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
| Franklin LibertyQ Global Equity ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 414 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 7,068 | a | Variation margin on futures contracts | $ | — | |||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | 345,052 | Unrealized depreciation on OTC forward exchange contracts | 92,659 | ||||||||
|
|
|
| |||||||||
| $ | 352,120 | $ | 92,659 | |||||||||
|
|
|
| |||||||||
| Franklin LibertyQ U.S. Equity ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 70,591 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 435,994 | $ | 92,659 | ||||||||
|
|
|
| |||||||||
aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
| 126 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
For the year ended March 31, 2022, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
| Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
| Franklin LibertyQ Emerging Markets ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized | |||||||||||
Equity contract | Futures contracts | $ | (22,512 | ) | Futures contracts | $ | 2,663 | |||||
|
|
|
| |||||||||
| Franklin LibertyQ Global Dividend ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized | |||||||||||
Equity contract | Futures contracts | $ | 1,698 | Futures contracts | $ | 10,716 | ||||||
|
|
|
| |||||||||
| Franklin LibertyQ Global Equity ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized | |||||||||||
Equity contract | Futures contracts | $ | 1,457 | Futures contracts | $ | 755 | ||||||
|
|
|
| |||||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized | |||||||||||
Equity contract | Futures contracts | $ | (11,657 | ) | Futures contracts | $ | 7,068 | |||||
Foreign exchange contracts | Forward exchange contract | 1,052,440 | Forward exchange contract | (85,308 | ) | |||||||
|
|
|
| |||||||||
Totals | $ | 1,040,783 | $ | (78,240 | ) | |||||||
|
|
|
| |||||||||
| Franklin LibertyQ U.S. Equity ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized | |||||||||||
Equity contract | Futures contracts | $ | 118,014 | Futures contracts | $ | 55,081 | ||||||
|
|
|
| |||||||||
For the year ended March 31, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
Franklin LibertyQ ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ ETF | Franklin LibertyQ ETF | |||||||||||||
Futures contracts | $ | 111,829 | $ | 105,452 | $ | 36,939 | $ | 113,392 | ||||||||
Forward exchange contracts | $ | — | $ | — | $ | — | $ | 48,558,284 | ||||||||
Franklin LibertyQ U.S. Equity ETF | ||||||||||||||||
Futures contracts | $ | 1,493,634 | ||||||||||||||
Forward exchange contracts | $ | — | ||||||||||||||
| franklintempleton.com | Annual Report | 127 | ||||||||
8. Other Derivative Information (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
At March 31, 2022, the Funds’ OTC derivative assets and liabilities are as follows:
| Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities | ||||||||
| Assetsa | Liabilitiesa | |||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||
Foreign exchange contracts | $ | 345,052 | $ | 92,659 | ||||
|
| |||||||
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At March 31, 2022, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
| Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
| Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
BOFA | $ | 294,157 | $ | (9,298 | ) | $ | — | $ | — | $ | 284,859 | |||||||||
DBAB | 2,124 | (2,124 | ) | — | — | — | ||||||||||||||
HSBK | 20,254 | (25 | ) | — | — | 20,229 | ||||||||||||||
MSCO | 8,185 | (98 | ) | — | — | 8,087 | ||||||||||||||
UBS AG | 20,332 | (15 | ) | — | — | 20,317 | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 345,052 | $ | (11,560 | ) | $ | — | $ | — | $ | 333,492 | |||||||||
|
| |||||||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
At March 31, 2022, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
| Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
| Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero) | ||||||||||||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
BOFA | $ | 9,298 | $ | (9,298 | ) | $ | — | $ | — | $ | — | |||||||||
DBAB | 83,223 | (2,124 | ) | — | — | 81,099 | ||||||||||||||
HSBK | 25 | (25 | ) | — | — | — | ||||||||||||||
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
| Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero) | ||||||||||||||||
| Franklin LibertyQ International Equity Hedged ETF (continued) | ||||||||||||||||||||
| Counterparty (continued) | ||||||||||||||||||||
MSCO | $ | 98 | $ | (98 | ) | $ | — | $ | — | $ | — | |||||||||
UBS AG | 15 | (15 | ) | — | — | — | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 92,659 | $ | (11,560 | ) | $ | — | $ | — | $ | 81,099 | |||||||||
|
| |||||||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
See Note 1(c) regarding derivative financial instruments.
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.
A summary of inputs used as of March 31, 2022, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin LibertyQ Emerging Markets ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 16,932,489 | $ | — | $ | — | c | $ | 16,932,489 | |||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 2,836 | $ | — | $ | — | $ | 2,836 | ||||||||
|
| |||||||||||||||
| Franklin LibertyQ Global Dividend ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 30,601,515 | $ | — | $ | — | c | $ | 30,601,515 | |||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 10,033 | $ | — | $ | — | $ | 10,033 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | Annual Report | 129 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin LibertyQ Global Equity ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 15,922,877 | $ | — | $ | — | c | $ | 15,922,877 | |||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 414 | $ | — | $ | — | $ | 414 | ||||||||
|
| |||||||||||||||
| Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 17,041,340 | $ | — | $ | — | $ | 17,041,340 | ||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | — | 345,052 | — | 345,052 | ||||||||||||
Futures Contracts | 7,068 | — | — | 7,068 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 7,068 | $ | 345,052 | $ | — | $ | 352,120 | ||||||||
|
| |||||||||||||||
| Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 92,659 | $ | — | $ | 92,659 | ||||||||
|
| |||||||||||||||
| Franklin LibertyQ U.S. Equity ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 965,196,314 | $ | — | $ | — | $ | 965,196,314 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 70,591 | $ | — | $ | — | $ | 70,591 | ||||||||
|
| |||||||||||||||
| Franklin LibertyQ U.S. Mid Cap Equity ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 62,754,332 | $ | — | $ | — | $ | 62,754,332 | ||||||||
Short-Term Investments | 10,850 | — | — | 10,850 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 62,765,182 | $ | — | $ | — | $ | 62,765,182 | ||||||||
|
| |||||||||||||||
| Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investmentsb | $ | 16,245,962 | $ | — | $ | — | $ | 16,245,962 | ||||||||
Short-Term Investments | 113,498 | — | — | 113,498 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 16,359,460 | $ | — | $ | — | $ | 16,359,460 | ||||||||
|
| |||||||||||||||
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and preferred stocks.
cIncludes securities determined to have no value at March 31, 2022.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period. At March 31, 2022, the reconciliation is as follows:
Balance at Beginning of Period | Purchases | Sales | Transfer into Level 3 | Transfer Out of Level 3 | Net Accretion (Amortization) | Net Realized Gain (Loss) | Net Unrealized Appreciation (Depreciation) | Balance at End of Period | Net Change Appreciation (Depreciation) on Period End | |||||||||||||||||||||||||||||||
| Franklin LibertyQ Emerging Markets ETF | ||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||
Investments in Securities: | ||||||||||||||||||||||||||||||||||||||||
Equity Investments: | $ | — | $ | 428,575 | $ | (857,418 | ) | $ | 2,435,812 | $ | — | $ | — | $ | 152,975 | $ | (2,159,944 | ) | $ | — | $ | (2,159,944 | ) | |||||||||||||||||
| Franklin LibertyQ Global Equity ETF | ||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||
Investments in Securities: | ||||||||||||||||||||||||||||||||||||||||
Equity Investments: | $ | — | $ | 34,620 | $ | (32,066 | ) | $ | 214,999 | $ | — | $ | — | $ | (3,427 | ) | $ | (214,126 | ) | $ | — | $ | (214,126 | ) | ||||||||||||||||
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.
| Selected Portfolio | ||
| ADR | American Depositary Receipt | |
| ETF | Exchange Traded Fund | |
| GDR | Global Depositary Receipt | |
| IDR | International Depository Receipt | |
| NVDR | Non-Voting Depositary Receipt | |
| REIT | Real Estate Investment Trust | |
| Counterparty | ||
| BOFA | Bank of America Corp. | |
| DBAB | Deutsche Bank AG | |
| HSBK | HSBC Bank PLC | |
| IDR | International Depository Receipt | |
| MSCO | Morgan Stanley | |
| UBSW | UBS AG | |
| franklintempleton.com | Annual Report | 131 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin LibertyQ Emerging Markets ETF, Franklin LibertyQ Global Dividend ETF, Franklin LibertyQ Global Equity ETF, Franklin LibertyQ International Equity Hedged ETF, Franklin LibertyQ U.S. Equity ETF, Franklin LibertyQ U.S. Mid Cap Equity ETF and Franklin LibertyQ U.S. Small Cap Equity ETF
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Franklin LibertyQ Emerging Markets ETF, Franklin LibertyQ Global Dividend ETF, Franklin LibertyQ Global Equity ETF, Franklin LibertyQ International Equity Hedged ETF, Franklin LibertyQ U.S. Equity ETF, Franklin LibertyQ U.S. Mid Cap Equity ETF and Franklin LibertyQ U.S. Small Cap Equity ETF (seven of the funds constituting Franklin Templeton 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, the statements 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 periods indicated therein (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, the changes in each of their net assets for each of the two years in the period ended March 31, 2022 and each of the financial highlights for each of the periods indicated therein 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 brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
May 19, 2022
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
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FRANKLIN TEMPLETON ETF TRUST
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 below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended March 31, 2022:
| Pursuant to: | Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | ||||||||||||||||
Dividends Received Deduction (DRD) | §854(b)(1)(A) | $ | — | $ | — | $ | 174,238 | $ | — | |||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 816,009 | $ | 803,985 | $ | 401,042 | $ | 478,088 | |||||||||||
| Pursuant to: | Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | |||||||||||||
Dividends Received Deduction (DRD) | §854(b)(1)(A) | $ | 20,021,595 | $ | 586,728 | $ | 184,173 | |||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 20,593,692 | $ | 586,728 | $ | 184,173 | |||||||||
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:
| Franklin LibertyQ Emerging Markets ETF | Franklin LibertyQ Global Dividend ETF | Franklin LibertyQ Global Equity ETF | Franklin LibertyQ International Equity Hedged ETF | |||||||||||||
Foreign Taxes Paid | $ | 198,578 | $ | 51,491 | $ | — | $ | 35,394 | ||||||||
Foreign Source Income | $ | 1,109,307 | $ | 756,418 | $ | — | $ | 635,381 | ||||||||
| Franklin LibertyQ U.S. Equity ETF | Franklin LibertyQ U.S. Mid Cap Equity ETF | Franklin LibertyQ U.S. Small Cap Equity ETF | ||||||||||
Foreign Taxes Paid | $ | — | $ | — | $ | — | ||||||
Foreign Source Income | $ | — | $ | — | $ | — | ||||||
| franklintempleton.com | Annual Report | 133 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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) One Franklin Parkway San Mateo, CA 94403-1906 | Lead Independent Trustee | Since 2016 | 61 | 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). | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2020 | 61 | 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). | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2016 | 61 | None | ||||
| 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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FRANKLIN TEMPLETON ETF TRUST
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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee and Chairperson of the Board | Since 2016 | 72 | None | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway | Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| 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) 620 Eighth Avenue, 47th Floor New York, NY 10018 | Chief Compliance Officer | Since July 2021 | Not Applicable | Not Applicable | ||||
| 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) New York, NY 10018 | Vice President – AML Compliance | Since September 2021 | Not Applicable | Not Applicable | ||||
| 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 | ||||||||
| franklintempleton.com | Annual Report | 135 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| 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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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 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 2016. 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.
| 136 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on the Fund’s website at franklintempleton.com.
| franklintempleton.com | Annual Report | 137 | ||||||||
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 Templeton ETF Trust | |||||
| Investment Manager | Distributor | Investor Services | ||||
| Franklin Advisory Services, LLC | Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
| © 2022 Franklin Templeton Investments. All rights reserved. | ETF A 06/22 | |||||
ANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
March 31, 2022
Franklin Disruptive Commerce ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
Franklin Intelligent Machines ETF |
Franklin Dynamic Municipal Bond ETF Formerly, Franklin Liberty Federal Intermediate |
Franklin Liberty Federal Tax-Free Bond ETF |
Franklin Liberty High Yield Corporate ETF |
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| Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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| franklintempleton.com | Annual Report | 1 | ||||||||
ANNUAL REPORT
Franklin Disruptive Commerce ETF
This annual report for Franklin Disruptive Commerce ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of disruptive commerce. These companies include those that are focused on, or that the investment manager believes will benefit from, electronic commerce, auctions, the sharing economy, electronic payment capabilities, drop shipping, direct marketing, significant decreases in transport and delivery costs and other activities or developments, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -36.61% based on market price and -36.59% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +11.92% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 4.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), posted a +15.65% total return for the 12 months ended March 31, 2022.1 Stocks benefited from the continued economic recovery, implementation of COVID-19 vaccination programs and easing pandemic restrictions. Higher wages and strong household balance sheets contributed to
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Internet & Direct Marketing Retail | 22.5% | |||
IT Services | 17.6% | |||
Software | 10.6% | |||
Hotels, Restaurants & Leisure | 6.8% | |||
Interactive Media & Services | 6.6% | |||
Trading Companies & Distributors | 5.5% | |||
Food & Staples Retailing | 4.9% | |||
Specialty Retail | 4.6% | |||
Entertainment | 4.2% | |||
Equity Real Estate Investment Trusts (REITs) | 3.4% | |||
Commercial Services & Supplies | 2.1% | |||
Other | 8.8% | |||
Short-Term Investments & Other Net Assets | 2.4% | |||
increased consumer spending, particularly on goods. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor sentiment. However, elevated demand combined with supply chain disruptions led to the highest inflation since 1982. Russia’s invasion of Ukraine late in the 12-month 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 increase from historically low levels.
Gross domestic product 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.
1. Source: Morningstar. 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.
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 100.
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FRANKLIN DISRUPTIVE COMMERCE ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
| Amazon.com Inc. Internet & Direct Marketing Retail | 11.7% | |||
| Shopify Inc., A IT Services | 4.9% | |||
| Adyen NV, ADR IT Services | 4.4% | |||
| ZoomInfo Technologies Inc., A Interactive Media & Services | 4.1% | |||
| Costco Wholesale Corp. Food & Staples Retailing | 3.8% | |||
| Airbnb Inc. Hotels, Restaurants & Leisure | 3.6% | |||
| Prologis Inc. Equity Real Estate Investment Trusts (REITs) | 3.4% | |||
| Mastercard Inc., A IT Services | 3.1% | |||
| Fastenal Co. Trading Companies & Distributors | 2.8% | |||
| Sea Ltd., ADR Entertainment | 2.7% | |||
The inflation rate was notably elevated during the 12-month period amid increased demand and supply chain bottlenecks. Consequently, the personal consumption expenditures index, a measure of inflation, surged during the period, representing the highest 12-month increase in decades. The unemployment rate declined from 6.0% in March 2021 to 3.6% in March 2022 as job openings increased, but a relative lack of available workers fueled wage growth, adding to some investors’ inflation concerns.
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.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on disruptive innovation or that are enabling the further development of the disruptive commerce themes in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from disruptive innovations in commerce relative to broad securities markets,
and we seek to identify the primary beneficiaries of new trends or developments in commerce. We may invest in companies in any economic sector or of any market capitalization and may invest in companies both inside and outside of the U.S., including those in developing or emerging markets. Although we search for investments across a large number of sectors, we expect to concentrate our investments in consumer discretionary-related industries.
Manager’s Discussion
During the reporting period the information technology (IT), consumer discretionary and communication services sectors detracted from absolute performance. In IT, a host of internet commerce-enabling and payment platform companies were among the notable detractors, including Shopify, Block and Adyen. In consumer discretionary, detractors included online game platform and metaverse-based game creator ROBLOX, unique and creative goods global marketplace Etsy and online used car retailer Carvana. In communication services, Singapore-based consumer internet entertainment company Sea, media streaming service Netflix (not held at period-end) and online dating services company Match Group Holdings hurt results.
Turning to contributors, the consumer staples and materials sectors contributed to absolute performance. In consumer staples, contributors included discount retailers Costco Wholesale and Walmart. In materials, Packaging Corp. of America helped performance. Elsewhere, cybersecurity provider Crowdstrike Holdings and business intelligence data provider Zoominfo Technologies also aided results.
Thank you for your participation in Franklin Disruptive Commerce ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
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.
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FRANKLIN DISRUPTIVE COMMERCE ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (2/27/20), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -36.59% | -36.61% | -36.59% | -36.61% | ||||||||||||
Since Inception (2/25/20) | +24.82% | +24.94% | +11.16% | +11.21% | ||||||||||||
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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FRANKLIN DISRUPTIVE COMMERCE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
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.
2/25/20–3/31/22
See page 6 for Performance Summary footnotes.
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FRANKLIN DISRUPTIVE COMMERCE ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Short-Term Capital Gains | Long-Term Capital Gains | Total | ||||||
$0.295433 | $0.022502 | $0.317935 | ||||||
Total Annual Operating Expenses5
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in consumer discretionary related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. Companies operating within consumer discretionary related industries could be affected by, among other things, overall economic conditions, interest rates, disposable income, fluctuating consumer confidence and consumer demand. Many of these companies compete aggressively on price, potentially affecting their long run profitability. Companies within consumer discretionary related industries may have extensive online operations, which could make these companies particularly vulnerable to cyber security risk. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: Morningstar. The Russell 3000 Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
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.
| 6 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN DISRUPTIVE COMMERCE ETF
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 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 in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $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 ETFs. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 631.70 | $ | 2.03 | $ | 1,022.44 | $ | 2.52 | 0.50 | % | ||||||||||||
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.
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This annual report for Franklin Exponential Data ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of exponential data. These companies include those that are focused on, or that the investment manager believes will benefit from, the use of large data sets and/or growth of data, including systems, services, hardware, software and other digital and physical infrastructure related to data products or services, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -2.40% based on market price and net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +11.92% 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 10.
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
U.S. equities, as measured by the Standard & Poor’s 500 Index (S&P 500), posted a +15.65% total return for the 12 months ended March 31, 2022.1 Stocks benefited from the continued economic recovery, implementation of COVID-19 vaccination programs and easing pandemic restrictions. Higher wages and strong household balance sheets contributed to increased consumer spending, particularly on goods. A rebound in corporate earnings and the passage of a
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Software | 46.2 | |||
IT Services | 21.7 | |||
Interactive Media & Services | 10.7 | |||
Equity Real Estate Investment Trusts (REITs) | 7.6 | |||
Capital Markets | 5.9 | |||
Communications Equipment | 2.1 | |||
Wireless Telecommunication Services | 2.0 | |||
Other | 4.4 | |||
Short-Term Investments & Other Net Assets | (0.6) | |||
bipartisan infrastructure bill further bolstered investor sentiment. However, elevated demand combined with supply chain disruptions led to the highest inflation since 1982. Russia’s invasion of Ukraine late in the 12-month 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 increase from historically low levels.
Gross domestic product 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.
The inflation rate was notably elevated during the 12-month period amid increased demand and supply chain bottlenecks. Consequently, the personal consumption expenditures index, a measure of inflation, surged during the period, representing the highest 12-month increase in decades. The unemployment rate declined from 6.0% in March 2021 to 3.6% in March 2022 as job openings increased, but a relative lack of available workers fueled wage growth, adding to some investors’ inflation concerns.
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.
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 104.
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FRANKLIN EXPONENTIAL DATA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
| Alphabet Inc., A Interactive Media & Services | 6.8% | |||
| Datadog Inc., A Software | 5.8% | |||
| Microsoft Corp. Software | 5.0% | |||
| MongoDB Inc. IT Services | 4.9% | |||
| Fortinet Inc. Software | 4.5% | |||
| Cloudflare Inc., A IT Services | 4.3% | |||
| Zscaler Inc. Software | 4.2% | |||
| Snowflake Inc., A IT Services | 4.0% | |||
| ZoomInfo Technologies Inc., A Interactive Media & Services | 3.8% | |||
| Palo Alto Networks Inc. Software | 3.8% | |||
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.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on innovations in or that are enabling the further development of the exponential data theme in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from innovations in data products or services or the commercialization of data relative to the broad equities market, and we seek to identify the primary beneficiaries of new trends or developments in exponential data. We may invest in companies in any economic sector or of any market capitalization and may invest in companies both inside and outside of the U.S., including those in developing or emerging markets. Although we search for investments across a large number of sectors, we expect to concentrate our investments in information technology-related industries.
Manager’s Discussion
During the reporting period, the real estate sector contributed to absolute results. Within the sector, contributors included data center and communications infrastructure REITs SBA Communications, Equinix and Crown Castle International. Elsewhere, cybersecurity companies Fortinet and Palo Alto Networks also helped results.
Turning to detractors, the communication services, health care and information technology (IT) sectors hurt absolute performance. In communication services, detractors included social media company Pinterest (not held at period-end), digital entertainment company Roku (not held at period-end) and social media company Twitter (not held at period-end). In health care, chemical simulation software company Schrodinger (not held at period-end) and biosimulation software provider Certara hurt returns. In IT, detractors included online telecommunications company Twilio, software development platform provider Gitlab and collaboration and workflow tool provider Monday.com.
Thank you for your participation in Franklin Exponential Data ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
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.
| franklintempleton.com | Annual Report | 9 | ||||||||
FRANKLIN EXPONENTIAL DATA ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (1/14/21), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -2.40% | -2.40% | -2.40% | -2.40% | ||||||||||||
Since Inception (1/12/21) | -8.88% | -8.76% | -7.38% | -7.28% | ||||||||||||
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 12 for Performance Summary footnotes.
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FRANKLIN EXPONENTIAL DATA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
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.
1/12/21–3/31/22
See page 12 for Performance Summary footnotes.
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FRANKLIN EXPONENTIAL DATA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in information technology related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a Fund that invests in a wider variety of industries. Companies operating within information technology related industries may be affected by worldwide technological developments, the success of their products and services (which may be outdated quickly), anticipated products or services that are delayed or cancelled, and investor perception of the company and/or its products or services. These companies typically face intense competition and potentially rapid product obsolescence. They may also have limited product lines, markets, financial resources or personnel. Technology companies are also heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. There can be no assurance these companies will be able to successfully protect their intellectual property to prevent the misappropriation of their technology, or that competitors will not develop technology that is substantially similar or superior to such companies’ technology. These companies typically engage in significant amounts of spending on research and development, and there is no guarantee that the products or services produced by these companies will be successful. Technology companies are also potential targets for cyberattacks, which can have a materially adverse impact on the performance of these companies. In addition, companies operating within the technology sector may develop and/or utilize artificial intelligence. Artificial intelligence technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Similarly, the collection of data from consumers and other sources could face increased scrutiny as regulators consider how the data is collected, stored, safeguarded and used. The customers and/or suppliers of technology companies may be concentrated in a particular country, region or industry. Any adverse event affecting one of these countries, regions or industries could have a negative impact on these companies. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to greater risk of loss with respect to its portfolio securities. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: Morningstar. The Russell 3000 Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
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.
| 12 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN EXPONENTIAL DATA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 838.70 | $ | 2.29 | $ | 1,022.44 | $ | 2.52 | 0.50 | % | ||||||||||||
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.
| franklintempleton.com | Annual Report | 13 | ||||||||
Franklin Genomic Advancements ETF
This annual report for Franklin Genomic Advancements ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of genomic advancements. These companies include those that are focused on, that the investment manager believes will benefit from, extending and enhancing the quality of human and animal life through technological or scientific advancements in such areas as genetic engineering, gene therapy, genome analysis and other uses, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -14.64% based on market price and -14.26% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +11.92% 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 16.
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
U.S. equities, as measured by the Standard & Poor’s 500 Index (S&P 500), posted a +15.65% total return for the 12 months ended March 31, 2022.1 Stocks benefited from the continued economic recovery, implementation of COVID-19 vaccination programs and easing pandemic restrictions.
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Life Sciences Tools & Services | 55.7% | |||
Biotechnology | 16.7% | |||
Pharmaceuticals | 12.5% | |||
Health Care Equipment & Supplies | 3.1% | |||
Semiconductors & Semiconductor Equipment | 2.9% | |||
Equity Real Estate Investment Trusts (REITs) | 2.5% | |||
Other | 3.5% | |||
Short-Term Investments & Other Net Assets | 3.1% | |||
Higher wages and strong household balance sheets contributed to increased consumer spending, particularly on goods. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor sentiment. However, elevated demand combined with supply chain disruptions led to the highest inflation since 1982. Russia’s invasion of Ukraine late in the 12-month 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 increase from historically low levels.
Gross domestic product 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.
The inflation rate was notably elevated during the 12-month period amid increased demand and supply chain bottlenecks. Consequently, the personal consumption expenditures index, a measure of inflation, surged during the period, representing the highest 12-month increase in decades. The unemployment rate declined from 6.0% in March 2021 to 3.6% in
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.
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 107.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
| Thermo Fisher Scientific Inc. Life Sciences Tools & Services | 6.3% | |||
| Repligen Corp. Life Sciences Tools & Services | 5.7% | |||
| Danaher Corp. Life Sciences Tools & Services | 4.1% | |||
| AstraZeneca PLC, ADR Pharmaceuticals | 4.0% | |||
| Intellia Therapeutics Inc. Biotechnology | 4.0% | |||
| Catalent Inc. Pharmaceuticals | 4.0% | |||
| Bruker Corp. Life Sciences Tools & Services | 3.6% | |||
| Agilent Technologies Inc. Life Sciences Tools & Services | 3.5% | |||
| Lonza Group AG Life Sciences Tools & Services | 3.3% | |||
| Avantor Inc. Life Sciences Tools & Services | 3.3% | |||
March 2022 as job openings increased, but a relative lack of available workers fueled wage growth, adding to some investors’ inflation concerns.
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.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on disruptive innovation or are enabling the further development of the genomic advancements theme in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from advancements in genomics relative to broad securities markets, and we seek to identify the primary beneficiaries of new trends or developments in genomics. We may invest in companies in any economic sector or of any market capitalization and may invest in companies both inside and outside of the U.S., including those in developing or emerging markets.
Although we search for investments across a large number of sectors, we expect to concentrate our investments in health care-related industries.
Manager’s Discussion
During the reporting period, the health care sector, which makes up a vast majority of the Fund’s portfolio, detracted from absolute performance. Within the sector, detractors included Natera (not held at period-end), a diagnostic company that develops and commercializes molecular testing services, Sartorius, a pharmaceutical and laboratory equipment supplier, and Guardant Health (not held at period-end), a cancer screening company. Repligen, which develops materials used in the manufacture of biological drugs, and Pacific Biosciences of California (not held at period-end), a gene sequencing equipment developer, also hurt results.
Turning to contributors, the information technology sector helped absolute returns due to the contribution of chipmaker NVIDIA. Elsewhere, contributors included therapeutics and vaccine developer Moderna, immunotherapy developer BioNTech and pharmaceuticals and biotechnology manufacturer Lonza Group.
Thank you for your participation in Franklin Genomic Advancements ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
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.
| franklintempleton.com | Annual Report | 15 | ||||||||
FRANKLIN GENOMIC ADVANCEMENTS ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (2/27/20), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -14.26% | -14.64% | -14.26% | -14.64% | ||||||||||||
Since Inception (2/25/20) | +48.55% | +48.22% | +20.78% | +20.66% | ||||||||||||
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 18 for Performance Summary footnotes.
| 16 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN GENOMIC ADVANCEMENTS ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
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.
2/25/20–3/31/22
See page 18 for Performance Summary footnotes.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.118083 |
Total Annual Operating Expenses5
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in health care related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. Companies operating within health care related industries face intense competition and potentially rapid product obsolescence. These companies are also heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. These companies typically engage in significant amounts of spending on research and development, and there is no guarantee that the products or services produced by these companies will be successful, or that competitors will not develop technology that is substantially similar or superior to such companies’ technology. The field of genomic science could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: Morningstar. The Russell 3000 Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
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.
| 18 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN GENOMIC ADVANCEMENTS ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 709.60 | $ | 2.13 | $ | 1,022.44 | $ | 2.52 | 0.50 | % | ||||||||||||
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.
| franklintempleton.com | Annual Report | 19 | ||||||||
Franklin Intelligent Machines ETF
This annual report for Franklin Intelligent Machines ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of intelligent machines. These companies include those that are focused on, or that the investment manager believes will benefit from, the ongoing technology-driven transformation of products, software, systems and machinery as well as product design, manufacture, logistics, distribution and maintenance, including through developments in artificial intelligence, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +6.80% based on market price and +7.27% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +11.92% 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 22.
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
U.S. equities, as measured by the Standard & Poor’s 500 Index (S&P 500), posted a +15.65% total return for the 12 months ended March 31, 2022.1 Stocks benefited from the continued economic recovery, implementation of COVID-19 vaccination programs and easing pandemic restrictions. Higher wages and strong household balance sheets
| Portfolio Composition | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Semiconductors & Semiconductor Equipment | 32.5% | |||
Software | 16.4% | |||
Health Care Equipment & Supplies | 13.3% | |||
Electronic Equipment, Instruments & Components | 9.7% | |||
Automobiles | 9.1% | |||
Technology Hardware, Storage & Peripherals | 6.4% | |||
Aerospace & Defense | 2.6% | |||
Other | 7.5% | |||
Short-Term Investments & Other Net Assets | 2.5% | |||
contributed to increased consumer spending, particularly on goods. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor sentiment. However, elevated demand combined with supply chain disruptions led to the highest inflation since 1982. Russia’s invasion of Ukraine late in the 12-month 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 increase from historically low levels.
Gross domestic product 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.
The inflation rate was notably elevated during the 12-month period amid increased demand and supply chain bottlenecks. Consequently, the personal consumption expenditures index, a measure of inflation, surged during the period, representing the highest 12-month increase in decades. The unemployment rate declined from 6.0% in March 2021 to 3.6% in
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.
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 110.
| 20 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN INTELLIGENT MACHINES ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
| Tesla Inc. Automobiles | 8.8% | |||
| NVIDIA Corp. Semiconductors & Semiconductor Equipment | 6.9% | |||
| Apple Inc. Technology Hardware, Storage & Peripherals | 6.4% | |||
| Intuitive Surgical Inc. Health Care Equipment & Supplies | 5.7% | |||
| ASML Holding NV Semiconductors & Semiconductor Equipment | 3.8% | |||
| Synopsys Inc. Software | 3.5% | |||
| Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR Semiconductors & Semiconductor Equipment | 3.0% | |||
| DexCom Inc. Health Care Equipment & Supplies | 2.9% | |||
| The Descartes Systems Group Inc. Software | 2.9% | |||
Axon Enterprise Inc. Aerospace & Defense | 2.6% | |||
March 2022 as job openings increased, but a relative lack of available workers fueled wage growth, adding to some investors’ inflation concerns.
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.
Investment Strategy
We use fundamental, bottom-up research analysis to identify companies positioned to capitalize on disruptive innovation in or are enabling the further development of the intelligent machines theme in the markets in which they operate. We evaluate market segments, products, services and business models positioned to benefit significantly from disruptive innovations in intelligent products, design, manufacturing and/or predictive maintenance relative to broad securities markets, and we seek to identify the primary beneficiaries of new trends or developments in physical applications of these innovations. We may invest in companies in any economic
sector or of any market capitalization and may invest in companies both inside and outside of the U.S., including those in developing or emerging markets. Although we search for investments across a large number of sectors, we expect to have significant investments in particular sectors, including technology.
Manager’s Discussion
During the reporting period, sectors that contributed to the Fund’s absolute performance included information technology (IT), health care and consumer discretionary. In IT, contributors included semiconductor manufacturer NVIDIA, consumer technology firm Apple and semiconductor-design software company Synopsys. In health care, contributors included Intuitive Surgical, a robotic surgical tools manufacturer, DexCom, a blood sugar monitoring device company, and Inspire Medical Systems, a developer of implantable neurostimulation systems to treat obstructive sleep apnea. In consumer discretionary, electric vehicle maker Tesla helped returns.
Turning to detractors, the industrials and materials sectors detracted from absolute performance. In industrials, detractors included custom manufacturer Proto Labs (not held at period-end), autonomous freight network company Tusimple Holdings (not held at period-end) and unmanned aerial vehicle company Aerovironment (not held at period-end). In materials, chemicals company SK IE Technology (not held at period-end) hurt results. Elsewhere, electric vehicle maker and auto technology company Rivian Automotive (not held at period-end) also hurt performance.
Thank you for your participation in Franklin Intelligent Machines ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
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.
| franklintempleton.com | Annual Report | 21 | ||||||||
FRANKLIN INTELLIGENT MACHINES ETF
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 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.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual 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 (2/27/20), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +7.27% | +6.80% | +7.27% | +6.80% | ||||||||||||
Since Inception (2/25/20) | +85.55% | +84.87% | +34.30% | +34.07% | ||||||||||||
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 24 for Performance Summary footnotes.
| 22 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN INTELLIGENT MACHINES ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
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.
2/25/20–3/31/22
See page 24 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 23 | ||||||||
FRANKLIN INTELLIGENT MACHINES ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Short-Term Capital Gains | Long-Term Capital Gains | Total | ||||||
$0.031956 | $0.062060 | $0.094016 | ||||||
Total Annual Operating Expenses5
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. The Fund has significant exposure to the technology sector. Companies operating within the technology sector may be affected by worldwide technological developments, the success of their products and services (which may be outdated quickly), anticipated products or services that are delayed or cancelled, and investor perception of the company and/or its products or services. In addition, companies operating within the technology sector may develop and/or utilize artificial intelligence. Artificial intelligence technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: Morningstar. The Russell 3000 Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
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.
| 24 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN INTELLIGENT MACHINES ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 957.10 | $ | 2.44 | $ | 1,022.44 | $ | 2.52 | 0.50 | % | ||||||||||||
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.
| franklintempleton.com | Annual Report | 25 | ||||||||
Franklin Dynamic Municipal Bond ETF
Formerly, Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF
This annual report for Franklin Dynamic Municipal Bond 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 that is exempt from federal income taxes, including the federal alternative minimum tax, by normally investing at least 80% of its net assets in municipal securities that pay interest free from such taxes.1 The Fund seeks to maintain a dollar-weighted average portfolio maturity (the time in which the debt must be repaid) of three to 10 years, and may invest in municipal securities in any rating category by U.S. nationally recognized rating services (or comparable unrated or short-term rated securities), including securities rated below investment grade and securities of issuers that are, or are about to be, involved in reorganizations, financial restructuring, or bankruptcy.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -3.66% based on market price and -3.70% based on net asset value (NAV). In comparison, the Bloomberg 1-15 Year Municipal Bond Index, which is a subset of the Bloomberg Municipal Bond Index, posted a -4.21% 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 28.
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.
| Portfolio Composition | ||||
| 3/31/22 | ||||
| % of Total Investments | ||||
Special Tax | 24.55% | |||
Industrial Development Revenue and Pollution Control | 16.98% | |||
Health Care | 11.20% | |||
Education | 7.51% | |||
Local | 7.24% | |||
Transportation | 6.69% | |||
Cash | 5.41% | |||
Utilities | 5.21% | |||
Lease | 4.92% | |||
Housing | 4.32% | |||
State | 3.26% | |||
Other | 2.15% | |||
Refunded | 0.57% | |||
Municipal Bond Market Overview
During the 12 months ending March 31, 2022, COVID-19 variants continued to be a significant driver of market forces. With each successive wave of infections, health authorities resisted returning to high levels of social distancing restrictions, allowing economic activity to improve. U.S. consumer inflation emerged as a large concern as pent-up demand for goods was met with stretched global supply chains. U.S. Treasury (UST) yields rose across the maturity curve as the U.S. Federal Reserve began removing accommodative monetary policies enacted to combat the COVID-19 induced economic slowdown.
Strong demand for municipal bonds (munis) drove valuations higher with the ratio of 30-year munis versus UST yields reaching an all-time best in June 2021. As market volatility increased, fund flows turned negative and muni performance suffered. We believe high levels of inflation in the U.S. will have a mixed impact on muni fundamentals. While higher prices should lead to more revenue from sales taxes, wages
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
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 113.
| 26 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
are typically an issuer’s largest operating expense, which could force some issuers to give employees raises to keep pace with increasing costs of living.
For the 12-month period, U.S. fixed income sectors underperformed relative to equities, as measured by the Standard & Poor’s 500 Index, which posted a +15.65% total return for the period.2 In comparison, investment-grade munis, as measured by the Bloomberg Municipal Bond Index, posted a -4.47% total return.2 USTs, as measured by the Bloomberg U.S. Treasury Index, posted a -3.67% total return, and investment-grade corporate bonds, as measured by the Bloomberg U.S. Corporate Bond Index, posted a -4.20% total return.2
Investment Strategy
We select securities that we believe will provide the best balance between risk and return within the Fund’s range of allowable investments and we typically use a buy-and-hold strategy. This means we generally hold securities in the Fund’s portfolio for income purposes, rather than trading securities for capital gains, although we may sell a security at any time if we believe it could help the Fund meet its goal. When selecting securities for the Fund’s portfolio, the investment manager may consider existing market conditions, the availability of lower-rated securities, and whether the difference in yields between higher and lower-rated securities justifies the higher risk of lower-rated securities. The Fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index.
Manager’s Discussion
During the reporting period, the portfolio management team invested across the entire quality spectrum, including below investment-grade bonds, to achieve our objective of maximizing income for our investors. As credit spreads fluctuate, we will continue to seek the best opportunities in higher and lower quality securities. The yield curve flattened significantly over the reporting period, and the team focused on yield curve positioning in an effort to help our investors achieve high levels of tax-free income over the long term.
Thank you for your participation in Franklin Dynamic Municipal Bond ETF. We look forward to serving your future investment needs.
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, state, 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.
| franklintempleton.com | Annual Report | 27 | ||||||||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
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 performance 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 mutual 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 (9/5/17), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | -3.70% | -3.66% | -3.70% | -3.66% | ||||||||||||
3-Year | +6.50% | +6.62% | +2.12% | +2.16% | ||||||||||||
Since Inception (8/31/17) | +10.10% | +10.14% | +2.12% | +2.13% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 | Taxable Equivalent 30-Day Standardized Yield7 | ||||||||||||||
| (with fee waiver) | (without fee waiver) | (with fee waiver) | (without fee waiver) | |||||||||||||
2.16% | 2.47% | 2.08% | 4.17% | 3.51% | ||||||||||||
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 30 for Performance Summary footnotes.
| 28 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
PERFORMANCE SUMMARY
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.
8/31/17–3/31/22
See page 30 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 29 | ||||||||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.558100 |
Total Annual Operating Expenses9
| With Waiver | Without Waiver | |||
0.30% | 1.01% | |||
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest-rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. The Fund may invest in lower-rated bonds which include higher risk of default and loss of principal. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. 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 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 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 certain 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 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 March dividend and the NAV 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. Taxable equivalent yield assumes the 2022 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. Source: Morningstar. Bloomberg 1-15 Year Municipal Bond Index is a subset of the Municipal Bond Index, which is a market value-weighted index of tax-exempt, investment-grade municipal bonds with maturities of one year or more.
9. 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.
| 30 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
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 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 in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $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.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 939.70 | $ | 1.45 | $ | 1,023.44 | $ | 1.51 | 0.30 | % | ||||||||||||
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.
| franklintempleton.com | Annual Report | 31 | ||||||||
Franklin Liberty Federal Tax-Free Bond ETF
This annual report for Franklin Liberty Federal Tax-Free Bond ETF covers the fiscal year ended March 31, 2022. Effective May 3, 2022, the Fund was renamed the Franklin Municipal Green Bond ETF, and under normal market conditions, the Fund will invest at least 80% of its net assets in municipal green bonds that promote environmental sustainability.
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income that is exempt from federal income taxes, including the federal alternative minimum tax, by normally investing at least 80% of its net assets in municipal securities that pay interest free from such taxes.1 The Fund seeks to maintain a dollar-weighted average portfolio maturity (the time in which the debt must be repaid) of five to 15 years, and only buys securities rated, at the time of purchase, in one of the top four ratings categories by one or more U.S. nationally recognized rating services (or comparable unrated or short-term rated securities).
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -5.44% based on market price and net asset value (NAV). In comparison, the Bloomberg Municipal Bond Index, which is a market value-weighted index of tax-exempt, investment-grade bonds with maturities of one year or more, posted a -4.47% 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 34.
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.
| Portfolio Composition | ||||
| 3/31/22 | ||||
| % of Total Investments | ||||
Utilities | 17.90% | |||
Lease | 13.52% | |||
Special Tax | 11.63% | |||
Transportation | 11.50% | |||
Industrial Development Revenue and Pollution Control | 9.86% | |||
Health Care | 8.45% | |||
Education | 8.26% | |||
Local | 7.32% | |||
Housing | 6.96% | |||
Other | 1.94% | |||
State | 1.57% | |||
Cash | 0.57% | |||
Refunded | 0.53% | |||
Municipal Bond Market Overview
During the 12 months ending March 31, 2022, COVID-19 variants continued to be a significant driver of market forces. With each successive wave of infections, health authorities resisted returning to high levels of social distancing restrictions, allowing economic activity to improve. U.S. consumer inflation emerged as a large concern as pent-up demand for goods was met with stretched global supply chains. U.S. Treasury (UST) yields rose across the maturity curve as the
U.S. Federal Reserve began removing accommodative monetary policies enacted to combat the COVID-19 induced economic slowdown.
Strong demand for municipal bonds (munis) drove valuations higher with the ratio of 30-year munis versus UST yields reaching an all-time best in June 2021. As market volatility increased, fund flows turned negative and muni performance suffered. We believe high levels of inflation in the U.S. will have a mixed impact on muni fundamentals. While higher prices should lead to more revenue from sales taxes, wages
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
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 126.
| 32 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
are typically an issuer’s largest operating expense, which could force some issuers to give employees raises to keep pace with increasing costs of living.
For the 12-month period, U.S. fixed income sectors underperformed relative to equities, as measured by the Standard & Poor’s 500 Index, which posted a +15.65% total return for the period.2 In comparison, investment-grade munis, as measured by the Bloomberg Municipal Bond Index, posted a -4.47% total return.2 USTs, as measured by the Bloomberg U.S. Treasury Index, posted a -3.67% total return, and investment-grade corporate bonds, as measured by the Bloomberg U.S. Corporate Bond Index, posted a -4.20% total return.2
Investment Strategy
We select securities that we believe will provide the best balance between risk and return within the Fund’s range of allowable investments and we typically use a buy-and-hold strategy. This means we generally hold securities in the Fund’s portfolio for income purposes, rather than trading securities for capital gains, although we may sell a security at any time if we believe it could help the Fund meet its goal. The Fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index.
Manager’s Discussion
During the reporting period, the portfolio management team invested across the investment-grade quality spectrum to achieve our objective of maximizing income for our investors. As credit spreads within investment grade fluctuate, we will continue to seek the best opportunities in higher and lower quality securities. The yield curve flattened significantly over the reporting period, and the team focused on yield curve positioning in an effort to help our investors achieve high levels of tax-free income over the long term.
Thank you for your participation in Franklin Liberty Federal Tax-Free Bond ETF. We look forward to serving your future investment needs.
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, state, 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.
| franklintempleton.com | Annual Report | 33 | ||||||||
FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
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 performance 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 mutual 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 (9/5/17), 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 reinvested 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 operating 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 NAV3 | Based on market price4 | Based on NAV3 | Based on market price4 | |||||||||||||
1-Year | -5.44% | -5.44% | -5.44% | -5.44% | ||||||||||||
3-Year | +5.33% | +5.32% | +1.74% | +1.74% | ||||||||||||
Since Inception (8/31/17) | +10.42% | +10.45% | +2.19% | +2.19% | ||||||||||||
| 30-Day Standardized Yield6 | Taxable Equivalent 30-Day Standardized Yield7 | |||||||||||||||
| Distribution Rate5 | (with fee waiver) | (without fee waiver) | (with fee waiver) | (without fee waiver) | ||||||||||||
1.82% | 2.11% | 1.75% | 3.56% | 2.96% | ||||||||||||
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 36 for Performance Summary footnotes.
| 34 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
PERFORMANCE SUMMARY
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.
8/31/17–3/31/22
See page 36 for Performance Summary footnotes.
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FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.436859 |
Total Annual Operating Expenses9
| With Waiver | Without Waiver | |||
0.30% | 0.78% | |||
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest-rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. 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 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 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 certain 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 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 March dividend and the NAV 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. Taxable equivalent yield assumes the 2022 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. Source: Morningstar. The Bloomberg Municipal Bond Index is a market value-weighted index of tax-exempt, investment-grade municipal bond with maturities of one year or more.
9. 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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FRANKLIN LIBERTY FEDERAL TAX-FREE BOND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 932.30 | $ | 1.45 | $ | 1,023.44 | $ | 1.51 | 0.30 | % | ||||||||||||
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.
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Franklin Liberty High Yield Corporate ETF
This annual report for Franklin Liberty High Yield Corporate ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to earn a high level of current income. Its secondary goal is to seek capital appreciation to the extent it is possible and consistent with the Fund’s principal goal. The Fund normally invests at least 80% of its net assets in high yield corporate debt securities and investments that provide exposure to high yield corporate debt securities, including bonds, notes, debentures, convertible securities, bank loans and corporate loans, and senior and subordinated debt securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -1.27% based on market price and -0.69% based on net asset value (NAV). In comparison, the ICE BofA U.S. High Yield Constrained Index, which tracks the performance of U.S. dollar denominated below investment-grade corporate debt publicly issued in the U.S. domestic market, posted a -0.30% 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 41.
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
| Portfolio Composition | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Corporate Bonds & Notes | 94.4% | |||
Senior Floating Rate Interests | 2.3% | |||
Short-Term Investments & Other Net Assets | 3.3% | |||
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
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.
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 133.
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FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Energy | 20.8% | |||
Materials | 12.7% | |||
Media & Entertainment | 11.4% | |||
Commercial & Professional Services | 6.8% | |||
Consumer Services | 5.7% | |||
Diversified Financials | 5.3% | |||
Utilities | 4.5% | |||
Pharmaceuticals, Biotechnology & Life Sciences | 4.4% | |||
Capital Goods | 4.1% | |||
Health Care Equipment & Services | 3.6% | |||
Investment Strategy
The Fund may invest up to 100% of its total assets in high yield debt securities. The Fund may buy both rated and unrated debt securities, including securities rated below B by Moody’s or Standard & Poor’s (or deemed comparable by the Fund’s investment manager). The Fund may invest in fixed or floating rate corporate loans and corporate debt securities, including covenant life loans. The Fund may also invest in defaulted debt securities. The Fund may invest in debt securities of any maturity or duration.
The Fund may invest in debt securities of U.S. and foreign issuers, including those in developing or emerging markets. The Fund may enter into certain derivative transactions, principally currency and cross currency forwards; and swap agreements, including interest rate and credit default swaps (including credit default index swaps). The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select currencies, interest rates, countries, durations or credit risks.
We are research driven, fundamental investors who rely on our team of analysts to provide in-depth industry expertise and use qualitative and quantitative analysis to evaluate companies. As bottom-up investors, we focus primarily on individual securities but consider sectors when choosing investments. In selecting securities, we do not rely principally on the ratings assigned by rating agencies, but perform our own independent investment analysis to evaluate the creditworthiness of the issuer. We consider a variety of factors, including the issuer’s experience and managerial strength, its sensitivity to economic conditions, and its current and prospective financial condition. The Fund is an actively managed ETF and, thus, does not seek to replicate the performance of a specified index. Accordingly, the investment manager has
discretion on a daily basis to manage the Fund’s portfolio in accordance with the Fund’s investment goals.
Manager’s Discussion
While “reflation,” meaning a return to growth, was the key driver for markets in the first quarter of 2021, “inflation” and commensurate risks of higher commodity prices took center stage over the summer and into the fall. For the high-yield (HY) market in particular, in the period leading up to the end of 2021, the sector enjoyed a favorable environment for leveraged credit. For most of last year, investor’s reach for yield remained strong and market participants focused on the positives. U.S. HY spreads ended 2021 close to the lows of the year despite a scare in the closing weeks from the Omicron variant and the U.S. Federal Reserve’s (Fed’s) hawkish pivot.
Since then, a broader risk-off tone has set in as markets have priced in more Fed tightening and the Russia-Ukraine conflict sends shock waves through the existing world order, prompting U.S. HY spreads to steadily widen to levels last seen toward the end of 2020. However, HY credit
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
Federal Farm Credit Discount Notes, 4/01/22 | 3.0% | |||
American Airlines Inc./AAdvantage Loyalty IP Ltd., 5.50%, 4/20/2026 Airlines | 1.4% | |||
Bausch Health Americas Inc., senior note, 144A, 9.25%, 4/01/26 Pharmaceuticals, Biotechnology & Life Sciences | 1.2% | |||
CSC Holdings LLC, senior note, 144A, Media & Entertainment | 1.2% | |||
Martin Midstream Partners LP, senior note, second lien, 144A, 11.50%, 2/28/25 Energry | 1.2% | |||
EnLink Midstream Partners LP, senior note, Energry | 1.1% | |||
TransDigm Inc., senior secured note, 144A, Capital Goods | 1.0% | |||
Cheniere Energy Inc., senior secured, 144A, Energy | 1.0% | |||
CCO Holdings LLC/CCO Holdings Capital Corp., 144A, senior bond, 144A, 4.50%, 8/15/2030 Media & Entertainment | 1.0% | |||
Carnival Corp., senior note, 144A, senior note, 144A, 5.75%, 3/01/2027 Consumer Services | 0.9% | |||
| franklintempleton.com | Annual Report | 39 | ||||||||
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
fundamentals are entering this turbulent period in solid shape, in our view, given the default rate has been hovering near historic lows, and wide-open capital markets the past two years have allowed many issuers to build up liquidity buffers and push out maturities.
Although input cost inflation pressures and shortages could present some headwinds to the fundamental picture, we believe the majority of HY sectors are still not likely to be negatively impacted to a significant degree. The potential impacts to HY corporate bonds from the Russia-Ukraine conflict are harder to quantify, however. As sanctions are levied, the impact to HY bonds would largely depend on the type of sanctions imposed, any unintended consequences, and the resulting response from Russia.
Based on benchmark index data, HY spreads generally widened during the 12-month period under review. Most segments of the HY market posted negative absolute returns for the performance period under review. CCC rated bonds returned 0.8%, compared to returns of 0.1% and -1.0% for B and BB rated segments, respectively. From an industry standpoint, energy stood out as a key performer, followed by metals and minerals.
The Fund’s yield-curve positioning detracted from performance during the 12-month period under review. Conversely, the Fund’s ratings quality contributed to results.
The Fund’s industry allocation contributed to relative performance for the period, led by overweight positions in the energy industry and underweight positions in the media cable and wired segments. Conversely, overweighted positions in the chemicals, health care and utilities industries hindered results.
The Fund’s security selection was a headwind to performance, particularly in the gaming, automotive and technology segments. Conversely, selection in the energy, chemicals and health care industries contributed to results.
The Fund held mostly cash bonds during the period under review. The Fund had no exposure to derivatives at the end of the review period.
Thank you for your participation in Franklin Liberty High Yield Corporate ETF. We look forward to serving your future investment needs.
Glenn I. Voyles, CFA
Patricia O’Connor, CFA
Jonathan G. Belk, CFA
Thomas Runkel, CFA
Pururav Thoutireddy, Ph.D
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.
| 40 | Annual Report | franklintempleton.com | ||||||||
CFA® is a trademark owned by CFA Institute.
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
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 performance 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 mutual 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 (6/1/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -0.69% | -1.27% | -0.69% | -1.27% | ||||||||||||
3-Year | +15.22% | +14.58% | +4.84% | +4.64% | ||||||||||||
Since Inception (5/30/18) | +23.37% | +23.06% | +5.63% | +5.56% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
4.89% | 5.86% | |||
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 43 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 41 | ||||||||
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
5/30/18–3/31/22
See page 43 for Performance Summary footnotes.
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FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income | Long-Term Capital Gain | Total | ||||||
$1.184398 | $0.074951 | $1.259349 | ||||||
Total Annual Operating Expenses7
0.40% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. The high-yield corporate debt securities and instruments in which the Fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated corporate debt securities and instruments involves greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/22.
5. 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.
6. Source: Morningstar. The ICE BofA U.S. High Yield Constrained Index tracks the performance of U.S. dollar denominated below investment-grade corporate debt publicly issued in the U.S. domestic market.
7. 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.
| franklintempleton.com | Annual Report | 43 | ||||||||
FRANKLIN LIBERTY HIGH YIELD CORPORATE ETF
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 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 in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $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 ETFs. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 959.40 | $ | 1.95 | $ | 1,022.94 | $ | 2.02 | 0.40 | % | ||||||||||||
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.
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Franklin Liberty International Aggregate Bond ETF
This annual report for Franklin Liberty International Aggregate Bond ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks total investment return, consistent with prudent investing, consisting of a combination of interest income and capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds. Bonds include debt obligations of any maturity, such as bonds, notes, bills and debentures.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -3.30% based on market price and -3.35% based on net asset value (NAV). In comparison, the Fund’s benchmark, the Bloomberg Global Aggregate Bond ex-USD Index (100% Hedged to USD), which measures global investment-grade debt from 24 local currency markets, posted a -3.56% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 48.
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 aggregate bond markets posted significantly negative returns over the 12-month review period. In April 2021, the U.S. Federal Reserve (Fed) Chair Jay Powell stated that the rollout of vaccinations, in tandem with unprecedented fiscal support, had improved economic activity and employment. U.S. economic data released in May 2021 were largely positive, although strong inflation data led to significant speculation as to whether the Fed might begin to reassess its policies. Even so, the central bank made no changes to its stimulus measures in its June 2021 meeting, while admitting that rising inflation had become a matter for concern. The
| Geographic Composition | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Europe | 43.9% | |||
Asia | 30.5% | |||
North America | 10.4% | |||
Supranationals | 2.2% | |||
Australia & New Zealand | 2.1% | |||
Middle East & Africa | 1.1% | |||
Latin America & Caribbean | 0.1% | |||
Short-Term Investments & Other Net Assets | 9.7% | |||
Fed also kept its policies unchanged in July 2021, stating that the U.S. economy had made progress toward reaching its goals of maximum employment and price stability. However, concerns remained about rising inflation, with data continuing to surprise on the upside. At its September 2021 meeting, the Fed indicated that it might begin tapering asset purchases earlier than previously expected, a decision that came after the Federal Open Market Committee revised U.S. growth and inflation projections upward for 2022. As strong economic data and concerns about high levels of inflation continued, the Fed announced in November 2021 that it would begin to taper its monetary support. Indeed, in December 2021, the Fed announced it would accelerate its tapering, doubling the monthly reduction rate of asset purchases from January 2022 onward.
Into the new year, the Fed moved decisively to dampen the threat from inflation by indicating its intention to raise interest rates at its meeting in March 2022. February was dominated by geopolitics, with President Putin’s decision to invade Ukraine leading to economic sanctions by Western countries on affiliates of the Russian government. U.S. inflation reached 7% during January, validating the Fed’s intention to implement multiple rates rises during 2022. In March the Fed raised interest rates and further strengthened its rhetoric on inflation, signaling potential multiple increases during 2022. Against this backdrop, benchmark U.S. Treasury yields followed a downward trajectory for the first half of the review period until rising in October 2021. U.S Treasury yields then dropped sharply at the end of November, amid worries about
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.
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 141.
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FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
| Portfolio Composition | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Foreign Government and Agency Securities | 81.6% | |||
Corporate Bonds & Notes | 5.8% | |||
Short-Term Investments & Other Net Assets | 12.6% | |||
the economic impact of the Omicron variant. However, affected by the Fed’s hawkish language, benchmark U.S. Treasury yields rose significantly over the first quarter of 2022, in late March hitting levels last seen in May 2019.
In Europe, the European Central Bank (ECB) decided at the start of the period to keep its monetary policy unchanged, although figures showed that the region had fallen into a ‘double-dip’ recession. In May 2021, however, there were encouraging signs that the region was bouncing back. Fears that rising inflation could threaten an economic recovery were downplayed by ECB President Christine Lagarde, while several ECB policymakers emphasized that it was too soon to rein in the central bank’s expansionary monetary policies. Indeed, the central bank maintained its policies at its June 2021 meeting, notwithstanding further strong economic data. The ECB subsequently raised both its growth and inflation forecasts for 2021, although it stipulated that it expected the latter to remain below its target for the foreseeable future.
The central bank announced in July 2021 that it would shift its inflation target from ‘below but close to 2%’ to a definitive 2%. Economic data remained upbeat, with the eurozone economy moving out of recession in the second three months of the year. In September 2021, the ECB announced that it would begin moderating its emergency bond purchases over the fourth quarter. Nonetheless, concerns remained about high levels of inflation. Though the ECB kept interest rates unchanged at its October 2021 meeting, it announced that it would begin to taper its asset purchases. Rising energy prices and supply chain tensions helped push up annualized eurozone inflation in November 2021 to 5%, its highest reading on record. The ECB then committed to an increased pace of asset purchase tapering at its December 2021 meeting but stated that continued accommodation would be required to stabilize inflation at 2% over the medium term.
Figures released early in January 2022 showed that eurozone inflation had risen to a record high of 5% in December 2021, putting pressure on the ECB to reduce its monetary stimulus more quickly than planned. The February 2022 meeting of the central bank marked a hawkish shift in rhetoric, with Lagarde’s initial refusal to rule out
interest-rate increases later in the year triggering a selloff in eurozone government bonds. In March 2022, the ECB announced a more aggressive schedule for asset purchase tapering and indicated a willingness to raise interest rates. In this environment, benchmark yields on German Bunds at first followed an erratic, albeit upward overall, path until they fell significantly in November 2021. They then rebounded in December, and indeed in January 2022 moved into positive territory for the first time since 2019, although falling back in February 2022 as the conflict in Ukraine escalated. Nevertheless, in March 2022, they rose sharply, reaching their highest reading since early 2018, to end the 12-month period up considerably.
Investment Strategy
The Fund invests predominantly in fixed and floating-rate bonds issued by governments, government agencies and governmental-related or corporate issuers located outside the U.S. Bonds may be denominated and issued in the local currency or in another currency. The Fund may also invest in securities or structured products that are linked to or derive their value from another security, asset or currency of any nation. In addition, the Fund’s assets are invested in issuers located in at least three countries (excluding the U.S.). The Fund may invest without limit in developing or emerging markets.
The Fund may invest in debt securities of any maturity or duration, and the average maturity or duration of debt securities in the Fund’s portfolio will fluctuate depending on the investment manager’s outlook on changing market, economic and political conditions.
The Fund is a “non-diversified” fund, which means it generally invests a greater portion of its assets in the securities of one or more issuers and invests overall in a smaller number of issuers than a diversified fund.
When choosing investments for the Fund, we allocate the Fund’s assets based upon our assessment of changing market, political and economic conditions. We consider various factors, including evaluation of interest rates, currency exchange rate changes and credit risks. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
We seek to hedge substantially all of the Fund’s foreign currency exposure using currency related derivatives, including currency and cross currency forwards and currency futures contracts. We expect to maintain extensive positions in
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FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
currency related derivative instruments as a hedging technique or to implement a currency investment strategy, which exposes a large amount of the Fund’s assets to obligations under these instruments. The results of such transactions may represent, from time to time, a significant component of the Fund’s investment returns. The use of these derivative transactions may allow the Fund to obtain net long or net negative (short) exposure to selected currencies. The Fund may also enter into various other transactions involving derivatives, including interest rate/bond futures contracts and interest rate swap agreements. These derivative instruments may be used for hedging purposes. Derivatives that provide exposure to bonds may be used to satisfy the Fund’s 80% policy.
Manager’s Discussion
During the reporting period, the Fund’s security selection and sector allocation contributed to relative returns. In government bonds, overweight exposure to German Bunds and selection in Italian sovereign debt bolstered relative results. In the corporate space, selection in investment-grade industrial issues added relative value.
The Fund’s duration and yield-curve positioning further helped relative results, mostly due to duration stances on U.K., Polish, Japanese and eurozone bonds. However, duration positioning in Chinese bonds hindered relative performance.
The Fund’s currency positioning also added to relative performance, largely owing to an underweight allocation to the British pound, which depreciated against the U.S. dollar.
In contrast, the Fund’s local market allocation detracted slightly from relative returns, namely exposures to the Chinese, Polish, eurozone and U.K. markets. However, an overweight allocation to the outperforming U.S. market and underweight position in the underperforming Russian market helped relative performance.
In terms of derivatives use, currency forwards are used in the Fund to hedge foreign-currency-denominated holdings back into the portfolio’s base currency, the U.S. dollar. Therefore, the use of the forwards is generally risk-reducing, both on an absolute basis and relative to the benchmark. However, for the period under review, derivatives use added 475 basis points to the Fund’s relative performance, as the U.S. dollar rose against most other major currencies.
Thank you for your participation in Franklin Liberty International Aggregate Bond ETF. We look forward to serving your future investment needs.
John Beck
Sonal Desai, Ph.D.
David Zahn, CFA
Patrick Klein, Ph.D.
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.
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FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
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 performance 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 mutual 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 (6/1/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -3.35% | -3.30% | -3.35% | -3.30% | ||||||||||||
3-Year | +1.29% | +1.50% | +0.43% | +0.50% | ||||||||||||
Since Inception (5/30/18) | +1.30% | +1.62% | +0.34% | +0.42% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
1.80% | 0.60% | |||
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 50 for Performance Summary footnotes.
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FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
5/30/18–3/31/22
See page 50 for Performance Summary footnotes.
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FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income | Short-Term Capital Gains | Long-Term Capital Gains | Total | |||||||||
$0.424879 | $0.128014 | $0.000051 | $0.552944 | |||||||||
Total Annual Operating Expenses6
0.25% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates and a rise in interest rates may cause the Fund’s share price to decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks including counterparty risk, and as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the December 2021 dividend and the NAV per share on 3/31/22.
5. 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.
6. Source: Morningstar. The Bloomberg Global Aggregate Bond ex-USD Index (100% Hedged to USD) measures global investment-grade debt from 24 local currency markets. This multicurrency benchmark is 100% hedged to the U.S. dollar and includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers.
7. 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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FRANKLIN LIBERTY INTERNATIONAL AGGREGATE BOND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 961.90 | $ | 1.22 | $ | 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.
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Franklin Liberty Investment Grade Corporate ETF
This annual report for Franklin Liberty Investment Grade Corporate ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks a high level of current income as is consistent with prudent investing, while seeking preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate debt securities and investments.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -4.49% based on market price and -4.30% based on net asset value (NAV).1 In comparison, the Bloomberg U.S. Corporate Investment Grade Index, which measures the performance of the investment grade, fixed-rate, taxable corporate bond market, posted a -4.20% 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 55.
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
During the 12 months under review, COVID-19 and its variants remained a significant driver of the U.S. economy. The Delta variant of the disease spread throughout the summer months reaching portions of the country that had yet to see high infection rates despite increasing vaccination levels. Many health authorities moved to reintroduce some social distancing requirements stalling the return to economic activity. Just as this strain of the disease seemed to lessen, the more contagious, milder Omicron variant pushed case rates to all-time highs in January 2022. However, state and local governments resisted returning to lockdowns which, in turn, helped the economic recovery.
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Banks | 24.6% | |||
Electric Utilities | 8.5% | |||
Oil, Gas & Consumable Fuels | 5.8% | |||
Health Care Providers & Services | 4.4% | |||
Diversified Telecommunication Services | 3.7% | |||
Capital Markets | 3.6% | |||
Specialty Retail | 2.8% | |||
Hotels, Restaurants & Leisure | 2.7% | |||
Media | 2.6% | |||
Diversified Financial Services | 2.5% | |||
The U.S. economy grew by 5.7% in 2021 and by another annualized rate of 6.9% in the first quarter 2022 as strong fiscal support bolstered consumer spending. Although not uniform across the period, U.S. employment improved markedly over the previous 12 months, averaging 556,000 monthly new job creations. The unemployment rate dropped to 3.8% by February 2022, just 0.3 percentage points above pre-COVID levels. Industrial production recovered throughout the period with November 2021 levels exceeding February 2020 amounts, but, more recently, the pace of growth has slowed.
Although initially labeled as transitory, U.S. consumer inflation increased rapidly through the end of 2021 and into 2022 and has become more persistent. With historically high levels of savings from pandemic recovery funds, pent-up demand for consumer goods met constrained supply growth due to fast rising commodity prices and stretched global supply chains. Additionally, the February 2022 Russian invasion of Ukraine put pressure on world energy and food commodity prices. In March 2022, the year-over-year gain in the U.S. Consumer Price Index reached 7.9%, the highest since 1982, eroding real incomes as wages were not able to keep up with prices of basic goods such as energy, food, and shelter.
Throughout most of the 12 months under review, the U.S. Federal Reserve (Fed) maintained their extraordinarily loose monetary policies which included an effective lower-bound
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.
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 146.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
federal funds rate and monthly purchases of assets. As U.S. inflation began to show no signs of retreating, the Fed turned hawkish ending all new asset purchases and raising short-term rates by 25 basis points at its March 2022 meeting. Median Fed projections show at least another six rate hikes in 2022 with more to come next year. Also, the Fed pledged to “normalize” its ample balance sheet by reducing its holdings of both U.S. Treasuries (UST) and agency mortgage-backed securities. This change in outlook and increased inflation put strong upward pressure on UST yields across the maturity spectrum, led by intermediate rates reaching levels last seen in 2019.
Throughout the summer months, investment-grade corporate bond spreads remained tight on a historical basis before increasing modestly towards the end of the year. Since then, spreads widened significantly after the start of the Russian/Ukraine war, but we have seen some rebound as higher all-in yields became more attractive to investors. Company earnings remained strong in the 12 months under review, which supported the sector. However, there are concerns that increased costs, specifically wage costs, could put pressure on corporate profits as we move forward.
Investment Strategy
The Fund invests primarily in U.S. dollar-denominated corporate debt securities issued by U.S. and foreign companies. The Fund may invest in debt securities of any maturity or duration.
The Fund’s focus on the credit quality of its portfolio is intended to reduce credit risk and help to preserve the Fund’s capital. The Fund may also invest a portion of its assets in convertible securities, preferred securities (including preferred stock) and U.S. Treasury securities, and generally expects to invest a portion of its assets in cash, cash equivalents and high-quality money market securities, including short-term U.S. government securities, commercial paper, repurchase agreements and affiliated or unaffiliated money market funds. The Fund may invest up to 40% of its net assets in foreign securities, including those in developing markets, and up to 15% of its net assets in non-U.S. dollar-denominated securities. The Fund may enter into certain derivative transactions to seek to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Issue/Issuer | % of Total Net Assets | |||
Bank of America Corp., senior unsecured note, sub. bond, 4.183%, 11/25/2027 | 2.3% | |||
JPMorgan Chase & Co., senior bond, FRN thereafter, 4.25%, 10/01/2027 | 2.0% | |||
Federal Farm Credit Discount Notes , | 2.0% | |||
Morgan Stanley, senior unsecured note, Series GMTN, to 1/22/24 FRN thereafter, senior note, 1.794%, 2/13/2032 | 1.9% | |||
Las Vegas Sands Corp., Senior unsecured, | 1.7% | |||
Citigroup Inc., senior bond, FRN thereafter, | 1.7% | |||
AT&T Inc., Senior unsecured, 3.55%, 9/15/2055 | 1.6% | |||
Verizon Communications Inc., senior bond, | 1.6% | |||
Imperial Brands Finance PLC, senior bond, senior note, 144A, 4.25%, 7/21/2025 | 1.6% | |||
Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 4.50%, 10/20/2025 | 1.4% | |||
bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. The Fund’s portfolio is constructed by taking into account our desired duration and yield curve exposure, total return potential, as well as the appropriate diversification and risk profile at the issue, company and industry level.
Manager’s Discussion
Investment-grade corporate bond absolute performance was negative over the 12 months under review, curbed by fast rising UST yields and modestly widening corporate bond spreads. The Fund performed slightly worse than the benchmark for the reporting period.
Duration and yield curve positioning was a strong contributor to relative performance. On average over the 12 months, we maintained a duration slightly lower than the benchmark (especially in bonds with 20 or more years to maturity). This lifted returns as UST yields rose. Our overweight allocation to bonds in the energy sector and in banking, overall, was accretive to relative performance as well.
The Fund’s overweight allocation to BBB-rated bonds and its underweight allocation to A-rated bonds contributed to its outperformance, relative to the benchmark. Among BBB-rated bonds, for example, those of airline Delta and energy utility Vistra Energy boosted returns.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
Security selection detracted from results, led by companies within the insurance, consumer cyclical, and capital goods segments.
The Fund primarily held cash bonds during the period. The Fund also used interest-rate futures contracts to manage duration exposure. The use of futures had a small impact on total Fund returns.
Thank you for your participation in Franklin Liberty Investment Grade Corporate ETF. We look forward to serving your future investment needs.
Marc Kremer, CFA
Shawn Lyons, CFA
Thomas Runkel, CFA
Pururav Thoutireddy, Ph.D.
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.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
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 performance 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 mutual 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 (10/5/16), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -4.30% | -4.49% | -4.30% | -4.49% | ||||||||||||
5-Year | +16.50% | +16.30% | +3.10% | +3.07% | ||||||||||||
Since Inception (10/3/16) | +14.37% | +14.31% | +2.48% | +2.47% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
2.80% | 3.37% | |||
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 57 for Performance Summary footnotes.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
10/03/16–3/31/22
See page 57 for Performance Summary footnotes.
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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income | Long-Term Capital Gains | Total | ||||||
$0.661062 | $0.051443 | $0.712505 | ||||||
Total Annual Operating Expenses7
0.35% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including currency fluctuations, and economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/22.
5. 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.
6. Source: Morningstar. The Bloomberg U.S. Corporate Investment Grade Index measures the performance of the investment grade, fixed-rate, taxable corporate bond market. It includes U.S. dollar-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.
7. 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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FRANKLIN LIBERTY INVESTMENT GRADE CORPORATE ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 923.60 | $ | 1.68 | $ | 1,023.19 | $ | 1.77 | 0.35 | % | ||||||||||||
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.
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Franklin Liberty Senior Loan ETF
This annual report for Franklin Liberty Senior Loan 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. A secondary goal is preservation of capital. The Fund invests at least 80% of its net assets in senior loans and investments that provide exposure to senior loans. Senior loans include loans referred to as leveraged loans, bank loans and/or floating rate loans.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +2.67% based on market price and +2.76% based on net asset value (NAV). In comparison, the Fund’s benchmark, the S&P/LSTA U.S. Leveraged Loan 100 Index, which reflects the performance of the largest facilities in the leveraged loan market, posted a +2.30% 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 62.
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.
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Senior Floating Rate Interests | 92.3% | |||
Short-Term Investments & Other Net Assets | 4.9% | |||
Corporate Bonds & Notes | 2.1% | |||
Asset-Backed Securities | 0.7% | |||
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
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.
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 153.
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FRANKLIN LIBERTY SENIOR LOAN ETF
| Top 10 Sector/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Software | 14.5% | |||
Media | 8.3% | |||
Health Care Providers & Services | 8.3% | |||
Commercial Services & Supplies | 4.9% | |||
Pharmaceuticals | 4.6% | |||
Airlines | 4.6% | |||
Diversified Financial Services | 3.8% | |||
Specialty Retail | 3.5% | |||
Chemicals | 3.5% | |||
Containers & Packaging | 2.9% | |||
Investment Strategy
The Fund invests predominantly in income-producing senior floating interest-rate corporate loans made to or issued by U.S. companies, non-U.S. entities and U.S. subsidiaries of non-U.S. entities. Floating interest rates vary with and are periodically adjusted to a generally recognized base interest rate such as the London Interbank Offered Rate (LIBOR) or the Prime Rate. The Fund may invest in companies whose financial condition is troubled or uncertain and that may be involved in bankruptcy proceedings, reorganizations or financial restructurings.
Senior loans generally have credit ratings below investment grade and may be subject to restrictions on resale. Under normal market conditions, the Fund invests at least 75% of its net assets in senior loans that are rated B- or higher at the time of purchase by a nationally recognized statistical rating organization (NRSRO) or, if unrated, are determined to be of comparable quality by the Fund’s investment manager. Under normal market conditions, the Fund may invest up to 25% of its net assets in senior loans that are rated below B- by an NRSRO or, if unrated, are determined to be of comparable quality by the investment manager.
Manager’s Discussion
Expectations of a rising rate environment over the one-year period ended March 31, 2022, contributed to favorable technical conditions for the loan market, accelerating inflows from retail investors and supporting loan valuations. Robust collateralized-loan-obligation (CLO) issuance also contributed to demand, reaching record volumes in 2021. However, new issuance to finance mergers and acquisitions and leveraged buyouts significantly increased, which limited spread compression and moderated price gains in the asset class, compared to the prior period. While volatility increased
toward the end of the period due to uncertainties surrounding the future impact of the ongoing geopolitical conflict in Ukraine and the renewal of COVID lockdowns in China, fundamental conditions in the loan market continued to improve as the default rate declined further and credit rating upgrades outpaced downgrades.
During the period, the Fund outperformed its benchmark, the S&P/LSTA U.S. Leveraged Loan 100 Index. The portfolio’s overweight in B-rated loans (as well as its underweight in higher rated loans and lower rated loans) contributed to outperformance, as the upper tier of the benchmark (including BB-rated loans) returned 2.01%, while the middle tier (B-rated loans) returned 3.19% and the lower tier (CCC-rated loans) returned -19.00% during the year. As of period-end, the Fund had 11.1% of its portfolio in upper tier loans and 80.1% in middle tier loans, compared to the benchmark, which had 37.5% in the upper tier and 60.1% in the middle tier. The Fund had 1% in lower tier loans, while the benchmark weighting was 2.5%.
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry | % of Total Net Assets | |||
Federal Home Loan Bank Discount Notes , U.S. Government & Agency Securities | 5.1% | |||
Peraton Corp., Term Loan B1, 4.50%, Aerospace & Defense | 1.4% | |||
Verscend Holding Corp., 2021 Term Loan B, IT Services | 1.3% | |||
Vertical US Newco Inc., (thyssenkrupp Elevator), Term Loan B, 4.02%, 4.015%, 7/30/2027 Machinery | 1.3% | |||
eResearchTechnology Inc., 2020 1st Lien Term Loan, 5.50%, 5.50%, 2/04/2027 Pharmaceuticals, Biotechnology & Life Sciences | 1.2% | |||
Great Outdoors Group LLC, 2021 Term Loan B1, 4.50%, 4.50%, 3/06/2028 Retail REITs | 1.2% | |||
Greeneden U.S. Holdings II LLC, Initial Dollar Term Loan, 4.75%, 12/01/27 Technology Hardware, Storage & Peripherals | 1.2% | |||
Polaris Newco LLC, USD Term Loan B, Software | 1.2% | |||
Radiate Holdco LLC, 2021 Term Loan B, Media | 1.1% | |||
Athenahealth Inc., 2022 Term Loan B, 4.00%, 2/15/29 Software | 1.1% | |||
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FRANKLIN LIBERTY SENIOR LOAN ETF
Among individual investments, the top contributors to performance included investments that continued to gain from the ongoing economic recovery. The term loan of Clear Channel Outdoor (a provider of out-of-home display advertising) traded higher as the company reported improvements in their core billboard business and a resumption in travel led to expectations of increased advertising demand. Additionally, our investments in American Airlines (a global airline operator) traded higher following expectations of a further recovery in air travel. The top detractors from performance included issuers facing operational challenges due to secular issues and pandemic related disruptions. Diamond Sports (an operator of regional sports networks) detracted from performance after continued financial underperformance and uncertainty around the company’s ability to renew distributor contracts. The term loan of Klockner Pentaplast (a packaging manufacturer) declined after the company reported weak results due to continued raw materials price increases.
Thank you for your participation in Franklin Liberty Senior Loan ETF. We look forward to serving your future investment needs.
Reema Agarwal, CFA
Justin Ma, CFA
Margaret Chiu, CFA
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.
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FRANKLIN LIBERTY SENIOR LOAN ETF
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 performance 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 mutual 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 (6/1/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +2.76% | +2.67% | +2.76% | +2.67% | ||||||||||||
3-Year | +10.48% | +10.20% | +3.38% | +3.29% | ||||||||||||
Since Inception (5/30/18) | +13.17% | +13.06% | +3.28% | +3.25% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
3.07% | 4.11% | |||
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.
See page 64 for Performance Summary footnotes.
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FRANKLIN LIBERTY SENIOR LOAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
5/30/18–3/31/22
See page 64 for Performance Summary footnotes.
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FRANKLIN LIBERTY SENIOR LOAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.808326 |
Total Annual Operating Expenses7
0.45% |
All investments involve risks, including possible loss of principal. Investors should be aware that the Fund’s share price and yield will fluctuate with market conditions. The senior loans and debt securities in which the Fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated, senior loans and debt securities involves greater risk of default, which could result in loss of principal—a risk that may be heightened in a slowing economy. Interest earned on senior loans varies with changes in prevailing interest rates. Therefore, while senior loans offer higher interest income when interest rates rise, they will also generate less income when interest rates decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/22.
5. 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.
6. Source: Morningstar. The S&P/LSTA U.S. Leveraged Loan 100 Index reflects the performance of the largest facilities in the leveraged loan market. This rules-based index consists of the 100 largest loan facilities in the benchmark S&P/LSTA Leveraged Loan Index.
7. 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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FRANKLIN LIBERTY SENIOR LOAN ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,004.30 | $ | 2.25 | $ | 1,022.69 | $ | 2.27 | 0.45 | % | ||||||||||||
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.
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Franklin Liberty Systematic Style Premia ETF
This annual report for Franklin Liberty Systematic Style Premia ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide absolute return. The Fund seeks to achieve its investment goal by allocating its assets across two underlying alternative investment strategies, which represent top-down and bottom-up approaches to capturing factor-based risk premia. The strategies consist of a top-down risk premia strategy and a bottom-up long/short equity strategy.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +9.06% based on market price and +10.09% based on net asset value (NAV). In comparison, the ICE BofA U.S. 3-Month Treasury Bill Index, which tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +0.06% 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 69.
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.
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Common Stocks | 63.2% | |||
Other Net Assets | 36.8% | |||
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
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.
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 161.
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FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
| Top 10 Sector/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Software | 6.1% | |||
Semiconductors & Semiconductor Equipment | 4% | |||
Interactive Media & Services | 3.2% | |||
Specialty Retail | 3.1% | |||
Oil, Gas & Consumable Fuels | 3.0% | |||
Biotechnology | 2.6% | |||
IT Services | 2.6% | |||
Banks | 2.4% | |||
Pharmaceuticals | 2.3% | |||
Food & Staples Retailing | 2.0% | |||
Investment Strategy
The Fund’s top-down risk premia strategy focuses on value, momentum and carry factors in taking both long and short positions across equity, fixed income, commodity and currency asset classes.
The Fund’s bottom-up long/short equity strategy focuses on quality, value and momentum factors in determining whether to hold long or short positions in individual equity securities. Long/short equity strategies generally seek to produce returns from investments in the equity markets by taking long and short positions in stocks and stock indices (through the use of derivatives or through a short position in an exchange-traded fund). Long positions benefit from an increase in the price of the underlying instrument, while short positions benefit from a decrease in that price.
Under normal market conditions, the top-down risk premia strategy invests primarily in equity, interest rate/bond and commodity index futures; equity and commodity-linked total return swaps; and currency forwards. Under normal market conditions, the bottom-up long/short equity strategy invests primarily in equity securities and equity total return swaps, with equity total return swaps being used to obtain short exposures.
Under normal market conditions, we seek to allocate assets between the two factor-based risk premia alternative investment strategies described above according to each strategy’s estimated risk, as measured by historical returns-based risk models. The allocation to each strategy is driven by the estimated risk contribution of each individual strategy to the Fund’s overall investment strategy, which the investment manager seeks to keep within certain pre-determined bounds.
| Top 10 Long Positions | ||||
| 3/31/22 | ||||
Company Sector/Industry/Country | % of Total Net Assets | |||
FLSP Holdings Corp. Diversified Financials | 7.6% | |||
Microsoft Corp. Software & Services | 2.5% | |||
Alphabet Inc., C Software & Services | 2.1% | |||
AbbVie Inc. Pharmaceuticals, Biotechnology & Life Sciences | 1.1% | |||
Meta Platforms Inc., A Software & Services | 1.1% | |||
Shell PLC Energy | 1.0% | |||
Intel Corp. Semiconductors & Semiconductor Equipment | 1.0% | |||
Accenture PLC, A Software & Services | 1.0% | |||
McDonald’s Corp. Consumer Services | 1.0% | |||
Texas Instruments Inc. Semiconductors & Semiconductor Equipment | 1.0% | |||
Through the two strategies, we invest the Fund’s assets based on a systematic investment process for securities selection and asset allocation by utilizing quantitative models. By employing these two approaches, we seek to provide positive absolute return over time while maintaining a relatively low correlation with traditional markets. The exposure to individual factors may vary based on the market opportunity of the individual factors.
The Fund may use derivatives for both hedging and non-hedging (investment) purposes. The Fund’s derivative investments may include, among other instruments: (i) futures contracts, including futures on equity, interest rate/bond and commodity indices; (ii) swaps, including equity and commodity-linked total return swaps; and (iii) currency forward contracts. These derivatives may be used to enhance Fund returns, increase liquidity, gain long or short exposure to certain instruments, markets or factors in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments. The results of such transactions are expected to represent a material component of the Fund’s investment returns.
Manager’s Discussion
During the 12 months ended March 31, 2022, the Fund’s equities and commodities strategies drove positive performance. The long/short single equities strategy accounted for
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FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
| Top 10 Short Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry/Country | % of Total Net Assets | |||
Phoenix Group Holdings PLC Insurance, United Kingdom | -0.1% | |||
Pan American Silver Corp. Materials, Canada | -0.1% | |||
SKF AB, B Capital Goods, Sweden | -0.1% | |||
Admiral Group PLC Insurance, United Kingdom | -0.1% | |||
Just Eat Takeaway.com NV Retailing, United Kingdom | -0.1% | |||
Ritchie Bros Auctioneers Inc. Commercial & Professional Services, Netherlands | -0.1% | |||
Orkla ASA Food, Beverage & Tobacco, United States | -0.1% | |||
Kinnevik AB, B Diversified Financials, Sweden | -0.1% | |||
HEICO Corp Capital Goods, United States | -0.1% | |||
Pan Pacific International Holdings Corp. Retailing, Japan | -0.0% | * | ||
*Rounds to more than -0.1%.
the majority of contribution, while the commodities strategies accounted for more than a third. The equity indices macro strategy was also a significant contributor.
Within our long/short single stock equities component, all three of our factors—quality, value and momentum—contributed to performance at different times. Quality and momentum factors were strong contributors to performance in the last three quarters of 2021, while value bolstered performance in the first quarter of 2022. Our portfolio was long lower-volatility stocks and short higher-volatility stocks on aggregate, and this positioning also contributed to returns over the year, particularly during the first quarter of 2022, when overall market volatility was elevated. In capital terms, the portfolio was net long, and this also aided performance, alongside the lower-volatility positioning. Our equity index macro strategies also had a positive impact, based on our long positioning in South Africa, Canada, France and Australia, together with our short positions in Japan, Germany and Spain.
Commodities strategies were notable drivers of gains during the period as the global commodities complex posted its biggest quarterly gain in three decades. Crude oil futures, gasoline futures, heating oil futures and gasoil futures accounted for the majority of gains. Our commodity time series momentum strategy was the single-largest factor driver of our performance within the asset class.
Conversely, the Fund’s fixed income positioning weighed on returns overall during the period. Our fixed income macro strategies had a negative impact, as long positions in Australian bond futures and French OAT bond futures detracted more from performance than the positive contribution from short positions in German bund futures and Canadian bond futures.
The Fund’s foreign currency macro strategies had negative results during the period, driven largely by long positions in the Russian ruble, Polish zloty and Czech koruna, as well as short positions in the Israeli shekel, owing to our foreign currency carry and value factors. In contrast, short positioning in the euro, Japanese yen and Canadian dollar helped offset the losses.
Thank you for your participation in Franklin Liberty Systematic Style Premia ETF. We look forward to serving your future investment needs.
Chandra Seethamraju, Ph.D.
Lead Portfolio Manager
Sundaram Chettiappan, CFA
Vaneet Chadha, CFA
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.
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FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
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 performance 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 mutual 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 (12/20/19), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +10.09% | +9.06% | +10.09% | +9.06% | ||||||||||||
Since Inception (12/18/19) | -6.87% | -7.20% | -3.07% | -3.22% | ||||||||||||
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.
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FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
12/18/19–3/31/22
See page 71 for Performance Summary footnotes.
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FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.258156 |
Total Annual Operating Expenses5
0.65% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund is actively managed and could experience losses if the manager’s judgment about particular investments, or its evaluation of the risks, potential returns and correlation properties of the various risk premia in which the Fund invests, prove to be incorrect. The manager’s allocation of Fund assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Trading models used by the manager for securities selection and asset allocation may become outdated and the historical patterns upon which the models are based may weaken or disappear. There can be no assurance that the factor-based risk premia investment strategies utilized by the manager will enhance Fund performance, reduce volatility or reduce potential loss. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. Investing in derivatives and the use of foreign currency techniques involve special risks and may not achieve the anticipated benefits and/or may result in losses to the Fund. Other risks include illiquidity, mispricing or improper valuation of the derivative, and imperfect correlation between the value of the derivative and the underlying instrument. The Fund may realize losses when a counterparty fails to perform as promised. Currency management strategies could result in losses to the Fund if currencies do not perform as the manager expects. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in an issuer’s financial strength or in a security’s credit rating may affect its value. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they’ve been valued. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks or adverse developments in such areas of focus than a Fund that invests in a wider variety of countries, regions, industries or sectors or investments. 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 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 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 certain 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the period indicated. Return for less than one year, if any, has not been annualized.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The ICE BofA U.S. 3-Month Treasury Bill Index tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months.
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.
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FRANKLIN LIBERTY SYSTEMATIC STYLE PREMIA ETF
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 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 in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $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 ETFs. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,044.20 | $ | 3.36 | $ | 1,021.64 | $ | 3.33 | 0.65 | % | ||||||||||||
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.
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Franklin Liberty U.S. Core Bond ETF
This annual report for Franklin Liberty U.S. Core Bond ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks total return. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds of U.S. issuers, including government, corporate debt, mortgage-backed and asset-backed securities. Bonds include debt obligations of any maturity, such as bonds, notes, bills and debentures.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -4.91% based on market price and -4.72% based on net asset value (NAV). In comparison, the Bloomberg U.S. Aggregate Bond Index, which measures the performance of the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, posted a -4.15% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 76.
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.
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
U.S. Government & Agency Securities | 41.2% | |||
Quasi-Sovereign and Corporate Bonds | 26.0% | |||
Mortgage-Backed Securities | 18.4% | |||
Municipal Bonds | 4.3% | |||
Foreign Government and Agency Securities | 3.3% | |||
Asset-Backed Securities | 2.7% | |||
Short-Term Investments & Other Net Assets | 4.1% | |||
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
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.
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 177.
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FRANKLIN LIBERTY U.S. CORE BOND ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
U.S. Treasury Note, 2.125%, 2/29/2024 | 6.6% | |||
U.S. Treasury Note, 0.375%, 11/30/2025 | 5.6% | |||
U.S. Treasury Note, 0.375%, 1/31/2026 | 3.8% | |||
U.S. Treasury Note, 0.50%, 3/31/2025 | 3.2% | |||
U.S. Treasury Note, 1.25%, 12/31/2026 | 2.1% | |||
U.S. Treasury Note, 1.50%, 3/31/2023 | 2.0% | |||
U.S. Treasury Bond, 2.25%, 8/15/2046 | 1.6% | |||
U.S. Treasury Note, 0.875%,6/30/2026 | 1.5% | |||
U.S. Treasury Note, 0.25 %, 6/30/2025 | 1.5% | |||
Federal National Mortgage Association, 2.00%, 7/1/2051 | 1.5% | |||
investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -4.20% total return.1
Investment Strategy
The Fund invests predominantly in investment-grade debt securities and, under normal market conditions, is generally expected to have sector, credit and duration exposures comparable to its benchmark index. However, we make investment decisions based upon our own fundamental analysis, which affects the Fund’s sector, credit and duration exposures so that they may vary from the benchmark index. The Fund’s investments in mortgage-backed securities include securities that are issued or guaranteed by the U.S. government, its agencies or instrumentalities, which include mortgage pass-through securities representing interests in pools of mortgage loans issued or guaranteed by the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac).
In addition, the Fund may purchase or sell mortgage-backed securities on a delayed delivery or forward commitment basis through the to-be-announced (TBA) market. With TBA transactions, the particular securities to be delivered must meet specified terms and conditions.
For purposes of pursuing its investment goal, the Fund may enter into various interest-rate and credit-related derivatives, principally U.S. Treasury futures, interest-rate swaps and credit default swaps. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates, durations or credit risks. The Fund
may enter into certain derivative transactions to seek to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
Manager’s Discussion
During the 12-month period under review, the Fund posted a return of -4.72% based on net asset value, underperforming the Bloomberg U.S. Aggregate Bond Index return of -4.15%. Duration positioning was a contributor to returns over the year. Throughout the period, we maintained a duration less than that of the benchmark, especially in longer-maturity bonds. Although this detracted from returns in calendar year 2021, more recently, U.S. Treasury (UST) yields have risen dramatically, leading our underweight positioning to contribute to results. Sector allocations weighed modestly on performance over the period, led by overweight holdings of taxable and tax-exempt municipal bonds (muni) and sovereign emerging market securities. In contrast, underweight exposure to agency mortgage-backed securities (MBS) and overweight positioning in corporate credit bonds boosted returns. Relative exposures in asset-backed securities, commercial MBS (CMBS), and agency notes did not have a meaningful impact on 12-month performance returns. Security selection was a detractor from our results, with selection in emerging market bonds being a particular drag on performance. Additionally, security selection in MBS and munis weighed on returns for the period. This was partially offset by positive performance contributions from our security selection in investment-grade corporate bonds.
Thank you for your participation in Franklin Liberty U.S. Core Bond ETF. We look forward to serving your future investment needs.
David Yuen, CFA, FRM
Patrick Klein, Ph.D.
Tina Chou
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FRANKLIN LIBERTY U.S. CORE BOND ETF
Portfolio Management Team
FRM® is a trademark owned by Global Association of Risk Professionals (GARP).
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.
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FRANKLIN LIBERTY U.S. CORE BOND ETF
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 performance 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 or redemption 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 mutual 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 (9/19/19), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -4.72% | -4.91% | -4.72% | -4.91% | ||||||||||||
Since Inception (9/17/19) | +0.29% | +0.24% | +0.11% | +0.09% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
2.16% | 2.43% | |||
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 78 for Performance Summary footnotes.
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FRANKLIN LIBERTY U.S. CORE BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
9/17/19–3/31/22
See page 78 for Performance Summary footnotes.
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FRANKLIN LIBERTY U.S. CORE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income | Long-Term Capital Gains | Total | ||||||
$0.504065 | $0.051358 | $0.555423 | ||||||
Total Annual Operating Expenses7
0.15% |
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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/22.
5. 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.
6. 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).
7. 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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FRANKLIN LIBERTY U.S. CORE BOND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 936.20 | $ | 0.72 | $ | 1,024.18 | $ | 0.76 | 0.15 | % | ||||||||||||
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.
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Franklin Liberty U.S. Low Volatility ETF
This annual report for Franklin Liberty U.S. Low Volatility ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation with an emphasis on lower volatility. Under normal market conditions, the Fund invests at least 80% of its net assets in U.S. investments, and primarily equity securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +13.98% based on market price and net asset value (NAV). In comparison, the Russell 1000® Index, which measures the performance of the approximately 1,000 largest companies in the Russell 3000® Index, posted a +13.27% 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 83.
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
U.S. equities, as measured by the Standard & Poor’s 500 Index (S&P 500), posted a +15.65% total return for the 12 months ended March 31, 2022.1 Stocks benefited from the continued economic recovery, implementation of COVID-19 vaccination programs and easing pandemic restrictions. Higher wages and strong household balance sheets contributed to increased consumer spending, particularly on goods. A rebound in corporate earnings and the passage of a bipartisan infrastructure bill further bolstered investor sentiment. However, elevated demand combined with supply chain disruptions led to the highest inflation since 1982. Russia’s invasion of Ukraine late in the 12-month period injected further uncertainty into financial markets, provoking significant
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Information Technology | 26.9% | |||
Health Care | 13.5% | |||
Financials | 11.7% | |||
Consumer Discretionary | 11.4% | |||
Industrials | 8.7% | |||
Communication Services | 8.6% | |||
Consumer Staples | 5.8% | |||
Energy | 3.9% | |||
Real Estate | 3.4% | |||
Utilities | 2.7% | |||
volatility in commodity and equity prices. Rising interest rates also pressured stocks, as borrowing costs began to increase from historically low levels.
Gross domestic product 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.
The inflation rate was notably elevated during the 12-month period amid increased demand and supply chain bottlenecks. Consequently, the personal consumption expenditures index, a measure of inflation, surged during the period, representing the highest 12-month increase in decades. The unemployment rate declined from 6.0% in March 2021 to 3.6% in March 2022 as job openings increased, but a relative lack of available workers fueled wage growth, adding to some investors’ inflation concerns.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate to a range of
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.
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 187.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry | % of Total Net Assets | |||
| Apple Inc. Information Technology | 1.6% | |||
| Automatic Data Processing Inc. Information Technology | 1.6% | |||
| Fidelity National Information Services Inc. Information Technology | 1.6% | |||
| Synopsys Inc. Information Technology | 1.6% | |||
| Accenture PLC, A Information Technology | 1.5% | |||
| Microsoft Corp. Information Technology | 1.5% | |||
| Mastercard Inc., A Information Technology | 1.5% | |||
| Texas Instruments Inc. Information Technology | 1.5% | |||
| Oracle Corp. Information Technology | 1.5% | |||
| Visa Inc., A Information Technology | 1.5% | |||
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.
Investment Strategy
The Fund invests primarily in equity securities (principally common stocks) of U.S. companies.2 The Fund seeks capital appreciation, while providing a lower level of volatility than the broader equity market as measured by the Russell 1000® Index, meaning the Fund seeks returns that fluctuate less than the returns of the Russell 1000® Index. We apply a fundamentally driven “bottom-up” research process to create a starting universe of eligible securities across a large number of sectors derived from the holdings of a number of Franklin Templeton equity funds. We screen that universe on a quarterly basis in order to identify those securities with the lowest realized volatility relative to their corresponding sectors, while we also incorporate fundamental views of individual stocks. The Fund’s sector weightings generally are based on the
current sector weightings within the Russell 1000® Index. Individual securities in the Fund’s portfolio are generally weighted equally within each sector. The investment manager may, from time to time, make adjustments to the Fund’s portfolio as a result of corporate actions, changes to the volatility profile of the Fund’s holdings, or for risk management related purposes.
Manager’s Discussion
The Fund fared better than its benchmark, the Russell 1000® Index, for the one-year period ended March 31, 2022. Leading contributors included the industrials, health care, consumer discretionary and communication services sectors.
Stock selection in the industrials sector, the road and rail industry in particular, had a positive impact on relative results. Stock selection in the health care sector was also beneficial. Overweight positions in pharmaceuticals firm Pfizer and AbbVie, from the biotechnology industry, were top contributors. An underweight in the entertainment industry and overweight in the insurance industry contributed to relative performance in the communication services and financials sectors, respectively.
Several individual contributors helped advance the Fund’s results. Although real estate was not a top contributor at the sector level, the Fund’s overweight investment in self-storage company Public Storage added to returns. Better-than-expected subscriber growth for its streaming services and solid revenue growth at its parks, experiences and consumer products division boosted shares of the entertainment and media conglomerate Walt Disney from the communication services sector. In the information technology (IT) sector, electronic design automation company Synopsys reported strength across all product groups and geographies, prompting management to raise its outlook for the year.
In contrast, stock selection in the IT sector detracted from relative performance. Within the sector, underweighting in Apple and Microsoft undermined relative returns as shares of both companies sharply appreciated over the period. Meanwhile, overweight positions in real estate data provider Black Knight and payment services provider Fidelity National Information Services, also in the IT sector, pressured performance. From the communication services sector, shares of cable operator Liberty Broadband declined.
Thank you for your participation in Franklin Liberty U.S. Low Volatility ETF. We look forward to serving your future investment needs.
2. “U.S. companies” are those that (i) are organized under the laws of, or have a principal office in, or for whose securities the principal trading market is, the U.S.; (ii) derive 50% or more of their total revenue or profit from either goods or services produced, or sales made, in the U.S.; or (iii) have 50% or more of their assets in the U.S.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
Todd Brighton, CFA
Portfolio Manager
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.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
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 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 or redemption 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 mutual 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 (9/22/16), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +13.98% | +13.98% | +13.98% | +13.98% | ||||||||||||
5-Year | +98.36% | +98.54% | +14.68% | +14.70% | ||||||||||||
Since Inception (9/20/16) | +115.02% | +115.37% | +14.86% | +14.89% | ||||||||||||
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 85 for Performance Summary footnotes.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
9/20/16–3/31/22
See page 85 for Performance Summary footnotes.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.712390 |
Total Annual Operating Expenses5
0.29% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. There can be no guarantee that the Fund’s volatility strategy will be successful, and achieving the Fund’s volatility strategy does not mean the Fund will achieve a positive or competitive return. The volatility strategy can also be expected to limit the Fund’s participation in market price appreciation when compared to similar funds that do not attempt this strategy. Smaller and midsize-company stocks have historically experienced more price volatility than larger company stocks, especially over the short term. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: Morningstar. The 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.
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.
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FRANKLIN LIBERTY U.S. LOW VOLATILITY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,059.30 | $ | 1.49 | $ | 1,023.49 | $ | 1.46 | 0.29 | % | ||||||||||||
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.
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Franklin Liberty U.S. Treasury Bond ETF
This annual report for Franklin Liberty U.S. Treasury Bond ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks income. Under normal market conditions, the Fund invests at least 80% of its net assets in direct obligations of the U.S. Treasury.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -3.55% based on market price and -3.35% based on net asset value (NAV). In comparison, the Bloomberg U.S. Treasury Index, which measures the performance of U.S. Treasury bills, posted a -3.67% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 89.
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
| Portfolio Composition | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
U.S. Government & Agency Securities | 96.5% | |||
Mortgage-Backed Securities | 1.5% | |||
Short-Term Investments & Other Net Assets | 2.0% | |||
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
Investment Strategy
The Fund invests at least 80% of its net assets in direct obligations of the U.S. Treasury, including Treasury bonds, bills and notes and investments that provide exposure to direct obligations of the U.S. Treasury. The Fund may also invest in securities issued or guaranteed by the U.S. government, its
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.
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 191.
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FRANKLIN LIBERTY U.S. TREASURY BOND ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
U.S. Treasury Note, 0.125%, 5/31/22 | 8.8% | |||
U.S. Treasury Note, 1.875%, 7/31/26 | 7.7% | |||
U.S. Treasury Note, 0.50%, 6/30/27 | 6.9% | |||
U.S. Treasury Note, 1.50%, 11/30/24 | 5.0% | |||
U.S. Treasury Note, 1.25%, 4/30/28 | 4.2% | |||
U.S. Treasury Note, 2.50%, 5/15/24 | 3.5% | |||
U.S. Treasury Note, 2.25%, 11/15/24 | 3.3% | |||
U.S. Treasury Note, 2.125%, 3/31/24 | 3.2% | |||
U.S. Treasury Note, 2.125%, 11/30/24 | 3.2% | |||
U.S. Treasury Note, 1.50%, 9/30/24 | 3.1% | |||
agencies, or instrumentalities, including government sponsored entities and mortgage-backed securities (MBS). In addition, the Fund may purchase or sell MBS on a delayed delivery or forward commitment basis through the to-be-announced (TBA) market. With TBA transactions, the particular securities to be delivered must meet specified terms and conditions.
To pursue its investment goal, the Fund may enter into certain interest rate-related derivative transactions, principally interest rate/bond futures contracts and interest rate swaps. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates or durations. These derivatives may be used to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
We generally buy and hold high quality fixed income securities. Using this straightforward approach, we seek to produce current income with a high degree of credit safety from a conservatively managed portfolio of U.S. Treasury securities. We may utilize quantitative models to identify investment opportunities as part of the portfolio construction process for the Fund. Quantitative models are proprietary systems that rely on mathematical computations to identify investment opportunities. The Fund is an actively managed ETF and, thus, does not seek to replicate the performance of a specified index. Accordingly, the investment manager has discretion on a daily basis to manage the Fund’s portfolio in accordance with the Fund’s investment goal.
Manager’s Discussion
During the 12-month period, yield-curve positioning was the primary contributor to the Fund’s performance relative to its benchmark, coming mainly during the first quarter of 2022 as yields rose sharply and the Fund was underweight duration on the 5- and 10-year portions of the yield curve. Over the period, yields for Treasuries with maturities less than five years rose more than yields for Treasuries with maturities greater than five years. Our off-benchmark allocation to U.S. Treasury Inflation-Protected Securities (TIPS) was also a contributor to performance relative to the benchmark, due to strong inflation accruals. Conversely, our allocation to agency fixed-rate mortgage-backed securities detracted from results as rate volatility weighed on the sector.
Thank you for your participation in Franklin Liberty U.S. Treasury Bond ETF. We look forward to serving your future investment needs.
Warren Keyser
Patrick Klein, Ph.D.
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.
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FRANKLIN LIBERTY U.S. TREASURY BOND ETF
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 performance 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 or redemption 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 mutual 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 (6/11/20), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -3.35% | -3.55% | -3.35% | -3.55% | ||||||||||||
Since Inception (6/9/20) | -6.60% | -6.60% | -3.70% | -3.70% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
1.19% | 1.95% | |||
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 91 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 89 | ||||||||
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
6/9/20–3/31/22
See page 91 for Performance Summary footnotes.
| 90 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.380854 |
Total Annual Operating Expenses7
0.09% |
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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/22.
5. 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.
6. Source: Morningstar. The Bloomberg U.S. Treasury Index measures the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury with at least one year until final maturity. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
7. 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.
| franklintempleton.com | Annual Report | 91 | ||||||||
FRANKLIN LIBERTY U.S. TREASURY BOND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 949.50 | $ | 0.44 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 92 | Annual Report | franklintempleton.com | ||||||||
Franklin Liberty Ultra Short Bond ETF
This annual report for Franklin Liberty Ultra Short Bond 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 preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -0.82% based on market price and -0.78% based on net asset value (NAV). In comparison, the ICE BofA U.S. 3-Month Treasury Bill Index, which tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +0.06% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 95.
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
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
Banks | 21.7% | |||
Pharmaceuticals | 10.8% | |||
Consumer Finance | 8.1% | |||
Energy Equipment & Services | 5.5% | |||
Chemicals | 4.9% | |||
Biotechnology | 4.1% | |||
Road & Rail | 4.1% | |||
Internet & Direct Marketing Retail | 4.1% | |||
Automobiles | 4.1% | |||
Insurance | 4.0% | |||
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
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.
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 194.
| franklintempleton.com | Annual Report | 93 | ||||||||
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Issue/Issuer | % of Total Net Assets | |||
DuPont de Nemours Inc., senior note, FRN thereafter, 1.616%, 11/15/2023 | 4.1% | |||
Penske Truck Leasing Co. LP/PTL Finance Corp., senior note, 144A, 2.7%, 3/14/2023 | 4.1% | |||
M&T Bank Corp., senior note, FRN thereafter, 0.947%, 7/26/2023 | 4.1% | |||
AstraZeneca PLC, senior note, 1.134%, 8/17/2023 | 4.1% | |||
Citigroup Inc., senior note, FRN thereafter, | 4.1% | |||
eBay Inc., senior note, 1.169%, 1/30/2023 | 4.1% | |||
Hyundai Capital America, senior note, 144A, | 4.1% | |||
AmerisourceBergen Corp., senior note, | 4.0% | |||
Microchip Technology Inc., senior secured note, 144A, 0.983%, 9/01/2024 | 3.9% | |||
Biogen Inc., senior note, 3.625%, 9/15/2022 | 2.7% | |||
Investment Strategy
The Fund targets securities with an estimated average portfolio duration of one year or less. The Fund invests predominantly in U.S. dollar denominated, investment-grade debt securities and investments. The Fund generally expects to invest a substantial portion of its assets in cash, cash equivalents and high-quality money market securities, including commercial paper, certificates of deposit, repurchase agreements and affiliated or unaffiliated money market funds. The Fund may invest in securities issued or guaranteed by the U.S. government or by non-U.S. governments or their respective agencies or instrumentalities, including mortgage-backed securities and inflation-indexed securities issued by the U.S. Treasury. The Fund may also invest in mortgage dollar rolls, asset-backed securities and U.S. dollar denominated foreign securities, including emerging market securities.
The Fund may enter into certain interest rate-related derivatives to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
Manager’s Discussion
The Fund underperformed its benchmark for the 12-month period ended March 31, 2022. Short-term investment-grade (IG) corporate spreads widened modestly during the period under review, underperforming similar maturity U.S. Treasuries. In addition, the short end of the U.S. Treasury yield curve steepened with two-year yields up 2.18%, while 3-month U.S. Treasury bill rates rose 0.29%.
The Fund’s longer duration positioning compared to its benchmark, the ICE BofA U.S. 3-month Treasury Bill Index, was the primary detractor to relative performance. The Fund’s overweight allocation to IG corporate debt also detracted from performance. However, the Fund’s IG corporate bonds did provide positive performance versus the benchmark basket of U.S. Treasury bills.
The Fund’s sector allocation within the IG corporate bond segment did modestly contribute to returns. Our allocations to banking, health care, automotive and media aided results, while our positioning in aerospace and electric utilities detracted slightly from performance. Positive contributors from individual positions included Goldman Sachs Group, Thermo Fisher Scientific and Kinder Morgan Energy Partners, while detractors included Wells Fargo, Morgan Stanley and Bristol-Myers Squibb.
While the Fund has the ability to invest in derivative securities, it held no derivatives during the period under review.
Thank you for your participation in Franklin Liberty Ultra Short Bond ETF. We look forward to serving your future investment needs.
David Yuen, CFA, FRM
Shawn Lyons, CFA
Thomas Runkel, CFA
Kent Burns, CFA
Johnson Ng, CFA
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.
| 94 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
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 performance 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 or redemption 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 mutual 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 (7/16/20), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -0.78% | -0.82% | -0.78% | -0.82% | ||||||||||||
Since Inception (7/14/20) | +0.12% | +0.08% | +0.07% | +0.04% | ||||||||||||
| Distribution Rate4 | 30-Day Standardized Yield5 | |||
0.54% | 1.45% | |||
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 97 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 95 | ||||||||
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
Class A (7/14/20–3/31/22)
See page 97 for Performance Summary footnotes.
| 96 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.136180 |
Total Annual Operating Expenses7
0.15% |
All investments involve risk, including possible loss of principal. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s focus on the credit quality of its portfolio is intended to reduce credit risk and help to preserve the Fund’s capital. The Fund is not a money market fund and does not seek to maintain a stable net value of $1.00 per share. Interest rate movements, unanticipated changes in mortgage prepayment rates 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 opposite direction of interest rates. Therefore, as the price of bonds in the Fund adjust to rise in interest rates, the Fund’s share price may decline. By focusing its investments in financials related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wide variety of industries. Because the Fund concentrates in a specific industry or group of industries, there is also the risk that the Fund will perform poorly during a slump in demand for securities of companies and such industries. The Fund’s investment in foreign securities involve certain risks including currency fluctuations, and economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities involves special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/22.
5. 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.
6. Source: Morningstar. The ICE BofA U.S. 3-Month Treasury Bill Index tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months.
7. 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.
| franklintempleton.com | Annual Report | 97 | ||||||||
FRANKLIN LIBERTY ULTRA SHORT BOND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 989.50 | $ | 0.74 | $ | 1,024.18 | $ | 0.76 | 0.15 | % | ||||||||||||
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.
| 98 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
| Year Ended March 31, | ||||||||||||
| 2022 | 2021 | 2020a | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||
Net asset value, beginning of year | $ | 49.21 | $ | 21.32 | $ | 25.00 | ||||||
|
| |||||||||||
| Income from investment operationsb: |
| |||||||||||
Net investment income (loss)c | (0.19 | ) | (0.21 | ) | (0.01 | ) | ||||||
Net realized and unrealized gains (losses) | (17.73 | ) | 28.10 | (3.67 | ) | |||||||
|
| |||||||||||
Total from investment operations | (17.92 | ) | 27.89 | (3.68 | ) | |||||||
|
| |||||||||||
Net realized gains | (0.32 | ) | — | — | ||||||||
|
| |||||||||||
Net asset value, end of year | $ | 30.97 | $ | 49.21 | $ | 21.32 | ||||||
|
| |||||||||||
Total returnd | (36.59)% | 130.82% | (14.72)% | |||||||||
| Ratios to average net assetse |
| |||||||||||
Expenses before waiver and payments by affiliates | 0.62% | 0.87% | 12.59% | |||||||||
Expenses net of waiver and payments by affiliates | 0.50% | 0.50% | 0.50% | |||||||||
Net investment loss | (0.40)% | (0.44)% | (0.32)% | |||||||||
| Supplemental data |
| |||||||||||
Net assets, end of year (000’s) | $18,584 | $41,827 | $2,132 | |||||||||
Portfolio turnover ratef | 89.85% | g | 45.81% | g | 0.94% | g | ||||||
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 89.79% | 45.81% | 0.94% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 99 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Disruptive Commerce ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 97.6% | ||||||||||||||
| Air Freight & Logistics 0.5% | ||||||||||||||
United Parcel Service Inc., B | United States | 448 | $ | 96,078 | ||||||||||
|
| |||||||||||||
| Commercial Services & Supplies 2.1% | ||||||||||||||
| a | Copart Inc. | United States | 3,068 | 384,942 | ||||||||||
|
| |||||||||||||
| Consumer Finance 0.4% | ||||||||||||||
| a | LendingClub Corp. | United States | 2,719 | 42,906 | ||||||||||
| a | Upstart Holdings Inc. | United States | 338 | 36,872 | ||||||||||
|
| |||||||||||||
| 79,778 | ||||||||||||||
|
| |||||||||||||
| Containers & Packaging 1.5% | ||||||||||||||
Packaging Corp. of America | United States | 1,734 | 270,695 | |||||||||||
|
| |||||||||||||
| Entertainment 4.2% | ||||||||||||||
| a | ROBLOX Corp., A | United States | 5,877 | 271,752 | ||||||||||
| a | Sea Ltd., ADR | Taiwan | 4,230 | 506,712 | ||||||||||
|
| |||||||||||||
| 778,464 | ||||||||||||||
|
| |||||||||||||
| Equity Real Estate Investment Trusts (REITs) 3.4% | ||||||||||||||
Prologis Inc. | United States | 3,906 | 630,741 | |||||||||||
|
| |||||||||||||
| Food & Staples Retailing 4.9% | ||||||||||||||
Costco Wholesale Corp. | United States | 1,213 | 698,506 | |||||||||||
Walmart Inc. | United States | 1,427 | 212,509 | |||||||||||
|
| |||||||||||||
| 911,015 | ||||||||||||||
|
| |||||||||||||
| Food Products 0.2% | ||||||||||||||
| a | Freshpet Inc. | United States | 407 | 41,775 | ||||||||||
|
| |||||||||||||
| Health Care Equipment & Supplies 0.3% | ||||||||||||||
| a | Figs Inc., A | United States | 2,888 | 62,150 | ||||||||||
|
| |||||||||||||
| Hotels, Restaurants & Leisure 6.8% | ||||||||||||||
| a | Airbnb Inc. | United States | 3,871 | 664,883 | ||||||||||
| a | Booking Holdings Inc. | United States | 169 | 396,888 | ||||||||||
Dominos Pizza Inc. | United States | 238 | 96,868 | |||||||||||
| a | Expedia Group Inc. | United States | 516 | 100,966 | ||||||||||
|
| |||||||||||||
| 1,259,605 | ||||||||||||||
|
| |||||||||||||
| Household Durables 1.9% | ||||||||||||||
Sony Group Corp., Sponsored ADR | Japan | 1,002 | 102,915 | |||||||||||
| a | The Lovesac Co. | United States | 4,584 | 247,811 | ||||||||||
|
| |||||||||||||
| 350,726 | ||||||||||||||
|
| |||||||||||||
| Interactive Media & Services 6.6% | ||||||||||||||
| a | Adevinta ASA | France | 4,877 | 45,100 | ||||||||||
| a | IAC/InterActiveCorp | United States | 2,236 | 224,226 | ||||||||||
| a | Match Group Inc. | United States | 1,442 | 156,803 | ||||||||||
| a,b | Trustpilot Group PLC, 144A | United Kingdom | 14,135 | 27,153 | ||||||||||
| a | ZoomInfo Technologies Inc., A | United States | 12,842 | 767,181 | ||||||||||
|
| |||||||||||||
| 1,220,463 | ||||||||||||||
|
| |||||||||||||
| Internet & Direct Marketing Retail 22.5% | ||||||||||||||
| a | Amazon.com Inc. | United States | 667 | 2,174,387 | ||||||||||
| a | Chewy Inc., A | United States | 985 | 40,168 | ||||||||||
| a,b | Delivery Hero SE, 144A | Germany | 577 | 25,590 | ||||||||||
| a | DoorDash Inc., A | United States | 446 | 52,267 | ||||||||||
eBay Inc. | United States | 4,169 | 238,717 | |||||||||||
| a | Etsy Inc. | United States | 3,432 | 426,529 | ||||||||||
| a | Fiverr International Ltd. | United States | 458 | 34,840 | ||||||||||
| a | Global-e Online Ltd. | Israel | 2,244 | 75,802 | ||||||||||
| a | Liquidity Services Inc. | United States | 11,397 | 195,117 | ||||||||||
| 100 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Disruptive Commerce ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Internet & Direct Marketing Retail (continued) | ||||||||||||||
| a | MercadoLibre Inc. | Argentina | 231 | $ | 274,770 | |||||||||
| a | Overstock.com Inc. | United States | 397 | 17,470 | ||||||||||
| a | Revolve Group Inc. | United States | 5,581 | 299,644 | ||||||||||
Shutterstock Inc. | United States | 1,922 | 178,900 | |||||||||||
| a,b | Zalando SE, 144A | Germany | 795 | 40,689 | ||||||||||
Zozo Inc. | Japan | 3,976 | 107,610 | |||||||||||
|
| |||||||||||||
| 4,182,500 | ||||||||||||||
|
| |||||||||||||
| IT Services 17.6% | ||||||||||||||
| a | Adyen NV, ADR | Netherlands | 41,082 | 812,191 | ||||||||||
| a | Dlocal Ltd. | Uruguay | 5,486 | 171,492 | ||||||||||
Jack Henry & Associates Inc. | United States | 986 | 194,291 | |||||||||||
Mastercard Inc., A | United States | 1,597 | 570,736 | |||||||||||
| a | Shift4 Payments Inc., A | United States | 612 | 37,901 | ||||||||||
| a | Shopify Inc., A | Canada | 1,338 | 904,435 | ||||||||||
| a | Square Inc., A | United States | 443 | 60,071 | ||||||||||
| a | Toast Inc., A | United States | 2,285 | 49,653 | ||||||||||
| a | Twilio Inc., A | United States | 374 | 61,639 | ||||||||||
Visa Inc., A | United States | 1,848 | 409,831 | |||||||||||
|
| |||||||||||||
| 3,272,240 | ||||||||||||||
|
| |||||||||||||
| Professional Services 0.7% | ||||||||||||||
TransUnion | United States | 1,282 | 132,482 | |||||||||||
|
| |||||||||||||
| Road & Rail 1.8% | ||||||||||||||
Old Dominion Freight Line Inc. | United States | 429 | 128,134 | |||||||||||
| a | XPO Logistics Inc. | United States | 2,868 | 208,790 | ||||||||||
|
| |||||||||||||
| 336,924 | ||||||||||||||
|
| |||||||||||||
| Software 10.6% | ||||||||||||||
| a | Avalara Inc. | United States | 4,069 | 404,906 | ||||||||||
| a | Bill.com Holdings Inc. | United States | 1,487 | 337,237 | ||||||||||
| a | Coupa Software Inc. | United States | 305 | 30,997 | ||||||||||
| a | Crowdstrike Holdings Inc., A | United States | 845 | 191,883 | ||||||||||
| a | Descartes Systems Group Inc. | Canada | 3,212 | 235,311 | ||||||||||
| a | Lightspeed Commerce Inc. | Canada | 2,613 | 79,767 | ||||||||||
| a | Manhattan Associates Inc. | United States | 1,889 | 262,023 | ||||||||||
| a | Sprout Social Inc., A | United States | 2,530 | 202,704 | ||||||||||
| a | Unity Software Inc. | United States | 2,280 | 226,199 | ||||||||||
|
| |||||||||||||
| 1,971,027 | ||||||||||||||
|
| |||||||||||||
| Specialty Retail 4.6% | ||||||||||||||
| a | Carvana Co. | United States | 521 | 62,150 | ||||||||||
| a | Petco Health & Wellness Co. Inc. | United States | 9,462 | 185,171 | ||||||||||
Tractor Supply Co. | United States | 1,980 | 462,073 | |||||||||||
| a | Warby Parker Inc., A | United States | 4,456 | 150,657 | ||||||||||
|
| |||||||||||||
| 860,051 | ||||||||||||||
|
| |||||||||||||
| Textiles, Apparel & Luxury Goods 1.5% | ||||||||||||||
NIKE Inc., B | United States | 1,514 | 203,724 | |||||||||||
| a | On Holding AG, A | Switzerland | 2,838 | 71,631 | ||||||||||
|
| |||||||||||||
| 275,355 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 101 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Disruptive Commerce ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Trading Companies & Distributors 5.5% | ||||||||||||||
Fastenal Co. | United States | 8,895 | $ | 528,363 | ||||||||||
W.W. Grainger Inc. | United States | 969 | 499,801 | |||||||||||
|
| |||||||||||||
| �� | 1,028,164 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $20,302,379) 97.6% | 18,145,175 | |||||||||||||
Other Assets, less Liabilities 2.4% | 438,604 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 18,583,779 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $93,432, representing 0.5% of net assets.
| 102 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Exponential Data ETF
| Year Ended March 31, | ||||||||
| 2022 | 2021a | |||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||
Net asset value, beginning of year | $ | 23.34 | $ | 25.00 | ||||
|
| |||||||
| Income from investment operationsb: |
| |||||||
Net investment income (loss)c | (0.05 | ) | (— | )d | ||||
Net realized and unrealized gains (losses) | (0.51 | ) | (1.66 | ) | ||||
|
| |||||||
Total from investment operations | (0.56 | ) | (1.66 | ) | ||||
|
| |||||||
Net asset value, end of year | $ | 22.78 | $ | 23.34 | ||||
|
| |||||||
Total returne | (2.40)% | (6.64)% | ||||||
| Ratios to average net assetsf |
| |||||||
Expenses before waiver and payments by affiliates | 1.73% | 5.95% | ||||||
Expenses net of waiver and payments by affiliates | 0.38% | 0.25% | ||||||
Net investment income (loss) | (0.20)% | (0.07)% | ||||||
| Supplemental data |
| |||||||
Net assets, end of year (000’s) | $3,417 | $2,334 | ||||||
Portfolio turnover rateg | 49.72% | h | 23.20% | h | ||||
aFor the period January 12, 2021 (commencement of operations) to March 31, 2021.
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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 49.72% | 23.20% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 103 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Country | Shares | Value | ||||||||||||
| Common Stocks 100.6% | ||||||||||||||
| Capital Markets 5.9% | ||||||||||||||
FactSet Research Systems Inc. | United States | 75 | $ | 32,561 | ||||||||||
Moody’s Corp. | United States | 100 | 33,741 | |||||||||||
MSCI Inc. | United States | 133 | 66,883 | |||||||||||
S&P Global Inc. | United States | 164 | 67,270 | |||||||||||
|
| |||||||||||||
| 200,455 | ||||||||||||||
|
| |||||||||||||
| Communications Equipment 2.1% | ||||||||||||||
| a | Arista Networks Inc. | United States | 516 | 71,714 | ||||||||||
|
| |||||||||||||
| Electronic Equipment, Instruments & Components 1.9% | ||||||||||||||
| a | Keysight Technologies Inc. | United States | 416 | 65,715 | ||||||||||
|
| |||||||||||||
| Equity Real Estate Investment Trusts (REITs) 7.6% | ||||||||||||||
Crown Castle International Corp. | United States | 490 | 90,454 | |||||||||||
Equinix Inc. | United States | 112 | 83,061 | |||||||||||
SBA Communications Corp. | United States | 247 | 84,993 | |||||||||||
|
| |||||||||||||
| 258,508 | ||||||||||||||
|
| |||||||||||||
| Health Care Equipment & Supplies 1.2% | ||||||||||||||
| a | DexCom Inc. | United States | 79 | 40,416 | ||||||||||
|
| |||||||||||||
| Health Care Technology 0.2% | ||||||||||||||
| a | Certara Inc. | United States | 391 | 8,399 | ||||||||||
|
| |||||||||||||
| Interactive Media & Services 10.7% | ||||||||||||||
| a | Alphabet Inc., A | United States | 84 | 233,634 | ||||||||||
| a | ZoomInfo Technologies Inc., A | United States | 2,195 | 131,129 | ||||||||||
|
| |||||||||||||
| 364,763 | ||||||||||||||
|
| |||||||||||||
| IT Services 21.7% | ||||||||||||||
Accenture PLC, A | United States | 106 | 35,746 | |||||||||||
| a | Cloudflare Inc., A | United States | 1,222 | 146,274 | ||||||||||
| a | Gartner Inc. | United States | 225 | 66,929 | ||||||||||
| a | MongoDB Inc. | United States | 381 | 169,008 | ||||||||||
| a | Okta Inc. | United States | 371 | 56,006 | ||||||||||
| a | Perficient Inc. | United States | 302 | 33,247 | ||||||||||
| a | Snowflake Inc., A | United States | 601 | 137,707 | ||||||||||
| a | TaskUS Inc., A | Philippines | 279 | 10,730 | ||||||||||
| a | Thoughtworks Holding Inc. | United States | 699 | 14,546 | ||||||||||
| a | Twilio Inc., A | United States | 426 | 70,209 | ||||||||||
|
| |||||||||||||
| 740,402 | ||||||||||||||
|
| |||||||||||||
| Professional Services 1.1% | ||||||||||||||
TransUnion | United States | 378 | 39,063 | |||||||||||
|
| |||||||||||||
| Software 46.2% | ||||||||||||||
| a | Asana Inc., A | United States | 944 | 37,732 | ||||||||||
| a | Confluent Inc., A | United States | 2,733 | 112,053 | ||||||||||
| a | Crowdstrike Holdings Inc., A | United States | 561 | 127,392 | ||||||||||
| a | CS Disco Inc. | United States | 268 | 9,104 | ||||||||||
| a | Datadog Inc., A | United States | 1,303 | 197,365 | ||||||||||
| a | Digital Turbine Inc. | United States | 220 | 9,638 | ||||||||||
| a | Fair Isaac Corp. | United States | 135 | 62,972 | ||||||||||
| a | Fortinet Inc. | United States | 451 | 154,125 | ||||||||||
| a | Gitlab Inc., A | United States | 1,161 | 63,216 | ||||||||||
| a | HubSpot Inc. | United States | 68 | 32,296 | ||||||||||
Microsoft Corp. | United States | 553 | 170,495 | |||||||||||
| a | Monday.com Ltd. | United States | 110 | 17,388 | ||||||||||
| a | Palantir Technologies Inc., A | United States | 1,053 | 14,458 | ||||||||||
| a | Palo Alto Networks Inc. | United States | 208 | 129,482 | ||||||||||
| a | Qualtrics International Inc., A | United States | 595 | 16,987 | ||||||||||
| 104 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Exponential Data ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Software (continued) | ||||||||||||||
| a | salesforce.com Inc. | United States | 159 | $ | 33,759 | |||||||||
| a | SentinelOne Inc., A | United States | 696 | 26,963 | ||||||||||
| a | ServiceNow Inc. | United States | 119 | 66,270 | ||||||||||
| a | Sprinklr Inc., A | United States | 412 | 4,903 | ||||||||||
| a | Sprout Social Inc., A | United States | 215 | 17,226 | ||||||||||
| a | Tenable Holdings Inc. | United States | 337 | 19,475 | ||||||||||
| a | The Trade Desk Inc., A | United States | 541 | 37,464 | ||||||||||
Trend Micro Inc. | Japan | 705 | 41,589 | |||||||||||
| a | Varonis Systems Inc. | United States | 648 | 30,806 | ||||||||||
| a | Zscaler Inc. | United States | 601 | 145,009 | ||||||||||
|
| |||||||||||||
| 1,578,167 | ||||||||||||||
|
| |||||||||||||
| Wireless Telecommunication Services 2.0% | ||||||||||||||
| a | T-Mobile US Inc. | United States | 529 | 67,897 | ||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 3,435,499 | |||||||||||||
|
| |||||||||||||
| Short Term Investments (Cost $591) 0.0%† | ||||||||||||||
| Money Market Funds 0.0%† | ||||||||||||||
| b,c | Institutional Fiduciary Trust Portfolio, 0.01% | United States | 591 | 591 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $3,246,009) 100.6% | 3,436,090 | |||||||||||||
Other Assets, less Liabilities (0.6)% | (18,964 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 3,417,126 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee Note 3(d) regarding investments in affiliated management investment companies.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 105 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Genomic Advancements ETF
| Year Ended March 31, | ||||||||||||
| 2022 | 2021 | 2020a | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||
Net asset value, beginning of year | $ | 43.26 | $ | 22.58 | $ | 25.00 | ||||||
|
| |||||||||||
| Income from investment operationsb: |
| |||||||||||
Net investment income (loss)c | (0.15 | ) | (0.18 | ) | (0.01 | ) | ||||||
Net realized and unrealized gains (losses) | (5.99 | ) | 20.92 | (2.41 | ) | |||||||
|
| |||||||||||
Total from investment operations | (6.14 | ) | 20.74 | (2.42 | ) | |||||||
|
| |||||||||||
| Less distributions from: |
| |||||||||||
Net investment income | (0.12 | ) | (0.01 | ) | — | |||||||
Net realized gains | — | (0.05 | ) | — | ||||||||
|
| |||||||||||
Total Distributions | (0.12 | ) | (0.06 | ) | — | |||||||
|
| |||||||||||
Net asset value, end of year | $ | 37.00 | $ | 43.26 | $ | 22.58 | ||||||
|
| |||||||||||
Total returnd | (14.26)% | 91.81% | (9.68)% | |||||||||
| Ratios to average net assetse |
| |||||||||||
Expenses before waiver and payments by affiliates | 0.66% | 1.84% | 12.22% | |||||||||
Expenses net of waiver and payments by affiliates | 0.50% | 0.50% | 0.50% | |||||||||
Net investment loss | (0.32)% | (0.45)% | (0.37)% | |||||||||
| Supplemental data |
| |||||||||||
Net assets, end of year (000’s) | $14,799 | $15,140 | $2,258 | |||||||||
Portfolio turnover ratef | 61.43% | g | 46.58% | g | 2.20% | g | ||||||
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 59.54% | 44.75% | 2.20% |
| 106 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Genomic Advancements ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 94.2% | ||||||||||||||
| Biotechnology 16.7% | ||||||||||||||
| a | Avid Bioservices Inc. | United States | 10,426 | $ | 212,378 | |||||||||
| a | Beam Therapeutics Inc. | United States | 2,267 | 129,899 | ||||||||||
| a | BioNTech SE, ADR | Germany | 1,831 | 312,295 | ||||||||||
| a | Dynavax Technologies Corp. | United States | 6,659 | 72,184 | ||||||||||
| a | Editas Medicine Inc. | United States | 1,052 | 20,009 | ||||||||||
| a | Intellia Therapeutics Inc. | United States | 8,132 | 590,952 | ||||||||||
| a | Krystal Biotech Inc. | United States | 1,757 | 116,911 | ||||||||||
| a | Ligand Pharmaceuticals Inc. | United States | 780 | 87,742 | ||||||||||
| a | Moderna Inc. | United States | 1,270 | 218,770 | ||||||||||
| a | Regeneron Pharmaceuticals Inc. | United States | 644 | 449,782 | ||||||||||
| a | Taysha Gene Therapies Inc. | United States | 201 | 1,311 | ||||||||||
| a | Veracyte Inc. | United States | 915 | 25,227 | ||||||||||
| a | Vertex Pharmaceuticals Inc. | United States | 894 | 233,307 | ||||||||||
|
| |||||||||||||
| 2,470,767 | ||||||||||||||
|
| |||||||||||||
| Chemicals 1.6% | ||||||||||||||
Corteva Inc. | United States | 2,087 | 119,961 | |||||||||||
FMC Corp. | United States | 898 | 118,150 | |||||||||||
|
| |||||||||||||
| 238,111 | ||||||||||||||
|
| |||||||||||||
| Equity Real Estate Investment Trusts (REITs) 2.5% | ||||||||||||||
Alexandria Real Estate Equities Inc. | United States | 1,830 | 368,287 | |||||||||||
|
| |||||||||||||
| Health Care Equipment & Supplies 0.5% | ||||||||||||||
| a | CryoPort Inc. | United States | 1,921 | 67,062 | ||||||||||
|
| |||||||||||||
| Health Care Providers & Services 1.2% | ||||||||||||||
| a | Fulgent Genetics Inc. | United States | 1,145 | 71,459 | ||||||||||
| a | Laboratory Corp. of America Holdings | United States | 275 | 72,507 | ||||||||||
UnitedHealth Group Inc. | United States | 72 | 36,718 | |||||||||||
|
| |||||||||||||
| 180,684 | ||||||||||||||
|
| |||||||||||||
| Health Care Technology 0.7% | ||||||||||||||
| a | Doximity Inc., A | United States | 651 | 33,910 | ||||||||||
| a | Veeva Systems Inc. | United States | 326 | 69,262 | ||||||||||
|
| |||||||||||||
| 103,172 | ||||||||||||||
|
| |||||||||||||
| Life Sciences Tools & Services 55.6% | ||||||||||||||
Agilent Technologies Inc. | United States | 3,936 | 520,851 | |||||||||||
| a | Avantor Inc. | United States | 14,312 | 484,032 | ||||||||||
| a | Bio-Rad Laboratories Inc., A | United States | 832 | 468,607 | ||||||||||
Bio-Techne Corp. | United States | 417 | 180,578 | |||||||||||
Bruker Corp. | United States | 8,241 | 529,896 | |||||||||||
| a | Charles River Laboratories International Inc. | United States | 1,503 | 426,807 | ||||||||||
| a | Codex DNA Inc. | United States | 6,801 | 36,521 | ||||||||||
Danaher Corp. | United States | 2,082 | 610,713 | |||||||||||
| a | Evotec SE | Germany | 6,041 | 184,170 | ||||||||||
| a | ICON PLC | Ireland | 1,531 | 372,370 | ||||||||||
| a | Illumina Inc. | United States | 747 | 261,002 | ||||||||||
| a | IQVIA Holdings Inc. | United States | 1,620 | 374,560 | ||||||||||
Lonza Group AG | Switzerland | 668 | 487,943 | |||||||||||
| a | Maravai LifeSciences Holdings Inc., A | United States | 1,045 | 36,857 | ||||||||||
| a | Medpace Holdings Inc. | United States | 2,763 | 451,999 | ||||||||||
| a | NanoString Technologies Inc. | United States | 132 | 4,587 | ||||||||||
| a | Olink Holding AB, ADR | Sweden | 640 | 11,303 | ||||||||||
| a | Oxford Nanopore Technologies PLC | United Kingdom | 11,687 | 61,243 | ||||||||||
PerkinElmer Inc. | United States | 1,602 | 279,485 | |||||||||||
| a | QIAGEN NV | Netherlands | 3,942 | 193,158 | ||||||||||
| a | Repligen Corp. | United States | 4,488 | 844,148 | ||||||||||
| franklintempleton.com | Annual Report | 107 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Genomic Advancements ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Life Sciences Tools & Services (continued) | ||||||||||||||
| a,b | Samsung Biologics Co. Ltd., 144A | South Korea | 699 | $ | 476,938 | |||||||||
Thermo Fisher Scientific Inc. | United States | 1,586 | 936,771 | |||||||||||
|
| |||||||||||||
| 8,234,539 | ||||||||||||||
|
| |||||||||||||
| Pharmaceuticals 12.5% | ||||||||||||||
AstraZeneca PLC, ADR | United Kingdom | 8,910 | 591,089 | |||||||||||
Bristol-Myers Squibb Co. | United States | 5,514 | 402,688 | |||||||||||
| a | Catalent Inc. | United States | 5,290 | 586,661 | ||||||||||
Eli Lilly & Co. | United States | 142 | 40,665 | |||||||||||
GlaxoSmithKline PLC, ADR | United Kingdom | 5,256 | 228,951 | |||||||||||
|
| |||||||||||||
| 1,850,054 | ||||||||||||||
|
| |||||||||||||
| Semiconductors & Semiconductor Equipment 2.9% | ||||||||||||||
Brooks Automation Inc. | United States | 1,976 | 163,771 | |||||||||||
NVIDIA Corp. | United States | 984 | 268,494 | |||||||||||
|
| |||||||||||||
| 432,265 | ||||||||||||||
|
| |||||||||||||
| Preferred Stocks 2.6% | ||||||||||||||
| Health Care Equipment & Supplies 2.6% | ||||||||||||||
| c | Sartorius AG, 0.314%, pfd. | Germany | 870 | 388,848 | ||||||||||
|
| |||||||||||||
| Rights 0.1% | ||||||||||||||
| Life Sciences Tools & Services 0.1% | ||||||||||||||
| a | Samsung Biologics Co. Ltd., rts. | South Korea | 52 | 8,066 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $17,138,284) 96.9% | 14,341,855 | |||||||||||||
Other Assets, less Liabilities 3.1% | 456,822 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 14,798,677 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $476,938, representing 3.2% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
| 108 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Intelligent Machines ETF
| Year Ended March 31, | ||||||||||||
| 2022 | 2021 | 2020a | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||
Net asset value, beginning of year | $ | 43.24 | $ | 20.67 | $ | 25.00 | ||||||
|
| |||||||||||
| Income from investment operationsb: |
| |||||||||||
Net investment income (loss)c | (0.10 | ) | (0.06 | ) | — | |||||||
Net realized and unrealized gains (losses) | 3.25 | 22.63 | (4.33 | ) | ||||||||
|
| |||||||||||
Total from investment operations | 3.15 | 22.57 | (4.33 | ) | ||||||||
|
| |||||||||||
| Less distributions from: | ||||||||||||
Net investment income | — | (0.00 | )d | — | ||||||||
Net realized gains | (0.09 | ) | — | — | ||||||||
|
| |||||||||||
Total distributions | (0.09 | ) | — | — | ||||||||
|
| |||||||||||
Net asset value, end of year | $ | 46.30 | $ | 43.24 | $ | 20.67 | ||||||
|
| |||||||||||
Total returne | 7.27% | 109.21% | (17.32)% | |||||||||
| Ratios to average net assetsf |
| |||||||||||
Expenses before waiver and payments by affiliates | 0.77% | 2.19% | 12.91% | |||||||||
Expenses net of waiver and payments by affiliates | 0.50% | 0.50% | 0.50% | |||||||||
Net investment income (loss) | (0.21)% | (0.17)% | 0.20% | |||||||||
| Supplemental data |
| |||||||||||
Net assets, end of year (000’s) | $11,574 | $10,809 | $2,067 | |||||||||
Portfolio turnover rateg | 35.98% | h | 75.25% | h | —% | h | ||||||
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 35.98% | 75.25% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 109 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Intelligent Machines ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 97.5% | ||||||||||||||
| Aerospace & Defense 2.6% | ||||||||||||||
| a | Axon Enterprise Inc. | United States | 2,181 | $ | 300,389 | |||||||||
|
| |||||||||||||
| Auto Components 0.5% | ||||||||||||||
| a | Aptiv PLC | United States | 517 | 61,890 | ||||||||||
|
| |||||||||||||
| Automobiles 9.1% | ||||||||||||||
| a | Lucid Group Inc. | United States | 1,113 | 28,270 | ||||||||||
| a | Tesla Inc. | United States | 947 | 1,020,487 | ||||||||||
|
| |||||||||||||
| 1,048,757 | ||||||||||||||
|
| |||||||||||||
| Construction & Engineering 0.7% | ||||||||||||||
Quanta Services Inc. | United States | 408 | 53,697 | |||||||||||
Valmont Industries Inc. | United States | 125 | 29,825 | |||||||||||
|
| |||||||||||||
| 83,522 | ||||||||||||||
|
| |||||||||||||
| Electrical Equipment 1.6% | ||||||||||||||
Eaton Corp. PLC | United States | 401 | 60,856 | |||||||||||
Rockwell Automation Inc. | United States | 402 | 112,572 | |||||||||||
| a | Sunrun Inc. | United States | 282 | 8,564 | ||||||||||
|
| |||||||||||||
| 181,992 | ||||||||||||||
|
| |||||||||||||
| Electronic Equipment, Instruments & Components 9.7% | ||||||||||||||
Amphenol Corp., A | United States | 3,312 | 249,559 | |||||||||||
Cognex Corp. | United States | 300 | 23,145 | |||||||||||
Keyence Corp. | Japan | 440 | 207,539 | |||||||||||
| a | Keysight Technologies Inc. | United States | 738 | 116,582 | ||||||||||
Samsung SDI Co. Ltd. | South Korea | 419 | 206,034 | |||||||||||
TE Connectivity Ltd. | United States | 418 | 54,750 | |||||||||||
| a | Zebra Technologies Corp., A | United States | 640 | 264,768 | ||||||||||
|
| |||||||||||||
| 1,122,377 | ||||||||||||||
|
| |||||||||||||
| Health Care Equipment & Supplies 13.3% | ||||||||||||||
| a | Align Technology Inc. | United States | 119 | 51,884 | ||||||||||
| a | DexCom Inc. | United States | 667 | 341,237 | ||||||||||
| a | IDEXX Laboratories Inc. | United States | 390 | 213,354 | ||||||||||
| a | Insulet Corp. | United States | 574 | 152,908 | ||||||||||
| a | Intuitive Surgical Inc. | United States | 2,184 | 658,869 | ||||||||||
ResMed Inc. | United States | 232 | 56,262 | |||||||||||
Stryker Corp. | United States | 228 | 60,956 | |||||||||||
|
| |||||||||||||
| 1,535,470 | ||||||||||||||
|
| |||||||||||||
| Health Care Technology 1.4% | ||||||||||||||
| a | Inspire Medical Systems Inc. | United States | 618 | 158,634 | ||||||||||
|
| |||||||||||||
| Household Durables 0.4% | ||||||||||||||
Panasonic Corp. | Japan | 5,246 | 51,369 | |||||||||||
|
| |||||||||||||
| Industrial Conglomerates 1.9% | ||||||||||||||
Honeywell International Inc. | United States | 276 | 53,704 | |||||||||||
Roper Technologies Inc. | United States | 250 | 118,057 | |||||||||||
Siemens AG | Germany | 376 | 52,571 | |||||||||||
|
| |||||||||||||
| 224,332 | ||||||||||||||
|
| |||||||||||||
| IT Services 1.0% | ||||||||||||||
| a | Endava PLC, ADR | United Kingdom | 416 | 55,341 | ||||||||||
| a | Globant SA | United States | 218 | 57,131 | ||||||||||
|
| |||||||||||||
| 112,472 | ||||||||||||||
|
| |||||||||||||
| Semiconductors & Semiconductor Equipment 32.5% | ||||||||||||||
| a | Advanced Micro Devices Inc. | United States | 1,064 | 116,338 | ||||||||||
| 110 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Intelligent Machines ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Semiconductors & Semiconductor Equipment (continued) | ||||||||||||||
Analog Devices Inc. | United States | 724 | $ | 119,590 | ||||||||||
Applied Materials Inc. | United States | 1,876 | 247,257 | |||||||||||
ASM International NV | Netherlands | 317 | 117,135 | |||||||||||
ASML Holding NV | Netherlands | 657 | 438,830 | |||||||||||
Brooks Automation Inc. | United States | 1,181 | 97,881 | |||||||||||
| a | Enphase Energy Inc. | United States | 815 | 164,451 | ||||||||||
Entegris Inc. | United States | 1,972 | 258,845 | |||||||||||
Infineon Technologies AG | Germany | 2,910 | 100,324 | |||||||||||
KLA Corp. | United States | 440 | 161,066 | |||||||||||
Lam Research Corp. | United States | 216 | 116,124 | |||||||||||
Marvell Technology Inc. | United States | 1,520 | 108,999 | |||||||||||
Microchip Technology Inc. | United States | 763 | 57,332 | |||||||||||
NVIDIA Corp. | United States | 2,938 | 801,663 | |||||||||||
NXP Semiconductors NV | China | 285 | 52,748 | |||||||||||
| a | SiTime Corp. | United States | 580 | 143,735 | ||||||||||
| a | SolarEdge Technologies Inc. | United States | 232 | 74,790 | ||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR | Taiwan | 3,299 | 343,954 | |||||||||||
Teradyne Inc. | United States | 1,102 | 130,289 | |||||||||||
Texas Instruments Inc. | United States | 619 | 113,574 | |||||||||||
|
| |||||||||||||
| 3,764,925 | ||||||||||||||
|
| |||||||||||||
| Software 16.4% | ||||||||||||||
| a | Altair Engineering Inc. | United States | 1,688 | 108,707 | ||||||||||
| a | ANSYS Inc. | United States | 352 | 111,813 | ||||||||||
| a | Asana Inc., A | United States | 1,164 | 46,525 | ||||||||||
| a | Atlassian Corp. PLC | United States | 462 | 135,750 | ||||||||||
| a | Autodesk Inc. | United States | 297 | 63,662 | ||||||||||
Bentley Systems Inc., B | United States | 293 | 12,945 | |||||||||||
| a | Cadence Design Systems Inc. | United States | 1,600 | 263,136 | ||||||||||
Constellation Software Inc. | Canada | 70 | 119,763 | |||||||||||
Dassault Systemes SE | France | 4,671 | 232,392 | |||||||||||
| a | PTC Inc. | United States | 506 | 54,506 | ||||||||||
| a | Synopsys Inc. | United States | 1,229 | 409,589 | ||||||||||
| a | The Descartes Systems Group Inc. | Canada | 4,604 | 337,380 | ||||||||||
|
| |||||||||||||
| 1,896,168 | ||||||||||||||
|
| |||||||||||||
| Technology Hardware, Storage & Peripherals 6.4% | ||||||||||||||
Apple Inc. | United States | 4,258 | 743,489 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $9,187,863) 97.5% | 11,285,786 | |||||||||||||
Other Assets, less Liabilities 2.5% | 288,030 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 11,573,816 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
aNon-income producing.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 111 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Dynamic Municipal Bond ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018b | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 26.32 | $ | 24.72 | $ | 24.97 | $ | 24.40 | $ | 25.00 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsc: |
| |||||||||||||||||||
Net investment incomed | 0.61 | 0.59 | 0.58 | 0.63 | 0.22 | |||||||||||||||
Net realized and unrealized gains (losses) | (1.56 | ) | 1.59 | (0.17 | ) | 0.57 | (0.60 | ) | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (0.95 | ) | 2.18 | 0.41 | 1.20 | (0.38 | ) | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.56 | ) | (0.58 | ) | (0.66 | ) | (0.63 | ) | (0.22 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 24.81 | $ | 26.32 | $ | 24.72 | $ | 24.97 | $ | 24.40 | ||||||||||
|
| |||||||||||||||||||
Total returne | (3.70)% | 8.84% | 1.61% | 4.99% | (1.53)% | |||||||||||||||
| Ratios to average net assetsf |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.75% | 1.01% | 1.46% | 2.15% | 1.71% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | |||||||||||||||
Net investment income | 2.32% | 2.29% | 2.29% | 2.57% | 1.55% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $76,908 | $42,112 | $12,362 | $7,490 | $7,319 | |||||||||||||||
Portfolio turnover rateg | 27.62% | h | 14.05% | h | 35.28% | h | 35.63% | 17.49% | ||||||||||||
aEffective January 31, 2022, Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF was renamed Franklin Dynamic Municipal Bond ETF.
bFor the period August 31, 2017 (commencement of operations) to March 31, 2018.
cThe 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 and/or fluctuating fair value of the investments of the Fund.
dBased on average daily shares outstanding.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 27.62% | 14.05% | 35.28% |
| 112 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Dynamic Municipal Bond ETF
| Principal Amount* | Value | |||||||||
| Municipal Bonds 96.4% | ||||||||||
| Alabama 2.4% | ||||||||||
Black Belt Energy Gas District, Refunding, VRDN, 4.00%, 6/01/51 | 1,000,000 | $ | 1,085,066 | |||||||
County of Mobile, Gomesa Projects, 4.00%, 11/01/45 | 100,000 | 91,149 | ||||||||
Homewood Educational Building Authority, Samford University, Refunding, Series 2019A, 4.00%, 12/01/33 | 100,000 | 107,001 | ||||||||
Southeast Energy Authority, Cooperative District, Series 2021A, VRDN, 4.00%, 11/01/51 | 500,000 | 526,891 | ||||||||
|
| |||||||||
| 1,810,107 | ||||||||||
|
| |||||||||
| Alaska 0.3% | ||||||||||
Alaska Industrial Development & Export Authority, Greater Fairbanks Community Hospital Foundation Obligated Group, Refunding, 4.00%, 4/01/32 | 100,000 | 107,755 | ||||||||
Borough of Matanuska-Susitna, State of Alaska Department of Administration, Refunding, 4.00%, 9/01/30 | 150,000 | 156,245 | ||||||||
|
| |||||||||
| 264,000 | ||||||||||
|
| |||||||||
| Arizona 1.4% | ||||||||||
Arizona Health Facilities Authority, Banner Health Obligated Group, Series 2015C, Daily, VRDN, 0.34%, 1/01/46 | 100,000 | 100,000 | ||||||||
City of Phoenix Civic Improvement Corp., Wastewater Revenue, Series 2018A, 5.00%, 7/01/25 | 100,000 | 109,281 | ||||||||
Glendale Industrial Development Authority, 4.00%, 5/15/31 | 160,000 | 166,209 | ||||||||
Industrial Development Authority of the City of Phoenix, Downtown Phoenix Student Housing II LLC, 5.00%, 7/01/31 | 100,000 | 111,960 | ||||||||
La Paz County Industrial Development Authority, | ||||||||||
5.00%, 2/15/28 | 100,000 | 107,213 | ||||||||
5.00%, 2/15/31 | 100,000 | 112,197 | ||||||||
Maricopa County Union High School District No 210-Phoenix, Series 2020C, 5.00%, 7/01/31 | 170,000 | 200,506 | ||||||||
Tempe Industrial Development Authority, Tempe Life Care Village Obligated Group, Refunding, 4.00%, 12/01/31 | 200,000 | 205,647 | ||||||||
|
| |||||||||
| 1,113,013 | ||||||||||
|
| |||||||||
| Arkansas 0.3% | ||||||||||
Arkansas Development Finance Authority, | 100,000 | 107,022 | ||||||||
Baptist Memorial Health Care Obligated Group, Refunding, 5.00%, 9/01/32 | 100,000 | 115,300 | ||||||||
|
| |||||||||
| 222,322 | ||||||||||
|
| |||||||||
| California 13.5% | ||||||||||
California Municipal Finance Authority, | 100,000 | 111,368 | ||||||||
Series 2020B, 4.00%, 9/01/30 | 50,000 | 52,316 | ||||||||
AMT, Sereis 2018A, 3.50%, 12/31/35 | 100,000 | 99,643 | ||||||||
Series 2021A, 4.00%, 9/01/30 | 205,000 | 213,426 | ||||||||
Caritas Corp., Refunding, Series 2021B, 3.00%, 8/15/31 | 200,000 | 181,594 | ||||||||
Series 2021C, 4.00%, 9/01/31 | 295,000 | 301,986 | ||||||||
Republic Services, Inc., AMT, VRDN, .375%, 7/01/51 | 2,000,000 | 1,994,578 | ||||||||
California Pollution Control Financing Authority, | ||||||||||
a CalPlant I LLC, AMT, 7.50%, 7/01/32 | 250,000 | 150,000 | ||||||||
Rialto Bioenergy Facility LLC, AMT, 6.75%, 12/01/28 | 110,000 | 89,071 | ||||||||
California School Finance Authority, | 100,000 | 109,960 | ||||||||
Classical Academy Obligated Group, Series 2020A, 3.00%, 10/01/30 | 215,000 | 212,824 | ||||||||
California Statewide Communities Development Authority, | 50,000 | 50,278 | ||||||||
Community Facilities District No 2015-01, 5.00%, 9/01/27 | 75,000 | 79,981 | ||||||||
Community Facilities District No 2018, 4.00%, 9/01/30 | 150,000 | 156,277 | ||||||||
Community Facilities District No 2016-02, 4.00%, 9/01/30 | 130,000 | 134,958 | ||||||||
Community Facilities District No 2015, 4.00%, 9/01/29 | 110,000 | 115,831 | ||||||||
Special Assessment, Series 2020B, 4.00%, 9/02/30 | 125,000 | 129,904 | ||||||||
4.00%, 9/01/31 | 200,000 | 206,181 | ||||||||
| franklintempleton.com | Annual Report | 113 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| California (continued) | ||||||||||
Special Assessment, Series 2021A, 4.00%, 9/02/31 | 150,000 | $ | 152,953 | |||||||
Special Assessment, 4.00%, 9/02/28 | 250,000 | 257,469 | ||||||||
Special Assessment, 4.00%, 9/02/31 | 100,000 | 101,297 | ||||||||
Southern California Edison Co, Refunding, 1.75%, 9/01/29 | 600,000 | 543,737 | ||||||||
Chino Community Facilities District, 4.00%, 9/01/30 | 150,000 | 157,508 | ||||||||
Chula Vista Community Facilities District, 4.00%, 9/01/31 | 100,000 | 104,433 | ||||||||
City of Calimesa, Community Facilities District No 2018-1, 4.00%, 9/01/33 | 150,000 | 156,574 | ||||||||
City of Fontana, Community Facilities District No 85, 4.00%, 9/01/30 | 150,000 | 157,733 | ||||||||
City of Gardena, 2.066%, 4/01/26 | 1,000,000 | 967,130 | ||||||||
City of Ontario, Community Facilities District No 45, 4.00%, 9/01/31 | 150,000 | 157,209 | ||||||||
City of Palm Desert, Community Facilities District No 2021-1, Refunding, 3.00%, 9/01/31 | 100,000 | 93,649 | ||||||||
City of Rancho Cordova, Community Facilities District No 2014-1, 4.00%, 9/01/28 | 215,000 | 224,821 | ||||||||
City of Sacramento, Greenbriar Community Facilities District No 2018-03, 4.00%, 9/01/31 | 200,000 | 207,974 | ||||||||
Corona-Norco Unified School District, Corona-Norco Unified School District Community Facilities District No 17-1, 4.00%, 9/01/34 | 105,000 | 109,465 | ||||||||
County of Orange, Village of Esencia, No 2017-1, Series 2018A, 5.00%, 8/15/28 | 100,000 | 113,156 | ||||||||
CSCDA Community Improvement Authority, 2.875%, 8/01/41 | 250,000 | 227,898 | ||||||||
Elsinore Valley Municipal Water District, Community Facilities District No 2020, Series 2021A, 4.00%, 9/01/27 | 100,000 | 100,791 | ||||||||
Irvine Unified School District, Series 2020A, 5.00%, 9/01/32 | 250,000 | 291,287 | ||||||||
Jurupa Community Services District, 4.00%, 9/01/28 | 145,000 | 152,310 | ||||||||
Marina Redevelopment Agency Successor Agency, Series 2020A, 4.00%, 9/01/32 | 135,000 | 140,232 | ||||||||
Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/25 | 100,000 | 108,280 | ||||||||
Poway Unified School District, 5.00%, 9/01/32 | 250,000 | 294,570 | ||||||||
River Islands Public Financing Authority, Series 2021A-2, 4.00%, 9/01/30 | 200,000 | 205,177 | ||||||||
Riverside Unified School District, 4.00%, 9/01/30 | 245,000 | 257,447 | ||||||||
Romoland School District, Series 2020A, 4.00%, 9/01/33 | 140,000 | 145,512 | ||||||||
Sacramento Municipal Utility District, Electric System Revenue, 5.00%, 8/15/30 | 250,000 | 302,976 | ||||||||
Sierra View Local Health Care District, Tulare County, Refunding, 5.00%, 7/01/30 | 100,000 | 117,739 | ||||||||
Three Rivers Levee Improvement Authority, Refunding, 4.00%, 9/01/31 | 100,000 | 104,717 | ||||||||
|
| |||||||||
| 10,344,220 | ||||||||||
|
| |||||||||
| Colorado 2.2% | ||||||||||
Colorado Educational & Cultural Facilities Authority, Golden View Classical Academy, Refunding, 4.00%, 1/01/32 | 200,000 | 213,425 | ||||||||
Colorado Health Facilities Authority, | ||||||||||
Christian Living Neighborhoods Obligated Group, Refunding, 4.00%, 1/01/29 | 100,000 | 102,854 | ||||||||
Boulder Community Health Obligated Group, Refunding, 5.00%, 10/01/32 | 150,000 | 176,331 | ||||||||
Series 2019A-1, 5.00%, 8/01/33 | 160,000 | 182,312 | ||||||||
Grand County School District No 2 East Grand, 5.00%, 12/01/31 | 350,000 | 427,858 | ||||||||
Regional Transportation District, | ||||||||||
Refunding, 5.00%, 1/15/32 | 250,000 | 285,070 | ||||||||
Sales Tax Revenue, Refunding, Series 2013A, 5.00%, 11/01/27 | 100,000 | 115,184 | ||||||||
Southglenn Metropolitan District, Refunding, 5.00%, 12/01/30 | 100,000 | 102,257 | ||||||||
Southlands Metropolitan District No 1, Refunding, Series 2017A-1, 3.50%, 12/01/27 | 100,000 | 100,232 | ||||||||
|
| |||||||||
| 1,705,523 | ||||||||||
|
| |||||||||
| Connecticut 2.2% | ||||||||||
Connecticut Housing Finance Authority, Refunding, Series 2016A-1, 2.875%, 11/15/30 | 150,000 | 150,008 | ||||||||
Connecticut State Health & Educational Facilities Authority, | ||||||||||
Series 2020A, 5.00%, 1/01/30 | 150,000 | 161,554 | ||||||||
Series 2017I-1, 5.00%, 7/01/29 | 135,000 | 151,611 | ||||||||
State of Connecticut, Social Bond, Sereis 2021B, 3.00%, 6/01/32 | 1,000,000 | 1,006,638 | ||||||||
Steel Point Infrastructure Improvement District, Steelpointe Harbor Project, 4.00%, 4/01/31 | 200,000 | 199,401 | ||||||||
|
| |||||||||
| 1,669,212 | ||||||||||
|
| |||||||||
| Delaware 0.1% | ||||||||||
County of Kent, CHF-Dover LLC, 5.00%, 7/01/29 | 100,000 | 107,844 | ||||||||
|
| |||||||||
| 114 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Florida 15.6% | ||||||||||
Artisan Lakes East Community Development District, Special Assessment, Series 2021-2, 2.30%, 5/01/26 | 195,000 | $ | 184,880 | |||||||
Astonia Community Development District, Assessment Area One Project, Special Assessment, 3.375%, 5/01/30 | 145,000 | 142,081 | ||||||||
Avalon Groves Community Development District, Assessment Area 3, Special Assessment, 2.375%, 5/01/26 | 150,000 | 145,010 | ||||||||
Avalon Park West Community Development District, Special Assessment, Refunding, 3.25%, 5/01/30 | 100,000 | 95,785 | ||||||||
Avenir Community Development District, Assessment Area 2, Special Assessment, Series 2021A, 2.75%, 5/01/31 | 90,000 | 84,245 | ||||||||
Babcock Ranch Community Independent Special District, | ||||||||||
Assessment Area 2C, Special Assessment, 3.00%, 5/01/30 | 50,000 | 48,597 | ||||||||
Assessment Area 3B, Special Assessment, 3.00%, 5/01/30 | 145,000 | 139,642 | ||||||||
Bannon Lakes Community Development District, Special Assessment, 3.00%, 5/01/31 | 200,000 | 189,062 | ||||||||
Belmond Reserve Community Development District, Special Assessment, Series 2020, 3.25%, 5/01/30 | 100,000 | 96,956 | ||||||||
Berry Bay Community Development District, Assessment Area 1, Special Assessment, 3.125%, 5/01/31 | 100,000 | 94,673 | ||||||||
Capital Projects Finance Authority, University Project, Series 2020A-1, 5.00%, 10/01/32 | 105,000 | 117,630 | ||||||||
Capital Trust Agency, Inc., | ||||||||||
Liza Jackson Preparatory School, Inc., 4.00%, 8/01/30 | 100,000 | 103,636 | ||||||||
Lutz Preparatory School, Inc., Refunding, 4.00%, 6/01/31 | 200,000 | 208,579 | ||||||||
Educational Growth Fund LLC, 3.375%, 7/01/31 | 100,000 | 96,407 | ||||||||
WFCS Holdings II LLC, Series 2021A, 3.30%, 1/01/31 | 150,000 | 133,685 | ||||||||
3.00%, 7/01/31 | 125,000 | 116,613 | ||||||||
Celebration Community Development District, Assessment Area One Project, Special Assessment, 2.25%, 5/01/26 | 105,000 | 99,484 | ||||||||
CFM Community Development District, Special Assessment, 2.40%, 5/01/26 | 100,000 | 96,468 | ||||||||
Coral Keys Homes Community Development District, Special Assessment, 3.125%, 5/01/30 | 165,000 | 158,844 | ||||||||
Cordoba Ranch Community Development District, Special Assessment, Refunding, 3.00%, 5/01/31 | 100,000 | 93,044 | ||||||||
Cordova Palms Community Development District, Special Assessment, 2.80%, 5/01/31 | 100,000 | 92,165 | ||||||||
County of Osceola, Refunding, Series 2020A-2, zero cpn., 10/01/32 | 150,000 | 103,084 | ||||||||
Crestview II Community Development District, Special Assessment, Refunding, 4.00%, 5/01/31 | 126,000 | 131,258 | ||||||||
Cypress Bluff Community Development District, Special Assessment, Series 2020A, 3.125%, 5/01/30 | 60,000 | 57,530 | ||||||||
DW Bayview Community Development District, Special Assessment, 3.00%, 5/01/32 | 100,000 | 92,083 | ||||||||
East Bonita Beach Road Community Development District, Special Assessment, 3.00%, 5/01/32 | 100,000 | 91,261 | ||||||||
East Nassau Stewardship District, Special Assessment, 2.40%, 5/01/26 | 100,000 | 96,630 | ||||||||
Edgewater East Community Development District, Special Assessment, 3.10%, 5/01/31 | 100,000 | 95,857 | ||||||||
Enbrook Community Development District, Special Assessment, 3.00%, 5/01/30 | 100,000 | 96,166 | ||||||||
Entrada Community Development District, Special Assessment, 2.125%, 5/01/26 | 100,000 | 96,796 | ||||||||
Epperson North Community Development District, Assessment Area 2, Special Assessment, 3.00%, 5/01/31 | 95,000 | 87,543 | ||||||||
Florida Development Finance Corp, Brightline Trains Florida LLC, AMT, 6.75%, 12/01/56 | 250,000 | 242,738 | ||||||||
Florida Development Finance Corp., | ||||||||||
Brightline Trains Florida LLC, AMT, VRDN, 6.375%, 1/01/49 | 175,000 | 175,435 | ||||||||
Glenridge on Palmer Ranch Obligated Group, Refunding, 5.00%, 6/01/31 | 100,000 | 108,561 | ||||||||
4.00%, 6/01/31 | 100,000 | 104,124 | ||||||||
Shands Jacksonville Medical Center Obligated Group, Refunding, 5.00%, 2/01/38 | 1,000,000 | 1,126,978 | ||||||||
Forest Lake Community Development District, Assessment Area 1 Project, Special Assessment, 3.25%, 5/01/30 | 145,000 | 141,532 | ||||||||
Grand Oaks Community Development District, Special Assessment, 4.00%, 5/01/30 | 150,000 | 151,546 | ||||||||
Hammock Reserve Community Development District, Assessment Area One Project, Special Assessment, 3.25%, 5/01/30 | 100,000 | 96,495 | ||||||||
Herons Glen Recreation District, Special Assessment, Refunding, 3.00%, 5/01/32 | 100,000 | 100,682 | ||||||||
| franklintempleton.com | Annual Report | 115 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Florida (continued) | ||||||||||
Hills of Minneola Community Development District, | ||||||||||
South Parcel Assessment Area, Special Assessment, 3.50%, 5/01/31 | 100,000 | $ | 97,447 | |||||||
South Parcel Assessment Area, Special Assessment, 2.375%, 5/01/26 | 75,000 | 71,127 | ||||||||
Holly Hill Road East Community Development District, Assessment Area 3 Project, Special Assessment, 4.00%, 11/01/25 | 85,000 | 85,960 | ||||||||
Indigo Community Development District, 2021 Assessment Area, Phase A1, Special Assessment, 2.70%, 5/01/31 | 100,000 | 92,276 | ||||||||
Kindred Community Development District II, | ||||||||||
Special Assessment, 3.00%, 5/01/30 | 155,000 | 150,331 | ||||||||
Special Assessment, 2.20%, 5/01/26 | 70,000 | 67,683 | ||||||||
Kingman Gate Community Development District, | ||||||||||
Special Assessment, 3.125%, 6/15/30 | 110,000 | 108,206 | ||||||||
Special Assessment, 2.50%, 6/15/26 | 100,000 | 97,615 | ||||||||
Lakes of Sarasota Community Development District, | ||||||||||
Special Assessment, Series 2021A-1, 3.40%, 5/01/31 | 135,000 | 126,076 | ||||||||
Special Assessment, Series 2021B-1, 3.00%, 5/01/26 | 115,000 | 110,577 | ||||||||
Lakewood Ranch Stewardship District, | ||||||||||
Special Assessment, 3.125%, 5/01/30 | 60,000 | 58,194 | ||||||||
Special Assessment, 3.20%, 5/01/30 | 175,000 | 170,645 | ||||||||
Northeast Sector Project, Special Assessment, Refunding, 3.20%, 5/01/30 | 100,000 | 97,285 | ||||||||
Star Farms at Lakewood Ranch Proj-Phase 1/2, Special Assessment, 2.70%, 5/01/31 | 100,000 | 92,558 | ||||||||
Laurel Road Community Development District, Special Assessment, Series 2021A-1, 2.60%, 5/01/26 | 100,000 | 96,019 | ||||||||
Magnolia Park Community Development District, Special Assessment, Refunding, 4.00%, 5/01/31 | 47,000 | 48,958 | ||||||||
Meadow View at Twin Creeks Community Development District, Phase 4, Special Assessment, 3.00%, 5/01/31 | 75,000 | 68,496 | ||||||||
Miami Health Facilities Authority, Miami Jewish Health Systems Obligated Group, Refunding, 5.00%, 7/01/28 | 150,000 | 146,611 | ||||||||
Mirada Community Development District, Assessment Area Four, Special Assessment, 3.25%, 5/01/32 | 200,000 | 186,867 | ||||||||
Mirada II Community Development District, Special Assessment, 3.125%, 5/01/31 | 100,000 | 94,232 | ||||||||
North AR-1 Pasco Community Development District, Assessment Area Two, Special Assessment, Series 2021A, 3.25%, 5/01/31 | 100,000 | 91,942 | ||||||||
Old Hickory Community Development District, Special Assessment, 3.00%, 6/15/30 | 100,000 | 96,322 | ||||||||
| b | Orange County Health Facilities Authority, Presbyterian Retirement Communities Inc Obligated Group, Refunding , Series 2023A, 5.00%, 8/01/32 | 500,000 | 544,301 | |||||||
Parkview at Long Lake Ranch Community Development District, Special Assessment, 3.125%, 5/01/30 | 100,000 | 96,661 | ||||||||
Parrish Plantation Community Development District, Special Assessment, 3.125%, 5/01/31 | 100,000 | 94,379 | ||||||||
Pine Ridge Plantation Community Development District, Subordinate Lien, Special Assessment, Refunding, Series 2020A-2, 3.30%, 5/01/30 | 150,000 | 145,434 | ||||||||
Preserve at South Branch Community Development District, Special Assessment, Series 2021, 3.00%, 5/01/31 | 100,000 | 94,422 | ||||||||
Reunion East Community Development District, Special Assessment, 2.85%, 5/01/31 | 100,000 | 91,511 | ||||||||
River Hall Community Development District, | ||||||||||
Assessment Area 3, Special Assessment, Series 2020A, 3.25%, 5/01/31 | 100,000 | 95,601 | ||||||||
Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/22 | 65,000 | 65,036 | ||||||||
Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/23 | 35,000 | 35,188 | ||||||||
Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/24 | 30,000 | 30,168 | ||||||||
Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/25 | 40,000 | 40,034 | ||||||||
Rivers Edge II Community Development District, Special Assessment, 3.00%, 5/01/31 | 100,000 | 91,570 | ||||||||
Rivers Edge III Community Development District, Special Assessment, 2.40%, 5/01/26 | 100,000 | 96,630 | ||||||||
Saddle Creek Preserve of Polk County Community Development District, Special Assessment, 3.00%, 6/15/30 | 80,000 | 77,058 | ||||||||
Sanctuary Cove Community Development District, Special Assessment, 2.125%, 5/01/26 | 135,000 | 126,973 | ||||||||
| 116 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Florida (continued) | ||||||||||
Sandmine Road Community Development District, | ||||||||||
Assessment Area One, Special Assessment, 3.125%, 5/01/30 | 100,000 | $ | 96,934 | |||||||
Assessment Area Two, Special Assessment, 2.30%, 11/01/26 | 50,000 | 47,362 | ||||||||
Sandridge Community Development District, Special Assessment, Series 2021A1, 2.875%, 5/01/26 | 140,000 | 136,645 | ||||||||
Sarasota National Community Development District, Special Assessment, Refunding, 3.50%, 5/01/31 | 100,000 | 100,370 | ||||||||
Sawyers Landing Community Development District, Special Assessment, 3.75%, 5/01/31 | 150,000 | 148,743 | ||||||||
Shingle Creek at Bronson Community Development District, Special Assessment, 3.10%, 6/15/31 | 100,000 | 94,205 | ||||||||
Six Mile Creek Community Development District, Assessment Area 2, Phase 3, Special Assessment, 3.10%, 5/01/31 | 75,000 | 68,327 | ||||||||
Stillwater Community Development District, 2021 Project, Special Assessment, 3.00%, 6/15/31 | 100,000 | 94,732 | ||||||||
Summer Woods Community Development District, Assessment Area Three Project, Special Assessment, 3.15%, 5/01/31 | 75,000 | 68,865 | ||||||||
Tamarindo Community Development District, Special Assessment, 3.00%, 5/01/31 | 100,000 | 92,176 | ||||||||
Timber Creek Southwest Community Development District, Special Assessment, Series 2020, 3.00%, 6/15/30 | 150,000 | 143,642 | ||||||||
Tohoqua Community Development District, | ||||||||||
Special Assessment, 2.875%, 5/01/31 | 100,000 | 93,209 | ||||||||
Special Assessment, 2.50%, 5/01/26 | 140,000 | 135,969 | ||||||||
Tradition Community Development District No 9, Special Assessment, 2.70%, 5/01/31 | 100,000 | 92,569 | ||||||||
Trevesta Community Development District, Special Assessment, 3.25%, 5/01/30 | 100,000 | 96,407 | ||||||||
V-Dana Community Development District, | ||||||||||
Assessment Area One, Special Assessment, 3.50%, 5/01/31 | 150,000 | 147,223 | ||||||||
Assessment Area One-2021 Project, Special Assessment, Series 2021P, 3.125%, 5/01/31 | 100,000 | 94,717 | ||||||||
Veranda Community Development District II, Special Assessment, Refunding, 3.10%, 5/01/31 | 100,000 | 94,741 | ||||||||
Viera Stewardship District, Village 2, Special Assessment, Series 2021, 2.80%, 5/01/31 | 130,000 | 119,909 | ||||||||
Village Community Development District No 13, Limited Offering, Special Assessment, 3.00%, 5/01/29 | 100,000 | 99,018 | ||||||||
West Villages Improvement District, Unit of Development No 7, Special Assessment, 3.125%, 5/01/31 | 100,000 | 95,339 | ||||||||
Windward Community Development District, Special Assessment, Series 2020A-1, 3.65%, 5/01/30 | 100,000 | 98,397 | ||||||||
|
| |||||||||
| 11,973,677 | ||||||||||
|
| |||||||||
| Georgia 5.0% | ||||||||||
Athens-Clarke County Unified Government Development Authority, University of Georgia Athletic Association, Inc., Series 2005B, Daily, VRDN, 0.37%, 7/01/35 | 100,000 | 100,000 | ||||||||
Development Authority of Rockdale County, AHPC Terraces at Fieldstone LLC, Series 2021B-S, 4.50%, 12/01/36 | 100,000 | 87,905 | ||||||||
George L Smith II Congress Center Authority, Signia Hotel Management LLC, 3.625%, 1/01/31 | 350,000 | 335,672 | ||||||||
Main Street Natural Gas, Inc., | ||||||||||
Series 2021C, VRDN, 4.00%, 5/01/52 | 500,000 | 527,867 | ||||||||
Series 2022A, VRDN, 4.00%, 9/01/52 | 1,000,000 | 1,061,772 | ||||||||
Series 2019A, 5.00%, 5/15/29 | 100,000 | 110,803 | ||||||||
Gas Supply Revenue, Sereis 2022C, VRDN, 4.00%, 8/01/52 | 1,500,000 | 1,539,368 | ||||||||
Municipal Electric Authority of Georgia, Refunding, Series 2019A, 5.00%, 1/01/33 | 100,000 | 114,271 | ||||||||
|
| |||||||||
| 3,877,658 | ||||||||||
|
| |||||||||
| Guam 0.2% | ||||||||||
Guam Government Waterworks Authority, Refunding, 5.00%, 7/01/30 | 125,000 | 138,219 | ||||||||
|
| |||||||||
| Illinois 5.0% | ||||||||||
Chicago Park District, Refunding, Series 2020F-2, 5.00%, 1/01/31 | 100,000 | 115,526 | ||||||||
City of Berwyn, Refunding, Series 2022B, 4.00%, 12/01/41 | 1,000,000 | 1,079,616 | ||||||||
City of Chicago, zero cpn., 1/01/31 | 525,000 | 389,700 | ||||||||
| franklintempleton.com | Annual Report | 117 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Illinois (continued) | ||||||||||
Illinois Finance Authority, | ||||||||||
a 2018 Blue Island LLC, 4.25%, 12/01/28 | 100,000 | $ | 200 | |||||||
Lifespace Communities, Inc. Obligated Group, Refunding, Series 2015A, 5.00%, 5/15/24 | 245,000 | 256,908 | ||||||||
Refunding, 4.00%, 10/01/31 | 180,000 | 182,559 | ||||||||
Metropolitan Pier & Exposition Authority, | ||||||||||
McCormick Project, Refunding, zero cpn., 6/15/28 | 100,000 | 80,878 | ||||||||
McCormick Project, zero cpn., 12/15/32 | 85,000 | 56,820 | ||||||||
Railsplitter Tobacco Settlement Authority, 5.00%, 6/01/27 | 100,000 | 109,250 | ||||||||
Southwestern Illinois Development Authority, Madison County Community Unit School District No 7 Edwardsville, Refunding, zero cpn., 12/01/24 | 245,000 | 227,804 | ||||||||
State of Illinois, | ||||||||||
Series 2017C, 5.00%, 11/01/29 | 200,000 | 220,282 | ||||||||
Series 2020B, 5.00%, 10/01/31 | 150,000 | 169,101 | ||||||||
Refunding, Series 2016B, 5.00%, 10/01/31 | 100,000 | 110,229 | ||||||||
5.50%, 5/01/30 | 175,000 | 203,488 | ||||||||
Series 2021B, 3.00%, 12/01/41 | 500,000 | 424,495 | ||||||||
Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 | 125,000 | 115,747 | ||||||||
Village of Villa Park, Garden Station Redevelopment Area, zero cpn, 12/31/38 | 100,000 | 76,612 | ||||||||
|
| |||||||||
| 3,819,215 | ||||||||||
|
| |||||||||
| Indiana 0.6% | ||||||||||
City of Goshen, Green Oaks of Goshen LLC, 4.75%, 8/01/24 | 130,000 | 125,621 | ||||||||
City of Jeffersonville, Vivera Senior Living of Columbus LLC, Series 2020A, 4.75%, 11/01/30 | 100,000 | 94,857 | ||||||||
Indiana Finance Authority, Ohio Valley Electric Corp., Series 2012C, 3.00%, 11/01/30 | 150,000 | 140,545 | ||||||||
Indiana Housing & Community Development Authority, Vita of Marion LLC, Series 2021A, 5.00%, 4/01/31 | 100,000 | 95,703 | ||||||||
|
| |||||||||
| 456,726 | ||||||||||
|
| |||||||||
| Kansas 0.2% | ||||||||||
City of Manhattan, Meadowlark Hills Retirement Community Obligated Group, Refunding, Series 2021A, 4.00%, 6/01/28 | 170,000 | 175,141 | ||||||||
|
| |||||||||
| Kentucky 2.9% | ||||||||||
City of Berea, Berea College, Series 2003B, Daily, VRDN, 0.38%, 6/01/29 | 300,000 | 300,000 | ||||||||
County of Owen, Refunding, VRDN, 2.45%, 6/01/39 | 100,000 | 99,692 | ||||||||
Kentucky Public Energy Authority, Kentucky Public Energy Authority, Series 2022A2, Daily, VRDN, 1.381%, 8/01/52 | 625,000 | 617,232 | ||||||||
Louisville/Jefferson County Metropolitan Sewer District, Green Bond, Refunding, Series 2022A, 4.00%, 5/15/34 | 1,000,000 | 1,128,646 | ||||||||
Louisville/Jefferson County Metropolitan Government, Refunding, 4.00%, 5/01/29 | 100,000 | 101,504 | ||||||||
|
| |||||||||
| 2,247,074 | ||||||||||
|
| |||||||||
| Louisiana 0.7% | ||||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, | ||||||||||
3.90%, 11/01/44 | 190,000 | 171,686 | ||||||||
5.00%, 7/01/29 | 100,000 | 99,992 | ||||||||
Patriot Services Group Obligated Group, 5.25%, 10/01/32 | 145,000 | 136,551 | ||||||||
Port New Orleans Board of Commissioners, AMT, Series 2020E, 5.00%, 4/01/34 | 100,000 | 114,067 | ||||||||
|
| |||||||||
| 522,296 | ||||||||||
|
| |||||||||
| Maryland 0.8% | ||||||||||
City of Baltimore, Refunding, 3.25%, 6/01/31 | 100,000 | 96,604 | ||||||||
County of Frederick, Oakdale-Lake Linganore Development District, 3.25%, 7/01/29 | 140,000 | 138,772 | ||||||||
Maryland Economic Development Corp., Ports America Chesapeake LLC, Refunding, Series 2017A, 5.00%, 6/01/27 | 100,000 | 112,252 | ||||||||
| 118 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Maryland (continued) | ||||||||||
Maryland Health & Higher Educational Facilities Authority, | ||||||||||
Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 | 145,000 | $ | 154,335 | |||||||
Refunding, 5.00%, 6/01/30 | 100,000 | 112,977 | ||||||||
|
| |||||||||
| 614,940 | ||||||||||
|
| |||||||||
| Massachusetts 0.4% | ||||||||||
Massachusetts Development Finance Agency, | ||||||||||
Foxborough Regional Charter School, Refunding, 5.00%, 7/01/27 | 100,000 | 105,552 | ||||||||
Wellforce Obligated Group, Refunding, Series 2020C, 5.00%, 10/01/30 | 200,000 | 237,592 | ||||||||
|
| |||||||||
| 343,144 | ||||||||||
|
| |||||||||
| Michigan 0.9% | ||||||||||
Grand Rapids Economic Development Corp., Refunding, 4.00%, 11/01/27 | 100,000 | 104,053 | ||||||||
Kalamazoo Economic Development Corp., Refunding, 5.00%, 8/15/31 | 115,000 | 120,693 | ||||||||
Michigan Finance Authority, | ||||||||||
Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/27 | 190,000 | 197,133 | ||||||||
Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/32 | 285,000 | 296,593 | ||||||||
|
| |||||||||
| 718,472 | ||||||||||
|
| |||||||||
| Minnesota 0.9% | ||||||||||
City of Eagan, Series 2018A, 4.00%, 2/01/26 | 100,000 | 107,416 | ||||||||
County of Mille Lacs, Series 2018A, 3.00%, 2/01/24 | 135,000 | 137,406 | ||||||||
Duluth Economic Development Authority, Refunding, 4.00%, 7/01/31 | 125,000 | 126,169 | ||||||||
Housing & Redevelopment Authority of The City of St Paul Minnesota, Episcopal Homes Obligated Group, Refunding, 4.00%, 11/01/33 | 135,000 | 129,547 | ||||||||
Northern Municipal Power Agency, Refunding, 5.00%, 1/01/36 | 100,000 | 110,779 | ||||||||
St Louis Park Independent School District No 283, Series 2018A, 5.00%, 2/01/25 | 100,000 | 108,436 | ||||||||
|
| |||||||||
| 719,753 | ||||||||||
|
| |||||||||
| Mississippi 0.5% | ||||||||||
Mississippi Development Bank, Magnolia Regional Health Center, Refunding, 5.00%, 10/01/31 | 150,000 | 171,671 | ||||||||
Mississippi Home Corp., | ||||||||||
Patriot Services Group Obligated Group, 3.50%, 6/01/33 | 100,000 | 88,065 | ||||||||
Patriot Services Group Pascagoula Portfolio II Obligated Group, 3.65%, 6/01/33 | 100,000 | 89,352 | ||||||||
|
| |||||||||
| 349,088 | ||||||||||
|
| |||||||||
| Missouri 1.8% | ||||||||||
Cape Girardeau County Industrial Development Authority, SoutheastHEALTH Obligated Group, 5.00%, 3/01/29 | 130,000 | 144,080 | ||||||||
City of Maryland Heights, Westport Plaza Redevelopment, 3.625%, 11/01/31 | 90,000 | 86,364 | ||||||||
Missouri Development Finance Board, City of Independence, Refunding, 5.00%, 3/01/30 | 930,000 | 1,040,023 | ||||||||
St Louis County Industrial Development Authority, Refunding, 5.00%, 9/01/27 | 100,000 | 108,509 | ||||||||
|
| |||||||||
| 1,378,976 | ||||||||||
|
| |||||||||
| Montana 0.1% | ||||||||||
Cascade County High School District A Great Falls, 5.00%, 7/01/25 | 100,000 | 108,952 | ||||||||
|
| |||||||||
| Nevada 1.2% | ||||||||||
City of Carson City, 5.00%, 9/01/28 | 115,000 | 128,494 | ||||||||
City of Las Vegas, | ||||||||||
Special Improvement District No 611, Special Assessment, 3.50%, 6/01/31 | 160,000 | 158,181 | ||||||||
Special Assessment, 4.00%, 12/01/22 | 95,000 | 95,836 | ||||||||
Special Assessment, 2.50%, 6/01/29 | 200,000 | 185,340 | ||||||||
Tahoe-Douglas Visitors Authority, 5.00%, 7/01/31 | 250,000 | 272,601 | ||||||||
Washoe County School District, Series 2017C, 5.00%, 10/01/26 | 100,000 | 112,243 | ||||||||
|
| |||||||||
| 952,695 | ||||||||||
|
| |||||||||
| franklintempleton.com | Annual Report | 119 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| New Hampshire 0.1% | ||||||||||
New Hampshire Health and Education Facilities Authority Act, University System of New Hampshire Obligated Group, Refunding, Series 2017A, 5.00%, 7/01/27 | 100,000 | $ | 114,466 | |||||||
|
| |||||||||
| New Jersey 2.8% | ||||||||||
New Jersey Economic Development Authority, | ||||||||||
AMT, Refunding, VRDN, 2.20%, 10/01/39 | 100,000 | 96,792 | ||||||||
5.00%, 7/01/32 | 100,000 | 105,023 | ||||||||
5.00%, 6/15/31 | 200,000 | 228,924 | ||||||||
New Jersey Educational Facilities Authority, Seton Hall University, Series 2016C, 5.00%, 7/01/29 | 240,000 | 258,862 | ||||||||
New Jersey Transportation Trust Fund Authority, | ||||||||||
Refunding, 5.00%, 12/15/28 | 100,000 | 113,025 | ||||||||
Transportation Program Bonds, Sereis 2022BB, 5.00%, 6/15/34 | 1,000,000 | 1,145,716 | ||||||||
Pinelands Regional School District, 3.00%, 8/01/27 | 100,000 | 101,629 | ||||||||
State of New Jersey, Series 2020A, 4.00%, 6/01/31 | 100,000 | 109,177 | ||||||||
|
| |||||||||
| 2,159,148 | ||||||||||
|
| |||||||||
| New York 3.8% | ||||||||||
Metropolitan Transportation Authority, | ||||||||||
Green Bond, Series 2017C-1, 5.00%, 11/15/28 | 270,000 | 302,148 | ||||||||
Green Bond, Series 2017C-1, 5.00%, 11/15/30 | 730,000 | 810,099 | ||||||||
New York State Dormitory Authority, St Joseph’s College, 5.00%, 7/01/30 | 65,000 | 73,390 | ||||||||
New York Transportation Development Corp., | ||||||||||
Laguardia Gateway Partners LLC, Term B, AMT, 5.00%, 7/01/30 | 100,000 | 105,762 | ||||||||
AMT, 5.25%, 8/01/31 | 95,000 | 103,612 | ||||||||
Delta Air Lines, Inc., AMT, 4.00%, 10/01/30 | 125,000 | 129,775 | ||||||||
AMT, Refunding, 5.00%, 12/01/30 | 100,000 | 111,953 | ||||||||
Refunding, 5.00%, 12/01/30 | 100,000 | 113,640 | ||||||||
AMT, 2.25%, 8/01/26 | 150,000 | 144,816 | ||||||||
State of New York Mortgage Agency, AMT, Series 2018-212, 2.95%, 4/01/25 | 1,000,000 | 1,010,074 | ||||||||
|
| |||||||||
| 2,905,269 | ||||||||||
|
| |||||||||
| North Carolina 1.4% | ||||||||||
Charlotte-Mecklenburg Hospital Authority, | ||||||||||
Atrium Health Obligated Group, Series 2018G, Daily, VRDN, .34%, 1/15/48 | 500,000 | 500,000 | ||||||||
Atrium Health Obligated Group, Refunding, Series 2007B, Daily, VRDN, .34%, 1/15/38 | 500,000 | 500,000 | ||||||||
North Carolina Medical Care Commission, 5.00%, 10/01/27 | 100,000 | 107,515 | ||||||||
|
| |||||||||
| 1,107,515 | ||||||||||
|
| |||||||||
| North Dakota 0.1% | ||||||||||
County of Grand Forks, Red River Biorefinery LLC, AMT, 6.625%, 12/15/31 | 125,000 | 79,391 | ||||||||
|
| |||||||||
| Ohio 1.6% | ||||||||||
Akron Bath Copley Joint Township Hospital District, Summa Health System Obligated Group, Refunding, 4.00%, 11/15/33 | 150,000 | 160,134 | ||||||||
County of Franklin, | ||||||||||
Nationwide Children’s Hospital, Inc., 5.00%, 11/01/28 | 100,000 | 114,505 | ||||||||
Trinity Health Corp Obligated Group, Series 2019A, 5.00%, 12/01/31 | 100,000 | 116,378 | ||||||||
Wesley Communities Obligated Group, Refunding, 5.00%, 11/15/30 | 100,000 | 107,448 | ||||||||
b Ohio Living Obligated Group, Refunding, 4.00%, 7/01/33 | 200,000 | 204,420 | ||||||||
County of Hamilton, UC Health Obligated Group, 5.00%, 9/15/33 | 100,000 | 116,452 | ||||||||
Franklin County Convention Facilities Authority, 5.00%, 12/01/30 | 100,000 | 108,357 | ||||||||
Ohio Air Quality Development Authority, AMT, 3.75%, 1/15/28 | 100,000 | 104,655 | ||||||||
State of Ohio, Refunding, 5.00%, 11/15/33 | 200,000 | 229,670 | ||||||||
|
| |||||||||
| 1,262,019 | ||||||||||
|
| |||||||||
| Oregon 1.0% | ||||||||||
Medford Hospital Facilities Authority, Asante Health System Obligated Group, Series 2020A, 5.00%, 8/15/33 | 200,000 | 234,467 | ||||||||
| 120 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Oregon (continued) | ||||||||||
Oregon State Facilities Authority, PeaceHealth Obligated Group, Refunding, Series 2018B, Daily, VRDN, 0.35%, 8/01/34 | 500,000 | $ | 500,000 | |||||||
|
| |||||||||
| 734,467 | ||||||||||
|
| |||||||||
| Pennsylvania 2.1% | ||||||||||
Allegheny County Higher Education Building Authority, Robert Morris University, 5.00%, 10/15/26 | 100,000 | 106,821 | ||||||||
Allentown Neighborhood Improvement Zone Development Authority, 5.00%, 5/01/28 | 100,000 | 110,315 | ||||||||
Bucks County Industrial Development Authority, Grand View Hospital/Sellersville PA Obligated Group, 5.00%, 7/01/32 | 150,000 | 173,150 | ||||||||
Franklin County Industrial Development Authority, 5.00%, 12/01/28 | 100,000 | 107,891 | ||||||||
Luzerne County Industrial Development Authority, Pennsylvania-American Water Co., AMT, Refunding, VRDN, 2.45%, 12/01/39 | 100,000 | 100,728 | ||||||||
Pennsylvania Economic Development Financing Authority, UPMC Obligated Group, Series 2017A, 3.375%, 11/15/33 | 125,000 | 128,708 | ||||||||
Philadelphia Authority for Industrial Development, | ||||||||||
MaST Community Charter School II, 5.00%, 8/01/30 | 150,000 | 164,811 | ||||||||
Philadelphia Electrical & Technology Charter High School, 4.00%, 6/01/31 | 100,000 | 103,130 | ||||||||
Redevelopment Authority of the City of Philadelphia, Social Bond, Series 2021A, 2.799%, 9/01/33 | 500,000 | 471,518 | ||||||||
Westmoreland County Industrial Development Authority, Excela Health Obligated Group, Refunding, Series 2020A, 5.00%, 7/01/30 | 100,000 | 118,064 | ||||||||
|
| |||||||||
| 1,585,136 | ||||||||||
|
| |||||||||
| Puerto Rico 3.5% | ||||||||||
Commonwealth of Puerto Rico, | ||||||||||
Series 2021A1, 5.25%, 7/01/23 | 10,754 | 11,019 | ||||||||
Series 2021A1, 5.375%, 7/01/25 | 10,723 | 11,323 | ||||||||
Series 2021A1, 5.625%, 7/01/27 | 10,626 | 11,618 | ||||||||
Series 2021A1, 5.625%, 7/01/29 | 10,454 | 11,679 | ||||||||
Series 2021A1, 5.75%, 7/01/31 | 10,154 | 11,591 | ||||||||
Series 2021A1, 4.00%, 7/01/33 | 9,628 | 9,424 | ||||||||
Series 2021A1, 4.00%, 7/01/35 | 8,655 | 8,378 | ||||||||
Series 2021A1, 4.00%, 7/01/37 | 7,428 | 7,156 | ||||||||
Series 2021A1, 4.00%, 7/01/41 | 10,099 | 9,628 | ||||||||
Series 2021A1, 4.00%, 7/01/46 | 110,503 | 104,422 | ||||||||
Series 2021A, zero cpn., 7/01/24 | 4,953 | 4,523 | ||||||||
Series 2021A, zero cpn., 7/01/33 | 12,391 | 7,175 | ||||||||
VRDN, zero cpn, 11/01/43 | 48,075 | 25,900 | ||||||||
GDB Debt Recovery Authority of Puerto Rico, 7.50%, 8/20/40 | 375,890 | 353,337 | ||||||||
Puerto Rico Electric Power Authority, | ||||||||||
Refunding, Series 2007VV, 5.25%, 7/01/27 | 170,000 | 177,007 | ||||||||
Refunding, Series 2007VV, 5.25%, 7/01/32 | 175,000 | 180,898 | ||||||||
Puerto Rico Highway & Transportation Authority, | ||||||||||
Refunding, Series 2007CC, 5.25%, 7/01/32 | 200,000 | 209,576 | ||||||||
Series 2007CC, 5.50%, 7/01/28 | 155,000 | 165,212 | ||||||||
Refunding, Series 2007CC, 5.50%, 7/01/29 | 250,000 | 266,593 | ||||||||
Puerto Rico Infrastructure Financing Authority, | ||||||||||
F, zero cpn, 7/01/27 | 100,000 | 99,843 | ||||||||
F, zero cpn, 7/01/29 | 320,000 | 228,228 | ||||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Revenue, Series 2018A-1, zero cpn., 7/01/31 | 1,009,000 | 748,103 | ||||||||
|
| |||||||||
| 2,662,633 | ||||||||||
|
| |||||||||
| South Carolina 0.5% | ||||||||||
County of Richland, Village at Sandhill Improvement District, Special Assessment, Refunding, 3.00%, 11/01/26 | 100,000 | 95,170 | ||||||||
Patriots Energy Group, Refunding, 4.00%, 6/01/33 | 100,000 | 107,587 | ||||||||
| franklintempleton.com | Annual Report | 121 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| South Carolina (continued) | ||||||||||
South Carolina Jobs-Economic Development Authority, | ||||||||||
AHPC Vista Towers 2021 LLC, 3.65%, 12/01/36 | 100,000 | $ | 87,223 | |||||||
Orchard Pk and Willowbrook Apartment, 3.65%, 12/01/36 | 100,000 | 87,318 | ||||||||
|
| |||||||||
| 377,298 | ||||||||||
|
| |||||||||
| Tennessee 1.9% | ||||||||||
City of Lawrenceburg, Refunding, 2.50%, 6/01/27 | 100,000 | 100,390 | ||||||||
Metropolitan Government of Nashville & Davidson County, Refunding, 4.00%, 7/01/29 | 100,000 | 108,856 | ||||||||
Metropolitan Nashville Airport Authority, Subordinate, AMT, Series 2019B, 5.00%, 7/01/30 | 100,000 | 115,491 | ||||||||
Tennessee Energy Acquisition Corp., Series 2021A, VRDN, 5.00%, 5/01/52 | 1,000,000 | 1,144,966 | ||||||||
|
| |||||||||
| 1,469,703 | ||||||||||
|
| |||||||||
| Texas 12.9% | ||||||||||
Arlington Higher Education Finance Corp., Riverwalk Education Foundation, Inc., 4.00%, 8/15/33 | 100,000 | 109,008 | ||||||||
City of Cedar Park, Refunding, 5.00%, 2/15/24 | 100,000 | 105,646 | ||||||||
City of Celina, | ||||||||||
Special Assessment, 3.625%, 9/01/30 | 125,000 | 119,776 | ||||||||
Special Assessment, Refunding, 4.00%, 9/01/30 | 190,000 | 194,389 | ||||||||
Wells North Public Improvement District, Special Assessment, 3.25%, 9/01/30 | 180,000 | 172,065 | ||||||||
Edgewood Creek Public Improvement District, Special Assessment, 3.75%, 9/01/31 | 180,000 | 169,996 | ||||||||
The Parks at Wilson Creek Public Improvement District, Special Assessment, 3.25%, 9/01/31 | 110,000 | 101,774 | ||||||||
Sutton Fields II Public Improvement District, Special Assessment, 2.875%, 9/01/27 | 100,000 | 95,288 | ||||||||
City of Crandall, Special Assessment, 4.75%, 9/15/31 | 100,000 | 94,617 | ||||||||
City of Fate, | ||||||||||
Williamsburg East Public Improvement District, Special Assessment, 3.375%, 8/15/30 | 145,000 | 138,956 | ||||||||
Monterra Public Improvement District, Special Assessment, 2.75%, 8/15/26 | 97,000 | 93,353 | ||||||||
City of Garland, Refunding, 5.00%, 2/15/27 | 100,000 | 113,357 | ||||||||
City of Horseshoe Bay, Escondido Public Improvement District, Special Assessment, Refunding, 3.00%, 10/01/30 | 140,000 | 134,049 | ||||||||
City of Kyle, | ||||||||||
b Plum Creek North Public Improvement District, Special Assessment, 4.375%, 9/01/32 | 215,000 | 216,040 | ||||||||
Creeks Public Improvement District, Special Assessment, 2.75%, 9/01/26 | 100,000 | 94,743 | ||||||||
City of Lago Vista, | ||||||||||
Tessera on Lake Travis Public Improvement District, Special Assessment, Refunding, 5.00%, 9/01/30 | 140,000 | 139,488 | ||||||||
Special Assessment, Refunding, 3.125%, 9/01/30 | 130,000 | 124,411 | ||||||||
City of Leander, Oak Creek Public Improvement District, Special Assessment, Refunding, 3.25%, 9/01/32 | 100,000 | 98,004 | ||||||||
City of Liberty Hill, Summerlyn West Public Improvement District, Special Assessment, 3.125%, 9/01/30 | 75,000 | 71,566 | ||||||||
City of Oak Point, Special Assessment, 3.25%, 9/01/30 | 155,000 | 148,478 | ||||||||
City of Princeton, | ||||||||||
Special Assessment, 3.25%, 9/01/30 | 100,000 | 96,030 | ||||||||
Winchester Public Improvement District, Special Assessment, 2.875%, 9/01/31 | 100,000 | 94,286 | ||||||||
City of Royse City, Creekshaw Public Improvement District, Special Assessment, 3.125%, 9/15/25 | 150,000 | 148,220 | ||||||||
City of Tomball, Raburn Reserve Public Improvement District, Special Assessment, 3.375%, 9/15/30 | 100,000 | 95,521 | ||||||||
County of Hays, La Cima Public Improvement District, Special Assessment, 3.25%, 9/15/30 | 150,000 | 142,622 | ||||||||
County of Medina, Woodlands Public Improvement District IA#1 Project, Special Assessment, 3.50%, 9/01/26 | 100,000 | 95,738 | ||||||||
Ector County Hospital District, Refunding, 5.00%, 9/15/31 | 100,000 | 111,271 | ||||||||
Hidalgo County Regional Mobility Authority, Senior Lien, Series 2022A, 5.00%, 12/01/33 | 350,000 | 393,306 | ||||||||
La Joya Independent School District, 5.00%, 2/15/26 | 1,415,000 | 1,561,606 | ||||||||
Lower Colorado River Authority, Refunding, 5.00%, 5/15/32 | 1,000,000 | 1,203,916 | ||||||||
| 122 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Texas (continued) | ||||||||||
New Hope Cultural Education Facilities Finance Corp., | ||||||||||
5.00%, 4/01/29 | 100,000 | $ | 113,155 | |||||||
4.00%, 1/01/29 | 100,000 | 95,100 | ||||||||
CHF-Collegiate Housing College Station I LLC, 5.00%, 4/01/29 | 100,000 | 102,861 | ||||||||
5.00%, 4/01/31 | 30,000 | 33,299 | ||||||||
4.00%, 4/01/22 | 80,000 | 80,000 | ||||||||
North Parkway Municipal Management District No 1, | ||||||||||
Special Assessment, 4.25%, 9/15/31 | 152,000 | 152,973 | ||||||||
Legacy Hills Public Improvement District, Special Assessment, 3.625%, 9/15/31 | 50,000 | 48,383 | ||||||||
Port Freeport, | ||||||||||
AMT, Series 2019A, 5.00%, 6/01/31 | 100,000 | 113,595 | ||||||||
AMT, 5.00%, 6/01/32 | 855,000 | 972,185 | ||||||||
Texas Municipal Gas Acquisition & Supply Corp. III, Refunding, 5.00%, 12/15/30 | 1,400,000 | 1,568,886 | ||||||||
Viridian Municipal Management District, | ||||||||||
Viridian Public Improvement District, Special Assessment, 2.375%, 12/01/25 | 53,000 | 50,965 | ||||||||
Special Assessment, 2.875%, 12/01/30 | 100,000 | 92,325 | ||||||||
|
| |||||||||
| 9,901,247 | ||||||||||
|
| |||||||||
| Utah 0.6% | ||||||||||
City of Provo, Refunding, 4.00%, 1/01/23 | 100,000 | 101,947 | ||||||||
Military Installation Development Authority, Series 2021A-2, 4.00%, 6/01/36 | 250,000 | 225,378 | ||||||||
Utah State Building Ownership Authority, Master Lease Program, 2.50%, 5/15/27 | 100,000 | 100,559 | ||||||||
|
| |||||||||
| 427,884 | ||||||||||
|
| |||||||||
| Vermont 0.1% | ||||||||||
Vermont Public Power Supply Authority, Refunding, Series 2017A, 5.00%, 7/01/28 | 100,000 | 111,809 | ||||||||
|
| |||||||||
| Virginia 1.3% | ||||||||||
Peninsula Town Center Community Development Authority, Special Assessment, Refunding, 4.50%, 9/01/28 | 100,000 | 100,952 | ||||||||
Virginia Small Business Financing Authority, | ||||||||||
National Senior Campuses, Inc.Obligated Group, Refunding, 5.00%, 1/01/33 | 100,000 | 111,200 | ||||||||
b Elizabeth River Crossings OpCo LLC, AMT, Refunding, 4.00%, 7/01/32 | 750,000 | 787,592 | ||||||||
|
| |||||||||
| 999,744 | ||||||||||
|
| |||||||||
| Washington 1.3% | ||||||||||
City of Seattle, 4.00%, 7/01/28 | 100,000 | 109,005 | ||||||||
Skagit County Public Hospital District No 1, Refunding, 5.00%, 12/01/29 | 100,000 | 110,858 | ||||||||
Spokane County School District No 356 Central Valley, 5.00%, 12/01/26 | 100,000 | 113,202 | ||||||||
University of Washington, Series 2016A, 5.00%, 12/01/26 | 100,000 | 113,012 | ||||||||
Washington Health Care Facilities Authority, 3.00%, 12/01/34 | 125,000 | 125,779 | ||||||||
Washington State Housing Finance Commission, | ||||||||||
Presbyterian Retirement Communities Northwest Obligated Group, Series 2019A, 5.00%, 1/01/34 | 100,000 | 103,805 | ||||||||
Spokane United Methodist Homes Obligated Group, 5.00%, 1/01/32 | 100,000 | 101,883 | ||||||||
eliseo Obligated Group, Series 2021A, 4.00%, 1/01/31 | 100,000 | 98,472 | ||||||||
Madison at Rivers Edge Apartments LLC, 3.65%, 1/01/37 | 100,000 | 87,268 | ||||||||
|
| |||||||||
| 963,284 | ||||||||||
|
| |||||||||
| Wisconsin 2.2% | ||||||||||
City of Brookfield, Refunding, 3.00%, 12/01/25 | 115,000 | 119,073 | ||||||||
Public Finance Authority, | ||||||||||
Refunding, 4.00%, 3/01/27 | 55,000 | 56,304 | ||||||||
Refunding, 5.00%, 10/01/29 | 100,000 | 109,396 | ||||||||
Friends Homes Obligated Group, Refunding, 4.00%, 9/01/29 | 100,000 | 105,305 | ||||||||
Refunding, 5.00%, 10/01/24 | 100,000 | 104,449 | ||||||||
Refunding, 5.00%, 1/01/30 | 250,000 | 292,790 | ||||||||
VRDN, 3.50%, 12/01/50 | 100,000 | 89,334 | ||||||||
Signature Preparatory, 5.00%, 6/15/31 | 120,000 | 123,721 | ||||||||
| franklintempleton.com | Annual Report | 123 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Wisconsin (continued) | ||||||||||
Refunding, 4.00%, 7/01/31 | 100,000 | $ | 93,723 | |||||||
Affordable Housing Preservation Corp., 5.25%, 12/01/22 | 100,000 | 99,338 | ||||||||
Ocean Academy Charter School, 4.00%, 10/15/31 | 100,000 | 97,216 | ||||||||
Wisconsin Center District, Series 2020C, zero cpn., 12/15/30 | 365,000 | 271,634 | ||||||||
Wisconsin Health & Educational Facilities Authority, St John’s Communities, Inc. Obligated Group, Series 2018A, 4.00%, 9/15/27 | 100,000 | 103,144 | ||||||||
|
| |||||||||
| 1,665,427 | ||||||||||
|
| |||||||||
Total Investments (Cost $77,838,921) 96.4% | 74,158,707 | |||||||||
Other Assets, less Liabilities 3.6% | 2,749,714 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 76,908,421 | ||||||||
|
| |||||||||
See Abbreviations on page 240.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSee Note 11 regarding defaulted securities.
bSecurity purchased on a when-issued basis.
| 124 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Federal Tax-Free Bond ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 26.86 | $ | 26.07 | $ | 25.20 | $ | 24.34 | $ | 25.00 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.36 | 0.40 | 0.46 | 0.67 | 0.30 | |||||||||||||||
Net realized and unrealized gains (losses) | (1.79 | ) | 0.94 | 1.02 | 0.85 | (0.66 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (1.43 | ) | 1.34 | 1.48 | 1.52 | (0.36 | ) | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.44 | ) | (0.55 | ) | (0.61 | ) | (0.66 | ) | (0.30 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 24.99 | $ | 26.86 | $ | 26.07 | $ | 25.20 | $ | 24.34 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (5.44)% | 5.16% | 5.92% | 6.38% | (1.45)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.66% | 0.78% | 1.00% | 2.05% | 1.71% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | |||||||||||||||
Net investment income | 1.34% | 1.50% | 1.77% | 2.74% | 2.11% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $104,939 | $126,221 | $28,674 | $8,820 | $7,302 | |||||||||||||||
Portfolio turnover ratef | 48.41% | g | 11.86% | g | 17.21% | g | 21.21% | 5.00% | ||||||||||||
aFor the period August 31, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 48.41% | 11.86% | 17.21% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 125 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty Federal Tax-Free Bond ETF
| Principal Amount* | Value | |||||||||
| Municipal Bonds 98.5% | ||||||||||
| Alabama 1.5% | ||||||||||
Black Belt Energy Gas District, | ||||||||||
Refunding, 4.00%, 12/01/23 | 435,000 | $ | 447,778 | |||||||
Refunding, 4.00%, 12/01/24 | 475,000 | 494,867 | ||||||||
City of Huntsville, Series 2019A, 5.00%, 5/01/37 | 250,000 | 292,917 | ||||||||
County of Mobile, Gomesa Projects, 4.00%, 11/01/45 | 400,000 | 364,597 | ||||||||
|
| |||||||||
| 1,600,159 | ||||||||||
|
| |||||||||
| Alaska 0.2% | ||||||||||
Borough of Matanuska-Susitna, State of Alaska Department of Administration, Refunding, 4.00%, 9/01/30 | 150,000 | 156,245 | ||||||||
|
| |||||||||
| Arizona 1.0% | ||||||||||
City of Phoenix Civic Improvement Corp., Wastewater Revenue, Series 2018A, 5.00%, 7/01/25 | 100,000 | 109,281 | ||||||||
Glendale Industrial Development Authority, 4.00%, 5/15/31 | 400,000 | 415,523 | ||||||||
Maricopa County Union High School District No 210-Phoenix, Series 2020C, 4.00%, 7/01/36 | 455,000 | 500,262 | ||||||||
|
| |||||||||
| 1,025,066 | ||||||||||
|
| |||||||||
| California 20.9% | ||||||||||
Alameda Corridor Transportation Authority, Subordinate Lien, Refunding, Series 2016A, 5.00%, 10/01/22 | 925,000 | 940,948 | ||||||||
California Community Choice Financing Authority, | ||||||||||
Green Bond, Series 2021B-1, VRDN, 4.00%, 2/01/52 | 3,850,000 | 4,168,315 | ||||||||
Green Bond, VRDN, 4.00%, 10/01/52 | 2,500,000 | 2,644,139 | ||||||||
California Infrastructure & Economic Development Bank, California Science Center Foundation, 4.00%, 5/01/46 | 1,000,000 | 1,056,827 | ||||||||
California Municipal Finance Authority, | ||||||||||
CHF-Davis II LLC, 4.00%, 5/15/40 | 1,000,000 | 1,042,129 | ||||||||
Northbay Healthcare Group Obligated Group, Refunding, 5.00%, 11/01/26 | 790,000 | 868,344 | ||||||||
City of Los Angeles, Department of Airports Customer Facility Charge Revenue, 4.058%, 5/15/37 | 1,000,000 | 998,582 | ||||||||
Clovis Unified School District, Refunding, zero cpn., 8/01/35 | 200,000 | 127,975 | ||||||||
Konocti Unified School District, Series 2004C, zero cpn., 8/01/28 | 150,000 | 122,179 | ||||||||
Los Angeles County Metropolitan Transportation Authority, 4.00%, 6/01/35 | 2,785,000 | 3,051,572 | ||||||||
Peninsula Corridor Joint Powers Board/CA, Series 2022A, 5.00%, 6/01/38 | 1,000,000 | 1,195,013 | ||||||||
Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/37 | 100,000 | 110,115 | ||||||||
San Diego Association of Governments, Green Bond, 5.00%, 11/15/24 | 2,000,000 | 2,095,620 | ||||||||
San Diego County Regional Airport Authority, Subordinate Bond, AMT, Series 2021B, 4.00%, 7/01/46 | 2,000,000 | 2,053,989 | ||||||||
Sierra View Local Health Care District, Refunding, 4.00%, 7/01/26 | 500,000 | 533,003 | ||||||||
South Tahoe Joint Powers Financing Authority, Project Area 1, Refunding, Series 2017A, 5.00%, 10/01/30 | 100,000 | 111,846 | ||||||||
Three Rivers Levee Improvement Authority, | ||||||||||
Community Facilities District No 2006-1, Refunding, 4.00%, 9/01/27 | 250,000 | 260,790 | ||||||||
Refunding, 4.00%, 9/01/29 | 250,000 | 262,074 | ||||||||
Refunding, 4.00%, 9/01/31 | 200,000 | 209,435 | ||||||||
University of California, Limited Project, Series 2017M, 5.00%, 5/15/34 | 100,000 | 112,992 | ||||||||
|
| |||||||||
| 21,965,887 | ||||||||||
|
| |||||||||
| Colorado 2.9% | ||||||||||
Board of Governors of Colorado State University System, Refunding, Series 2017A, 4.00%, 3/01/35 | 115,000 | 123,361 | ||||||||
City of Westminster, Refunding, 5.00%, 12/01/30 | 200,000 | 241,741 | ||||||||
Denver Convention Center Hotel Authority, Senior, Refunding, 5.00%, 12/01/23 | 880,000 | 918,339 | ||||||||
Regional Transportation District, Refunding, 5.00%, 1/15/32 | 250,000 | 285,070 | ||||||||
Sterling Ranch Community Authority Board, Refunding, Series 2020A, 3.375%, 12/01/30 | 25,000 | 25,167 | ||||||||
University of Colorado, Refunding, VRDN, 2.00%, 6/01/51 | 1,500,000 | 1,486,001 | ||||||||
|
| |||||||||
| 3,079,679 | ||||||||||
|
| |||||||||
| 126 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Federal Tax-Free Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Connecticut 1.3% | ||||||||||
Connecticut State Health & Educational Facilities Authority, Refunding Series 2014B, VRDN, 1.80%, 7/01/49 | 225,000 | $ | 224,214 | |||||||
Hartford County Metropolitan District, Clean Water Project Revenue, Refunding, Series 2021A, 4.00%, 2/01/39 | 745,000 | 819,630 | ||||||||
State of Connecticut, Series 2015A, 5.00%, 8/01/31 | 320,000 | 346,007 | ||||||||
|
| |||||||||
| 1,389,851 | ||||||||||
|
| |||||||||
| Delaware 0.3% | ||||||||||
University of Delaware, 5.00%, 11/01/37 | 250,000 | 292,739 | ||||||||
|
| |||||||||
| District of Columbia 2.1% | ||||||||||
District of Columbia Water & Sewer Authority, | ||||||||||
Sub Series 2019A, 4.00%, 10/01/49 | 475,000 | 509,151 | ||||||||
Sub Series 2022B, 5.00%, 10/01/34 | 500,000 | 612,641 | ||||||||
Washington Metropolitan Area Transit Authority, Green Bond, Series 2021A, 4.00%, 7/15/34 | 1,000,000 | 1,109,394 | ||||||||
|
| |||||||||
| 2,231,186 | ||||||||||
|
| |||||||||
| Florida 0.8% | ||||||||||
City of Gainesville, Utilities System Revenue, Series 2017A, 5.00%, 10/01/36 | 250,000 | 283,633 | ||||||||
City of Pompano Beach, John Knox Village of Florida, Inc. Obligated Group, 3.50%, 9/01/30 | 250,000 | 247,300 | ||||||||
County of Sarasota, 5.00%, 10/01/34 | 250,000 | 298,316 | ||||||||
|
| |||||||||
| 829,249 | ||||||||||
|
| |||||||||
| Georgia 1.5% | ||||||||||
City of Atlanta, Department of Aviation, Series 2019A, 5.00%, 7/01/34 | 175,000 | 202,418 | ||||||||
Cobb County Kennestone Hospital Authority, WellStar Health System Obligated Group, 3.00%, 4/01/37 | 910,000 | 882,996 | ||||||||
Main Street Natural Gas, Inc., | ||||||||||
Series 2018A, VRDN, 4.00%, 4/01/48 | 100,000 | 102,751 | ||||||||
Series 2018B, Monthly, VRDN, .904%, 4/01/48 | 425,000 | 424,236 | ||||||||
|
| |||||||||
| 1,612,401 | ||||||||||
|
| |||||||||
| Hawaii 0.3% | ||||||||||
State of Hawaii, Refunding, Series 2016B, 5.00%, 1/01/29 | 255,000 | 284,578 | ||||||||
|
| |||||||||
| Illinois 6.2% | ||||||||||
Chicago Transit Authority Capital Grant Receipts, Section 5307, Refunding, 5.00%, 6/01/28 | 1,000,000 | 1,152,835 | ||||||||
Illinois Finance Authority, | ||||||||||
Refunding, Monthly, VRDN, .657%, 11/01/34 | 285,000 | 284,690 | ||||||||
State of Illinois Water Revolving Fund – Clean Water Program, 4.00%, 7/01/38 | 1,000,000 | 1,096,215 | ||||||||
Metropolitan Water Reclamation District of Greater Chicago, Green Bond, Series 2021B, 5.00%, 12/01/33 | 1,500,000 | 1,792,852 | ||||||||
Northern Illinois University, | ||||||||||
Refunding, 5.00%, 10/01/25 | 325,000 | 353,879 | ||||||||
Refunding, 5.00%, 10/01/26 | 295,000 | 327,109 | ||||||||
State of Illinois, | ||||||||||
Series 2019B, 4.00%, 11/01/38 | 200,000 | 203,332 | ||||||||
5.50%, 5/01/30 | 100,000 | 116,279 | ||||||||
5.50%, 5/01/39 | 250,000 | 282,770 | ||||||||
Refunding, 5.00%, 2/01/28 | 700,000 | 765,057 | ||||||||
Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 | 150,000 | 138,896 | ||||||||
|
| |||||||||
| 6,513,914 | ||||||||||
|
| |||||||||
| Indiana 2.6% | ||||||||||
East Allen Multi School Building Corp., East Allen County Schools, 5.00%, 1/15/38 | 250,000 | 280,126 | ||||||||
Indianapolis Local Public Improvement Bond Bank, | ||||||||||
5.00%, 1/15/27 | 610,000 | 689,389 | ||||||||
5.00%, 7/15/27 | 450,000 | 512,818 | ||||||||
Refunding, 5.00%, 1/01/52 | 1,000,000 | 1,193,208 | ||||||||
|
| |||||||||
| 2,675,541 | ||||||||||
|
| |||||||||
| franklintempleton.com | Annual Report | 127 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Federal Tax-Free Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Iowa 0.1% | ||||||||||
Iowa Tobacco Settlement Authority, Refunding, Class A, Series 2021B-1, 0.375%, 6/01/30 | 140,000 | $ | 139,704 | |||||||
|
| |||||||||
| Kentucky 2.5% | ||||||||||
Kentucky Municipal Power Agency, Prairie State Project, Refunding, 5.00%, 9/01/34 | 285,000 | 314,392 | ||||||||
Louisville/Jefferson County Metropolitan Sewer District, Green Bond, Refunding , Series 2022A, 4.00%, 5/15/34 | 2,000,000 | 2,257,293 | ||||||||
|
| |||||||||
| 2,571,685 | ||||||||||
|
| |||||||||
| Louisiana 4.3% | ||||||||||
City of New Orleans, Series 2020B, 5.00%, 6/01/30 | 800,000 | 938,951 | ||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, | ||||||||||
Parish of St Bernard LA, 4.00%, 11/01/45 | 1,000,000 | 891,673 | ||||||||
Parish of St Chareles LA, 4.50%, 11/01/47 | 1,000,000 | 937,844 | ||||||||
Parish of St John LA, 3.90%, 11/01/44 | 500,000 | 451,805 | ||||||||
State of Louisiana, Series 2017B, 4.00%, 10/01/34 | 240,000 | 257,058 | ||||||||
Terrebonne Levee & Conservation District, Series 2020B, 4.00%, 6/01/39 | 1,000,000 | 1,055,142 | ||||||||
|
| |||||||||
| 4,532,473 | ||||||||||
|
| |||||||||
| Maine 0.2% | ||||||||||
Maine Municipal Bond Bank, Series 2017C, 5.00%, 11/01/31 | 135,000 | 154,353 | ||||||||
|
| |||||||||
| Maryland 0.9% | ||||||||||
County of Prince George’s, Series 2017A, 3.00%, 9/15/32 | 100,000 | 102,663 | ||||||||
Maryland Community Development Administration, Series 2021C, 0.375%, 7/01/23 | 500,000 | 490,538 | ||||||||
Maryland Health & Higher Educational Facilities Authority, Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 | 365,000 | 388,499 | ||||||||
|
| |||||||||
| 981,700 | ||||||||||
|
| |||||||||
| Massachusetts 4.5% | ||||||||||
Massachusetts Clean Energy Cooperative Corp., Green Bond, 2.135%, 7/01/29 | 1,295,000 | 1,215,391 | ||||||||
Massachusetts Development Finance Agency, | ||||||||||
Springfield College, Green Bond, 5.00%, 6/01/26 | 420,000 | 454,287 | ||||||||
Springfield College, Green Bond, 5.00%, 6/01/27 | 440,000 | 482,058 | ||||||||
Beth Israel Lahey Health Obligated Group, Refunding, Series 2016I, 5.00%, 7/01/34 | 490,000 | 539,302 | ||||||||
Massachusetts Housing Finance Agency, Sustainability Bond, Series 2021B-1, 2.60%, 12/01/41 | 2,000,000 | 1,749,314 | ||||||||
Town of Braintree, 4.00%, 6/01/32 | 250,000 | 275,528 | ||||||||
|
| |||||||||
| 4,715,880 | ||||||||||
|
| |||||||||
| Michigan 0.1% | ||||||||||
Michigan Finance Authority, Tobacco Settlement Revenue, Refunding, Class 2, Series 2020B-1, 1.25%, 6/01/30 | 115,000 | 110,093 | ||||||||
|
| |||||||||
| Minnesota 0.8% | ||||||||||
City of Center City, Refunding, 4.00%, 11/01/34 | 125,000 | 133,674 | ||||||||
Minnesota Higher Education Facilities Authority, Macalester College, 3.00%, 3/01/35 | 500,000 | 504,964 | ||||||||
Northern Municipal Power Agency, Refunding, 5.00%, 1/01/36 | 100,000 | 110,779 | ||||||||
Southern Minnesota Municipal Power Agency, Series 2017A, 5.00%, 1/01/31 | 100,000 | 113,299 | ||||||||
|
| |||||||||
| 862,716 | ||||||||||
|
| |||||||||
| Mississippi 0.6% | ||||||||||
Mississippi Development Bank, County of Jackson Project, 3.625%, 11/01/36 | 400,000 | 364,878 | ||||||||
Mississippi Home Corp., Patriot Services Group Obligated Group, 5.20%, 6/01/36 | 280,000 | 258,149 | ||||||||
|
| |||||||||
| 623,027 | ||||||||||
|
| |||||||||
| Missouri 0.9% | ||||||||||
Health & Educational Facilities Authority of the State of Missouri, St Luke’s Episcopal-Presbyterian Hospitals Obligated Group, 4.00%, 12/01/35 | 755,000 | 808,232 | ||||||||
Park Hill School District of Platte County, 3.00%, 3/01/33 | 100,000 | 101,863 | ||||||||
|
| |||||||||
| 910,095 | ||||||||||
|
| |||||||||
| 128 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Federal Tax-Free Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| New Hampshire 0.1% | ||||||||||
New Hampshire Health and Education Facilities Authority Act, University System of New Hampshire Obligated Group, Refunding, Series 2017A, 5.00%, 7/01/27 | 100,000 | $ | 114,466 | |||||||
|
| |||||||||
| New Jersey 4.1% | ||||||||||
New Jersey Economic Development Authority, | ||||||||||
Refunding, Series 2019A, VRDN, 5.25%, 4/01/28 | 1,000,000 | 1,135,292 | ||||||||
State of New Jersey Department of the Treasury, Refunding, Weekly, VRDN, 2.11%, 3/01/28 | 1,000,000 | 1,008,892 | ||||||||
New Jersey Transportation Trust Fund Authority, | ||||||||||
Series 2006C, zero cpn.,12/15/29 | 870,000 | 687,260 | ||||||||
5.00%, 6/15/34 | 1,000,000 | 1,113,575 | ||||||||
Newark Board of Education, Sustainability Bonds, 5.00%, 7/15/25 | 250,000 | 272,462 | ||||||||
Pinelands Regional School District, 3.00%, 8/01/27 | 100,000 | 101,629 | ||||||||
|
| |||||||||
| 4,319,110 | ||||||||||
|
| |||||||||
| New Mexico 0.1% | ||||||||||
City of Santa, Wastewater Utility System Revenue, 4.00%, 6/01/35 | 100,000 | 108,657 | ||||||||
|
| |||||||||
| New York 10.0% | ||||||||||
City of New York, | ||||||||||
Series 2017B-1, 4.00%, 10/01/36 | 100,000 | 106,896 | ||||||||
Subseries 2018F-1, 5.00%, 4/01/37 | 500,000 | 563,177 | ||||||||
Long Island Power Authority, Series 2019A, 5.00%, 9/01/28 | 300,000 | 350,427 | ||||||||
Metropolitan Transportation Authority, | ||||||||||
Climate Bond Certified, 5.00%, 11/15/32 | 500,000 | 562,214 | ||||||||
Green Bond, Series 2021A-1, 4.00%, 11/15/45 | 1,000,000 | 1,024,060 | ||||||||
Refunding, Series 2017B, 5.00%, 11/15/28 | 100,000 | 113,371 | ||||||||
Refunding, Subseries 2012G-4, Monthly, VRDN, 0.704%, 11/01/30 | 995,000 | 992,747 | ||||||||
New York Liberty Development Corp., 7 World Trade Center II LLC, Refunding, 3.00%, 9/15/43 | 1,000,000 | 935,089 | ||||||||
New York Liberty Development corp., Green Bonds- 4 World Trade, Refunding, 2.50%, 11/15/36 | 1,900,000 | 1,644,689 | ||||||||
New York State Dormitory Authority, | ||||||||||
Refunding, 3.00%, 10/01/33 | 100,000 | 100,617 | ||||||||
Rochester Institute of Technology, 5.00%, 7/01/39 | 300,000 | 344,984 | ||||||||
New York State Housing Finance Agency, Sustainability Bonds, Series 2022A, VRDN, 2.50%, 11/01/60 | 1,500,000 | 1,487,301 | ||||||||
New York State Urban Development Corp., State of New York Personal Income Tax Revenue, Series 2013C, 5.00%, 3/15/31 | 630,000 | 648,671 | ||||||||
New York Transportation Development Corp., | ||||||||||
AMT, Refunding, 5.00%, 12/01/30 | 100,000 | 111,953 | ||||||||
Refunding, 5.00%, 12/01/34 | 500,000 | 560,432 | ||||||||
Western Nassau County Water Authority, Green Bonds, Series 2021A, 4.00%, 4/01/40 | 900,000 | 989,322 | ||||||||
|
| |||||||||
| 10,535,950 | ||||||||||
|
| |||||||||
| North Carolina 0.2% | ||||||||||
City of Winston-Salem, 4.00%, 6/01/33 | 100,000 | 108,012 | ||||||||
University of North Carolina at Charlotte, 4.00%, 10/01/34 | 100,000 | 108,266 | ||||||||
|
| |||||||||
| 216,278 | ||||||||||
|
| |||||||||
| Ohio 3.7% | ||||||||||
County of Franklin, Sales Tax Revenue, 5.00%, 6/01/43 | 450,000 | 518,166 | ||||||||
Northeast Ohio Regional Sewer District, Refunding, 4.00%, 11/15/34 | 100,000 | 109,242 | ||||||||
Ohio State University, 5.00%, 12/01/23 | 3,000,000 | 3,160,366 | ||||||||
Ohio Water Development Authority, Refunding, 4.00%, 12/01/30 | 100,000 | 113,489 | ||||||||
|
| |||||||||
| 3,901,263 | ||||||||||
|
| |||||||||
| Oregon 2.6% | ||||||||||
Clackamas County, School District No 7J Lake Oswego, 5.00%, 6/01/29 | 310,000 | 352,976 | ||||||||
| franklintempleton.com | Annual Report | 129 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Federal Tax-Free Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Oregon (continued) | ||||||||||
County of Washington, 5.00%, 3/01/25 | 175,000 | $ | 190,056 | |||||||
Port of Portland OR Airport Revenue, AMT, Series 2021-27A, 4.00%, 7/01/50 | 2,000,000 | 2,060,496 | ||||||||
Portland Community College District, 5.00%, 6/15/25 | 100,000 | 109,358 | ||||||||
|
| |||||||||
| 2,712,886 | ||||||||||
|
| |||||||||
| Pennsylvania 2.7% | ||||||||||
Delaware Valley Regional Finance Authority, Series 1998A, 5.50%, 8/01/28 | 810,000 | 950,239 | ||||||||
Pennsylvania Economic Development Financing Authority, UPMC Obligated Group, Series 2017A, 3.375%, 11/15/33 | 125,000 | 128,708 | ||||||||
School District of Philadelphia, Green Bond, Series 2019B, 5.00%, 9/01/29 | 1,500,000 | 1,746,562 | ||||||||
|
| |||||||||
| 2,825,509 | ||||||||||
|
| |||||||||
| Puerto Rico 0.8% | ||||||||||
Puerto Rico Highway & Transportation Authority, | ||||||||||
Refunding, Series 2007N, 5.25%, 7/01/36 | 200,000 | 210,258 | ||||||||
Series 2007CC, 5.50%, 7/01/28 | 550,000 | 586,234 | ||||||||
|
| |||||||||
| 796,492 | ||||||||||
|
| |||||||||
| South Carolina 0.6% | ||||||||||
City of Columbia, Stormwater System Revenue, Special Assessment, 5.00%, 2/01/39 | 520,000 | 592,908 | ||||||||
|
| |||||||||
| South Dakota 0.9% | ||||||||||
County of Lincoln, Augustana College Association, 4.00%, 8/01/41 | 900,000 | 903,721 | ||||||||
|
| |||||||||
| Tennessee 1.8% | ||||||||||
Chattanooga Health Educational & Housing Facility Board, Series 2019A-1, 5.00%, 8/01/25 | 250,000 | 271,235 | ||||||||
City of Kingsport, Series 2017B, 3.00%, 3/01/35 | 130,000 | 130,459 | ||||||||
Metropolitan Government Nashville & Davidson County Industrial Development Board, Waste Management, Inc. of Tennessee Project, VRDN, 0.58%, 8/01/31 | 1,200,000 | 1,146,433 | ||||||||
Tennessee Housing Development Agency, Refunding, 1.95%, 1/01/26 | 250,000 | 246,225 | ||||||||
Tennessee State School Bond Authority, Higher Educational Facility 2nd Program, 5.00%, 11/01/37 | 100,000 | 114,322 | ||||||||
|
| |||||||||
| 1,908,674 | ||||||||||
|
| |||||||||
| Texas 1.2% | ||||||||||
Central Texas Regional Mobility Authority, Refunding, Series 2020B, 5.00%, 1/01/33 | 400,000 | 461,996 | ||||||||
City of Fort Worth, 5.00%, 2/15/32 | 295,000 | 339,685 | ||||||||
City of Round Rock, Utility System Revenue, Refunding, 2.75%, 8/01/29 | 100,000 | 100,584 | ||||||||
Pflugerville Independent School District, Series 2019A, 5.00%, 2/15/29 | 100,000 | 115,915 | ||||||||
Texas A&M University, Refunding, Series 2017C, 5.00%, 5/15/33 | 100,000 | 113,104 | ||||||||
Texas Water Development Board, State Water Implementation Revenue Fund, Series 2017A, 4.00%, 10/15/33 | 115,000 | 124,812 | ||||||||
|
| |||||||||
| 1,256,096 | ||||||||||
|
| |||||||||
| Utah 1.4% | ||||||||||
City of Provo, Refunding, 4.00%, 1/01/23 | 100,000 | 101,947 | ||||||||
Utah Infrastructure Agency, 4.00%, 10/15/30 | 500,000 | 533,170 | ||||||||
Utah State Building Ownership Authority, Master Lease Program, 2.50%, 5/15/27 | 100,000 | 100,559 | ||||||||
Utah Transit Authority, Refunding, Series 2015A, 5.00%, 6/15/29 | 500,000 | 545,674 | ||||||||
Utah Water Finance Agency, Central Valley Water Reclamation Facility, Series 2019B, 5.00%, 3/01/38 | 200,000 | 231,901 | ||||||||
|
| |||||||||
| 1,513,251 | ||||||||||
|
| |||||||||
| Vermont 0.6% | ||||||||||
| a | City of Burlington, Electric System Revenue, Series 2022A, 5.00%, 7/01/31 | 500,000 | 595,907 | |||||||
|
| |||||||||
| Virginia 2.8% | ||||||||||
Charles City County Economic Development Authority, Waste Management, Inc., AMT, 1.45%, 4/01/27 | 1,100,000 | 1,028,326 | ||||||||
Fairfax County Economic Development Authority, County of Fairfax, 4.00%, 10/01/37 | 1,630,000 | 1,820,608 | ||||||||
| 130 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Federal Tax-Free Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) | ||||||||||
| Virginia (continued) | ||||||||||
Virginia College Building Authority, 5.00%, 9/01/32 | 100,000 | $ | 117,150 | |||||||
|
| |||||||||
| 2,966,084 | ||||||||||
|
| |||||||||
| Washington 3.0% | ||||||||||
Central Puget Sound Regional Transit Authority, Green Bond, Refunding, Series 2021S-1, 5.00%, 11/01/22 | 1,080,000 | 1,103,442 | ||||||||
City of Seattle, Drainage & Wastewater Revenue, 4.00%, 4/01/31 | 125,000 | 133,393 | ||||||||
Spokane County School District No 356 Central Valley, | ||||||||||
5.00%, 12/01/26 | 100,000 | 113,202 | ||||||||
5.00%, 12/01/28 | 310,000 | 358,328 | ||||||||
Washington Health Care Facilities Authority, | ||||||||||
Refunding, Series 2017B, 5.00%, 8/15/29 | 125,000 | 143,573 | ||||||||
5.00%, 12/01/32 | 250,000 | 293,073 | ||||||||
Washington State Housing Finance Commission, Series 2021A-1, 3.50%, 12/20/35 | 988,203 | 977,118 | ||||||||
|
| |||||||||
| 3,122,129 | ||||||||||
|
| |||||||||
| Wisconsin 4.5% | ||||||||||
Public Finance Authority, | ||||||||||
RED River Valley Alliance LLC, AMT, 4.00%, 3/31/56 | 2,500,000 | 2,450,936 | ||||||||
VRDN, 3.50%, 12/01/50 | 200,000 | 178,667 | ||||||||
University of Wisconsin Hospitals & Clinics, Obligated Group, Green Bond, 4.00%, 4/01/46 | 2,000,000 | 2,131,323 | ||||||||
|
| |||||||||
| 4,760,926 | ||||||||||
|
| |||||||||
| Wyoming 0.9% | ||||||||||
County of Laramie, Cheyenne Regional Medical Center, Refunding, 3.00%, 5/01/42 | 1,000,000 | 911,234 | ||||||||
|
| |||||||||
Total Investments (Cost $109,291,453) 98.5% | 103,319,762 | |||||||||
Other Assets, less Liabilities 1.5% | 1,618,780 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 104,938,542 | ||||||||
|
| |||||||||
See Abbreviations on page 240.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity purchased on a when-issued basis. See Note 1(d).
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 131 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty High Yield Corporate ETF
| Year Ended March 31, | ||||||||||||||||
| 2022 | 2021 | 2020 | 2019a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||
Net asset value, beginning of year | $ | 26.16 | $ | 22.67 | $ | 25.45 | $ | 25.00 | ||||||||
|
| |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 1.20 | 1.23 | 1.33 | 1.21 | ||||||||||||
Net realized and unrealized gains (losses) | (1.34 | ) | 3.73 | (2.51 | ) | 0.49 | ||||||||||
|
| |||||||||||||||
Total from investment operations | (0.14 | ) | 4.96 | (1.18 | ) | 1.70 | ||||||||||
|
| |||||||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (1.18 | ) | (1.47 | ) | (1.56 | ) | (1.23 | ) | ||||||||
Net realized gains | (0.08 | ) | — | (0.04 | ) | (0.02 | ) | |||||||||
|
| |||||||||||||||
Total Distributions | (1.26 | ) | (1.47 | ) | (1.60 | ) | (1.25 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of year | $ | 24.76 | $ | 26.16 | $ | 22.67 | $ | 25.45 | ||||||||
|
| |||||||||||||||
Total returnd | (0.69)% | 22.28% | (5.12)% | 7.07% | ||||||||||||
| Ratios to average net assetse | ||||||||||||||||
Expenses before waiver and payments by affiliates | 0.47% | 0.64% | 0.86% | 1.54% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.40% | 0.40% | 0.40% | 0.40% | ||||||||||||
Net investment income | 4.62% | 4.84% | 5.29% | 5.80% | ||||||||||||
| Supplemental data | ||||||||||||||||
Net assets, end of year (000’s) | $334,286 | $346,586 | $130,362 | $10,181 | ||||||||||||
Portfolio turnover ratef | 43.83% | g | 53.18% | g | 129.98% | g | 23.57% | |||||||||
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 43.83% | 53.18% | 129.98% |
| 132 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty High Yield Corporate ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 94.4% | ||||||||||||||
| Airlines 2.2% | ||||||||||||||
American Airlines Inc./AAdvantage Loyalty IP Ltd., | ||||||||||||||
a senior secured note, 144A, 5.75%, 4/20/29 | United States | 700,000 | $ | 698,338 | ||||||||||
a senior secured note, 144A, 5.50%, 4/20/26 | United States | 4,600,000 | 4,640,963 | |||||||||||
United Airlines Inc., | ||||||||||||||
a senior secured note, 144A, 4.375%, 4/15/26 | United States | 1,300,000 | 1,280,500 | |||||||||||
a senior secured note, 144A, 4.625%, 4/15/29 | United States | 800,000 | 761,780 | |||||||||||
|
| |||||||||||||
| 7,381,581 | ||||||||||||||
|
| |||||||||||||
| Automobiles & Components 3.4% | ||||||||||||||
| a | Allison Transmission Inc., senior bond, 144A, 3.75%, 1/30/31 | United States | 500,000 | 454,325 | ||||||||||
Dana Inc., senior note, 5.625%, 6/15/28 | United States | 1,700,000 | 1,719,950 | |||||||||||
| a | Dornoch Debt Merger Sub Inc., senior note, 144A, 6.625%, 10/15/29 | United States | 2,300,000 | 2,002,656 | ||||||||||
| a | Jaguar Land Rover Automotive PLC, 144A, 5.50%, 7/15/29 | United Kingdom | 3,000,000 | 2,645,625 | ||||||||||
| a | Real Hero Merger Sub 2 Inc., senior note, 144A, 6.25%, 2/01/29 | United States | 2,000,000 | 1,826,220 | ||||||||||
The Goodyear Tire & Rubber Co., | ||||||||||||||
a 144A, 5.00%, 7/15/29 | United States | 2,100,000 | 1,958,764 | |||||||||||
senior bond, 4.875%, 3/15/27 | United States | 700,000 | 680,890 | |||||||||||
|
| |||||||||||||
| 11,288,430 | ||||||||||||||
|
| |||||||||||||
| Capital Goods 4.1% | ||||||||||||||
| a | ATS Automation Tooling Systems Inc., senior note, 144A, 4.125%, 12/15/28 | Canada | 3,000,000 | 2,823,600 | ||||||||||
| a | Cornerstone Building Brands Inc., senior note, 144A, 6.125%, 1/15/29 | United States | 1,100,000 | 1,022,769 | ||||||||||
Standard Industries Inc., | ||||||||||||||
a senior unsecured note, 144A, 4.75%, 1/15/28 | United States | 200,000 | 191,604 | |||||||||||
a senior unsecured note, 144A, 4.375%, 7/15/30 | United States | 300,000 | 275,160 | |||||||||||
| a | Stericycle Inc., Senior note, 144A, 3.875%, 1/15/29 | United States | 1,700,000 | 1,582,964 | ||||||||||
| a | The Manitowoc Co. Inc., secured note, second lien, 144A, 9.00%, 4/01/26 | United States | 2,700,000 | 2,818,381 | ||||||||||
| a | TransDigm Inc., senior secured note, 144A, 6.25%, 3/15/26 | United States | 3,400,000 | 3,494,758 | ||||||||||
| a | Vertiv Group Corp., senior secured note, 144A, 4.125%, 11/15/28 | United States | 1,600,000 | 1,462,080 | ||||||||||
|
| |||||||||||||
| 13,671,316 | ||||||||||||||
|
| |||||||||||||
| Commercial & Professional Services 6.8% | ||||||||||||||
| a | Ahern Rentals Inc., secured note, senior lien, 144A, 7.375%, 5/15/23 | United States | 2,400,000 | 2,238,000 | ||||||||||
| a | APX Group Inc., 144A, 5.75%, 7/15/29 | United States | 1,200,000 | 1,097,250 | ||||||||||
| a | Gartner Inc., 144A, 3.625%, 6/15/29 | United States | 1,000,000 | 938,890 | ||||||||||
Grand Canyon University, unsecured note, 5.125%, 10/01/28 | United States | 2,800,000 | 2,743,160 | |||||||||||
| a | H&E Equipment Services Inc., senior note, 144A, 3.875%, 12/15/28 | United States | 1,900,000 | 1,783,616 | ||||||||||
| a | Herc Holdings Inc., senior note, 144A, 5.50%, 7/15/27 | United States | 2,200,000 | 2,233,506 | ||||||||||
| a | MPH Acquisition Holdings LLC, senior note, 144A, 5.75%, 11/01/28 | United States | 2,100,000 | 1,900,059 | ||||||||||
| a | NESCO Holdings II Inc., second lien, 144A, 5.50%, 4/15/29 | United States | 1,600,000 | 1,573,984 | ||||||||||
| a | Nielsen Finance LLC/Nielsen Finance Co., 144A, 4.50%, 7/15/29 | United States | 1,800,000 | 1,799,460 | ||||||||||
| a | Prime Security Services Borrower LLC/Prime Finance Inc., senior secured note, first lien, 144A, 3.375%, 8/31/27 | United States | 2,200,000 | 2,015,629 | ||||||||||
| a | PROG Holdings Inc., 144A, 6.00%, 11/15/29 | United States | 2,900,000 | 2,695,593 | ||||||||||
| a | Ritchie Bros Holdings Inc., 144A, 4.75%, 12/15/31 | United States | 700,000 | 683,634 | ||||||||||
| a | ZipRecruiter Inc., Sr. Unsecured, 144A, 5.00%, 1/15/30 | United States | 900,000 | 879,894 | ||||||||||
|
| |||||||||||||
| 22,582,675 | ||||||||||||||
|
| |||||||||||||
| Consumer Durables & Apparel 1.2% | ||||||||||||||
| a | Ashton Woods USA LLC/Ashton Woods Finance Co., senior note, 144A, 4.625%, 4/01/30 | United States | 2,300,000 | 2,007,877 | ||||||||||
| a | Kontoor Brands Inc., 144A, 4.125%, 11/15/29 | United States | 1,000,000 | 916,135 | ||||||||||
| a | Williams Scotsman International Inc., senior secured note, 144A, 4.625%, 8/15/28 | United States | 1,200,000 | 1,171,368 | ||||||||||
|
| |||||||||||||
| 4,095,380 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 133 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Consumer Services 5.7% | ||||||||||||||
| a,b | 24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22 | United States | 800,000 | $ | 240 | |||||||||
Carnival Corp., | ||||||||||||||
a senior note, 144A, 7.625%, 3/01/26 | United States | 3,000,000 | 3,023,100 | |||||||||||
a senior note, 144A, 5.75%, 3/01/27 | United States | 3,200,000 | 3,056,000 | |||||||||||
| a | NCL Corp. Ltd., senior note, 144A, 5.875%, 3/15/26 | United States | 3,000,000 | 2,853,990 | ||||||||||
Premier Entertainment Sub LLC/Premier Entertainment Finance Corp., | ||||||||||||||
a 144A, 5.625%, 9/01/29 | United States | 2,200,000 | 1,895,256 | |||||||||||
a 144A, 5.875%, 9/01/31 | United States | 1,200,000 | 1,026,690 | |||||||||||
| a | Royal Caribbean Cruises Ltd., senior note, 144A, 5.50%, 8/31/26 | United States | 2,300,000 | 2,238,394 | ||||||||||
| a | Station Casinos LLC, 144A, 4.50%, 2/15/28 | United States | 1,200,000 | 1,140,252 | ||||||||||
| a | Studio City Finance Ltd., senior note, 144A, 5.00%, 1/15/29 | United States | 2,200,000 | 1,678,094 | ||||||||||
| a | Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 144A, 5.50%, 3/01/25 | United States | 2,100,000 | 2,102,940 | ||||||||||
|
| |||||||||||||
| 19,014,956 | ||||||||||||||
|
| |||||||||||||
| Diversified Financials 5.3% | ||||||||||||||
| a | American Finance Trust Inc./American Finance Operating Partner LP, 144A, 4.50%, 9/30/28 | United States | 2,100,000 | 1,894,315 | ||||||||||
| a | Apollo Commercial Real Estate Finance Inc., senior secured note, 144A, 4.625%, 6/15/29 | United States | 2,900,000 | 2,637,390 | ||||||||||
| a | Global Net Lease Inc./Global Net Lease Operating Partnership LP, senior note, 144A, 3.75%, 12/15/27 | United States | 3,000,000 | 2,765,209 | ||||||||||
| a | Jane Street Group/JSG Finance Inc., senior secured note, 144A, 4.50%, 11/15/29 | United States | 600,000 | 569,283 | ||||||||||
| a | Jefferson Capital Holdings LLC, 144A, 6.00%, 8/15/26 | United States | 2,600,000 | 2,484,898 | ||||||||||
| a | Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp., 144A, 4.75%, 6/15/29 | United States | 1,800,000 | 1,699,938 | ||||||||||
| a | MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer Inc., senior note, 144A, 3.875%, 2/15/29 | United States | 1,500,000 | 1,476,608 | ||||||||||
| a | Oxford Finance LLC / Oxford Finance Co-Issuer II Inc., 144A, 6.375%, 2/01/27 | United States | 900,000 | 918,459 | ||||||||||
| a | PRA Group Inc., 144A, 5.00%, 10/01/29 | United States | 1,700,000 | 1,614,346 | ||||||||||
| a | XHR LP, senior secured note, 144A, 4.875%, 6/01/29 | United States | 1,800,000 | 1,750,752 | ||||||||||
|
| |||||||||||||
| 17,811,198 | ||||||||||||||
|
| |||||||||||||
| Energy 20.8% | ||||||||||||||
Antero Resources Corp., | ||||||||||||||
a Senior note, 144A, 8.375%, 7/15/26 | United States | 2,010,000 | 2,218,487 | |||||||||||
a senior note, 144A, 7.625%, 2/01/29 | United States | 1,101,000 | 1,192,234 | |||||||||||
| a | Atlantica Sustainable Infrastructure PLC, 144A, 4.125%, 6/15/28 | United Kingdom | 500,000 | 482,840 | ||||||||||
| a | Calumet Specialty Products Partners LP / Calumet Finance Corp., senior note,144A, 8.125%, 1/15/27 | United States | 2,300,000 | 2,141,691 | ||||||||||
Cheniere Energy Inc., senior secured, 4.625%, 10/15/28 | United States | 3,200,000 | 3,214,800 | |||||||||||
Cheniere Energy Partners LP, | ||||||||||||||
senior note, 4.00%, 3/01/31 | United States | 1,300,000 | 1,262,228 | |||||||||||
senior note, 4.50%, 10/01/29 | United States | 2,000,000 | 2,012,370 | |||||||||||
| a | Chesapeake Energy Corp., 144A, 6.75%, 4/15/29 | United States | 1,800,000 | 1,909,098 | ||||||||||
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp., | ||||||||||||||
senior note, 5.75%, 4/01/25 | United States | 700,000 | 704,207 | |||||||||||
a senior note, 144A, 5.625%, 5/01/27 | United States | 2,800,000 | 2,780,176 | |||||||||||
| a | CrownRock LP/CrownRock Finance Inc., senior unsecured note, 144A, 5.00%, 5/01/29 | United States | 900,000 | 901,913 | ||||||||||
| a | CSI Compressco LP/CSI Compressco Finance Inc., senior secured note, first lien, 144A, 7.50%, 4/01/25 | United States | 1,600,000 | 1,581,776 | ||||||||||
| a | DT Midstream Inc., 144A, 4.125%, 6/15/29 | United States | 3,000,000 | 2,880,870 | ||||||||||
EnLink Midstream LLC, senior bond, 5.375%, 6/01/29 | United States | 1,300,000 | 1,298,986 | |||||||||||
EnLink Midstream Partners LP, senior note, 4.15%, 6/01/25 | United States | 3,600,000 | 3,593,520 | |||||||||||
| a | Harbour Energy PLC, 144A, 5.50%, 10/15/26 | United Kingdom | 3,000,000 | 2,966,325 | ||||||||||
| 134 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Energy (continued) | ||||||||||||||
Hilcorp Energy I LP/Hilcorp Finance Co., | ||||||||||||||
a senior bond, 144A, 6.00%, 2/01/31 | United States | 2,600,000 | $ | 2,616,250 | ||||||||||
a senior note, 144A, 5.75%, 2/01/29 | United States | 2,200,000 | 2,205,720 | |||||||||||
| a | Martin Midstream Partners LP, senior note, second lien, 144A, 11.50%, 2/28/25 | United States | 3,786,248 | 3,879,693 | ||||||||||
| a | Nabors Industries Inc., 144A, 7.375%, 5/15/27 | United States | 2,400,000 | 2,497,056 | ||||||||||
| a | Nabors Industries Ltd., senior note, 144A, 7.25%, 1/15/26 | United States | 2,300,000 | 2,303,841 | ||||||||||
| a | Oasis Midstream Partners LP/OMP Finance Corp., senior note, 144A, 8.00%, 4/01/29 | United States | 2,700,000 | 2,885,625 | ||||||||||
Occidental Petroleum Corp., | ||||||||||||||
senior bond, 8.875%, 7/15/30 | United States | 1,900,000 | 2,439,020 | |||||||||||
senior bond, 6.625%, 9/01/30 | United States | 700,000 | 804,125 | |||||||||||
senior bond, 6.45%, 9/15/36 | United States | 1,800,000 | 2,117,880 | |||||||||||
senior note, 6.125%, 1/01/31 | United States | 900,000 | 1,013,900 | |||||||||||
senior note, 5.55%, 3/15/26 | United States | 2,400,000 | 2,546,832 | |||||||||||
| a | PBF Holding Co. LLC / PBF Finance Corp., Sr. Secured, 144A, 9.25%, 5/15/25 | United States | 400,000 | 412,544 | ||||||||||
| a | Renewable Energy Group Inc., senior secured note, 144A, 5.875%, 6/01/28 | United States | 1,000,000 | 1,075,815 | ||||||||||
| a | SunCoke Energy Inc., senior secured note, 144A, 4.875%, 6/30/29 | United States | 2,100,000 | 1,982,400 | ||||||||||
Sunoco LP / Sunoco Finance Corp., 4.50%, 5/15/29 | United States | 1,900,000 | 1,794,930 | |||||||||||
Sunoco LP/Sunoco Finance Corp., senior note, 6.00%, 4/15/27 | United States | 1,200,000 | 1,224,642 | |||||||||||
Venture Global Calcasieu Pass LLC, | ||||||||||||||
a senior note, 144A, 3.875%, 8/15/29 | United States | 700,000 | 681,496 | |||||||||||
a senior note, 144A, 4.125%, 8/15/31 | United States | 1,600,000 | 1,572,496 | |||||||||||
Weatherford International Ltd., | ||||||||||||||
a 144A, 8.625%, 4/30/30 | United States | 1,900,000 | 1,931,378 | |||||||||||
a senior secured, 144A, 6.50%, 9/15/28 | United States | 2,500,000 | 2,587,500 | |||||||||||
|
| |||||||||||||
| 69,714,664 | ||||||||||||||
|
| |||||||||||||
| Food, Beverage & Tobacco 0.6% | ||||||||||||||
| a | Primo Water Holdings Inc., 144A, 4.375%, 4/30/29 | United States | 2,300,000 | 2,084,709 | ||||||||||
|
| |||||||||||||
| Health Care Equipment & Services 3.6% | ||||||||||||||
Centene Corp., | ||||||||||||||
senior bond, 2.50%, 3/01/31 | United States | 800,000 | 707,336 | |||||||||||
senior note, 4.25%, 12/15/27 | United States | 2,200,000 | 2,210,516 | |||||||||||
CHS/Community Health Systems Inc., | ||||||||||||||
a secured note, second lien, 144A, 6.875%, 4/15/29 | United States | 2,400,000 | 2,361,312 | |||||||||||
a senior secured note, 144A, 6.00%, 1/15/29 | United States | 1,300,000 | 1,315,860 | |||||||||||
| a | DaVita Inc., senior note, 144A, 4.625%, 6/01/30 | United States | 2,500,000 | 2,338,000 | ||||||||||
Mozart Debt Merger Sub Inc., | ||||||||||||||
a senior bond, 144A, 5.25%, 10/01/29 | United States | 2,300,000 | 2,141,185 | |||||||||||
a senior note, 144A, 3.875%, 4/01/29 | United States | 900,000 | 833,647 | |||||||||||
|
| |||||||||||||
| 11,907,856 | ||||||||||||||
|
| |||||||||||||
| Household & Personal Products 1.4% | ||||||||||||||
| a | Great Lakes Dredge & Dock Corp., 144A, 5.25%, 6/01/29 | United States | 1,700,000 | 1,625,608 | ||||||||||
| a | Spectrum Brands Inc., senior bond, 144A, 5.50%, 7/15/30 | United States | 1,600,000 | 1,538,832 | ||||||||||
| a | VM Consolidated Inc., senior note, 144A, 5.50%, 4/15/29 | United States | 1,800,000 | 1,693,053 | ||||||||||
|
| |||||||||||||
| 4,857,493 | ||||||||||||||
|
| |||||||||||||
| Materials 11.5% | ||||||||||||||
| a | Arcosa Inc., 144A, 4.375%, 4/15/29 | United States | 1,600,000 | 1,520,040 | ||||||||||
| a | Ardagh Metal Packaging Finance USA LLC/Ardagh Metal Packaging Finance PLC, senior note, 144A, 4.00%, 9/01/29 | United States | 1,000,000 | 902,300 | ||||||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA Inc., | ||||||||||||||
a senior note, 144A, 5.25%, 8/15/27 | United States | 1,000,000 | 925,505 | |||||||||||
a senior secured note, first lien, 144A, 5.25%, 4/30/25 | United States | 800,000 | 800,304 | |||||||||||
| franklintempleton.com | Annual Report | 135 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Materials (continued) | ||||||||||||||
| a | Braskem Idesa SAPI, senior secured note, 144A, 6.99%, 2/20/32 | Mexico | 1,000,000 | $ | 981,280 | |||||||||
| a | Consolidated Energy Finance SA, 144A, 5.625%, 10/15/28 | Luxembourg | 1,200,000 | 1,112,370 | ||||||||||
| a | Constellium SE, 144A, 3.75%, 4/15/29 | France | 2,200,000 | 1,978,603 | ||||||||||
| a | CVR Partners LP/CVR Nitrogen Finance Corp., senior secured note, 144A, 6.125%, 6/15/28 | United States | 2,400,000 | 2,403,240 | ||||||||||
| a | Diamond BC B.V., senior bond, 144A, 4.625%, 10/01/29 | Netherlands | 400,000 | 359,764 | ||||||||||
| a | Eco Material Technologies Inc., Sr. Secured, 144A, 7.875%, 1/31/27 | United States | 1,300,000 | 1,294,813 | ||||||||||
| a | Element Solutions Inc., senior note, 144A, 3.875%, 9/01/28 | United States | 2,200,000 | 2,058,254 | ||||||||||
| a | Gates Global LLC/Gates Corp., senior note, 144A, 6.25%, 1/15/26 | United States | 1,900,000 | 1,905,187 | ||||||||||
| a | Glatfelter Corp., 144A, 4.75%, 11/15/29 | United States | 800,000 | 679,512 | ||||||||||
| a | Ingevity Corp., senior note, 144A, 3.875%, 11/01/28 | United States | 2,100,000 | 1,901,896 | ||||||||||
| a | Kobe US Midco 2 Inc., senior unsecured note, PIK, 144A, 9.25%, 11/01/26 | United States | 500,000 | 487,628 | ||||||||||
| a | LSF11 A5 HoldCo. LLC, Senior Unsecured, 144A, 6.625%, 10/15/29 | United States | 2,000,000 | 1,863,150 | ||||||||||
Mauser Packaging Solutions Holding Co., | ||||||||||||||
a senior note, 144A, 7.25%, 4/15/25 | United States | 2,000,000 | 1,984,600 | |||||||||||
a senior note, 144A, 8.50%, 4/15/24 | United States | 1,400,000 | 1,428,399 | |||||||||||
| a | Neon Holdings Inc., senior note, 144A, 10.125%, 4/01/26 | United States | 1,650,000 | 1,717,873 | ||||||||||
| a | Novelis Corp., senior bond, 144A, 4.75%, 1/30/30 | United States | 1,500,000 | 1,459,095 | ||||||||||
| a | OI European Group B.V., 144A, 4.75%, 2/15/30 | Netherlands | 1,700,000 | 1,582,725 | ||||||||||
| a | Owens-Brockway Glass Container Inc., senior note, 144A, 5.875%, 8/15/23 | United States | 629,000 | 643,687 | ||||||||||
| a | PMHC II Inc., Sr. Unsecured, 144A, 9.00%, 2/15/30 | United States | 1,400,000 | 1,233,806 | ||||||||||
| a | Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA, senior secured note, 4.00% 144A, 4.00%, 10/15/27 | United States | 2,500,000 | 2,325,500 | ||||||||||
| a | Roller Bearing Co. of America Inc., Sr. Secured, 144A, 4.375%, 10/15/29 | United States | 2,200,000 | 2,054,250 | ||||||||||
| a | Trivium Packaging Finance BV, senior secured note, 144A, 5.50%, 8/15/26 | Netherlands | 1,500,000 | 1,495,800 | ||||||||||
Unifrax Escrow Issuer Corp., | ||||||||||||||
a senior bond, 144A, 5.25%, 5.25%, 9/30/28 | United States | 700,000 | 651,161 | |||||||||||
a senior note, 144A, 7.50%, 9/30/29 | United States | 700,000 | 623,862 | |||||||||||
|
| |||||||||||||
| 38,374,604 | ||||||||||||||
|
| |||||||||||||
| Media & Entertainment 10.8% | ||||||||||||||
| a | Banijay Entertainment SASU, senior note, 144A, 5.375%, 3/01/25 | France | 1,900,000 | 1,862,019 | ||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., | ||||||||||||||
a senior bond, 144A, 4.25%, 2/01/31 | United States | 1,100,000 | 999,675 | |||||||||||
a senior bond, 144A, 5.375%, 6/01/29 | United States | 800,000 | 801,404 | |||||||||||
a senior bond, 144A, 4.50%, 8/15/30 | United States | 3,400,000 | 3,195,991 | |||||||||||
| a | Clear Channel International BV, senior secured note, first lien, 144A, 6.625%, 8/01/25 | United States | 1,700,000 | 1,731,875 | ||||||||||
| a | Clear Channel Outdoor Holdings Inc., 144A, 7.50%, 6/01/29 | United States | 1,100,000 | 1,098,933 | ||||||||||
| a | Clear Channel Worldwide Holdings Inc., senior secured note, first lien, 144A, 5.125%, 8/15/27 | United States | 1,100,000 | 1,090,100 | ||||||||||
| a | Cogent Communications Group Inc., senior secured note, 144A, 3.50%, 5/01/26 | United States | 1,000,000 | 951,365 | ||||||||||
| a | CSC Holdings LLC, senior note, 144A, 7.50%, 4/01/28 | United States | 4,000,000 | 3,937,440 | ||||||||||
Diamond Sports Group LLC/Diamond Sports Finance Co., | ||||||||||||||
a first lien, 144A, 5.375%, 8/15/26 | United States | 1,000,000 | 388,740 | |||||||||||
a senior note, 144A, 6.625%, 8/15/27 | United States | 1,200,000 | 250,140 | |||||||||||
| a | DIRECTV Holdings LLC / DIRECTV Financing Co. Inc., Sr. Secured, 144A, 5.875%, 8/15/27 | United States | 2,100,000 | 2,068,657 | ||||||||||
| a | DISH DBS Corp., senior secured note, 144A, 5.75%, 12/01/28 | United States | 2,000,000 | 1,896,250 | ||||||||||
| a | Everi Holding Inc. Co., 144A, 5.00%, 7/15/29 | United States | 2,100,000 | 1,992,008 | ||||||||||
| a | Match Group Holdings II LLC, senior bond, 144A, 3.625%, 10/01/31 | United States | 500,000 | 448,000 | ||||||||||
| a | Motion Bondco DAC, 144A, 6.625%, 11/15/27 | United Kingdom | 600,000 | 566,634 | ||||||||||
| 136 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Media & Entertainment (continued) | ||||||||||||||
Netflix Inc., | ||||||||||||||
senior bond, 5.75%, 3/01/24 | United States | 600,000 | $ | 630,690 | ||||||||||
senior unsecured, 6.375%, 5/15/29 | United States | 1,800,000 | 2,038,482 | |||||||||||
senior unsecured note, 5.875%, 11/15/28 | United States | 1,400,000 | 1,546,720 | |||||||||||
| a | Northwest Fiber LLC/Northwest Fiber Finance Sub Inc., senior note, 144A, 6.00%, 2/15/28 | United States | 2,000,000 | 1,759,713 | ||||||||||
Sinclair Television Group Inc., | ||||||||||||||
a senior bond, 144A, 5.50%, 3/01/30 | United States | 800,000 | 693,904 | |||||||||||
a senior bond, 144A, 5.125%, 2/15/27 | United States | 700,000 | 636,724 | |||||||||||
| a | Sirius XM Radio Inc., 144A, 4.00%, 7/15/28 | United States | 1,600,000 | 1,522,168 | ||||||||||
Univision Communications Inc., | ||||||||||||||
a senior note, 144A, 6.625%, 6/01/27 | United States | 1,600,000 | 1,677,864 | |||||||||||
a senior secured note, 144A, 4.50%, 5/01/29 | United States | 1,400,000 | 1,334,480 | |||||||||||
| a | Virgin Media Secured Finance PLC, senior secured bond, 144A, 4.50%, 8/15/30 | United Kingdom | 1,000,000 | 933,790 | ||||||||||
|
| |||||||||||||
| 36,053,766 | ||||||||||||||
|
| |||||||||||||
| Pharmaceuticals, Biotechnology & Life Sciences 4.4% | ||||||||||||||
| a | Bausch Health Americas Inc., senior note, 144A, 9.25%, 4/01/26 | United States | 3,900,000 | 3,998,397 | ||||||||||
| a | Bausch Health Cos. Inc., senior secured note, 144A, 4.875%, 6/01/28 | Canada | 2,100,000 | 2,013,595 | ||||||||||
| a | Jazz Securities DAC, senior secured note, 144A, 4.375%, 1/15/29 | United Kingdom | 2,600,000 | 2,522,247 | ||||||||||
Organon & Co./Organon Foreign Debt Co-Issuer BV, | ||||||||||||||
a senior secured note, 144A, 4.125%, 4/30/28 | United States | 1,600,000 | 1,526,400 | |||||||||||
a senior unsecured note, 144A, 5.125%, 4/30/31 | United States | 600,000 | 579,810 | |||||||||||
| a | Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27 | United States | 2,200,000 | 2,056,604 | ||||||||||
Teva Pharmaceutical Finance Netherlands III B.V. 4.75%, 5/09/27 | Israel | 1,300,000 | 1,249,560 | |||||||||||
Teva Pharmaceutical Finance Netherlands III BV, senior bond, 3.15%, 10/01/26 | Israel | 1,000,000 | 907,200 | |||||||||||
|
| |||||||||||||
| 14,853,813 | ||||||||||||||
|
| |||||||||||||
| Retailing 2.8% | ||||||||||||||
| a | Fertitta Entertainment LLC / Fertitta Entertainment Finance Co. Inc., 144A, 6.75%, 1/15/30 | United States | 1,200,000 | 1,105,482 | ||||||||||
Lithia Motors Inc., | ||||||||||||||
a senior note, 144A, 4.625%, 12/15/27 | United States | 1,800,000 | 1,788,831 | |||||||||||
a senior unsecured note, 144A, 3.875%, 6/01/29 | United States | 500,000 | 473,365 | |||||||||||
Macy’s Retail Holdings LLC, | ||||||||||||||
a 144A, 5.875%, 3/15/30 | United States | 1,200,000 | 1,185,204 | |||||||||||
a 144A, 6.125%, 3/15/32 | United States | 1,200,000 | 1,186,596 | |||||||||||
Magic Mergeco Inc., | ||||||||||||||
a senior secured note, 144A, 5.25%, 5/01/28 | United States | 1,200,000 | 1,103,256 | |||||||||||
a senior unsecured note, 144A, 7.875%, 5/01/29 | United States | 1,000,000 | 857,495 | |||||||||||
| a | Papa John’s International Inc., 144A, 3.875%, 9/15/29 | United States | 700,000 | 643,272 | ||||||||||
| a | The Gap Inc., 144A, 3.625%, 10/01/29 | United States | 1,100,000 | 982,272 | ||||||||||
|
| |||||||||||||
| 9,325,773 | ||||||||||||||
|
| |||||||||||||
| Software & Services 1.3% | ||||||||||||||
Gartner Inc., | ||||||||||||||
a senior bond, 144A, 3.75%, 10/01/30 | United States | 1,200,000 | 1,128,390 | |||||||||||
a senior note, 144A, 4.50%, 7/01/28 | United States | 1,000,000 | 997,400 | |||||||||||
| a | Rocket Software Inc., senior note, 144A, 6.50%, 2/15/29 | United States | 2,600,000 | 2,364,583 | ||||||||||
|
| |||||||||||||
| 4,490,373 | ||||||||||||||
|
| |||||||||||||
| Technology Hardware & Equipment 0.8% | ||||||||||||||
| a | CommScope Inc., senior secured note, 144A, 7.125%, 7/01/28 | United States | 2,000,000 | 1,809,000 | ||||||||||
| a | Condor Merger Sub Inc., 144A, 7.375%, 2/15/30 | United States | 800,000 | 768,500 | ||||||||||
|
| |||||||||||||
| 2,577,500 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 137 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Telecommunication Services 2.6% | ||||||||||||||
| a | Altice France Holding SA, senior note, 144A, 10.50%, 5/15/27 | Luxembourg | 1,600,000 | $ | 1,676,320 | |||||||||
| a | Altice France SA, senior note, first lien, 144A, 8.125%, 2/01/27 | France | 1,600,000 | 1,651,504 | ||||||||||
| a | CommScope Technologies LLC, 144A, 5.00%, 3/15/27 | United States | 1,400,000 | 1,218,924 | ||||||||||
Iliad Holding SASU, | ||||||||||||||
a senior secured note, 144A, 6.50%, 10/15/26 | France | 1,300,000 | 1,305,213 | |||||||||||
a senior secured note, 144A, 7.00%, 10/15/28 | France | 1,100,000 | 1,103,438 | |||||||||||
T-Mobile USA Inc., senior bond, 2.875%, 2/15/31 | United States | 1,900,000 | 1,714,750 | |||||||||||
|
| |||||||||||||
| 8,670,149 | ||||||||||||||
|
| |||||||||||||
| Transportation 0.6% | ||||||||||||||
| a | First Student Bidco Inc. / First Transit Parent Inc., Sr. Secured, 144A, 4.00%, 7/31/29 | United States | 2,000,000 | 1,867,970 | ||||||||||
|
| |||||||||||||
| Utilities 4.5% | ||||||||||||||
Calpine Corp., | ||||||||||||||
a first lien, 144A, Senior Secured, 4.50%, 2/15/28 | United States | 1,300,000 | 1,270,360 | |||||||||||
a senior note, 144A, 5.125%, 3/15/28 | United States | 2,000,000 | 1,908,830 | |||||||||||
| a | Clearway Energy Operating LLC, senior bond, 144A, 3.75%, 1/15/32 | United States | 800,000 | 737,560 | ||||||||||
| a | InterGen NV, senior secured note, 144A, 7.00%, 6/30/23 | Netherlands | 1,500,000 | 1,474,103 | ||||||||||
| a | Leeward Renewable Energy Operations LLC, 144A, 4.25%, 7/01/29 | United States | 2,300,000 | 2,160,148 | ||||||||||
| a | Sensata Technologies B.V., senior note, 144A, 4.00%, 4/15/29 | Netherlands | 1,900,000 | 1,812,049 | ||||||||||
Talen Energy Supply LLC, | ||||||||||||||
senior note, 6.50%, 6/01/25 | United States | 1,000,000 | 253,245 | |||||||||||
a senior note, 144A, 7.625%, 6/01/28 | United States | 2,200,000 | 2,041,930 | |||||||||||
| a | TTM Technologies Inc., senior note, 144A, 4.00%, 3/01/29 | United States | 1,400,000 | 1,297,891 | ||||||||||
| a | Vistra Operations Co. LLC, senior note, 144A, 5.50%, 9/01/26 | United States | 2,100,000 | 2,113,755 | ||||||||||
|
| |||||||||||||
| 15,069,871 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $331,950,442) | 315,694,077 | |||||||||||||
|
| |||||||||||||
Senior Floating Rate Interests 2.3% |
| |||||||||||||
| Materials 1.2% | ||||||||||||||
Hexion Holdings Corporation, | ||||||||||||||
c 2022 USD 2nd Lien Term Loan, TBD, zero cpn, 3/02/30 | United States | 1,186,047 | 1,141,570 | |||||||||||
c 2022 USD Term Loan, 5.00%, zero cpn, 3/15/29 | United States | 1,100,000 | 1,078,000 | |||||||||||
| c | PMHC II Inc., 2022 Term Loan B, TBD, zero cpn, 2/01/29 | United States | 1,700,000 | 1,626,330 | ||||||||||
|
| |||||||||||||
| 3,845,900 | ||||||||||||||
|
| |||||||||||||
| Media & Entertainment 0.6% | ||||||||||||||
Diamond Sports Group LLC, 2022 First Priority Term Loan, 9.00%, 5/26/26 | United States | 275,914 | 280,648 | |||||||||||
Fertitta Entertainment LLC, 2022 Term Loan B, 4.50%, 1/27/29 | United States | 1,700,000 | 1,693,736 | |||||||||||
|
| |||||||||||||
| 1,974,384 | ||||||||||||||
|
| |||||||||||||
| Software & Services 0.5% | ||||||||||||||
Athenahealth Inc., | ||||||||||||||
c 2022 Delayed Draw Term loan, TBD, zero cpn, 2/15/29 | United States | 246,377 | 244,221 | |||||||||||
2022 Term Loan B, 4.00%, 2/15/29 | United States | 1,453,623 | 1,440,904 | |||||||||||
|
| |||||||||||||
| 1,685,125 | ||||||||||||||
|
| |||||||||||||
Total Floating Rate Loans (Cost $7,562,934) | 7,505,409 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $339,513,376) | 323,199,486 | |||||||||||||
|
| |||||||||||||
| 138 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty High Yield Corporate ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Short Term Investments 3.0% | ||||||||||||||
| U.S. Government & Agency Securities (Cost $10,000,000) 3.0% | ||||||||||||||
| d | Federal Home Loan Bank Discount Notes, 4/01/22 | 10,000,000 | $ | 10,000,000 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $349,513,376) 99.7% | 333,199,486 | |||||||||||||
Other Assets, less Liabilities 0.3% | 1,086,345 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 334,285,831 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $275,264,138 representing 82.3% of net assets.
bSee Note 11 regarding defaulted securities.
cA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
dThe security was issued on a discount basis with no stated coupon rate.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 139 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty International Aggregate Bond ETF
| Year Ended March 31, | ||||||||||||||||
| 2022 | 2021 | 2020 | 2019a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||
Net asset value, beginning of year | $ | 25.02 | $ | 24.95 | $ | 24.56 | $ | 25.00 | ||||||||
|
| |||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||
Net investment income (loss)c | 0.05 | (0.01 | ) | 0.22 | 0.39 | |||||||||||
Net realized and unrealized gains (losses) | (0.87 | ) | 0.19 | 0.78 | (0.40 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | (0.82 | ) | 0.18 | 1.00 | (0.01 | ) | ||||||||||
|
| |||||||||||||||
| Less distributions from: |
| |||||||||||||||
Net investment income | (0.42 | ) | (0.11 | ) | (0.09 | ) | (0.43 | ) | ||||||||
Net realized gains | (0.13 | ) | — | (0.52 | ) | — | ||||||||||
|
| |||||||||||||||
Total Distributions | (0.55 | ) | (0.11 | ) | (0.61 | ) | (0.43 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of year | $ | 23.65 | $ | 25.02 | $ | 24.95 | $ | 24.56 | ||||||||
|
| |||||||||||||||
Total returnd | (3.35)% | 0.72% | 4.05% | 0.00% | ||||||||||||
| Ratios to average net assetse |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.39% | 0.58% | 3.23% | 2.32% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.25% | 0.25% | 0.28% | 0.35% | ||||||||||||
Net investment income (loss) | 0.21% | (0.03)% | 0.87% | 1.91% | ||||||||||||
| Supplemental data |
| |||||||||||||||
Net assets, end of year (000’s) | $193,968 | $181,405 | $4,989 | $4,912 | ||||||||||||
Portfolio turnover ratef | 24.12% | g | 72.21% | g | 66.78% | g | 50.32% | |||||||||
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 24.12% | 72.21% | 66.78% |
| 140 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty International Aggregate Bond ETF
| Principal Amount* | Value | |||||||||||||
| Foreign Government and Agency Securities 81.6% | ||||||||||||||
| Australia 2.1% | ||||||||||||||
| a | Government of Australia, senior bond, 149, Reg S, 2.25%, 5/21/28 | 1,900,000 | AUD | $ | 1,386,142 | |||||||||
| a | New South Wales Treasury Corp., senior bond, Reg S, 3.00%, 5/20/27 | 1,200,000 | AUD | 904,004 | ||||||||||
| a,b | Queensland Treasury Corp., senior bond, 144A, Reg S, 3.25%, 8/21/29 | 1,200,000 | AUD | 910,924 | ||||||||||
| a | Western Australian Treasury Corp., senior note, 26, Reg S, 3.00%, 10/21/26 | 1,200,000 | AUD | 905,811 | ||||||||||
|
| |||||||||||||
| 4,106,881 | ||||||||||||||
|
| |||||||||||||
| Austria 1.5% | ||||||||||||||
Government of Austria, | ||||||||||||||
a,b senior bond, 144A, Reg S, 1.50%, 2/20/47 | 1,200,000 | EUR | 1,442,955 | |||||||||||
a,b Sr. Unsecured, 144A, Reg S,, 1.20%, 10/20/25 | 1,200,000 | EUR | 1,370,192 | |||||||||||
|
| |||||||||||||
| 2,813,147 | ||||||||||||||
|
| |||||||||||||
| Belgium 3.2% | ||||||||||||||
| a,b | Government of Belgium, unsecured bond, 144A, Reg S, 1.00%, 6/22/31 | 5,500,000 | EUR | 6,156,291 | ||||||||||
|
| |||||||||||||
| Canada 4.5% | ||||||||||||||
Government of Canada, | ||||||||||||||
1.25%, 3/01/25 | 3,800,000 | CAD | 2,948,477 | |||||||||||
1.25%, 6/01/30 | 750,000 | CAD | 549,972 | |||||||||||
5.00%, 6/01/37 | 2,300,000 | CAD | 2,426,834 | |||||||||||
senior bond, 2.00%, 9/01/23 | 2,400,000 | CAD | 1,917,005 | |||||||||||
senior bond, 2.00%, 12/01/51 | 1,100,000 | CAD | 810,163 | |||||||||||
|
| |||||||||||||
| 8,652,451 | ||||||||||||||
|
| |||||||||||||
| China 11.0% | ||||||||||||||
Agricultural Development Bank of China, Series 2008, Unsecured, 3.45%, 9/23/25 | 13,000,000 | CNY | 2,086,457 | |||||||||||
China Development Bank, | ||||||||||||||
senior note, 2003, 3.23%, 1/10/25 | 24,000,000 | CNY | 3,835,737 | |||||||||||
senior note, 2004, 3.43%, 1/14/27 | 25,000,000 | CNY | 4,028,059 | |||||||||||
China Government Bond, | ||||||||||||||
2.64%, 8/13/22 | 24,000,000 | CNY | 3,783,965 | |||||||||||
2.85%, 6/04/27 | 25,000,000 | CNY | 3,967,946 | |||||||||||
Unsecured, 3.03%, 3/11/26 | 12,000,000 | CNY | 1,920,479 | |||||||||||
The Export-Import Bank of China, Series 2003, Unsecured, 2.17%, 4/07/23 | 11,000,000 | CNY | 1,728,838 | |||||||||||
|
| |||||||||||||
| 21,351,481 | ||||||||||||||
|
| |||||||||||||
| Cyprus 1.1% | ||||||||||||||
| a | Government of Cyprus, Reg S, 1.50%, 4/16/27 | 1,900,000 | EUR | 2,105,593 | ||||||||||
|
| |||||||||||||
| France 4.3% | ||||||||||||||
French Republic Government Bond OAT, | ||||||||||||||
a,c Reg S, .01%, 11/25/29 | 2,800,000 | EUR | 2,923,051 | |||||||||||
a Reg S, .75%, 5/25/52 | 2,000,000 | EUR | 1,862,960 | |||||||||||
a Reg S, 1.00%, 11/25/25 | 3,200,000 | EUR | 3,618,269 | |||||||||||
|
| |||||||||||||
| 8,404,280 | ||||||||||||||
|
| |||||||||||||
| Germany 16.9% | ||||||||||||||
Government of Germany, | ||||||||||||||
a Reg S, 4.25%, 7/04/39 | 2,100,000 | EUR | 3,711,414 | |||||||||||
a Reg S, 5.50%, 1/04/31 | 1,100,000 | EUR | 1,745,333 | |||||||||||
a,c senior bond, 180, Reg S, zero cpn, 10/18/24 | 8,500,000 | EUR | 9,394,510 | |||||||||||
a,c senior bond, Reg S, .01%, 8/15/26 | 14,000,000 | EUR | 15,295,870 | |||||||||||
KFW, senior note, 2.05%, 2/16/26 | 300,000,000 | JPY | 2,658,648 | |||||||||||
|
| |||||||||||||
| 32,805,775 | ||||||||||||||
|
| |||||||||||||
| Indonesia 0.1% | ||||||||||||||
Indonesia Treasury Bond, senior bond, 8.25%, 5/15/36 | 3,000,000,000 | IDR | 227,256 | |||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 141 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty International Aggregate Bond ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Foreign Government and Agency Securities (continued) | ||||||||||||||
| Italy 3.1% | ||||||||||||||
Italy Treasury Bond, | ||||||||||||||
a senior bond, Reg S, 1.25%, 12/01/26 | 3,700,000 | EUR | $ | 4,104,912 | ||||||||||
a,b senior unsecured bond, Reg S, .05%, 1/15/23 | 1,800,000 | EUR | 1,997,323 | |||||||||||
|
| |||||||||||||
| 6,102,235 | ||||||||||||||
|
| |||||||||||||
| Japan 19.4% | ||||||||||||||
Development Bank of Japan, senior bond, 2.30%, 3/19/26 | 1,000,000,000 | JPY | 8,906,894 | |||||||||||
Government of Japan, | ||||||||||||||
senior bond, 1.00%, 12/20/35 | 1,300,000,000 | JPY | 11,534,108 | |||||||||||
senior bond, 1.50%, 3/20/33 | 270,000,000 | JPY | 2,514,363 | |||||||||||
Japan Government Five Year Bond, senior bond, 142, 0.10%, 12/20/24 | 1,300,000,000 | JPY | 10,716,898 | |||||||||||
Japan Government Thirty Year Bond, senior bond, 0.40%, 12/20/49 | 550,000,000 | JPY | 3,970,276 | |||||||||||
|
| |||||||||||||
| 37,642,539 | ||||||||||||||
|
| |||||||||||||
| Mexico 0.1% | ||||||||||||||
| d | Mexican Bonos, senior bond, 8.00%, 11/07/47 | 3,900,000 | MXN | 187,106 | ||||||||||
|
| |||||||||||||
| Netherlands 1.5% | ||||||||||||||
| a,b | Government of the Netherlands, 144A, Reg S, 0.50%, 7/15/26 | 2,700,000 | EUR | 3,004,796 | ||||||||||
|
| |||||||||||||
| Romania 1.0% | ||||||||||||||
| a | Government of Romania, senior bond, Reg S, 2.00%, 1/28/32 | 2,100,000 | EUR | 1,937,730 | ||||||||||
|
| |||||||||||||
| Slovenia 1.7% | ||||||||||||||
| a | Slovenia Government Bond, senior bond, Reg S, 0.875%, 7/15/30 | 3,000,000 | EUR | 3,217,849 | ||||||||||
|
| |||||||||||||
| Spain 4.1% | ||||||||||||||
Government of Spain, | ||||||||||||||
c senior note, .01%, 1/31/25 | 3,600,000 | EUR | 3,942,781 | |||||||||||
a,b senior unsecured bond, 144A, Reg S, 1.25%, 10/31/30 | 3,600,000 | EUR | 3,998,083 | |||||||||||
|
| |||||||||||||
| 7,940,864 | ||||||||||||||
|
| |||||||||||||
| e | Supranational 2.2% | |||||||||||||
Asian Development Bank, senior bond, 339-00-1, 2.35%, 6/21/27 | 140,000,000 | JPY | 1,293,960 | |||||||||||
| a | European Investment Bank, senior bond, Reg S, 1.90%, 1/26/26 | 330,000,000 | JPY | 2,910,567 | ||||||||||
|
| |||||||||||||
| 4,204,527 | ||||||||||||||
|
| |||||||||||||
| Sweden 1.2% | ||||||||||||||
Government of Sweden, | ||||||||||||||
a,b 144A, Reg S, 1.50%, 11/13/23 | 11,000,000 | SEK | 1,185,270 | |||||||||||
senior bond, .75%, 5/12/28 | 11,000,000 | SEK | 1,139,982 | |||||||||||
|
| |||||||||||||
| 2,325,252 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 2.6% | ||||||||||||||
| a | United Kingdom Gilt, Reg S, 1.75%, 9/07/37 | 1,250,000 | GBP | 1,627,119 | ||||||||||
| a | United Kingdom Treasury Bond, Reg S, 4.75%, 12/07/30 | 2,100,000 | GBP | 3,485,731 | ||||||||||
|
| |||||||||||||
| 5,112,850 | ||||||||||||||
|
| |||||||||||||
Total Foreign Government and Agency Securities | 158,298,903 | |||||||||||||
|
| |||||||||||||
| Corporate Bonds & Notes 5.8% | ||||||||||||||
| Denmark 0.1% | ||||||||||||||
| a | Nykredit Realkredit AS, secured bond, Reg S, 1.00%, 10/01/50 | 1,067,167 | DKK | 138,380 | ||||||||||
|
| |||||||||||||
| France 0.8% | ||||||||||||||
| a | Air Liquide Finance SA, senior note, Reg S, 1.375%, 4/02/30 | 500,000 | EUR | 558,875 | ||||||||||
| a | Orange SA, senior note, Reg S, 1.375%, 3/20/28 | 1,000,000 | EUR | 1,110,428 | ||||||||||
|
| |||||||||||||
| 1,669,303 | ||||||||||||||
|
| |||||||||||||
| 142 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty International Aggregate Bond ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Germany 1.1% | ||||||||||||||
| a | Aroundtown SA, senior note, Reg S, 1.625%, 1/31/28 | 1,000,000 | EUR | $ | 1,059,715 | |||||||||
| a | Deutsche Telekom AG, senior note, Reg S, 0.875%, 3/25/26 | 500,000 | EUR | 551,905 | ||||||||||
| a,c | Siemens Financieringsmaatschappij NV, senior note, Reg S, 0.01%, 2/20/26 | 500,000 | EUR | 534,303 | ||||||||||
|
| |||||||||||||
| 2,145,923 | ||||||||||||||
|
| |||||||||||||
| Romania 0.2% | ||||||||||||||
| a | Globalworth Real Estate Investments Ltd., senior note, Reg S, 3.00%, 3/29/25 | 300,000 | EUR | 337,074 | ||||||||||
|
| |||||||||||||
| United Kingdom 0.5% | ||||||||||||||
| a | RELX Finance BV, senior note, Reg S, 0.50%, 3/10/28 | 1,000,000 | EUR | 1,041,848 | ||||||||||
|
| |||||||||||||
| United States 3.1% | ||||||||||||||
AbbVie Inc., senior note, 1.375%, 5/17/24 | 500,000 | EUR | 559,311 | |||||||||||
Air Products and Chemicals Inc., senior note, 0.50%, 5/05/28 | 1,000,000 | EUR | 1,039,792 | |||||||||||
Apple Inc., senior bond, 1.625%, 11/10/26 | 500,000 | EUR | 574,470 | |||||||||||
AT&T Inc., senior note, 0.25%, 3/04/26 | 1,000,000 | EUR | 1,069,829 | |||||||||||
| a | Schlumberger Finance France SAS, senior note, Reg S, 1.00%, 2/18/26 | 500,000 | EUR | 550,442 | ||||||||||
Stryker Corp., senior note, 0.25%, 12/03/24 | 1,000,000 | EUR | 1,086,385 | |||||||||||
The Procter & Gamble Co., senior note, 0.50%, 10/25/24 | 500,000 | EUR | 553,636 | |||||||||||
Verizon Communications Inc., senior note, 0.875%, 4/02/25 | 500,000 | EUR | 552,862 | |||||||||||
|
| |||||||||||||
| 5,986,727 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $11,858,900) | 11,319,255 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 169,618,158 | |||||||||||||
|
| |||||||||||||
| Short Term Investments 2.9% | ||||||||||||||
| U.S. Government & Agency Securities (Cost $5,520,000) 2.9% | ||||||||||||||
| c | Federal Home Loan Bank Discount Notes, 4/01/22 | 5,520,000 | 5,520,000 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $190,792,264) 90.3% | 175,138,158 | |||||||||||||
Other Assets, less Liabilities 9.7% | 18,829,647 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 193,967,805 | ||||||||||||
|
| |||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $87,085,669, representing 44.9% of net assets.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $18,068,511, representing 9.3% of net assets.
cThe security was issued on a discount basis with no stated coupon rate.
dPrincipal amount is stated in 100 Mexican Peso Units.
eA supranational organization is an entity formed by two or more central governments through international treaties.
| franklintempleton.com | Annual Report | 143 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty International Aggregate Bond ETF (continued)
At March 31, 2022 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
| OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar | CITI | Sell | 1,000,000 | $ | 721,816 | 5/09/22 | $ | — | $ | (28,372 | ) | |||||||||||||||||
Australian Dollar | CITI | Sell | 5,265,000 | 3,767,555 | 5/09/22 | — | (182,183 | ) | ||||||||||||||||||||
Canadian Dollar | CITI | Sell | 2,000,000 | 1,602,299 | 5/09/22 | 499 | — | |||||||||||||||||||||
Canadian Dollar | CITI | Sell | 7,620,000 | 6,020,822 | 5/09/22 | — | (82,035 | ) | ||||||||||||||||||||
Danish Krone | CITI | Sell | 1,141,000 | 173,917 | 5/09/22 | 3,572 | — | |||||||||||||||||||||
Euro | CITI | Buy | 51,050 | 18,300,000 | 5/09/22 | 1,803 | — | |||||||||||||||||||||
Euro | CITI | Sell | 15,500,000 | 17,637,777 | 5/09/22 | 422,491 | — | |||||||||||||||||||||
Euro | CITI | Sell | 64,670,000 | 73,313,469 | 5/09/22 | 1,486,855 | — | |||||||||||||||||||||
Great British Pound | CITI | Sell | 300,000 | 408,480 | 5/09/22 | 14,045 | — | |||||||||||||||||||||
Great British Pound | CITI | Sell | 9,245,968 | 12,525,976 | 5/09/22 | 369,525 | — | |||||||||||||||||||||
Hungarian Forint | CITI | Buy | 22,203,286 | 70,217 | 5/09/22 | — | (3,612 | ) | ||||||||||||||||||||
Indonesian Rupiah | CITI | Sell | 2,825,000,000 | 195,311 | 5/09/22 | — | (1,105 | ) | ||||||||||||||||||||
Japanese Yen | CITI | Sell | 1,000,000,000 | 8,744,468 | 5/09/22 | 504,058 | — | |||||||||||||||||||||
Japanese Yen | CITI | Sell | 4,499,000,000 | 39,337,755 | 5/09/22 | 2,264,153 | — | |||||||||||||||||||||
Mexican Peso | CITI | Sell | 7,600,000 | 363,894 | 5/09/22 | — | (15,341 | ) | ||||||||||||||||||||
Polish Zloty | CITI | Sell | 2,300,000 | 572,432 | 5/09/22 | 24,783 | — | |||||||||||||||||||||
Polish Zloty | CITI | Sell | 5,750,000 | 1,423,091 | 5/09/22 | 53,966 | — | |||||||||||||||||||||
South African Rand | CITI | Sell | 470,000 | 30,261 | 5/09/22 | — | (1,741 | ) | ||||||||||||||||||||
Swedish Krona | CITI | Sell | 4,000,000 | 439,036 | 5/09/22 | 10,718 | — | |||||||||||||||||||||
Swedish Krona | CITI | Sell | 19,500,000 | 2,121,848 | 5/09/22 | 33,797 | — | |||||||||||||||||||||
Chinese Yuan | CITI | Sell | 21,000,000 | 3,283,893 | 5/10/22 | — | (15,216 | ) | ||||||||||||||||||||
Chinese Yuan | CITI | Sell | 112,700,000 | 17,598,678 | 5/10/22 | — | (106,537 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 5,190,265 | $ | (436,142 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 4,754,123 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
See Note 12 regarding other derivative information.
See Abbreviations on page 240.
| 144 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Investment Grade Corporate ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 25.47 | $ | 24.22 | $ | 24.09 | $ | 23.97 | $ | 24.21 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsa: |
| |||||||||||||||||||
Net investment incomeb | 0.58 | 0.60 | 0.73 | 0.82 | 0.80 | |||||||||||||||
Net realized and unrealized gains (losses) | (1.63 | ) | 1.71 | 0.27 | 0.21 | (0.22 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (1.05 | ) | 2.31 | 1.00 | 1.03 | 0.58 | ||||||||||||||
|
| |||||||||||||||||||
| Less distributions from: |
| |||||||||||||||||||
Net investment income | (0.66 | ) | (0.83 | ) | (0.81 | ) | (0.91 | ) | (0.82 | ) | ||||||||||
Net realized gains | (0.05 | ) | (0.23 | ) | (0.06 | ) | — | — | ||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.71 | ) | (1.06 | ) | (0.87 | ) | (0.91 | ) | (0.82 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 23.71 | $ | 25.47 | $ | 24.22 | $ | 24.09 | $ | 23.97 | ||||||||||
|
| |||||||||||||||||||
Total returnc | (4.30)% | 9.43% | 4.02% | 4.46% | 2.38% | |||||||||||||||
| Ratios to average net assetsd |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.42% | 0.50% | 0.58% | 1.07% | 1.04% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.35% | 0.35% | 0.35% | 0.35% | 0.37% | |||||||||||||||
Net investment income | 2.27% | 2.27% | 2.86% | 3.49% | 3.27% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $981,602 | $1,018,639 | $553,338 | $18,065 | $39,554 | |||||||||||||||
Portfolio turnover ratee | 36.76% | f | 53.32% | f | 52.17% | f | 22.02% | 63.14% | ||||||||||||
aThe 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 and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal 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.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| fPortfolio turnover rate excluding cash creations was as follows: | 36.76% | 53.32% | 52.17% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 145 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty Investment Grade Corporate ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 95.5% | ||||||||||||||
| Aerospace & Defense 1.8% | ||||||||||||||
| a | Huntington Ingalls Industries Inc., 144A, 0.67%, 8/16/23 | United States | 5,000,000 | $ | 4,854,194 | |||||||||
Lockheed Martin Corp., senior note, 4.07%, 12/15/42 | United States | 4,100,000 | 4,395,222 | |||||||||||
The Boeing Co., | ||||||||||||||
senior unsecured note, 3.65%, 3/01/47 | United States | 7,010,000 | 5,977,253 | |||||||||||
Sr. Unsecured, 5.15%, 5/01/30 | United States | 2,600,000 | 2,776,793 | |||||||||||
|
| |||||||||||||
| 18,003,462 | ||||||||||||||
|
| |||||||||||||
| Air Freight & Logistics 1.0% | ||||||||||||||
FedEx Corp., senior bond, 4.75%, 11/15/45 | United States | 8,950,000 | 9,574,911 | |||||||||||
|
| |||||||||||||
| Airlines 2.2% | ||||||||||||||
| a | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 4.50%, 10/20/25 | United States | 13,900,000 | 13,991,693 | ||||||||||
United Airlines, senior bond, 2016-1 Class A, 3.45%, 1/07/30 | United States | 3,812,779 | 3,561,347 | |||||||||||
United Airlines 2020-1 Class B Pass Through Trust, 2020-1 Class B, 4.875%, 7/15/27 | United States | 4,320,000 | 4,269,710 | |||||||||||
|
| |||||||||||||
| 21,822,750 | ||||||||||||||
|
| |||||||||||||
| Banks 24.6% | ||||||||||||||
| a | Banco de Chile, senior unsecured, 144A, 2.99%, 12/09/31 | Chile | 2,400,000 | 2,218,212 | ||||||||||
Banco Santander SA, sub. note, 2.749%, 12/03/30 | Spain | 9,300,000 | 8,198,608 | |||||||||||
Bancolombia SA, senior note, 3.00%, 1/29/25 | Colombia | 8,200,000 | 7,985,160 | |||||||||||
Bank of America Corp., | ||||||||||||||
Senior unsecured, 2.676%, 6/19/41 | United States | 5,000,000 | 4,237,429 | |||||||||||
senior unsecured note, 2.592%, 4/29/31 | United States | 5,900,000 | 5,453,251 | |||||||||||
sub. bond, 4.183%, 11/25/27 | United States | 12,300,000 | 12,555,636 | |||||||||||
| a | BNP Paribas SA, senior note, 144A, FRN thereafter, 4.705%, 1/10/25 | France | 11,700,000 | 11,951,528 | ||||||||||
| a | BPCE SA, senior note, 144A, 5.70%, 10/22/23 | France | 11,300,000 | 11,693,803 | ||||||||||
Citigroup Inc., | ||||||||||||||
3.057%, 1/25/33 | United States | 10,000,000 | 9,353,971 | |||||||||||
senior bond, FRN thereafter, 3.668%, 7/24/28 | United States | 7,100,000 | 7,110,068 | |||||||||||
| a | Credit Agricole SA, subordinated, 144A, 4.375%, 3/17/25 | France | 12,000,000 | 12,152,696 | ||||||||||
Deutsche Bank AG, Senior unsecured, 0.898%, 5/28/24 | Germany | 5,500,000 | 5,240,822 | |||||||||||
Deutsche Bank AG/New York NY, senior note, FRN thereafter, 2.129%, 11/24/26 | Germany | 8,000,000 | 7,425,232 | |||||||||||
Goldman Sachs Group Inc. 3.436%, 2/24/43 | United States | 7,000,000 | 6,499,866 | |||||||||||
HSBC Holdings PLC, senior note, FRN thereafter, 1.645%, 4/18/26 | United Kingdom | 11,500,000 | 10,832,462 | |||||||||||
JPMorgan Chase & Co., | ||||||||||||||
2.963%, 1/25/33 | United States | 5,000,000 | 4,718,948 | |||||||||||
senior bond, FRN thereafter, 2.522%, 4/22/31 | United States | 8,000,000 | 7,425,521 | |||||||||||
sub. bond, 4.25%, 10/01/27 | United States | 7,100,000 | 7,340,987 | |||||||||||
Morgan Stanley, | ||||||||||||||
senior unsecured note, FRN thereafter, .731%, 4/05/24 | United States | 5,150,000 | 5,046,614 | |||||||||||
senior unsecured note, Series GMTN, to 1/22/24 FRN thereafter, .791%, 1/22/25 | United States | 5,000,000 | 4,802,970 | |||||||||||
| a | National Australia Bank Ltd., sub. note, 144A, 2.332%, 8/21/30 | Australia | 13,800,000 | 12,023,838 | ||||||||||
NatWest Group PLC, subordinated, 5.125%, 5/28/24 | United Kingdom | 5,300,000 | 5,463,621 | |||||||||||
Standard Chartered PLC, | ||||||||||||||
a senior note, 144A, FRN thereafter, 1.456%, 1/14/27 | United Kingdom | 10,000,000 | 9,105,770 | |||||||||||
a Sr. Unsecured, 144A, 2.608%, 1/12/28 | United Kingdom | 5,000,000 | 4,680,167 | |||||||||||
SVB Financial Group, | ||||||||||||||
a senior note, 3.125%, 6/05/30 | United States | 7,500,000 | 7,219,209 | |||||||||||
a Series D, 4.25%, 11/15/26 | United States | 5,000,000 | 4,634,375 | |||||||||||
The PNC Financial Services Group Inc., Junior Subordinated Note, Series T, to 9/15/26 FRN thereafter, 3.40%, 9/15/26 | United States | 11,000,000 | 9,933,000 | |||||||||||
Truist Bank, sub. note, 3.30%, 5/15/26 | United States | 6,400,000 | 6,454,882 | |||||||||||
Truist Financial Corp., sub. bond, 3.875%, 3/19/29 | United States | 7,000,000 | 7,141,767 | |||||||||||
| a | UniCredit SpA, Senior unsecured, 144A, 1.982%, 6/03/27 | Italy | 9,800,000 | 8,846,651 | ||||||||||
| 146 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Banks (continued) | ||||||||||||||
Wachovia Corp., Subordinated, 5.50%, 8/01/35 | United States | 3,700,000 | $ | 4,181,429 | ||||||||||
Wells Fargo & Co., sub. bond, 4.75%, 12/07/46 | United States | 8,669,000 | 9,460,376 | |||||||||||
|
| |||||||||||||
| 241,388,869 | ||||||||||||||
|
| |||||||||||||
| Beverages 1.6% | ||||||||||||||
Anheuser-Busch Companies LLC/Anheuser-Busch InBev Worldwide Inc. 4.90%, 2/01/46 | United States | 5,300,000 | 5,902,840 | |||||||||||
Anheuser-Busch InBev Worldwide Inc., senior bond, 5.80%, 1/23/59 | Belgium | 6,000,000 | 7,605,909 | |||||||||||
Constellation Brands Inc., senior unsecured note, 2.25%, 8/01/31 | United States | 3,000,000 | 2,646,604 | |||||||||||
|
| |||||||||||||
| 16,155,353 | ||||||||||||||
|
| |||||||||||||
| Biotechnology 0.4% | ||||||||||||||
AbbVie Inc., Senior unsecured, 4.25%, 11/21/49 | United States | 3,000,000 | 3,124,553 | |||||||||||
Bio-Rad Laboratories Inc. 3.30%, 3/15/27 | United States | 1,100,000 | 1,084,198 | |||||||||||
|
| |||||||||||||
| 4,208,751 | ||||||||||||||
|
| |||||||||||||
| Building Products 1.0% | ||||||||||||||
MDC Holdings Inc. 2.50%, 1/15/31 | United States | 10,725,000 | 9,379,960 | |||||||||||
|
| |||||||||||||
| Capital Markets 3.6% | ||||||||||||||
Brixmor Operating Partnership LP, senior bond, 4.125%, 5/15/29 | United States | 3,200,000 | 3,286,318 | |||||||||||
Credit Suisse Group AG, | ||||||||||||||
a senior bond,144A, FRN thereafter, 3.869%, 1/12/29 | Switzerland | 3,900,000 | 3,811,177 | |||||||||||
a senior note, 144A, FRN thereafter, 2.997%, 12/14/23 | Switzerland | 8,400,000 | 8,402,214 | |||||||||||
Morgan Stanley, senior note, 1.794%, 2/13/32 | United States | 9,900,000 | 8,525,978 | |||||||||||
The Goldman Sachs Group Inc., | ||||||||||||||
senior note, FRN thereafter, 2.908%, 6/05/23 | United States | 3,250,000 | 3,253,500 | |||||||||||
Series V, 4.125%, 11/10/26 | United States | 4,000,000 | 3,756,000 | |||||||||||
sub. note, 4.25%, 10/21/25 | United States | 4,175,000 | 4,281,215 | |||||||||||
|
| |||||||||||||
| 35,316,402 | ||||||||||||||
|
| |||||||||||||
| Chemicals 0.9% | ||||||||||||||
| a | Alpek SAB de CV, 144A, 3.25%, 2/25/31 | Mexico | 3,200,000 | 2,922,848 | ||||||||||
CF Industries Inc. 5.15%, 3/15/34 | United States | 5,300,000 | 5,898,794 | |||||||||||
|
| |||||||||||||
| 8,821,642 | ||||||||||||||
|
| |||||||||||||
| Computers & Peripherals 0.4% | ||||||||||||||
Apple Inc., Sr. Unsecured, 2.80%, 2/08/61 | United States | 4,100,000 | 3,538,426 | |||||||||||
|
| |||||||||||||
| Diversified Financial Services 2.5% | ||||||||||||||
AerCap Ireland Capital DAC / AerCap Global Aviation Trust 3.00%, 10/29/28 | Ireland | 7,500,000 | 6,930,959 | |||||||||||
Air Lease Corp., senior unsecured note, 0.80%, 8/18/24 | United States | 7,000,000 | 6,599,297 | |||||||||||
American Express Co. 2.25%, 3/04/25 | United States | 6,000,000 | 5,897,931 | |||||||||||
Aon PLC 4.60%, 6/14/44 | Ireland | 5,000,000 | 5,264,552 | |||||||||||
|
| |||||||||||||
| 24,692,739 | ||||||||||||||
|
| |||||||||||||
| Diversified Telecommunication Services 3.7% | ||||||||||||||
AT&T Inc., Senior unsecured, 3.50%, 6/01/41 | United States | 12,400,000 | 11,449,105 | |||||||||||
T-Mobile USA Inc., senior bond, 2.875%, 2/15/31 | United States | 11,000,000 | 9,927,500 | |||||||||||
Verizon Communications Inc., senior bond, 3.40%, 3/22/41 | United States | 16,200,000 | 15,229,546 | |||||||||||
|
| |||||||||||||
| 36,606,151 | ||||||||||||||
|
| |||||||||||||
| Electric Utilities 8.5% | ||||||||||||||
| a | Comision Federal de Electricidad, 144A, 3.348%, 2/09/31 | Mexico | 5,000,000 | 4,397,800 | ||||||||||
Commonwealth Edison Co., first mortgage, Secured, 4.00%, 3/01/48 | United States | 3,500,000 | 3,734,059 | |||||||||||
Dominion Energy Inc., senior unsecured note, Series B, 3.30%, 4/15/41 | United States | 4,000,000 | 3,640,850 | |||||||||||
DTE Electric Co., Series B, 3.65%, 3/01/52 | United States | 4,000,000 | 4,055,420 | |||||||||||
Duke Energy Corp., senior bond, 4.80%, 12/15/45 | United States | 4,115,000 | 4,419,716 | |||||||||||
| franklintempleton.com | Annual Report | 147 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Electric Utilities (continued) | ||||||||||||||
Duke Energy Progress LLC, senior bond, 2.50%, 8/15/50 | United States | 6,150,000 | $ | 5,019,112 | ||||||||||
| a | EDP Finance BV, senior note, 144A, 1.71%, 1/24/28 | Netherlands | 8,000,000 | 7,069,277 | ||||||||||
| a | Enel Finance International NV, senior note, 144A, 3.625%, 5/25/27 | Italy | 8,000,000 | 7,966,294 | ||||||||||
Exelon Corp., senior bond, 4.05%, 4/15/30 | United States | 10,000,000 | 10,336,368 | |||||||||||
Georgia Power Co., | ||||||||||||||
senior bond, 4.30%, 3/15/42 | United States | 3,745,000 | 3,796,881 | |||||||||||
senior bond, 4.75%, 9/01/40 | United States | 5,898,000 | 6,239,191 | |||||||||||
Public Service Electric and Gas Co., First Mortgage, 3.15%, 1/01/50 | United States | 3,150,000 | 2,936,405 | |||||||||||
Virginia Electric and Power Co., senior note, 3.50%, 3/15/27 | United States | 7,100,000 | 7,226,298 | |||||||||||
| a | Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24 | United States | 12,400,000 | 12,291,603 | ||||||||||
|
| |||||||||||||
| 83,129,274 | ||||||||||||||
|
| |||||||||||||
| Electronic Equipment, Instruments & Components 1.6% | ||||||||||||||
Flex Ltd., senior note, 3.75%, 2/01/26 | Singapore | 4,500,000 | 4,505,545 | |||||||||||
Jabil Inc., senior note, 3.60%, 1/15/30 | United States | 5,400,000 | 5,240,647 | |||||||||||
Teledyne FLIR LLC, senior unsecured note, 2.50%, 8/01/30 | United States | 6,500,000 | 5,929,882 | |||||||||||
|
| |||||||||||||
| 15,676,074 | ||||||||||||||
|
| |||||||||||||
| Energy Equipment & Services 1.6% | ||||||||||||||
Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc., senior bond, 4.08%, 12/15/47 | United States | 2,590,000 | 2,627,208 | |||||||||||
Energy Transfer LP, Sr. Unsecured, 4.90%, 3/15/35 | United States | 2,700,000 | 2,738,939 | |||||||||||
| a | Schlumberger Holdings Corp., senior bond, 144A, 4.30%, 5/01/29 | United States | 6,750,000 | 6,968,748 | ||||||||||
The Williams Companies Inc., Sr. Unsecured, 3.50%, 10/15/51 | United States | 3,750,000 | 3,295,623 | |||||||||||
|
| |||||||||||||
| 15,630,518 | ||||||||||||||
|
| |||||||||||||
| Entertainment 0.4% | ||||||||||||||
| a | Magallanes Inc., 144A, 5.05%, 3/15/42 | United States | 4,100,000 | 4,190,625 | ||||||||||
|
| |||||||||||||
| Equity Real Estate Investment Trusts (REITs) 2.2% | ||||||||||||||
Essex Portfolio LP, senior bond, 2.65%, 3/15/32 | United States | 10,000,000 | 9,162,980 | |||||||||||
| a | Global Net Lease Inc./Global Net Lease Operating Partnership LP, senior note, 144A, 3.75%, 12/15/27 | United States | 3,400,000 | 3,133,903 | ||||||||||
Simon Property Group LP, senior note, 3.375%, 12/01/27 | United States | 9,000,000 | 8,956,882 | |||||||||||
|
| |||||||||||||
| 21,253,765 | ||||||||||||||
|
| |||||||||||||
| Food & Staples Retailing 1.7% | ||||||||||||||
| a | Bimbo Bakeries USA Inc., 144A, 4.00%, 5/17/51 | United States | 2,700,000 | 2,525,021 | ||||||||||
JBS Finance Luxembourg Sarl, | ||||||||||||||
a 144A, 2.50%, 1/15/27 | United States | 4,400,000 | 4,095,410 | |||||||||||
a 144A, 3.625%, 1/15/32 | Luxembourg | 5,200,000 | 4,769,648 | |||||||||||
The Kroger Co., senior bond, 4.45%, 2/01/47 | United States | 5,000,000 | 5,329,666 | |||||||||||
|
| |||||||||||||
| 16,719,745 | ||||||||||||||
|
| |||||||||||||
| Health Care Providers & Services 4.4% | ||||||||||||||
Cigna Corp., senior bond, 4.90%, 12/15/48 | United States | 7,500,000 | 8,440,463 | |||||||||||
Cigna Holding Co. 3.05%, 10/15/27 | United States | 1,100,000 | 1,092,065 | |||||||||||
CVS Health Corp., senior bond, 5.30%, 12/05/43 | United States | 9,000,000 | 10,505,923 | |||||||||||
HCA Inc., senior secured bond, first lien, 4.50%, 2/15/27 | United States | 9,490,000 | 9,815,599 | |||||||||||
STERIS Irish FinCo UnLtd Co. 3.75%, 3/15/51 | Ireland | 6,600,000 | 6,163,562 | |||||||||||
UnitedHealth Group Inc., Senior unsecured, 3.05%, 5/15/41 | United States | 8,200,000 | 7,656,148 | |||||||||||
|
| |||||||||||||
| 43,673,760 | ||||||||||||||
|
| |||||||||||||
| Hotels, Restaurants & Leisure 2.7% | ||||||||||||||
Las Vegas Sands Corp., | ||||||||||||||
Senior unsecured, 3.20%, 8/08/24 | United States | 12,000,000 | 11,465,158 | |||||||||||
Senior unsecured, 3.90%, 8/08/29 | United States | 6,000,000 | 5,509,628 | |||||||||||
| 148 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Hotels, Restaurants & Leisure (continued) | ||||||||||||||
Marriott International Inc., senior bond, 3.125%, 6/15/26 | United States | 10,000,000 | $ | 9,895,489 | ||||||||||
|
| |||||||||||||
| 26,870,275 | ||||||||||||||
|
| |||||||||||||
| Household Durables 0.8% | ||||||||||||||
Mohawk Industries Inc., senior bond, 3.625%, 5/15/30 | United States | 7,500,000 | 7,377,724 | |||||||||||
|
| |||||||||||||
| Household Products 2.0% | ||||||||||||||
| a | Kimberly-Clark de Mexico SAB de CV, senior bond, 144A, 2.431%, 7/01/31 | Mexico | 10,375,000 | 9,415,105 | ||||||||||
The Procter & Gamble Co., senior bond, 3.00%, 3/25/30 | United States | 10,000,000 | 10,068,313 | |||||||||||
|
| |||||||||||||
| 19,483,418 | ||||||||||||||
|
| |||||||||||||
| Insurance 2.4% | ||||||||||||||
Aflac Inc., senior bond, 4.75%, 1/15/49 | United States | 7,000,000 | 8,028,454 | |||||||||||
Arch Capital Group Ltd., senior bond, 3.635%, 6/30/50 | Bermuda | 5,800,000 | 5,331,632 | |||||||||||
Berkshire Hathaway Finance Corp. 3.85%, 3/15/52 | United States | 1,650,000 | 1,689,354 | |||||||||||
MetLife Inc., junior sub. bond, 6.40%, 12/15/66 | United States | 4,910,000 | 5,311,638 | |||||||||||
The Allstate Corp., senior bond, 4.20%, 12/15/46 | United States | 3,100,000 | 3,311,588 | |||||||||||
|
| |||||||||||||
| 23,672,666 | ||||||||||||||
|
| |||||||||||||
| Interactive Media & Services 1.2% | ||||||||||||||
| a | Tencent Holdings Ltd., senior note, 144A, 3.595%, 1/19/28 | China | 12,000,000 | 11,713,227 | ||||||||||
|
| |||||||||||||
| Internet & Direct Marketing Retail 1.7% | ||||||||||||||
Alibaba Group Holding Ltd., | ||||||||||||||
senior note, 2.125%, 2/09/31 | China | 3,600,000 | 3,135,032 | |||||||||||
senior note, 3.40%, 12/06/27 | China | 8,000,000 | 7,859,170 | |||||||||||
Amazon.com Inc., senior bond, 2.70%, 6/03/60 | United States | 6,400,000 | 5,304,903 | |||||||||||
|
| |||||||||||||
| 16,299,105 | ||||||||||||||
|
| |||||||||||||
| IT Services 1.0% | ||||||||||||||
Fiserv Inc., senior bond, 4.40%, 7/01/49 | United States | 9,200,000 | 9,528,511 | |||||||||||
|
| |||||||||||||
| Media 2.6% | ||||||||||||||
AT&T Inc., Sr. Unsecured, 3.55%, 9/15/55 | United States | 5,100,000 | 4,515,481 | |||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, | ||||||||||||||
senior bond, 2.80%, 4/01/31 | United States | 8,450,000 | 7,628,635 | |||||||||||
senior secured note, 3.50%, 3/01/42 | United States | 3,500,000 | 2,903,522 | |||||||||||
Comcast Corp., senior bond, 4.95%, 10/15/58 | United States | 6,000,000 | 7,131,037 | |||||||||||
Fox Corp., senior bond, 5.476%, 1/25/39 | United States | 3,000,000 | 3,404,558 | |||||||||||
|
| |||||||||||||
| 25,583,233 | ||||||||||||||
|
| |||||||||||||
| Metals & Mining 0.5% | ||||||||||||||
| a | Antofagasta PLC, senior note, 144A, 2.375%, 10/14/30 | United Kingdom | 5,000,000 | 4,434,975 | ||||||||||
|
| |||||||||||||
| Multi-Utilities 1.1% | ||||||||||||||
Berkshire Hathaway Energy Co., | ||||||||||||||
senior bond, 3.80%, 7/15/48 | United States | 8,600,000 | 8,532,684 | |||||||||||
Sr. Unsecured, 5.15%, 11/15/43 | United States | 2,000,000 | 2,284,763 | |||||||||||
|
| |||||||||||||
| 10,817,447 | ||||||||||||||
|
| |||||||||||||
| Oil, Gas & Consumable Fuels 5.8% | ||||||||||||||
Aker BP ASA, | ||||||||||||||
a senior bond, 144A, 4.00%, 1/15/31 | Norway | 3,350,000 | 3,342,744 | |||||||||||
a senior note, 144A, 3.75%, 1/15/30 | Norway | 5,000,000 | 4,899,581 | |||||||||||
Canadian Natural Resources Ltd., senior bond, 3.85%, 6/01/27 | Canada | 7,700,000 | 7,798,916 | |||||||||||
Chevron Corp., senior bond, 3.078%, 5/11/50 | United States | 1,200,000 | 1,136,341 | |||||||||||
Devon Energy Corp., Sr. Unsecured, 4.75%, 5/15/42 | United States | 2,700,000 | 2,863,052 | |||||||||||
| a | EASTERN GAS TRAN, Senior unsecured, 144A, 3.90%, 11/15/49 | United States | 8,000,000 | 7,842,838 | ||||||||||
| franklintempleton.com | Annual Report | 149 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Oil, Gas & Consumable Fuels (continued) | ||||||||||||||
Energy Transfer LP, Sr. Unsecured, 5.15%, 3/15/45 | United States | 3,800,000 | $ | 3,848,184 | ||||||||||
Exxon Mobil Corp., | ||||||||||||||
senior bond, 3.567%, 3/06/45 | United States | 5,000,000 | 4,865,088 | |||||||||||
Sr. Unsecured, 3.452%, 4/15/51 | United States | 5,000,000 | 4,872,038 | |||||||||||
Phillips 66 3.30%, 3/15/52 | United States | 3,600,000 | 3,176,970 | |||||||||||
TransCanada PipeLines Ltd., | ||||||||||||||
senior bond, 4.25%, 5/15/28 | Canada | 8,200,000 | 8,531,700 | |||||||||||
senior note, 6.10%, 6/01/40 | Canada | 3,400,000 | 4,188,144 | |||||||||||
|
| |||||||||||||
| 57,365,596 | ||||||||||||||
|
| |||||||||||||
| Paper & Forest Products 0.5% | ||||||||||||||
Suzano Austria GmbH, senior bond, 3.75%, 1/15/31 | Austria | 5,000,000 | 4,716,100 | |||||||||||
|
| |||||||||||||
| Pharmaceuticals 2.4% | ||||||||||||||
AbbVie Inc., Senior unsecured, 4.05%, 11/21/39 | United States | 5,400,000 | 5,564,373 | |||||||||||
Bristol-Myers Squibb Co., | ||||||||||||||
senior bond, 4.125%, 6/15/39 | United States | 4,459,000 | 4,804,345 | |||||||||||
senior bond, 5.00%, 8/15/45 | United States | 3,100,000 | 3,665,696 | |||||||||||
Takeda Pharmaceutical Co. Ltd., Senior unsecured, 3.175%, 7/09/50 | Japan | 10,800,000 | 9,482,161 | |||||||||||
|
| |||||||||||||
| 23,516,575 | ||||||||||||||
|
| |||||||||||||
| Real Estate Management & Development 0.3% | ||||||||||||||
ERP Operating LP, senior bond, 4.50%, 7/01/44 | United States | 3,000,000 | 3,272,443 | |||||||||||
|
| |||||||||||||
| Road & Rail 0.8% | ||||||||||||||
Burlington Northern Santa Fe LLC, Sr. Unsecured, 5.75%, 5/01/40 | United States | 4,800,000 | 6,002,882 | |||||||||||
| a | SMBC Aviation Capital Finance DAC, 144A, 1.90%, 10/15/26 | Ireland | 2,000,000 | 1,790,040 | ||||||||||
|
| |||||||||||||
| 7,792,922 | ||||||||||||||
|
| |||||||||||||
| Software 0.7% | ||||||||||||||
Microsoft Corp., senior bond, 2.675%, 6/01/60 | United States | 3,600,000 | 3,116,340 | |||||||||||
ServiceNow Inc., senior bond, 1.40%, 9/01/30 | United States | 5,000,000 | 4,255,199 | |||||||||||
|
| |||||||||||||
| 7,371,539 | ||||||||||||||
|
| |||||||||||||
| Specialty Retail 2.8% | ||||||||||||||
AutoZone Inc., senior bond, 1.65%, 1/15/31 | United States | 4,000,000 | �� | 3,415,568 | ||||||||||
| a | GSK Consumer Healthcare Capital US LLC, 144A, 3.375%, 3/24/27 | United States | 5,300,000 | 5,305,893 | ||||||||||
Home Depot Inc. 3.625%, 4/15/52 | United States | 3,900,000 | 3,877,624 | |||||||||||
Lowe’s Cos Inc. 4.25%, 4/01/52 | United States | 8,000,000 | 8,287,446 | |||||||||||
Nordstrom Inc., | ||||||||||||||
senior unsecured note, 4.25%, 8/01/31 | United States | 1,600,000 | 1,461,128 | |||||||||||
senior unsecured note, 4.375%, 4/01/30 | United States | 4,000,000 | 3,743,800 | |||||||||||
Target Corp. 2.95%, 1/15/52 | United States | 1,000,000 | 921,515 | |||||||||||
|
| |||||||||||||
| 27,012,974 | ||||||||||||||
|
| |||||||||||||
| Tobacco 1.5% | ||||||||||||||
Imperial Brands Finance PLC, | ||||||||||||||
a senior bond, 144A, 3.875%, 7/26/29 | United Kingdom | 3,400,000 | 3,339,574 | |||||||||||
a senior note, 144A, 4.25%, 7/21/25 | United Kingdom | 11,765,000 | 11,878,946 | |||||||||||
|
| |||||||||||||
| 15,218,520 | ||||||||||||||
|
| |||||||||||||
| Wireless Telecommunication Services 0.6% | ||||||||||||||
| a | Sprint Spectrum Co. LLC, senior secured bond, first lien, 144A, 5.152%, 9/20/29 | United States | 5,500,000 | 5,796,722 | ||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $1,009,528,337) | 937,627,149 | |||||||||||||
|
| |||||||||||||
| 150 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Discount Notes 0.2% | ||||||||||||||
U.S. Treasury Note 0.125%, 10/15/23 | United States | 2,000,000 | $ | 1,938,789 | ||||||||||
|
| |||||||||||||
Total Discount Notes (Cost $1,993,555) | 1,938,789 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 939,565,938 | |||||||||||||
|
| |||||||||||||
| Short-Term Investments 2.0% | ||||||||||||||
| U.S. Government & Agency Securities (Cost $19,440,000) 2.0% | ||||||||||||||
| b | Federal Home Loan Bank Discount Notes, 4/01/22 | United States | 19,440,000 | 19,440,000 | ||||||||||
|
| |||||||||||||
Total Short-Term Investments (Cost $19,440,000) 2.0% | 19,440,000 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $1,030,961,892) 97.7% | 959,005,938 | |||||||||||||
Other Assets, less Liabilities 2.3% | 22,595,889 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 981,601,827 | ||||||||||||
|
| |||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $245,676,349, representing 25.0% of net assets.
bThe security was issued on a discount basis with no stated coupon rate.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
Ultra 10 Yr. U.S. Treasury Note | Short | 64 | $ | 8,670,000 | 6/21/22 | $ | 248,998 | |||||||||||||
U.S. Treasury 5 Yr. Note | Short | 83 | 9,519,063 | 6/30/22 | 231,583 | |||||||||||||||
U.S. Treasury 10 Yr. Note | Short | 119 | 14,622,125 | 6/21/22 | 390,305 | |||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | 870,886 | |||||||||||||||||
|
| |||||||||||||||||||
*As of year end.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 151 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Senior Loan ETF
| Year Ended March 31, | ||||||||||||||||
| 2022 | 2021 | 2020 | 2019a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||
Net asset value, beginning of year | $ | 24.83 | $ | 22.85 | $ | 24.85 | $ | 25.00 | ||||||||
|
| |||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||
Net investment incomec | 0.91 | 0.70 | 0.99 | 0.81 | ||||||||||||
Net realized and unrealized gains (losses) | (0.23 | ) | 1.99 | (1.90 | ) | (0.21 | ) | |||||||||
|
| |||||||||||||||
Total from investment operations | 0.68 | 2.69 | (0.91 | ) | 0.60 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.81 | ) | (0.71 | ) | (1.09 | ) | (0.75 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of year | $ | 24.70 | $ | 24.83 | $ | 22.85 | �� | $ | 24.85 | |||||||
|
| |||||||||||||||
Total returnd | 2.76% | 11.91% | (3.92)% | 2.44% | ||||||||||||
| Ratios to average net assetse |
| |||||||||||||||
Expenses before waiver and payments by affiliates | 0.58% | 0.92% | 0.97% | 1.00% | ||||||||||||
Expenses net of waiver and payments by affiliates | 0.45% | 0.45% | 0.45% | 0.45% | ||||||||||||
Net investment income | 3.72% | 2.88% | 4.02% | 3.90% | ||||||||||||
| Supplemental data |
| |||||||||||||||
Net assets, end of year (000’s) | $292,722 | $201,101 | $54,833 | $57,165 | ||||||||||||
Portfolio turnover ratef | 35.67% | g | 45.87% | g | 51.48% | g | 10.62% | |||||||||
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 35.67% | 45.87% | 51.48% |
| 152 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty Senior Loan ETF
| Country | Principal Amount* | Value | ||||||||||||
| * | Corporate Bonds & Notes 2.1% | |||||||||||||
| Airlines 0.6% | ||||||||||||||
| a | American Airlines Inc./AAdvantage Loyalty IP Ltd., senior secured note, 144A, 5.50%, 4/20/26 | United States | 1,500,000 | $ | 1,513,358 | |||||||||
| a | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 10/20/25 | United States | 250,000 | 251,649 | ||||||||||
|
| |||||||||||||
| 1,765,007 | ||||||||||||||
|
| |||||||||||||
| Chemicals 0.3% | ||||||||||||||
| a | SCIH Salt Holdings Inc., senior secured note, 144A, 4.875%, 5/01/28 | United States | 500,000 | 471,943 | ||||||||||
| a | Unifrax Escrow Issuer Corp., senior bond, 144A, 5.25%, 9/30/28 | United States | 419,400 | 390,138 | ||||||||||
|
| |||||||||||||
| 862,081 | ||||||||||||||
|
| |||||||||||||
| Commercial Services & Supplies 0.1% | ||||||||||||||
| a | MPH Acquisition Holdings LLC, senior secured, 144A, 5.50%, 9/01/28 | United States | 213,000 | 204,627 | ||||||||||
|
| |||||||||||||
| Communications Equipment 0.1% | ||||||||||||||
| a | CommScope Inc., senior secured, 144A, 4.75%, 9/01/29 | United States | 288,500 | 266,107 | ||||||||||
|
| |||||||||||||
| Construction Materials 0.1% | ||||||||||||||
| a | Cemex SAB de CV, senior secured note, 144A, 5.20%, 9/17/30 | Mexico | 375,000 | 373,699 | ||||||||||
|
| |||||||||||||
| Containers & Packaging 0.1% | ||||||||||||||
| a | Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Luxembourg SA, senior secured note, 4.00% 144A, 10/15/27 | United States | 400,000 | 372,080 | ||||||||||
|
| |||||||||||||
| Diversified Financial Services 0.2% | ||||||||||||||
| a | Altice France SA, senior secured note, 144A, 5.125%, 7/15/29 | France | 500,000 | 448,800 | ||||||||||
| a | Vmed O2 UK Financing I PLC, senior secured bond, 144A, 4.25%, 1/31/31 | United Kingdom | 210,000 | 192,341 | ||||||||||
|
| |||||||||||||
| 641,141 | ||||||||||||||
|
| |||||||||||||
| Media 0.1% | ||||||||||||||
| a | Diamond Sports Group LLC/Diamond Sports Finance Co., first lien, 144A, 5.375%, 8/15/26 | United States | 1,210,000 | 470,375 | ||||||||||
| a | Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 2/15/25 | United States | 44,444 | 44,540 | ||||||||||
|
| |||||||||||||
| 514,915 | ||||||||||||||
|
| |||||||||||||
| Oil, Gas & Consumable Fuels 0.1% | ||||||||||||||
Cheniere Energy Inc., senior secured, 4.625%, 10/15/28 | United States | 150,000 | 150,694 | |||||||||||
| a | Weatherford International Ltd., senior secured, 144A, 6.50%, 9/15/28 | United States | 44,600 | 46,161 | ||||||||||
|
| |||||||||||||
| 196,855 | ||||||||||||||
|
| |||||||||||||
| Pharmaceuticals 0.3% | ||||||||||||||
| a | Endo Luxembourg Finance Co. I Sarl/Endo US Inc., 144A, 6.125%, 4/01/29 | United States | 925,000 | 845,177 | ||||||||||
|
| |||||||||||||
| Specialty Retail 0.1% | ||||||||||||||
| a | Staples Inc., 144A, 7.50%, 4/15/26 | United States | 161,000 | 156,524 | ||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $6,879,336) | 6,198,213 | |||||||||||||
|
| |||||||||||||
| b | Senior Floating Rate Interests 92.3% | |||||||||||||
| Aerospace & Defense 3.4% | ||||||||||||||
Dynasty Acquisition Co. Inc., | ||||||||||||||
Initial Term B-1 Loan, 4.51%, 4/06/26 | United States | 2,337,092 | 2,303,006 | |||||||||||
Initial Term B-2 Loan (CAD), 4.51%, 4/06/26 | United States | 1,256,501 | 1,238,175 | |||||||||||
Madison IAQ LLC, Term Loan, 4.52%, 6/21/28 | United States | 2,335,701 | 2,305,535 | |||||||||||
Peraton Corp., Term Loan B1, 4.50%, 2/01/28 | United States | 4,155,467 | 4,134,689 | |||||||||||
|
| |||||||||||||
| 9,981,405 | ||||||||||||||
|
| |||||||||||||
| Air Freight & Logistics 0.9% | ||||||||||||||
Kenan Advantage Group Inc., 2021 Term Loan B1, 4.50%, 3/24/26 | United States | 2,567,590 | 2,537,908 | |||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 153 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Senior Loan ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| b | Senior Floating Rate Interests (continued) | |||||||||||||
| Airlines 4.0% | ||||||||||||||
AAdvantage Loyalty IP Ltd., 2021 Term Loan, 5.50%, 4/20/28 | United States | 1,024,129 | $ | 1,039,491 | ||||||||||
Air Canada, 2021 Term Loan B, 4.25%, 8/11/28 | Canada | 2,165,116 | 2,147,070 | |||||||||||
American Airlines Inc., | ||||||||||||||
c 2018 Replacement Term Loans, 2.20%, 6/27/25 | United States | 2,533,130 | 2,391,439 | |||||||||||
c 2017 Incremental Term Loan, TBD, zero cpn, 12/15/23 | United States | 500,000 | 494,793 | |||||||||||
Kestrel Bidco Inc., Term Loan B, 4.00%, 12/11/26 | Canada | 3,161,063 | 3,055,041 | |||||||||||
SkyMiles IP Ltd., Term Loan B, 4.75%, 10/20/27 | United States | 136,597 | 141,420 | |||||||||||
United Airlines Inc., 2021 Term Loan B, 4.50%, 4/21/28 | United States | 2,489,388 | 2,464,320 | |||||||||||
|
| |||||||||||||
| 11,733,574 | ||||||||||||||
|
| |||||||||||||
| Auto Components 0.7% | ||||||||||||||
Clarios Global LP, 2021 USD Term Loan B, 3.359%, 4/30/26 | United States | 1,955,327 | 1,933,819 | |||||||||||
|
| |||||||||||||
| Auto Parts & Equipment 1.5% | ||||||||||||||
First Brands Group LLC, 2021 Term Loan, 6.00%, 3/30/27 | United States | 1,960,054 | 1,950,254 | |||||||||||
Truck Hero Inc., 2021 Term Loan B, 4.00%, 1/31/28 | United States | 2,387,461 | 2,319,574 | |||||||||||
|
| |||||||||||||
| 4,269,828 | ||||||||||||||
|
| |||||||||||||
| Automobile Manufacturers 0.7% | ||||||||||||||
American Trailer World Corp., Term Loan B, 4.50%, 3/03/28 | United States | 2,194,472 | 2,111,839 | |||||||||||
|
| |||||||||||||
| Building Products 2.1% | ||||||||||||||
Allied Universal Holdco LLC, 2021 USD Incremental Term Loan B, 4.25%, 5/12/28 | United States | 2,767,016 | 2,728,222 | |||||||||||
Solis IV BV, USD Term Loan B1, 4.00%, 2/26/29 | Netherlands | 1,800,000 | 1,766,817 | |||||||||||
White Cap Buyer LLC, Term Loan, 4.25%, 10/19/27 | United States | 1,583,217 | 1,569,032 | |||||||||||
|
| |||||||||||||
| 6,064,071 | ||||||||||||||
|
| |||||||||||||
| Casinos & Gaming 1.7% | ||||||||||||||
| c | Scientific Games Holdings LP, 2022 USD Term Loan B, TBD, 4/04/29 | United States | 2,283,425 | 2,265,889 | ||||||||||
Twin River Worldwide Holdings Inc., 2021 Term Loan B, 3.75%, 10/02/28 | United States | 2,593,500 | 2,582,763 | |||||||||||
|
| |||||||||||||
| 4,848,652 | ||||||||||||||
|
| |||||||||||||
| Chemicals 3.2% | ||||||||||||||
Hexion Holdings Corporation, 2022 USD Term Loan, 5.00%, 3/15/29 | United States | 1,800,000 | 1,764,000 | |||||||||||
INEOS Styrolution US Holding LLC, 2021 USD Term Loan B, 3.25%, 1/29/26 | United States | 2,416,258 | 2,377,900 | |||||||||||
LSF11 A5 Holdco LLC, Term Loan, 4.00%, 10/15/28 | United States | 1,300,000 | 1,283,913 | |||||||||||
| c | PMHC II Inc., 2022 Term Loan B, TBD, 2/01/29 | United States | 2,200,000 | 2,104,663 | ||||||||||
SCIH Salt Holdings Inc., 2021 Incremental Term Loan B, 4.75%, 3/16/27 | United States | 1,802,927 | 1,776,848 | |||||||||||
|
| |||||||||||||
| 9,307,324 | ||||||||||||||
|
| |||||||||||||
| Commercial Services & Supplies 4.8% | ||||||||||||||
Amentum Government Services Holdings LLC, 2022 Term Loan, 4.50%, 2/15/29 | United States | 2,335,398 | 2,320,802 | |||||||||||
APX Group Inc., 2021 Term Loan B, 4.00%, 7/10/28 | United States | 1,894,486 | 1,871,487 | |||||||||||
Intrado Corp., Term B Loans, 5.00%, 10/10/24 | United States | 336,335 | 308,359 | |||||||||||
KUEHG Corp., 2018 Incremental Term Loan, 4.76%, 2/21/25 | United States | 1,985,584 | 1,959,216 | |||||||||||
PECF USS Intermediate Holding III Corporation, Term Loan B, 4.76%, 12/15/28 | United States | 2,238,339 | 2,221,361 | |||||||||||
Prime Security Services Borrower LLC, 2021 Term Loan, 3.50%, 9/23/26 | United States | 2,650,271 | 2,634,819 | |||||||||||
Spin Holdco Inc., 2021 Term Loan, 4.75%, 3/04/28 | United States | 2,682,244 | 2,666,406 | |||||||||||
|
| |||||||||||||
| 13,982,450 | ||||||||||||||
|
| |||||||||||||
| Communications Equipment 0.5% | ||||||||||||||
CommScope Inc., Initial Term Loans, 3.71%, 4/06/26 | United States | 1,374,996 | 1,341,192 | |||||||||||
|
| |||||||||||||
| Computer & Electronics Retail 0.7% | ||||||||||||||
Vision Solutions Inc., 2021 Incremental Term Loan, 4.75%, 4/24/28 | United States | 2,099,453 | 2,081,082 | |||||||||||
|
| |||||||||||||
| 154 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Senior Loan ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| b | Senior Floating Rate Interests (continued) | |||||||||||||
| Construction & Engineering 0.4% | ||||||||||||||
Brand Energy & Infrastructure Services Inc., 2017 Term Loan, 5.25%, 6/21/24 | United States | 1,092,714 | $ | 1,046,503 | ||||||||||
|
| |||||||||||||
| Construction Materials 0.5% | ||||||||||||||
Cornerstone Building Brands Inc., 2021 Term Loan B, 3.75%, 4/12/28 | United States | 1,385,183 | 1,344,202 | |||||||||||
|
| |||||||||||||
| Containers & Packaging 2.8% | ||||||||||||||
BWAY Holding Company, 2017 Term Loan B, 3.48%, 4/03/24 | United States | 2,811,539 | 2,777,857 | |||||||||||
Charter NEX US Inc., 2021 Term Loan, 4.50%, 12/01/27 | United States | 2,074,797 | 2,066,042 | |||||||||||
Klockner-Pentaplast of America Inc., 2021 Term Loan B, 5.55%, 2/12/26 | Luxembourg | 2,391,716 | 2,186,937 | |||||||||||
| c | Reynolds Group Holdings Inc., 2021 Term Loan B, TBD, 9/20/28 | United States | 1,196,992 | 1,168,564 | ||||||||||
|
| |||||||||||||
| 8,199,400 | ||||||||||||||
|
| |||||||||||||
| Diversified Banks 0.5% | ||||||||||||||
Aqgen Island Holdings Inc., Term Loan, 4.51%, 8/02/28 | United States | 1,502,563 | 1,493,172 | |||||||||||
|
| |||||||||||||
| Diversified Financial Services 3.6% | ||||||||||||||
Amentum Government Services Holdings LLC, Term Loan B, 3.96%, 1/29/27 | United States | 1,518,658 | 1,504,733 | |||||||||||
Astra Acquisition Corp., 2021 1st Lien Term Loan, 5.75%, 10/25/28 | United States | 498,750 | 485,346 | |||||||||||
Asurion LLC, | ||||||||||||||
Term Loan B-8, 3.71%, 12/23/26 | United States | 1,089,555 | 1,067,535 | |||||||||||
2021 2nd Lien Term Loan B3, 5.71%, 1/31/28 | United States | 819,599 | 804,846 | |||||||||||
Replacement B-6 Term Loans, 3.58%, 11/03/23 | United States | 749,919 | 746,450 | |||||||||||
2021 2nd Lien Term Loan B4, 5.71%, 1/20/29 | United States | 1,397,666 | 1,368,406 | |||||||||||
Citadel Securities LP, 2021 Term Loan B, 2.93%, 2/02/28 | United States | 1,435,500 | 1,429,729 | |||||||||||
Edelman Financial Center LLC, 2021 Term Loan B, 4.25%, 4/07/28 | United States | 2,388,326 | 2,364,944 | |||||||||||
Jane Street Group LLC, 2021 Term Loan, 3.21%, 1/26/28 | United States | 927,773 | 917,145 | |||||||||||
|
| |||||||||||||
| 10,689,134 | ||||||||||||||
|
| |||||||||||||
| Diversified Telecommunication Services 1.2% | ||||||||||||||
Altice France SA, USD TLB-13 Incremental Term Loans, FRN, 4.51%, 8/14/26 | France | 2,385,792 | 2,345,043 | |||||||||||
Zayo Group Holdings Inc., Initial Dollar Term Loan, 3.46%, 3/09/27 | United States | 1,308,194 | 1,274,946 | |||||||||||
|
| |||||||||||||
| 3,619,989 | ||||||||||||||
|
| |||||||||||||
| Electronic Equipment & Instruments 1.0% | ||||||||||||||
Magenta Buyer LLC, 2021 USD 1st Lien Term Loan, 5.75%, 7/27/28 | United States | 1,405,697 | 1,397,263 | |||||||||||
Verifone Systems Inc., 2018 1st Lien Term Loan, 4.50%, 8/20/25 | United States | 1,660,537 | 1,639,780 | |||||||||||
|
| |||||||||||||
| 3,037,043 | ||||||||||||||
|
| |||||||||||||
| Food Products 0.7% | ||||||||||||||
Shearer’s Foods Inc., 2021 Term Loan, 4.25%, 9/23/27 | United States | — | ||||||||||||
Triton Water Holdings Inc, Term Loan, 4.51%, 3/31/28 | United States | 2,023,116 | 1,977,232 | |||||||||||
|
| |||||||||||||
| 1,977,232 | ||||||||||||||
|
| |||||||||||||
| Health Care Providers & Services 8.3% | ||||||||||||||
ADMI Corp., | ||||||||||||||
2021 Term Loan B2, 3.88%, 12/23/27 | United States | 2,664,018 | 2,622,605 | |||||||||||
2021 Incremental Term Loan B3, 4.00%, 12/23/27 | United States | 312,428 | 309,468 | |||||||||||
CHG Healthcare Services Inc., 2021 Term Loan, 4.51%, 9/29/28 | United States | 1,810,083 | 1,796,507 | |||||||||||
Gainwell Acquisition Corp., Term Loan B, FRN thereafter, 5.00%, 10/01/27 | United States | 2,907,439 | 2,907,439 | |||||||||||
Global Medical Response Inc., 2018 New Term Loans, 5.25%, 3/14/25 | United States | 1,138,962 | 1,133,876 | |||||||||||
Heartland Dental LLC, 2021 Incremental Term Loan, 4.45%, 4/30/25 | United States | 315,795 | 313,596 | |||||||||||
Icon Luxembourg SARL, | ||||||||||||||
LUX Term Loan, 3.31%, 7/03/28 | Luxembourg | 712,087 | 709,641 | |||||||||||
US Term Loan, 3.31%, 7/03/28 | United States | 177,417 | 176,807 | |||||||||||
Medical Solutions Holdings Inc., | ||||||||||||||
2021 First Lien Term Loan, 4.51%, 11/01/28 | United States | 1,501,231 | 1,490,910 | |||||||||||
2021 Delayed Draw Term Loan, 3.50%, 11/01/28 | United States | 285,949 | 283,983 | |||||||||||
| franklintempleton.com | Annual Report | 155 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Senior Loan ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| b | Senior Floating Rate Interests (continued) | |||||||||||||
| Health Care Providers & Services (continued) | ||||||||||||||
Medline Borrower LP, USD Term Loan B, 3.75%, 10/23/28 | United States | 2,554,717 | $ | 2,532,197 | ||||||||||
National Mentor Holdings Inc., | ||||||||||||||
2021 Term Loan, 4.50%, 3/02/28 | United States | 1,977,031 | 1,917,987 | |||||||||||
2021 Term Loan C, 4.76%, 3/02/28 | United States | 62,563 | 60,695 | |||||||||||
Phoenix Guarantor Inc., | ||||||||||||||
Tranche B-1 Term Loan, 3.71%, 3/05/26 | United States | 1,025,607 | 1,015,833 | |||||||||||
2021 Term Loan B, 3.95%, 3/05/26 | United States | 790,882 | 783,677 | |||||||||||
Radiology Partners Inc., 2018 1st Lien Term Loan B, 4.72%, 7/09/25 | United States | 1,124,138 | 1,111,694 | |||||||||||
Team Health Holdings Inc., 1st Lien Term Loan, 3.75%, 2/06/24 | United States | 1,314,852 | 1,254,507 | |||||||||||
U.S. Anesthesia Partners Inc., 2021 Term Loan, 4.75%, 10/01/28 | United States | 1,744,470 | 1,735,424 | |||||||||||
U.S. Radiology Specialists Inc., 2020 Term Loan, 6.31%, 12/15/27 | United States | 1,288,101 | 1,285,821 | |||||||||||
U.S. Renal Care Inc., 2019 Term Loan B, 5.46%, 6/26/26 | United States | 1,088,832 | 1,004,448 | |||||||||||
|
| |||||||||||||
| 24,447,115 | ||||||||||||||
|
| |||||||||||||
| Health Care Services 0.7% | ||||||||||||||
MedAssets Software Intermediate Holdings Inc., 2021 Term Loan, 4.50%, 12/18/28 | United States | 2,118,473 | 2,100,593 | |||||||||||
|
| |||||||||||||
| Home Furnishings 0.7% | ||||||||||||||
AI Aqua Merger Sub Inc., | ||||||||||||||
c 2022 Term Loan B, TBD, zero cpn, 7/31/28 | United States | 426,667 | 422,801 | |||||||||||
c 2022 Delayed Draw Term loan, TBD, zero cpn, 7/31/28 | United States | 96,970 | 96,091 | |||||||||||
c 2021 1st Lien Term Loan B, 4.25%, 7/31/28 | United States | 1,498,333 | 1,486,399 | |||||||||||
c 2021 1st Lien Delayed Draw Term Loan, TBD, zero cpn, 7/31/28 | United States | 26,667 | 26,455 | |||||||||||
|
| |||||||||||||
| 2,031,746 | ||||||||||||||
|
| |||||||||||||
| Hotels Restaurants & Leisure 2.3% | ||||||||||||||
Caesars Resort Collection LLC, | ||||||||||||||
Term B-1 Loans, 3.96%, 7/21/25 | United States | 1,118,066 | 1,115,829 | |||||||||||
Term B Loans, 3.21%, 12/23/24 | United States | 1,617,792 | 1,611,499 | |||||||||||
Fertitta Entertainment LLC, 2022 Term Loan B, 4.50%, 1/27/29 | United States | 2,463,357 | 2,454,280 | |||||||||||
Hilton Grand Vacations BWR LLC, 2021 Term Loan B, 3.50%, 8/02/28 | United States | 1,667,950 | 1,660,236 | |||||||||||
|
| |||||||||||||
| 6,841,844 | ||||||||||||||
|
| |||||||||||||
| Insurance 2.1% | ||||||||||||||
Acrisure LLC, | ||||||||||||||
2021 First Lien Term Loan B, 4.75%, 2/15/27 | United States | 244,143 | 243,534 | |||||||||||
Term Loan B, 3.96%, 2/15/27 | United States | 1,726,223 | 1,705,370 | |||||||||||
Alliant Holdings Intermediate LLC, | ||||||||||||||
2021 Term Loan B4, 4.00%, 11/06/27 | United States | 757,843 | 754,107 | |||||||||||
Initial Term Loan, 3.71%, 5/09/25 | United States | 927,713 | 918,686 | |||||||||||
AssuredPartners Inc., | ||||||||||||||
2020 February Refinancing Term Loans, 3.96%, 2/12/27 | United States | 1,667,289 | 1,649,366 | |||||||||||
2021 Term Loan B, 4.00%, 2/12/27 | United States | 420,233 | 416,033 | |||||||||||
2022 Term Loan, 4.00%, 2/12/27 | United States | 568,750 | 563,242 | |||||||||||
|
| |||||||||||||
| 6,250,338 | ||||||||||||||
|
| |||||||||||||
| Interactive Media & Services 2.0% | ||||||||||||||
Arches Buyer Inc., 2021 Term Loan B, 3.75%, 12/06/27 | United States | 1,394,957 | 1,374,402 | |||||||||||
Hunter Holdco 3 Limited, USD Term Loan B, 5.26%, 8/19/28 | United Kingdom | 1,895,153 | 1,890,415 | |||||||||||
MH Sub I LLC, | ||||||||||||||
Initial Term Loans, 3.96%, 9/13/24 | United States | 1,292,718 | 1,279,073 | |||||||||||
2020 June New Term Loans, 4.75%, 9/13/24 | United States | 1,334,158 | 1,321,771 | |||||||||||
|
| |||||||||||||
| 5,865,661 | ||||||||||||||
|
| |||||||||||||
| IT Services 3.3% | ||||||||||||||
Deerfield Dakota Holding LLC, Term Loan B, 4.75%, 4/09/27 | United States | 2,677,850 | 2,668,089 | |||||||||||
Dun and Bradstreet Corp., Term Loan B, 3.70%, 2/06/26 | United States | 987,046 | 979,555 | |||||||||||
| 156 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Senior Loan ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| b | Senior Floating Rate Interests (continued) | |||||||||||||
| IT Services (continued) | ||||||||||||||
Sedgwick Claims Management Services Inc., Initial Term Loans, 3.71%, 12/31/25 | United States | 2,270,201 | $ | 2,250,745 | ||||||||||
Verscend Holding Corp., 2021 Term Loan B, 4.46%, 8/27/25 | United States | 3,702,019 | 3,697,392 | |||||||||||
|
| |||||||||||||
| 9,595,781 | ||||||||||||||
|
| |||||||||||||
| Leisure Equipment & Products 0.2% | ||||||||||||||
Varsity Brands Inc., 2017 Term Loan B, 4.50%, 12/15/24 | United States | 497,398 | 478,176 | |||||||||||
|
| |||||||||||||
| Machinery 1.3% | ||||||||||||||
Vertical US Newco Inc., (thyssenkrupp Elevator), Term Loan B, 4.02%, 7/30/27 | United States | 3,720,485 | 3,692,600 | |||||||||||
|
| |||||||||||||
| Media 8.2% | ||||||||||||||
AMC Entertainment Holdings Inc., 2019 Term Loan B, 3.35%, 4/22/26 | United States | 247,449 | 221,477 | |||||||||||
Cengage Learning Inc., 2021 Term Loan B, 5.75%, 7/14/26 | United States | 3,027,327 | 3,006,907 | |||||||||||
Clear Channel Outdoor Holdings Inc., Term B Loan, 3.80%, 8/21/26 | United States | 2,939,279 | 2,894,279 | |||||||||||
Crown Finance US Inc., 2018 USD Term Loan, 3.51%, 2/28/25 | United States | 1,309,522 | 1,014,113 | |||||||||||
CSC Holdings LLC, March 2017 Incremental Term Loans, 2.65%, 7/17/25 | United States | 2,090,894 | 2,062,155 | |||||||||||
Diamond Sports Group LLC, | ||||||||||||||
2022 First Priority Term Loan, 9.00%, 5/26/26 | United States | 461,521 | 469,439 | |||||||||||
2022 2nd Lien Term Loan, 3.545%, 8/24/26 | United States | 931,770 | 322,919 | |||||||||||
Gray Television Inc., 2021 Term Loan D, 3.23%, 12/01/28 | United States | 798,000 | 794,936 | |||||||||||
McGraw-Hill Global Education Holdings LLC, 2021 Term Loan, 5.26%, 7/28/28 | United States | 1,498,175 | 1,484,834 | |||||||||||
| d | Nexstar Broadcasting Inc., Term B-4 Loan, 2.73%, 9/18/26 | United States | 1,210,393 | 1,207,258 | ||||||||||
Radiate Holdco LLC, 2021 Term Loan B, 4.00%, 9/25/26 | United States | 3,374,434 | 3,350,610 | |||||||||||
Univision Communications Inc., | ||||||||||||||
2022 Term Loan B, 4.00%, 1/31/29 | United States | 642,391 | 637,037 | |||||||||||
2021 First Lien Term Loan B, 4.00%, 3/15/26 | United States | 2,565,693 | 2,555,006 | |||||||||||
Virgin Media Bristol LLC, 2020 USD Term Loan Q, 3.65%, 1/31/29 | United States | 1,770,000 | 1,761,982 | |||||||||||
William Morris Endeavor Entertainment LLC and IMG LLC, Term Loan B, 3.21%, 5/18/25 | United States | 2,307,944 | 2,272,852 | |||||||||||
|
| |||||||||||||
| 24,055,804 | ||||||||||||||
|
| |||||||||||||
| Personal Products 1.8% | ||||||||||||||
Conair Holdings LLC, Term Loan B, 4.76%, 5/17/28 | United States | 2,163,873 | 2,133,038 | |||||||||||
Sunshine Luxembourg VII SARL, 2021 Term Loan B3, 4.76%, 10/01/26 | Luxembourg | 3,136,584 | 3,120,415 | |||||||||||
|
| |||||||||||||
| 5,253,453 | ||||||||||||||
|
| |||||||||||||
| Pharmaceuticals 4.3% | ||||||||||||||
Bausch Health Companies Inc., | ||||||||||||||
c 2022 Term Loan B, TBD, zero cpn, 1/27/27 | Canada | 1,031,104 | 1,022,809 | |||||||||||
Initial Term Loans, 3.46%, 6/02/25 | United States | 1,438,327 | 1,429,337 | |||||||||||
eResearchTechnology Inc., 2020 1st Lien Term Loan, 5.50%, 2/04/27 | United States | 3,483,191 | 3,475,580 | |||||||||||
Jazz Financing Lux S.a.r.l., USD Term Loan, 4.00%, 5/05/28 | United States | 2,203,410 | 2,198,044 | |||||||||||
Organon & Co., USD Term Loan, 3.56%, 6/02/28 | United States | 1,458,702 | 1,453,232 | |||||||||||
Parexel International Corporation, 2021 1st Lien Term Loan, 4.00%, 11/15/28 | United States | 1,593,548 | 1,583,876 | |||||||||||
Pathway Vet Alliance LLC, 2021 Term Loan, 4.21%, 3/31/27 | United States | 797,980 | 791,500 | |||||||||||
PetVet Care Centers LLC, 2021 Term Loan B3, 4.25%, 2/14/25 | United States | 730,401 | 727,892 | |||||||||||
|
| |||||||||||||
| 12,682,270 | ||||||||||||||
|
| |||||||||||||
| Precious Metals & Minerals 0.2% | ||||||||||||||
Lucid Energy Group II Borrower LLC, 2021 Term Loan, 5.00%, 11/24/28 | United States | 600,000 | 595,815 | |||||||||||
|
| |||||||||||||
| Real Estate Management & Development 0.7% | ||||||||||||||
Brookfield Property REIT Inc., 1st Lien Term Loan B, 2.96%, 8/27/25 | United States | 475,468 | 464,697 | |||||||||||
Cushman & Wakefield U.S. Borrower LLC, Replacement Term Loan, 3.21%, 8/21/25 | United States | 1,601,179 | 1,582,829 | |||||||||||
|
| |||||||||||||
| 2,047,526 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 157 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Senior Loan ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| b | Senior Floating Rate Interests (continued) | |||||||||||||
| Retail REITs 1.3% | ||||||||||||||
Great Outdoors Group LLC, 2021 Term Loan B1, 4.50%, 3/06/28 | United States | 3,479,987 | $ | 3,471,826 | ||||||||||
Restoration Hardware Inc., Term Loan B, 3.00%, 10/20/28 | United States | 411,635 | 404,946 | |||||||||||
|
| |||||||||||||
| 3,876,772 | ||||||||||||||
|
| |||||||||||||
| Soft Drinks 0.3% | ||||||||||||||
Naked Juice LLC, | ||||||||||||||
Term Loan, 3.75%, 1/24/29 | United States | 909,154 | 896,167 | |||||||||||
Delayed Draw Term Loan, 3.75%, 1/24/29 | United States | 52,451 | 51,702 | |||||||||||
|
| |||||||||||||
| 947,869 | ||||||||||||||
|
| |||||||||||||
| Software 14.5% | ||||||||||||||
Aptean Inc., 2019 Term Loan, 4.71%, 4/23/26 | United States | 698,149 | 693,039 | |||||||||||
Athenahealth Inc., | ||||||||||||||
2022 Term Loan B, 4.00%, 2/15/29 | United States | 3,334,783 | 3,305,603 | |||||||||||
c 2022 Delayed Draw Term loan, TBD, zero cpn, 2/15/29 | United States | 565,217 | 560,272 | |||||||||||
Cloudera Inc., | ||||||||||||||
2021 Term Loan, 4.25%, 10/08/28 | United States | 1,533,333 | 1,517,042 | |||||||||||
2021 Second Lien Term Loan, 6.50%, 10/08/29 | United States | 303,306 | 299,514 | |||||||||||
Cornerstone OnDemand Inc., 2021 Term Loan, 4.25%, 10/16/28 | United States | 1,706,024 | 1,692,163 | |||||||||||
DCert Buyer Inc., | ||||||||||||||
2021 2nd Lien Term Loan, 7.457%, 2/19/29 | United States | 600,000 | 594,624 | |||||||||||
Term Loan B, 4.457%, 10/16/26 | United States | 2,886,626 | 2,869,984 | |||||||||||
Epicor Software Corporation, Term B Loans, 4.00%, 7/30/27 | United States | 2,812,137 | 2,793,422 | |||||||||||
Finastra USA Inc., Dollar Term Loan, 4.50%, 6/13/24 | United States | 2,501,921 | 2,474,063 | |||||||||||
GoTo Group Inc., Initial Term Loans, 5.22%, 8/31/27 | United States | 2,382,178 | 2,344,587 | |||||||||||
Hyland Software Inc., | ||||||||||||||
Term Loan, 4.25%, 7/01/24 | United States | 3,206,078 | �� | 3,194,055 | ||||||||||
2021 2nd Lien Term Loan, 7.00%, 7/07/25 | United States | 30,303 | 30,038 | |||||||||||
Idera Inc., 2021 Term Loan, 4.50%, 3/02/28 | United States | 1,844,330 | 1,814,821 | |||||||||||
Ivanti Software Inc., | ||||||||||||||
2021 Term Loan B, 5.00%, 12/01/27 | United States | 1,594,500 | 1,575,565 | |||||||||||
2021 Add On Term Loan B, 4.75%, 12/01/27 | United States | 140,004 | 137,904 | |||||||||||
MA Finance Co., Tranche B-4 Term Loans, 5.25%, 6/05/25 | United States | 401,821 | 399,143 | |||||||||||
McAfee LLC, 2022 USD Term Loan B, 4.50%, 3/01/29 | United States | 1,354,839 | 1,347,218 | |||||||||||
Mitchell International Inc., 2021 Term Loan B, 4.25%, 10/15/28 | United States | 1,893,000 | 1,865,362 | |||||||||||
Navicure Inc., 2019 Term Loan B, 4.46%, 10/22/26 | United States | 2,699,330 | 2,695,956 | |||||||||||
Polaris Newco LLC, USD Term Loan B, 4.50%, 6/02/28 | United States | 3,402,890 | 3,382,898 | |||||||||||
Quest Software US Holdings Inc., 2022 Term Loan, 4.75%, 2/01/29 | United States | 1,700,000 | 1,677,024 | |||||||||||
RealPage Inc., 1st Lien Term Loan, 3.75%, 4/24/28 | United States | — | ||||||||||||
Sovos Compliance LLC, | ||||||||||||||
2021 Term Loan, 5.00%, 8/11/28 | United States | 1,659,219 | 1,659,228 | |||||||||||
2021 Delayed Draw Term Loan, 4.50%, 8/11/28 | United States | 287,250 | 287,251 | |||||||||||
The Ultimate Software Group Inc., 2021 Incremental Term Loans, 3.75%, 5/04/26 | United States | 2,469,289 | 2,452,732 | |||||||||||
Ultimate Software Group Inc. (The), | ||||||||||||||
Term Loan B, 4.76%, 5/04/26 | United States | 299,233 | 298,485 | |||||||||||
2021 2nd Lien Term Loan, 5.75%, 5/03/27 | United States | 570,096 | 567,514 | |||||||||||
|
| |||||||||||||
| 42,529,507 | ||||||||||||||
|
| |||||||||||||
| Specialty Retail 3.4% | ||||||||||||||
IRB Holding Corp, 2022 Term Loan B, 3.75%, 12/15/27 | United States | 1,141,274 | 1,136,281 | |||||||||||
Michaels Companies Inc., 2021 Term Loan B, 5.26%, 4/15/28 | United States | 1,998,910 | 1,880,085 | |||||||||||
PetSmart Inc., 2021 Term Loan B, 4.50%, 2/11/28 | United States | 1,734,584 | 1,731,331 | |||||||||||
SRS Distribution Inc., | ||||||||||||||
2022 Incremental Term Loan, 4.00%, 6/02/28 | United States | 79,545 | 78,700 | |||||||||||
2021 Term Loan B, 4.00%, 6/02/28 | United States | 1,679,497 | 1,661,308 | |||||||||||
Staples Inc., 2019 Refinancing Term B-1 Loans, 5.32%, 4/16/26 | United States | 2,849,336 | 2,699,148 | |||||||||||
| 158 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Senior Loan ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| b | Senior Floating Rate Interests (continued) | |||||||||||||
| Specialty Retail (continued) | ||||||||||||||
Whatabrands LLC, 2021 Term Loan B, 3.75%, 8/03/28 | United States | 835,861 | $ | 826,897 | ||||||||||
|
| |||||||||||||
| 10,013,750 | ||||||||||||||
|
| |||||||||||||
| Technology Hardware, Storage & Peripherals 1.2% | ||||||||||||||
Greeneden U.S. Holdings II LLC, Initial Dollar Term Loan, 4.75%, 12/01/27 | United States | 3,472,452 | 3,471,376 | |||||||||||
|
| |||||||||||||
| Wireless Telecommunication Services 0.6% | ||||||||||||||
CCI Buyer Inc., Term Loan, 4.75%, 12/17/27 | United States | 1,895,970 | 1,873,853 | |||||||||||
|
| |||||||||||||
Total Floating Rate Loans (Cost $272,836,083) | 270,251,668 | |||||||||||||
|
| |||||||||||||
| Asset-Backed Securities 0.7% | ||||||||||||||
| a,e | BlueMountain CLO 2018-3 Ltd., 2018-3A, C, 144A, 2.458%, 2,10/25/2030 | United States | 1,000,000 | 984,380 | ||||||||||
| a,e | LCM XVIII LP, 2018A, CR, 144A, 2.104%, 2,04/20/2031 | United States | 1,000,000 | 982,112 | ||||||||||
|
| |||||||||||||
Total Asset-Backed Securities (Cost $1,996,875) | 1,966,492 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 278,416,373 | |||||||||||||
|
| |||||||||||||
| Short Term Investments 5.1% | ||||||||||||||
| U.S. Government & Agency Securities (Cost $15,000,000) 5.1% | ||||||||||||||
| f | Federal Home Loan Bank Discount Notes,4/01/22 | United States | 15,000,000 | 15,000,000 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $296,659,319) 100.2% | 293,416,373 | |||||||||||||
Other Assets, less Liabilities (0.2)% | (694,130 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 292,722,243 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $8,014,011, representing 2.7% of net assets.
bThe coupon rate shown represents the rate at period end.
cA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
dA portion or all of the security purchased on a delayed delivery basis.
eThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
fThe security was issued on a discount basis with no stated coupon rate.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 159 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Consolidated Financial Highlights
Franklin Liberty Systematic Style Premia ETF
| Year Ended March 31, | ||||||||||||
| 2022 | 2021 | 2020a | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||
Net asset value, beginning of year | $ | 19.55 | $ | 23.16 | $ | 25.00 | ||||||
|
| |||||||||||
| Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.14 | 0.23 | 0.11 | |||||||||
Net realized and unrealized gains (losses) | 1.82 | (2.25 | ) | (1.94 | ) | |||||||
|
| |||||||||||
Total from investment operations | 1.96 | (2.02 | ) | (1.83 | ) | |||||||
|
| |||||||||||
| Less distributions from: | ||||||||||||
Net investment income | (0.26 | ) | (0.05 | ) | (0.01 | ) | ||||||
Net realized gains | — | (1.54 | ) | — | ||||||||
|
| |||||||||||
Total Distributions | (0.26 | ) | (1.59 | ) | (0.01 | ) | ||||||
|
| |||||||||||
Net asset value, end of year | $ | 21.25 | $ | 19.55 | $ | 23.16 | ||||||
|
| |||||||||||
Total returnd | 10.09% | (8.70)% | (7.34)% | |||||||||
| Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.73% | 1.14% | 1.15% | |||||||||
Expenses net of waiver and payments by affiliates | 0.63% | 0.65% | 0.65% | |||||||||
Net investment income | 0.69% | 1.08% | 1.67% | |||||||||
| Supplemental data | ||||||||||||
Net assets, end of year (000’s) | $55,258 | $46,927 | $50,948 | |||||||||
Portfolio turnover ratef | 189.89% | g | 171.16% | g | 60.95% | g | ||||||
aFor the period December 18, 2019 (commencement of operations) to March 31, 2020.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 189.89% | 171.16% | 60.95% |
| 160 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Consolidated Schedule of Investments, March 31, 2022
Franklin Liberty Systematic Style Premia ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 63.16% | ||||||||||||||
| Aerospace & Defense 0.4% | ||||||||||||||
General Dynamics Corp. | United States | 955 | $ | 230,327 | ||||||||||
|
| |||||||||||||
| Air Freight & Logistics 0.9% | ||||||||||||||
Deutsche Post AG | Germany | 3,908 | 189,366 | |||||||||||
Expeditors International of Washington Inc. | United States | 695 | 71,696 | |||||||||||
FedEx Corp. | United States | 1,031 | 238,563 | |||||||||||
|
| |||||||||||||
| 499,625 | ||||||||||||||
|
| |||||||||||||
| Automobiles 0.3% | ||||||||||||||
Stellantis NV | United States | 7,863 | 129,482 | |||||||||||
Yamaha Motor Co. Ltd. | Japan | 1,100 | 24,977 | |||||||||||
|
| |||||||||||||
| 154,459 | ||||||||||||||
|
| |||||||||||||
| Banks 2.4% | ||||||||||||||
Banco Bilbao Vizcaya Argentaria SA | Spain | 21,371 | 123,886 | |||||||||||
Bank of Montreal | Canada | 2,500 | 294,444 | |||||||||||
Barclays PLC | United Kingdom | 65,151 | 127,213 | |||||||||||
BOC Hong Kong (Holdings) Ltd. | Hong Kong | 15,000 | 56,887 | |||||||||||
Canadian Imperial Bank of Commerce | Canada | 500 | 60,746 | |||||||||||
Hang Seng Bank Ltd. | Hong Kong | 1,500 | 28,960 | |||||||||||
Mediobanca Banca di Credito Finanziario SpA | Italy | 2,398 | 24,600 | |||||||||||
Mitsubishi UFJ Financial Group Inc. | Japan | 46,800 | 293,158 | |||||||||||
Mizuho Financial Group Inc. | Japan | 8,400 | 108,447 | |||||||||||
The Bank of Nova Scotia | Canada | 2,900 | 208,030 | |||||||||||
|
| |||||||||||||
| 1,326,371 | ||||||||||||||
|
| |||||||||||||
| Beverages 0.1% | ||||||||||||||
Heineken Holding NV | Netherlands | 466 | 36,865 | |||||||||||
|
| |||||||||||||
| Biotechnology 2.6% | ||||||||||||||
AbbVie Inc. | United States | 3,614 | 585,865 | |||||||||||
Gilead Sciences Inc. | United States | 5,062 | 300,936 | |||||||||||
| a | Regeneron Pharmaceuticals Inc. | United States | 419 | 292,638 | ||||||||||
| a | Vertex Pharmaceuticals Inc. | United States | 1,006 | 262,536 | ||||||||||
|
| |||||||||||||
| 1,441,975 | ||||||||||||||
|
| |||||||||||||
| Building Products 0.3% | ||||||||||||||
AGC Inc. | Japan | 800 | 32,329 | |||||||||||
Compagnie de Saint-Gobain | France | 2,030 | 122,579 | |||||||||||
Owens Corning | United States | 402 | 36,783 | |||||||||||
|
| |||||||||||||
| 191,691 | ||||||||||||||
|
| |||||||||||||
| Capital Markets 1.8% | ||||||||||||||
3i Group PLC | United Kingdom | 3,860 | 70,567 | |||||||||||
Ameriprise Financial Inc. | United States | 450 | 135,162 | |||||||||||
Goldman Sachs Group Inc. | United States | 1,373 | 453,227 | |||||||||||
SBI Holdings Inc. | Japan | 1,000 | 25,541 | |||||||||||
SEI Investments Co. | United States | 470 | 28,299 | |||||||||||
The Carlyle Group Inc. | United States | 660 | 32,281 | |||||||||||
UBS Group AG | Switzerland | 14,143 | 278,864 | |||||||||||
|
| |||||||||||||
| 1,023,941 | ||||||||||||||
|
| |||||||||||||
| Chemicals 1.9% | ||||||||||||||
Arkema SA | France | 189 | 22,869 | |||||||||||
Asahi Kasei Corp. | Japan | 5,000 | 43,769 | |||||||||||
Celanese Corp. | United States | 435 | 62,148 | |||||||||||
CF Industries Holdings Inc. | United States | 878 | 90,487 | |||||||||||
| b | Covestro AG, 144A | Germany | 776 | 39,579 | ||||||||||
Dow Inc. | United States | 3,023 | 192,626 | |||||||||||
| franklintempleton.com | Annual Report | 161 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Chemicals (continued) | ||||||||||||||
ICL Group Ltd. | Israel | 2,954 | $ | 35,388 | ||||||||||
LyondellBasell Industries NV, A | United States | 1,072 | 110,223 | |||||||||||
Mitsubishi Chemical Holdings Corp. | Japan | 5,000 | 33,660 | |||||||||||
Mosaic Co. | United States | 1,597 | 106,201 | |||||||||||
Nitto Denko Corp. | Japan | 600 | 43,600 | |||||||||||
Nutrien Ltd. | Canada | 2,200 | 227,600 | |||||||||||
Sumitomo Chemical Co. Ltd. | Japan | 5,900 | 27,319 | |||||||||||
Toray Industries Inc. | Japan | 5,400 | 28,420 | |||||||||||
|
| |||||||||||||
| 1,063,889 | ||||||||||||||
|
| |||||||||||||
| Commercial Services & Supplies 0.0%† | ||||||||||||||
Dai Nippon Printing Co. Ltd. | Japan | 900 | 21,340 | |||||||||||
|
| |||||||||||||
| Communications Equipment 0.3% | ||||||||||||||
Juniper Networks Inc. | United States | 666 | 24,749 | |||||||||||
| a | Nokia OYJ | Finland | 21,104 | 117,066 | ||||||||||
|
| |||||||||||||
| 141,815 | ||||||||||||||
|
| |||||||||||||
| Construction Materials 0.4% | ||||||||||||||
CRH PLC | Ireland | 617 | 24,955 | |||||||||||
HeidelbergCement AG | Germany | 584 | 33,568 | |||||||||||
| a | Holcim Ltd. | Switzerland | 2,098 | 103,253 | ||||||||||
James Hardie Industries PLC, CDI | United States | 1,630 | 49,696 | |||||||||||
|
| |||||||||||||
| 211,472 | ||||||||||||||
|
| |||||||||||||
| Consumer Finance 0.5% | ||||||||||||||
Ally Financial Inc. | United States | 1,465 | 63,698 | |||||||||||
Capital One Financial Corp. | United States | 1,676 | 220,042 | |||||||||||
|
| |||||||||||||
| 283,740 | ||||||||||||||
|
| |||||||||||||
| Distributors 0.3% | ||||||||||||||
Genuine Parts Co. | United States | 574 | 72,336 | |||||||||||
LKQ Corp. | United States | 1,093 | 49,633 | |||||||||||
Pool Corp. | United States | 54 | 22,834 | |||||||||||
|
| |||||||||||||
| 144,803 | ||||||||||||||
|
| |||||||||||||
| Diversified Financial Services 0.1% | ||||||||||||||
Investor AB, A | Sweden | 1,973 | 46,661 | |||||||||||
Sofina SA | Belgium | 61 | 22,411 | |||||||||||
|
| |||||||||||||
| 69,072 | ||||||||||||||
|
| |||||||||||||
| Diversified Telecommunication Services 1.6% | ||||||||||||||
| a | Liberty Global PLC, C | United Kingdom | 1,344 | 34,823 | ||||||||||
Nippon Telegraph & Telephone Corp. | Japan | 4,700 | 137,273 | |||||||||||
Orange SA | France | 7,946 | 94,635 | |||||||||||
Telefonica SA | Spain | 21,067 | 102,867 | |||||||||||
Verizon Communications Inc. | United States | 9,777 | 498,041 | |||||||||||
|
| |||||||||||||
| 867,639 | ||||||||||||||
|
| |||||||||||||
| Electric Utilities 0.7% | ||||||||||||||
CLP Holdings Ltd. | Hong Kong | 6,500 | 63,370 | |||||||||||
Endesa SA | Spain | 1,267 | 27,877 | |||||||||||
Exelon Corp. | United States | 3,312 | 157,750 | |||||||||||
| c | Fortum OYJ, Reg S | Finland | 1,719 | 31,616 | ||||||||||
NRG Energy Inc. | United States | 985 | 37,785 | |||||||||||
Power Assets Holdings Ltd. | Hong Kong | 6,000 | 39,112 | |||||||||||
Red Electrica Corp. SA | Spain | 1,791 | 37,085 | |||||||||||
|
| |||||||||||||
| 394,595 | ||||||||||||||
|
| |||||||||||||
| 162 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Electrical Equipment 1.0% | ||||||||||||||
ABB Ltd. | Switzerland | 5,119 | $ | 167,824 | ||||||||||
Emerson Electric Co. | United States | 2,424 | 237,673 | |||||||||||
Fuji Electric Co. Ltd. | Japan | 500 | 25,376 | |||||||||||
Mitsubishi Electric Corp. | Japan | 7,300 | 84,803 | |||||||||||
| a | Sensata Technologies Holding PLC | United States | 648 | 32,951 | ||||||||||
|
| |||||||||||||
| 548,627 | ||||||||||||||
|
| |||||||||||||
| Electronic Equipment, Instruments & Components 0.6% | ||||||||||||||
| a | Arrow Electronics Inc. | United States | 281 | 33,335 | ||||||||||
Kyocera Corp. | Japan | 1,300 | 73,711 | |||||||||||
Murata Manufacturing Co. Ltd. | Japan | 1,000 | 66,875 | |||||||||||
TE Connectivity Ltd. | Switzerland | 1,331 | 174,334 | |||||||||||
|
| |||||||||||||
| 348,255 | ||||||||||||||
|
| |||||||||||||
| Equity Real Estate Investment Trusts (REITs) 1.8% | ||||||||||||||
Ascendas REIT | Singapore | 11,600 | 25,114 | |||||||||||
Dexus | Australia | 4,362 | 35,868 | |||||||||||
Goodman Group | Australia | 6,803 | 116,938 | |||||||||||
GPT Group | Australia | 7,832 | 30,466 | |||||||||||
Link REIT | Hong Kong | 8,700 | 74,431 | |||||||||||
Public Storage | United States | 649 | 253,292 | |||||||||||
Scentre Group | Australia | 17,202 | 39,399 | |||||||||||
Segro PLC | United Kingdom | 4,846 | 85,850 | |||||||||||
Simon Property Group Inc. | United States | 1,349 | 177,475 | |||||||||||
Stockland | Australia | 9,631 | 30,882 | |||||||||||
Weyerhaeuser Co. | United States | 3,097 | 117,376 | |||||||||||
|
| |||||||||||||
| 987,091 | ||||||||||||||
|
| |||||||||||||
| Food & Staples Retailing 2.0% | ||||||||||||||
Carrefour SA | France | 2,459 | 53,749 | |||||||||||
Jeronimo Martins SGPS SA | Portugal | 1,115 | 26,958 | |||||||||||
Koninklijke Ahold Delhaize NV | Netherlands | 4,051 | 131,232 | |||||||||||
Loblaw Cos. Ltd. | Canada | 700 | 62,869 | |||||||||||
The Kroger Co. | United States | 2,882 | 165,340 | |||||||||||
Walgreens Boots Alliance Inc. | United States | 2,947 | 131,937 | |||||||||||
Walmart Inc. | United States | 3,688 | 549,217 | |||||||||||
|
| |||||||||||||
| 1,121,302 | ||||||||||||||
|
| |||||||||||||
| Food Products 1.0% | ||||||||||||||
Archer-Daniels-Midland Co. | United States | 2,292 | 206,876 | |||||||||||
Bunge Ltd. | United States | 578 | 64,048 | |||||||||||
Meiji Holdings Co. Ltd. | Japan | 500 | 27,230 | |||||||||||
The Hershey Co. | United States | 582 | 126,078 | |||||||||||
Tyson Foods Inc. | United States | 1,222 | 109,528 | |||||||||||
|
| |||||||||||||
| 533,760 | ||||||||||||||
|
| |||||||||||||
| Gas Utilities 0.2% | ||||||||||||||
Osaka Gas Co. Ltd. | Japan | 1,600 | 27,577 | |||||||||||
Tokyo Gas Co. Ltd. | Japan | 1,600 | 29,423 | |||||||||||
UGI Corp. | United States | 797 | 28,868 | |||||||||||
|
| |||||||||||||
| 85,868 | ||||||||||||||
|
| |||||||||||||
| Health Care Equipment & Supplies 0.4% | ||||||||||||||
| a | Edwards Lifesciences Corp. | United States | 1,115 | 131,258 | ||||||||||
| a | Hologic Inc. | United States | 1,015 | 77,972 | ||||||||||
|
| |||||||||||||
| 209,230 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 163 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Health Care Providers & Services 1.5% | ||||||||||||||
Cigna Corp. | United States | 1,345 | $ | 322,276 | ||||||||||
HCA Healthcare Inc. | United States | 1,028 | 257,637 | |||||||||||
| a | Laboratory Corp. of America Holdings | United States | 307 | 80,944 | ||||||||||
McKesson Corp. | United States | 610 | 186,739 | |||||||||||
|
| |||||||||||||
| 847,596 | ||||||||||||||
|
| |||||||||||||
| Hotels, Restaurants & Leisure 1.5% | ||||||||||||||
Aristocrat Leisure Ltd. | Australia | 2,416 | 66,585 | |||||||||||
Dominos Pizza Inc. | United States | 147 | 59,830 | |||||||||||
McDonald’s Corp. | United States | 2,263 | 559,595 | |||||||||||
Yum! Brands Inc. | United States | 1,216 | 144,132 | |||||||||||
|
| |||||||||||||
| 830,142 | ||||||||||||||
|
| |||||||||||||
| Industrial Conglomerates 0.3% | ||||||||||||||
CK Hutchison Holdings Ltd. | Hong Kong | 11,500 | 84,509 | |||||||||||
Jardine Matheson Holdings Ltd. | Hong Kong | 900 | 49,500 | |||||||||||
Toshiba Corp. | Japan | 1,600 | 61,298 | |||||||||||
|
| |||||||||||||
| 195,307 | ||||||||||||||
|
| |||||||||||||
| Insurance 1.6% | ||||||||||||||
Aflac Inc. | United States | 2,506 | 161,361 | |||||||||||
American Financial Group Inc. | United States | 290 | 42,230 | |||||||||||
Assicurazioni Generali SpA | Italy | 4,298 | 99,326 | |||||||||||
Dai-ichi Life Holdings Inc. | Japan | 3,900 | 80,297 | |||||||||||
Fairfax Financial Holdings Ltd. | Canada | 100 | 54,604 | |||||||||||
Fidelity National Financial Inc. | United States | 1,071 | 52,308 | |||||||||||
MetLife Inc. | United States | 2,871 | 201,774 | |||||||||||
NN Group NV | Netherlands | 1,065 | 54,343 | |||||||||||
Principal Financial Group Inc. | United States | 1,054 | 77,374 | |||||||||||
Sompo Holdings Inc. | Japan | 1,200 | 53,200 | |||||||||||
|
| |||||||||||||
| 876,817 | ||||||||||||||
|
| |||||||||||||
| Interactive Media & Services 3.2% | ||||||||||||||
| a | Alphabet Inc., A | United States | 125 | 347,669 | ||||||||||
| a | Alphabet Inc., C | United States | 294 | 821,139 | ||||||||||
| a | Meta Platforms Inc., A | United States | 2,613 | 581,027 | ||||||||||
|
| |||||||||||||
| 1,749,835 | ||||||||||||||
|
| |||||||||||||
| Internet & Direct Marketing Retail 0.2% | ||||||||||||||
eBay Inc. | United States | 2,434 | 139,371 | |||||||||||
|
| |||||||||||||
| IT Services 2.6% | ||||||||||||||
Accenture PLC, A | Ireland | 1,678 | 565,872 | |||||||||||
| a | CGI Inc. | Canada | 900 | 71,759 | ||||||||||
Cognizant Technology Solutions Corp., A | United States | 2,140 | 191,894 | |||||||||||
Fujitsu Ltd. | Japan | 800 | 121,376 | |||||||||||
| a | Gartner Inc. | United States | 340 | 101,137 | ||||||||||
International Business Machines Corp. | United States | 1,213 | 157,714 | |||||||||||
NTT Data Corp. | Japan | 2,500 | 49,804 | |||||||||||
Paychex Inc. | United States | 1,321 | 180,277 | |||||||||||
|
| |||||||||||||
| 1,439,833 | ||||||||||||||
|
| |||||||||||||
| Leisure Products 0.1% | ||||||||||||||
Hasbro Inc. | United States | 528 | 43,254 | |||||||||||
|
| |||||||||||||
| Life Sciences Tools & Services 1.1% | ||||||||||||||
Agilent Technologies Inc. | United States | 1,248 | 165,148 | |||||||||||
| a | IQVIA Holdings Inc. | United States | 782 | 180,806 | ||||||||||
| a | Mettler-Toledo International Inc. | United States | 95 | 130,453 | ||||||||||
| 164 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Life Sciences Tools & Services (continued) | ||||||||||||||
PerkinElmer Inc. | United States | 469 | $ | 81,822 | ||||||||||
| a | Waters Corp. | United States | 248 | 76,977 | ||||||||||
|
| |||||||||||||
| 635,206 | ||||||||||||||
|
| |||||||||||||
| Machinery 0.5% | ||||||||||||||
CNH Industrial NV | United Kingdom | 4,047 | 64,819 | |||||||||||
Dover Corp. | United States | 417 | 65,427 | |||||||||||
Minebea Mitsumi Inc. | Japan | 1,400 | 31,074 | |||||||||||
Snap-on Inc. | United States | 218 | 44,795 | |||||||||||
Techtronic Industries Co. Ltd. | Hong Kong | 6,000 | 97,224 | |||||||||||
|
| |||||||||||||
| 303,339 | ||||||||||||||
|
| |||||||||||||
| Marine 0.2% | ||||||||||||||
AP Moller-Maersk A/S, A | Denmark | 12 | 35,810 | |||||||||||
AP Moller-Maersk A/S, B | Denmark | 22 | 67,033 | |||||||||||
|
| |||||||||||||
| 102,843 | ||||||||||||||
|
| |||||||||||||
| Media 0.4% | ||||||||||||||
Dentsu Group Inc. | Japan | 800 | 33,088 | |||||||||||
Omnicom Group Inc. | United States | 824 | 69,941 | |||||||||||
The Interpublic Group of Cos. Inc. | United States | 1,538 | 54,522 | |||||||||||
WPP PLC | United Kingdom | 4,729 | 62,451 | |||||||||||
|
| |||||||||||||
| 220,002 | ||||||||||||||
|
| |||||||||||||
| Metals & Mining 1.5% | ||||||||||||||
Anglo American PLC | South Africa | 2,465 | 128,929 | |||||||||||
ArcelorMittal SA | Luxembourg | 2,618 | 85,349 | |||||||||||
BlueScope Steel Ltd. | Australia | 2,009 | 31,471 | |||||||||||
Nippon Steel Corp. | Japan | 3,500 | 62,603 | |||||||||||
Nucor Corp. | United States | 1,184 | 176,002 | |||||||||||
Rio Tinto PLC | Australia | 3,804 | 304,569 | |||||||||||
Steel Dynamics Inc. | United States | 810 | 67,578 | |||||||||||
|
| |||||||||||||
| 856,501 | ||||||||||||||
|
| |||||||||||||
| Multi-Utilities 0.9% | ||||||||||||||
DTE Energy Co. | United States | 787 | 104,049 | |||||||||||
E.ON SE | Germany | 8,758 | 102,728 | |||||||||||
Engie SA | France | 7,101 | 94,290 | |||||||||||
Sempra Energy | United States | 1,034 | 173,836 | |||||||||||
|
| |||||||||||||
| 474,903 | ||||||||||||||
|
| |||||||||||||
| Multiline Retail 0.8% | ||||||||||||||
Canadian Tire Corp. Ltd., A | Canada | 200 | 30,224 | |||||||||||
Target Corp. | United States | 1,922 | 407,887 | |||||||||||
|
| |||||||||||||
| 438,111 | ||||||||||||||
|
| |||||||||||||
| Oil, Gas & Consumable Fuels 3.0% | ||||||||||||||
BP PLC | United Kingdom | 32,098 | 158,630 | |||||||||||
ConocoPhillips | United States | 269 | 26,900 | |||||||||||
ENEOS Holdings Inc. | Japan | 12,200 | 46,036 | |||||||||||
Eni SpA | Italy | 10,312 | 152,531 | |||||||||||
Imperial Oil Ltd. | Canada | 1,000 | 48,437 | |||||||||||
INPEX Corp. | Japan | 4,300 | 51,015 | |||||||||||
OMV AG | Austria | 590 | 28,484 | |||||||||||
Repsol SA | Spain | 5,963 | 79,112 | |||||||||||
Shell PLC | Netherlands | 20,673 | 573,915 | |||||||||||
Suncor Energy Inc. | Canada | 6,100 | 198,767 | |||||||||||
| franklintempleton.com | Annual Report | 165 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Oil, Gas & Consumable Fuels (continued) | ||||||||||||||
TotalEnergies SE | France | 5,454 | $ | 279,328 | ||||||||||
|
| |||||||||||||
| 1,643,155 | ||||||||||||||
|
| |||||||||||||
| Paper & Forest Products 0.1% | ||||||||||||||
West Fraser Timber Co. Ltd. | Canada | 400 | 32,940 | |||||||||||
|
| |||||||||||||
| Personal Products 0.4% | ||||||||||||||
L’Oreal SA | France | 319 | 129,143 | |||||||||||
The Estee Lauder Cos Inc., A | United States | 283 | 77,067 | |||||||||||
|
| |||||||||||||
| 206,210 | ||||||||||||||
|
| |||||||||||||
| Pharmaceuticals 2.3% | ||||||||||||||
Bristol-Myers Squibb Co. | United States | 6,228 | 454,831 | |||||||||||
Otsuka Holdings Co. Ltd. | Japan | 1,600 | 55,788 | |||||||||||
Pfizer Inc. | United States | 10,666 | 552,179 | |||||||||||
Roche Holding AG, Bearer | Switzerland | 127 | 55,892 | |||||||||||
Roche Holding AG, Non-Voting | Switzerland | 319 | 127,028 | |||||||||||
|
| |||||||||||||
| 1,245,718 | ||||||||||||||
|
| |||||||||||||
| Professional Services 0.2% | ||||||||||||||
Adecco Group AG | Switzerland | 642 | 29,308 | |||||||||||
Randstad NV | Netherlands | 473 | 28,756 | |||||||||||
Robert Half International Inc. | United States | 443 | 50,582 | |||||||||||
|
| |||||||||||||
| 108,646 | ||||||||||||||
|
| |||||||||||||
| Real Estate Management & Development 0.8% | ||||||||||||||
Aroundtown SA | Germany | 3,975 | 22,972 | |||||||||||
| a | CBRE Group Inc., A | United States | 1,357 | 124,193 | ||||||||||
CK Asset Holdings Ltd. | Hong Kong | 8,500 | 58,285 | |||||||||||
Daiwa House Industry Co. Ltd. | Japan | 900 | 23,735 | |||||||||||
Henderson Land Development Co. Ltd. | Hong Kong | 6,000 | 24,976 | |||||||||||
Hongkong Land Holdings Ltd. | Hong Kong | 4,900 | 24,010 | |||||||||||
LEG Immobilien AG | Germany | 295 | 33,890 | |||||||||||
New World Development Co. Ltd. | Hong Kong | 6,000 | 24,402 | |||||||||||
Sun Hung Kai Properties Ltd. | Hong Kong | 5,500 | 65,735 | |||||||||||
Wharf Real Estate Investment Co. Ltd. | Hong Kong | 5,000 | 24,804 | |||||||||||
|
| |||||||||||||
| 427,002 | ||||||||||||||
|
| |||||||||||||
| Road & Rail 1.5% | ||||||||||||||
AMERCO | United States | 39 | 23,281 | |||||||||||
JB Hunt Transport Services Inc. | United States | 345 | 69,272 | |||||||||||
Knight-Swift Transportation Holdings Inc. | United States | 634 | 31,992 | |||||||||||
MTR Corp. Ltd. | Hong Kong | 6,500 | 35,150 | |||||||||||
Old Dominion Freight Line Inc. | United States | 406 | 121,264 | |||||||||||
Union Pacific Corp. | United States | 1,984 | 542,049 | |||||||||||
|
| |||||||||||||
| 823,008 | ||||||||||||||
|
| |||||||||||||
| Semiconductors & Semiconductor Equipment 4.0% | ||||||||||||||
Intel Corp. | United States | 11,478 | 568,850 | |||||||||||
Micron Technology Inc. | United States | 4,749 | 369,900 | |||||||||||
| a | ON Semiconductor Corp. | United States | 1,177 | 73,692 | ||||||||||
| a | Qorvo Inc. | United States | 465 | 57,706 | ||||||||||
QUALCOMM Inc. | United States | 3,488 | 533,036 | |||||||||||
| a | Renesas Electronics Corp. | Japan | 5,100 | 60,171 | ||||||||||
Texas Instruments Inc. | United States | 3,040 | 557,779 | |||||||||||
|
| |||||||||||||
| 2,221,134 | ||||||||||||||
|
| |||||||||||||
| 166 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Software 6.1% | ||||||||||||||
| a | Cadence Design Systems Inc. | United States | 1,168 | $ | 192,089 | |||||||||
Constellation Software Inc. | Canada | 100 | 171,090 | |||||||||||
| a | Dropbox Inc., A | United States | 1,245 | 28,946 | ||||||||||
| a | Fair Isaac Corp. | United States | 110 | 51,311 | ||||||||||
Intuit Inc. | United States | 1,061 | 510,171 | |||||||||||
Microsoft Corp. | United States | 4,527 | 1,395,719 | |||||||||||
Open Text Corp. | Canada | 1,100 | 46,684 | |||||||||||
Oracle Corp. | United States | 1,520 | 125,750 | |||||||||||
SAP SE | Germany | 4,197 | 472,210 | |||||||||||
SS&C Technologies Holdings Inc. | United States | 911 | 68,343 | |||||||||||
| a | Synopsys Inc. | United States | 650 | 216,626 | ||||||||||
The Sage Group PLC | United Kingdom | 4,096 | 37,816 | |||||||||||
Trend Micro Inc. | Japan | 500 | 29,495 | |||||||||||
|
| |||||||||||||
| 3,346,250 | ||||||||||||||
|
| |||||||||||||
| Specialty Retail 3.1% | ||||||||||||||
Advance Auto Parts Inc. | United States | 258 | 53,396 | |||||||||||
| a | AutoZone Inc. | United States | 85 | 173,789 | ||||||||||
Bath & Body Works Inc. | United States | 1,079 | 51,576 | |||||||||||
Best Buy Co. Inc. | United States | 895 | 81,356 | |||||||||||
Industria de Diseno Textil SA | Spain | 1,501 | 33,034 | |||||||||||
Kingfisher PLC | United Kingdom | 8,346 | 28,065 | |||||||||||
Lowe’s Cos Inc. | United States | 2,224 | 449,671 | |||||||||||
| a | O’Reilly Automotive Inc. | United States | 273 | 186,994 | ||||||||||
The Home Depot Inc. | United States | 1,812 | 542,386 | |||||||||||
Tractor Supply Co. | United States | 166 | 38,740 | |||||||||||
| a | Ulta Beauty Inc. | United States | 215 | 85,617 | ||||||||||
|
| |||||||||||||
| 1,724,624 | ||||||||||||||
|
| |||||||||||||
| Technology Hardware, Storage & Peripherals 0.5% | ||||||||||||||
Hewlett Packard Enterprise Co. | United States | 5,366 | 89,666 | |||||||||||
HP Inc. | United States | 4,962 | 180,120 | |||||||||||
|
| |||||||||||||
| 269,786 | ||||||||||||||
|
| |||||||||||||
| Textiles, Apparel & Luxury Goods 0.7% | ||||||||||||||
Burberry Group PLC | United Kingdom | 1,622 | 35,750 | |||||||||||
Gildan Activewear Inc. | Canada | 800 | 30,032 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | France | 388 | 280,351 | |||||||||||
Pandora AS | Denmark | 391 | 37,876 | |||||||||||
|
| |||||||||||||
| 384,009 | ||||||||||||||
|
| |||||||||||||
| Tobacco 0.2% | ||||||||||||||
Imperial Brands PLC | United Kingdom | 3,559 | 75,467 | |||||||||||
Japan Tobacco Inc. | Japan | 1,900 | 32,678 | |||||||||||
|
| |||||||||||||
| 108,145 | ||||||||||||||
|
| |||||||||||||
| Trading Companies & Distributors 1.6% | ||||||||||||||
| a | AerCap Holdings NV | Ireland | 545 | 27,403 | ||||||||||
Ferguson PLC | United States | 903 | 123,411 | |||||||||||
ITOCHU Corp. | Japan | 4,900 | 167,296 | |||||||||||
Marubeni Corp. | Japan | 6,400 | 75,192 | |||||||||||
Mitsubishi Corp. | Japan | 5,200 | 197,118 | |||||||||||
Mitsui & Co. Ltd. | Japan | 6,500 | 178,225 | |||||||||||
Sumitomo Corp. | Japan | 4,600 | 80,308 | |||||||||||
Toyota Tsusho Corp. | Japan | 800 | 33,351 | |||||||||||
|
| |||||||||||||
| 882,304 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 167 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Wireless Telecommunication Services 0.7% | ||||||||||||||
KDDI Corp. | Japan | 6,400 | $ | 211,180 | ||||||||||
Vodafone Group PLC | United Kingdom | 108,399 | �� | 178,176 | ||||||||||
|
| |||||||||||||
| 389,356 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $31,430,864) | 34,903,099 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $31,430,864) 63.16% | 34,903,099 | |||||||||||||
Other Assets, less Liabilities 36.84% | 20,355,215 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 55,258,314 | ||||||||||||
|
| |||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $39,579, representing 0.1% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the value of this security was $31,616, representing 0.1% of net assets.
At March 31, 2022, the Fund had the following total return equity swap contracts outstanding. See Note 1(c).
| Swaps | ||||||||||||||||||||||
Description OTC Swap Contracts Short | Financing Rate | Payment Frequency | Counterparty | Maturity Date | Notional Amount | Unrealized Appreciation (Depreciation) | ||||||||||||||||
MSFTLSSP | 1-month USD LIBOR | At Maturity | MSCS | 4/21/22 | 24,824 | 878 | ||||||||||||||||
At March 31, 2022 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
| OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar | MSCO | Buy | 2,024,413 | $ | 1,485,368 | 6/15/22 | $ | 36,706 | $ | — | ||||||||||||||||||
Australian Dollar | MSCO | Buy | 2,130,395 | 1,563,130 | 6/15/22 | 38,627 | — | |||||||||||||||||||||
Australian Dollar | MSCO | Sell | 2,130,395 | 1,565,879 | 6/15/22 | — | (35,879 | ) | ||||||||||||||||||||
Brazilian Real | MSCO | Buy | 3,706,831 | 713,717 | 6/15/22 | 50,314 | — | |||||||||||||||||||||
Brazilian Real | MSCO | Buy | 200,318 | 38,489 | 6/15/22 | 2,800 | — | |||||||||||||||||||||
Canadian Dollar | MSCO | Buy | 1,784,528 | 1,392,503 | 6/15/22 | 35,942 | — | |||||||||||||||||||||
Canadian Dollar | MSCO | Buy | 697,060 | 550,674 | 6/15/22 | 7,296 | — | |||||||||||||||||||||
Czech Koruna | MSCO | Buy | 38,806,504 | 1,682,884 | 6/15/22 | 70,063 | — | |||||||||||||||||||||
Czech Koruna | MSCO | Sell | 351,211 | 15,558 | 6/15/22 | — | (307 | ) | ||||||||||||||||||||
Euro | MSCO | Sell | 1,016,753 | 1,127,929 | 6/15/22 | — | (6,412 | ) | ||||||||||||||||||||
Euro | MSCO | Sell | 298,372 | 330,559 | 6/15/22 | — | (2,321 | ) | ||||||||||||||||||||
Great British Pound | MSCO | Buy | 1,035,491 | 1,363,150 | 6/15/22 | — | (158 | ) | ||||||||||||||||||||
Great British Pound | MSCO | Buy | 452,157 | 595,447 | 6/15/22 | — | (284 | ) | ||||||||||||||||||||
Hungarian Forint | MSCO | Buy | 714,098,062 | 2,050,653 | 6/15/22 | 91,480 | — | |||||||||||||||||||||
Hungarian Forint | MSCO | Sell | 471,892,664 | 1,386,207 | 6/15/22 | — | (29,364 | ) | ||||||||||||||||||||
Hungarian Forint | MSCO | Sell | 714,098,062 | 2,097,697 | 6/15/22 | — | (44,436 | ) | ||||||||||||||||||||
Israeli Shekel | MSCO | Buy | 1,322,400 | 409,658 | 6/15/22 | 5,606 | — | |||||||||||||||||||||
Israeli Shekel | MSCO | Sell | 11,636,234 | 3,581,702 | 6/15/22 | — | (72,346 | ) | ||||||||||||||||||||
Japanese Yen | MSCO | Sell | 57,183,755 | 494,259 | 6/15/22 | 22,257 | — | |||||||||||||||||||||
Japanese Yen | MSCO | Sell | 213,281,806 | 1,800,513 | 6/15/22 | 40,058 | — | |||||||||||||||||||||
Mexican Peso | MSCO | Buy | 61,939,237 | 2,909,894 | 6/15/22 | 156,759 | — | |||||||||||||||||||||
Mexican Peso | MSCO | Sell | 31,585,166 | 1,507,098 | 6/15/22 | — | (56,704 | ) | ||||||||||||||||||||
New Zealand Dollar | MSCO | Buy | 4,018,526 | 2,746,944 | 6/15/22 | 44,792 | — | |||||||||||||||||||||
| 168 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
| Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
| OTC Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
New Zealand Dollar | MSCO | Sell | 5,672,608 | $ | 3,881,601 | 6/15/22 | $ | — | $ | (59,253 | ) | |||||||||||||||||
Norwegian Krone | MSCO | Buy | 10,898,000 | 1,224,748 | 6/15/22 | 20,995 | — | |||||||||||||||||||||
Norwegian Krone | MSCO | Sell | 10,898,000 | 1,216,254 | 6/15/22 | — | (29,489 | ) | ||||||||||||||||||||
South African Rand | MSCO | Buy | 11,974,500 | 793,576 | 6/15/22 | 18,511 | — | |||||||||||||||||||||
Swedish Krona | MSCO | Buy | 3,429,302 | 364,006 | 6/15/22 | 4,612 | — | |||||||||||||||||||||
Swedish Krona | MSCO | Buy | 15,907,993 | 1,688,567 | 6/15/22 | 21,393 | — | |||||||||||||||||||||
Swedish Krona | MSCO | Sell | 15,907,993 | 1,641,722 | 6/15/22 | — | (68,238 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Buy | 696,831 | 754,511 | 6/15/22 | 4,990 | — | |||||||||||||||||||||
Swiss Franc | MSCO | Buy | 242,473 | 258,808 | 6/15/22 | 5,472 | — | |||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 678,673 | $ | (405,191 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 273,482 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
Australian 10 Yr. Bond | Long | 92 | $ | 8,756,344 | 6/15/22 | $ | (311,054 | ) | ||||||||||||
Euro-OAT | Long | 39 | 6,574,528 | 6/08/22 | (320,720 | ) | ||||||||||||||
Euro-BTP | Long | 28 | 4,308,938 | 6/08/22 | (146,467 | ) | ||||||||||||||
EURO STOXX 50 Index | Long | 77 | 3,275,320 | 6/17/22 | 2,408 | |||||||||||||||
S&P/TSX 60 Index | Long | 6 | 1,265,378 | 6/16/22 | 38,771 | |||||||||||||||
Mex Bolsa Index | Long | 39 | 1,109,433 | 6/17/22 | 53,287 | |||||||||||||||
FTSE/MIB Index | Long | 8 | 1,086,214 | 6/17/22 | 27,539 | |||||||||||||||
FTSE 100 Index | Long | 11 | 1,084,209 | 6/17/22 | 30,242 | |||||||||||||||
OMXS30 Index | Long | 18 | 402,708 | 4/13/22 | (12,576 | ) | ||||||||||||||
CAC 40 10 Euro | Long | 3 | 222,224 | 4/14/22 | 1,503 | |||||||||||||||
IBEX 35 Index | Short | 3 | 280,919 | 4/14/22 | (1,316 | ) | ||||||||||||||
Nikkei 225 Mini | Short | 3 | 687,868 | 6/09/22 | (35,360 | ) | ||||||||||||||
DAX Index | Short | 2 | 802,944 | 6/17/22 | 3,528 | |||||||||||||||
Euro-Bund | Short | 8 | 1,412,265 | 6/08/22 | 21,145 | |||||||||||||||
S&P 500 E-Mini | Short | 8 | 1,812,300 | 6/17/22 | (71,980 | ) | ||||||||||||||
Canada 10 Yr. Bond | Short | 21 | 2,195,076 | 6/21/22 | 95,454 | |||||||||||||||
SPI 200 Index | Short | 17 | 2,386,950 | 6/16/22 | (88,294 | ) | ||||||||||||||
SGX Nifty 50 | Short | 82 | 2,875,986 | 4/28/22 | (13,478 | ) | ||||||||||||||
U.S. Treasury 10 Yr. Note | Short | 66 | 8,109,750 | 6/21/22 | 222,643 | |||||||||||||||
Long Gilt, June | Short | 61 | 9,736,670 | 6/28/22 | 127,823 | |||||||||||||||
| Commodity Contracts | ||||||||||||||||||||
NY Harbor ULSD, May | Long | 6 | 846,947 | 4/29/22 | 24,077 | |||||||||||||||
Soybean Oil, May | Long | 20 | 839,280 | 5/13/22 | 29,850 | |||||||||||||||
Brent Crude, June | Long | 8 | 837,680 | 4/29/22 | 18,356 | |||||||||||||||
Soybean, May | Long | 10 | 809,125 | 5/13/22 | 6,137 | |||||||||||||||
Low Sulphur Gasoil, May | Long | 8 | 806,400 | 5/12/22 | 28,786 | |||||||||||||||
WTI Crude, May | Long | 8 | 802,240 | 4/20/22 | (1,719 | ) | ||||||||||||||
Gasoline Rbob, May | Long | 6 | 794,027 | 4/29/22 | 4,379 | |||||||||||||||
Cotton No. 2, May | Long | 9 | 610,605 | 5/06/22 | 72,640 | |||||||||||||||
Gold 100 Ounce, June | Long | 2 | 390,800 | 6/28/22 | 1,535 | |||||||||||||||
Silver, May | Long | 2 | 251,330 | 5/26/22 | (3,758 | ) | ||||||||||||||
Live Cattle, October | Long | 4 | 231,080 | 10/31/22 | 1,508 | |||||||||||||||
Sugar No. 11, October | Long | 6 | 129,965 | 9/30/22 | 11,205 | |||||||||||||||
Copper, September | Long | 1 | 118,825 | 9/28/22 | 5,673 | |||||||||||||||
| franklintempleton.com | Annual Report | 169 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Futures Contracts (continued) | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Commodity Contracts (continued) | ||||||||||||||||||||
Cotton No. 2, December | Long | 2 | $ | 111,280 | 12/07/22 | $ | 9,004 | |||||||||||||
Cocoa, September | Long | 4 | 107,760 | 9/15/22 | (1,225 | ) | ||||||||||||||
Corn, September | Long | 3 | 104,437 | 9/14/22 | 7,479 | |||||||||||||||
Lean Hog, August | Long | 2 | 94,760 | 8/12/22 | 874 | |||||||||||||||
Coffee ‘C’, September | Long | 1 | 84,637 | 9/20/22 | (8,928 | ) | ||||||||||||||
Soybean Meal, December | Long | 2 | 82,300 | 12/14/22 | (852 | ) | ||||||||||||||
Soybean Oil, December | Long | 2 | 76,248 | 12/14/22 | 570 | |||||||||||||||
Soybean, November | Long | 1 | 71,025 | 11/14/22 | (2,322 | ) | ||||||||||||||
Wheat, May | Long | 1 | 50,300 | 5/13/22 | (3,303 | ) | ||||||||||||||
Wheat, September | Long | 1 | 49,450 | 9/14/22 | 10,310 | |||||||||||||||
Corn, May | Long | 1 | 37,438 | 5/13/22 | 5,135 | |||||||||||||||
Cocoa, May | Short | 1 | 26,500 | 5/13/22 | (1,858 | ) | ||||||||||||||
Soybean Meal, May | Short | 4 | 187,000 | 5/13/22 | (8,092 | ) | ||||||||||||||
Platinum, July | Short | 4 | 199,160 | 7/27/22 | 5,710 | |||||||||||||||
Copper, May | Short | 2 | 237,550 | 5/26/22 | (10,213 | ) | ||||||||||||||
Lean Hog, June | Short | 5 | 241,250 | 6/14/22 | (1,254 | ) | ||||||||||||||
Coffee ‘C’, May | Short | 4 | 339,600 | 5/18/22 | (16,774 | ) | ||||||||||||||
Natural Gas, May | Short | 8 | 451,360 | 4/27/22 | (58,099 | ) | ||||||||||||||
Sugar No. 11, May | Short | 35 | 764,008 | 4/29/22 | (75,195 | ) | ||||||||||||||
Live Cattle, June | Short | 28 | 1,535,800 | 6/30/22 | (22,522 | ) | ||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | (349,788 | ) | ||||||||||||||||
|
| |||||||||||||||||||
*As of year end.
The following table represents the individual short positions and related values of the equity securities underlying the total return swap with Morgan Stanley Capital Services LLC as of March 31, 2022 , expiration date 4/22/22:
| Country | Shares | Value | ||||||||||||
| Reference Entity – Short 100.00% | ||||||||||||||
| Automobiles & Components 4.28% | ||||||||||||||
Aptiv PLC | United States | (1,226 | ) | $ | (146,765 | ) | ||||||||
BorgWarner Inc. | United States | (1,069 | ) | (41,584 | ) | |||||||||
Denso Corp. | Japan | (1,900 | ) | (123,040 | ) | |||||||||
Ferrari NV | Italy | (555 | ) | (122,701 | ) | |||||||||
Lear Corp. | United States | (264 | ) | (37,644 | ) | |||||||||
Lucid Group Inc., A | United States | (1,952 | ) | (49,581 | ) | |||||||||
Nissan Motor Co. Ltd. | Japan | (10,000 | ) | (45,133 | ) | |||||||||
Porsche Automobil Holding SE | Germany | (470 | ) | (45,967 | ) | |||||||||
Tesla Inc. | United States | (414 | ) | (446,126 | ) | |||||||||
|
| |||||||||||||
| (1,058,541 | ) | |||||||||||||
|
| |||||||||||||
| Banks 1.66% | ||||||||||||||
Danske Bank A/S | Denmark | (3,051 | ) | (51,388 | ) | |||||||||
First Republic Bank | United States | (802 | ) | (130,004 | ) | |||||||||
Huntington Bancshares Inc. | United States | (6,314 | ) | (92,311 | ) | |||||||||
Skandinaviska Enskilda Banken AB, A | Sweden | (7,022 | ) | (77,194 | ) | |||||||||
Swedbank AB | Sweden | (3,971 | ) | (60,080 | ) | |||||||||
|
| |||||||||||||
| (410,977 | ) | |||||||||||||
|
| |||||||||||||
| Capital Goods 10.54% | ||||||||||||||
Airbus SE | France | (2,645 | ) | (324,785 | ) | |||||||||
Alfa Laval AB | Sweden | (1,393 | ) | (48,624 | ) | |||||||||
Alstom SA | France | (1,396 | ) | (33,038 | ) | |||||||||
| 170 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Reference Entity – Short (continued) | ||||||||||||||
| Capital Goods (continued) | ||||||||||||||
Assa Abloy AB, B | Sweden | (4,384 | ) | $ | (119,909 | ) | ||||||||
Atlas Copco AB, A | Sweden | (1,661 | ) | (87,636 | ) | |||||||||
Boeing Co. | United States | (1,810 | ) | (346,615 | ) | |||||||||
CAE Inc. | Canada | (1,500 | ) | (39,078 | ) | |||||||||
Epiroc AB, A | Sweden | (2,901 | ) | (62,942 | ) | |||||||||
Epiroc AB, B | Sweden | (1,694 | ) | (31,001 | ) | |||||||||
Ferrovial SA | Spain | (2,130 | ) | (57,187 | ) | |||||||||
Generac Holdings Inc. | United States | (287 | ) | (85,314 | ) | |||||||||
General Electric Co. | United States | (757 | ) | (69,265 | ) | |||||||||
HEICO Corp. | United States | (197 | ) | (30,247 | ) | |||||||||
HEICO Corp., A | United States | (331 | ) | (41,981 | ) | |||||||||
Howmet Aerospace Inc. | United States | (1,227 | ) | (44,098 | ) | |||||||||
Kone Oyj | Finland | (1,540 | ) | (81,545 | ) | |||||||||
Melrose Industries PLC | United Kingdom | (18,968 | ) | (31,180 | ) | |||||||||
MTU Aero Engines AG | Germany | (230 | ) | (53,920 | ) | |||||||||
Nibe Industrier AB | Sweden | (6,255 | ) | (70,508 | ) | |||||||||
Plug Power Inc. | United States | (2,514 | ) | (71,926 | ) | |||||||||
Rolls-Royce Holdings PLC | United Kingdom | (37,945 | ) | (50,510 | ) | |||||||||
Safran SA | France | (1,540 | ) | (183,788 | ) | |||||||||
Siemens Energy AG | Germany | (1,778 | ) | (40,990 | ) | |||||||||
Skanska AB, B | Sweden | (1,492 | ) | (33,844 | ) | |||||||||
SKF AB, B | Sweden | (1,672 | ) | (27,620 | ) | |||||||||
Smiths Group PLC | United Kingdom | (1,753 | ) | (33,525 | ) | |||||||||
Thales SA | France | (454 | ) | (57,561 | ) | |||||||||
TransDigm Group Inc. | United States | (236 | ) | (153,763 | ) | |||||||||
United Rentals Inc. | United States | (325 | ) | (115,443 | ) | |||||||||
Vestas Wind Systems A/S | Denmark | (4,890 | ) | (146,107 | ) | |||||||||
Vinci SA | France | (353 | ) | (36,523 | ) | |||||||||
|
| |||||||||||||
| (2,610,473 | ) | |||||||||||||
|
| |||||||||||||
| Commercial & Professional Services 0.82% | ||||||||||||||
CoStar Group Inc. | United States | (1,745 | ) | (116,234 | ) | |||||||||
Rentokil Initial PLC | United Kingdom | (8,148 | ) | (56,430 | ) | |||||||||
Ritchie Bros Auctioneers Inc. | Canada | (500 | ) | (29,558 | ) | |||||||||
|
| |||||||||||||
| (202,222 | ) | |||||||||||||
|
| |||||||||||||
| Consumer Durables & Apparel 1.29% | ||||||||||||||
adidas AG | Germany | (842 | ) | (198,519 | ) | |||||||||
Newell Brands Inc. | United States | (1,723 | ) | (36,889 | ) | |||||||||
Peloton Interactive Inc., A | United States | (1,321 | ) | (34,901 | ) | |||||||||
PulteGroup Inc. | United States | (1,183 | ) | (49,568 | ) | |||||||||
|
| |||||||||||||
| (319,877 | ) | |||||||||||||
|
| |||||||||||||
| Consumer Services 3.65% | ||||||||||||||
Aramark | United States | (1,037 | ) | (38,991 | ) | |||||||||
Caesars Entertainment Inc. | United States | (991 | ) | (76,664 | ) | |||||||||
Carnival Corp. | United States | (3,738 | ) | (75,582 | ) | |||||||||
Darden Restaurants Inc. | United States | (601 | ) | (79,903 | ) | |||||||||
Evolution AB | Sweden | (790 | ) | (82,065 | ) | |||||||||
Flutter Entertainment PLC | Ireland | (759 | ) | (88,673 | ) | |||||||||
InterContinental Hotels Group PLC | United Kingdom | (816 | ) | (55,761 | ) | |||||||||
Las Vegas Sands Corp. | United States | (1,741 | ) | (67,673 | ) | |||||||||
MGM Resorts International | United States | (1,728 | ) | (72,472 | ) | |||||||||
Restaurant Brands International Inc. | Canada | (1,200 | ) | (70,172 | ) | |||||||||
Royal Caribbean Cruises Ltd. | United States | (1,027 | ) | (86,042 | ) | |||||||||
Sands China Ltd. | Macau | (14,400 | ) | (34,900 | ) | |||||||||
Whitbread PLC | United Kingdom | (900 | ) | (33,855 | ) | |||||||||
Wynn Resorts Ltd. | United States | (502 | ) | (40,029 | ) | |||||||||
|
| |||||||||||||
| (902,782 | ) | |||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 171 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Reference Entity – Short (continued) | ||||||||||||||
| Diversified Financials 2.32% | ||||||||||||||
AGNC Investment Corp. REIT | United States | (2,379 | ) | $ | (31,165 | ) | ||||||||
Annaly Capital Management Inc. REIT | United States | (6,532 | ) | (45,985 | ) | |||||||||
Credit Suisse Group AG | Switzerland | (11,827 | ) | (94,333 | ) | |||||||||
EQT AB | Sweden | (1,342 | ) | (53,583 | ) | |||||||||
Euronext NV | Netherlands | (372 | ) | (34,230 | ) | |||||||||
Japan Exchange Group Inc. | Japan | (2,400 | ) | (45,202 | ) | |||||||||
Kinnevik AB, B | Sweden | (1,124 | ) | (29,850 | ) | |||||||||
London Stock Exchange Group PLC | United Kingdom | (1,429 | ) | (149,880 | ) | |||||||||
M&G PLC | United Kingdom | (11,458 | ) | (33,371 | ) | |||||||||
MarketAxess Holdings Inc. | United States | (169 | ) | (57,494 | ) | |||||||||
|
| |||||||||||||
| (575,093 | ) | |||||||||||||
|
| |||||||||||||
| Energy 2.22% | ||||||||||||||
Cameco Corp. | Canada | (1,900 | ) | (55,385 | ) | |||||||||
Occidental Petroleum Corp. | United States | (4,343 | ) | (246,422 | ) | |||||||||
TC Energy Corp. | Canada | (4,400 | ) | (248,384 | ) | |||||||||
|
| |||||||||||||
| (550,191 | ) | |||||||||||||
|
| |||||||||||||
| Food & Staples Retailing 0.53% | ||||||||||||||
Aeon Co. Ltd. | Japan | (2,900 | ) | (62,348 | ) | |||||||||
HelloFresh SE | Germany | (751 | ) | (34,226 | ) | |||||||||
Ocado Group PLC | United Kingdom | (2,208 | ) | (34,043 | ) | |||||||||
|
| |||||||||||||
| (130,617 | ) | |||||||||||||
|
| |||||||||||||
| Food, Beverage & Tobacco 0.93% | ||||||||||||||
Brown-Forman Corp. | United States | (1,386 | ) | (92,890 | ) | |||||||||
Mowi ASA | Norway | (1,954 | ) | (53,185 | ) | |||||||||
Orkla ASA | Norway | (3,306 | ) | (29,627 | ) | |||||||||
Swedish Match AB | Sweden | (7,211 | ) | (54,844 | ) | |||||||||
|
| |||||||||||||
| (230,546 | ) | |||||||||||||
|
| |||||||||||||
| Health Care Equipment & Services 4.31% | ||||||||||||||
DaVita Inc. | United States | (299 | ) | (33,820 | ) | |||||||||
Dexcom Inc. | United States | (414 | ) | (211,802 | ) | |||||||||
Fisher & Paykel Healthcare Corp. Ltd. | New Zealand | (2,614 | ) | (44,272 | ) | |||||||||
Fresenius Medical Care AG & Co. KGaA | Germany | (899 | ) | (60,777 | ) | |||||||||
Humana Inc. | United States | (565 | ) | (245,871 | ) | |||||||||
Insulet Corp. | United States | (324 | ) | (86,310 | ) | |||||||||
M3 Inc. | Japan | (2,100 | ) | (77,322 | ) | |||||||||
Masimo Corp. | United States | (235 | ) | (34,202 | ) | |||||||||
Novocure Ltd. | United States | (444 | ) | (36,785 | ) | |||||||||
Olympus Corp. | Japan | (4,900 | ) | (94,427 | ) | |||||||||
Ramsay Health Care Ltd. | Australia | (813 | ) | (39,776 | ) | |||||||||
SARTORIUS AG | Germany | (116 | ) | (51,846 | ) | |||||||||
Teladoc Health Inc. | United States | (691 | ) | (49,842 | ) | |||||||||
|
| |||||||||||||
| (1,067,052 | ) | |||||||||||||
|
| |||||||||||||
| Household & Personal Products 2.67% | ||||||||||||||
Clorox Co. | United States | (559 | ) | (77,718 | ) | |||||||||
Essity AB, B | Sweden | (2,693 | ) | (64,208 | ) | |||||||||
Kimberly-Clark Corp. | United States | (1,482 | ) | (182,523 | ) | |||||||||
Reckitt Benckiser Group PLC | United Kingdom | (3,129 | ) | (240,267 | ) | |||||||||
Shiseido Co. Ltd. | Japan | (1,900 | ) | (97,336 | ) | |||||||||
|
| |||||||||||||
| (662,052 | ) | |||||||||||||
|
| |||||||||||||
| Insurance 4.17% | ||||||||||||||
Admiral Group PLC | United Kingdom | (869 | ) | (29,325 | ) | |||||||||
Ageas SA/NV | Belgium | (748 | ) | (38,151 | ) | |||||||||
Alleghany Corp. | United States | (60 | ) | (50,820 | ) | |||||||||
| 172 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Reference Entity – Short (continued) | ||||||||||||||
| Insurance (continued) | ||||||||||||||
Aviva PLC | United Kingdom | (16,771 | ) | $ | (99,830 | ) | ||||||||
Insurance Australia Group Ltd. | Australia | (10,616 | ) | (34,918 | ) | |||||||||
Lincoln National Corp. | United States | (749 | ) | (48,955 | ) | |||||||||
Phoenix Group Holdings PLC | United Kingdom | (3,159 | ) | (25,538 | ) | |||||||||
Progressive Corp. | United States | (2,605 | ) | (296,944 | ) | |||||||||
Prudential PLC | United Kingdom | (13,124 | ) | (195,952 | ) | |||||||||
QBE Insurance Group Ltd. | Australia | (6,447 | ) | (55,676 | ) | |||||||||
Tryg A/S | Denmark | (1,574 | ) | (38,671 | ) | |||||||||
Willis Towers Watson PLC | United States | (500 | ) | (118,110 | ) | |||||||||
|
| |||||||||||||
| (1,032,890 | ) | |||||||||||||
|
| |||||||||||||
| Materials 7.70% | ||||||||||||||
Agnico Eagle Mines Ltd. | Canada | (2,100 | ) | (128,618 | ) | |||||||||
Air Products and Chemicals Inc. | United States | (993 | ) | (248,161 | ) | |||||||||
Antofagasta PLC | United Kingdom | (1,816 | ) | (40,002 | ) | |||||||||
Boliden AB | Sweden | (1,252 | ) | (64,230 | ) | |||||||||
Chr. Hansen Holding A/S | Denmark | (466 | ) | (34,622 | ) | |||||||||
Croda International PLC | United Kingdom | (605 | ) | (62,770 | ) | |||||||||
Ecolab Inc. | United States | (1,107 | ) | (195,452 | ) | |||||||||
First Quantum Minerals Ltd. | Canada | (2,800 | ) | (97,021 | ) | |||||||||
Freeport-McMoRan Inc. | United States | (6,904 | ) | (343,405 | ) | |||||||||
Givaudan SA | Switzerland | (40 | ) | (166,346 | ) | |||||||||
International Flavors & Fragrances Inc. | United States | (1,152 | ) | (151,292 | ) | |||||||||
Nippon Paint Holdings Co. Ltd. | Japan | (3,800 | ) | (33,875 | ) | |||||||||
Northern Star Resources Ltd. | Australia | (5,177 | ) | (41,753 | ) | |||||||||
Pan American Silver Corp. | Canada | (1,000 | ) | (27,317 | ) | |||||||||
RPM International Inc. | United States | (573 | ) | (46,665 | ) | |||||||||
Svenska Cellulosa AB SCA, B | Sweden | (2,617 | ) | (51,515 | ) | |||||||||
Umicore SA | Belgium | (867 | ) | (37,969 | ) | |||||||||
Wheaton Precious Metals Corp. | Canada | (2,100 | ) | (99,952 | ) | |||||||||
Yara International ASA | Norway | (717 | ) | (36,244 | ) | |||||||||
|
| |||||||||||||
| (1,907,209 | ) | |||||||||||||
|
| |||||||||||||
| Media & Entertainment 8.00% | ||||||||||||||
Activision Blizzard Inc. | United States | (749 | ) | (60,002 | ) | |||||||||
AMC Entertainment Holdings Inc., A | United States | (2,417 | ) | (59,555 | ) | |||||||||
Cable One Inc. | United States | (24 | ) | (35,142 | ) | |||||||||
Informa PLC | United Kingdom | (6,488 | ) | (51,408 | ) | |||||||||
Liberty Broadband Corp. | United States | (633 | ) | (85,658 | ) | |||||||||
Match Group Inc. | United States | (743 | ) | (80,794 | ) | |||||||||
Netflix Inc, | United States | (959 | ) | (359,232 | ) | |||||||||
News Corp., A | United States | (1,665 | ) | (36,880 | ) | |||||||||
Nexon Co Ltd. | Japan | (2,000 | ) | (48,313 | ) | |||||||||
Nintendo Co. Ltd. | Japan | (500 | ) | (254,047 | ) | |||||||||
Paramount Global, B | United States | (2,468 | ) | (93,315 | ) | |||||||||
Pearson PLC | United Kingdom | (3,140 | ) | (31,032 | ) | |||||||||
Pinterest Inc., A | United States | (2,589 | ) | (63,715 | ) | |||||||||
Roku Inc. | United States | (542 | ) | (67,896 | ) | |||||||||
Sea Ltd. ADR | Taiwan | (1,400 | ) | (167,706 | ) | |||||||||
Snap Inc. | United States | (5,190 | ) | (186,788 | ) | |||||||||
Take-Two Interactive Software Inc. | United States | (556 | ) | (85,480 | ) | |||||||||
Twitter Inc. | United States | (3,563 | ) | (137,853 | ) | |||||||||
Zoominfo Technologies Inc. | United States | (1,291 | ) | (77,124 | ) | |||||||||
|
| |||||||||||||
| (1,981,940 | ) | |||||||||||||
|
| |||||||||||||
| Pharmaceuticals, Biotechnology & Life Sciences 6.11% | ||||||||||||||
Alnylam Pharmaceuticals Inc. | United States | (545 | ) | (88,993 | ) | |||||||||
Argenx SE | Netherlands | (205 | ) | (64,436 | ) | |||||||||
AstraZeneca PLC | United Kingdom | (2,594 | ) | (346,047 | ) | |||||||||
BioMarin Pharmaceutical Inc. | United States | (818 | ) | (63,068 | ) | |||||||||
| franklintempleton.com | Annual Report | 173 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Reference Entity – Short (continued) | ||||||||||||||
| Pharmaceuticals, Biotechnology & Life Sciences (continued) | ||||||||||||||
Chugai Pharmaceutical Co. Ltd. | Japan | (3,000 | ) | $ | (101,265 | ) | ||||||||
Daiichi Sankyo Co. Ltd. | Japan | (7,700 | ) | (170,019 | ) | |||||||||
Eisai Co. Ltd. | Japan | (1,100 | ) | (51,386 | ) | |||||||||
Elanco Animal Health Inc. | United States | (1,997 | ) | (52,102 | ) | |||||||||
Exact Sciences Corp. | United States | (822 | ) | (57,474 | ) | |||||||||
Incyte Corp. | United States | (857 | ) | (68,063 | ) | |||||||||
Jazz Pharmaceuticals PLC | United States | (300 | ) | (46,701 | ) | |||||||||
Sartorius Stedim Biotech | France | (121 | ) | (50,150 | ) | |||||||||
Seagen Inc. | United States | (617 | ) | (88,879 | ) | |||||||||
Takeda Pharmaceutical Co. Ltd. | Japan | (7,100 | ) | (204,620 | ) | |||||||||
Viatris Inc. | United States | (5,510 | ) | (59,949 | ) | |||||||||
|
| |||||||||||||
| (1,513,152 | ) | |||||||||||||
|
| |||||||||||||
| Real Estate 5.19% | ||||||||||||||
Boston Properties Inc. REIT | United States | (665 | ) | (85,652 | ) | |||||||||
Digital Realty Trust Inc. | United States | (1,295 | ) | (183,631 | ) | |||||||||
Equinix Inc. | United States | (407 | ) | (301,839 | ) | |||||||||
Host Hotels & Resorts Inc. | United States | (3,206 | ) | (62,293 | ) | |||||||||
Mitsui Fudosan Co. Ltd. | Japan | (3,900 | ) | (84,185 | ) | |||||||||
Realty Income Corp. REIT | United States | (2,542 | ) | (176,161 | ) | |||||||||
SBA Communications Corp. REIT | United States | (485 | ) | (166,888 | ) | |||||||||
Unibail-Rodamco-Westfield REIT | France | (543 | ) | (41,192 | ) | |||||||||
Ventas Inc. REIT | United States | (1,801 | ) | (111,230 | ) | |||||||||
Vornado Realty Trust REIT | United States | (734 | ) | (33,265 | ) | |||||||||
Zillow Group Inc., C | United States | (783 | ) | (38,594 | ) | |||||||||
|
| |||||||||||||
| (1,284,930 | ) | |||||||||||||
|
| |||||||||||||
| Retailing 3.01% | ||||||||||||||
Carvana Co. | United States | (370 | ) | (44,137 | ) | |||||||||
Delivery Hero SE | South Korea | (752 | ) | (33,351 | ) | |||||||||
Doordash Inc. | United States | (556 | ) | (65,158 | ) | |||||||||
Etsy Inc. | United States | (579 | ) | (71,958 | ) | |||||||||
Fast Retailing Co. Ltd. | Japan | (300 | ) | (155,691 | ) | |||||||||
Just Eat Takeaway.com NV | United Kingdom | (859 | ) | (29,395 | ) | |||||||||
MercadoLibre Inc. | Brazil | (205 | ) | (243,844 | ) | |||||||||
Pan Pacific International Holdings Corp. | Japan | (1,900 | ) | (30,744 | ) | |||||||||
Rakuten Group Inc. | Japan | (4,000 | ) | (31,868 | ) | |||||||||
Wayfair Inc. | United States | (361 | ) | (39,992 | ) | |||||||||
|
| |||||||||||||
| (746,138 | ) | |||||||||||||
|
| |||||||||||||
| Semiconductors & Semiconductor Equipment 4.57% | ||||||||||||||
Advanced Micro Devices Inc. | United States | (1,618 | ) | (176,912 | ) | |||||||||
ASM International NV | Netherlands | (200 | ) | (73,902 | ) | |||||||||
Enphase Energy Inc. | United States | (620 | ) | (125,104 | ) | |||||||||
Lam Research Corp. | United States | (648 | ) | (348,371 | ) | |||||||||
Lasertec Corp. | Japan | (300 | ) | (51,374 | ) | |||||||||
Marvell Technology Inc. | United States | (3,846 | ) | (275,797 | ) | |||||||||
SolarEdge Technologies Inc. | United States | (250 | ) | (80,592 | ) | |||||||||
|
| |||||||||||||
| (1,132,052 | ) | |||||||||||||
|
| |||||||||||||
| Software & Services 18.43% | ||||||||||||||
Adyen NV | Netherlands | (83 | ) | (167,061 | ) | |||||||||
Amadeus IT Group SA | Spain | (2,009 | ) | (132,286 | ) | |||||||||
Avalara Inc. | United States | (413 | ) | (41,098 | ) | |||||||||
Bill.com Holdings Inc. | United States | (373 | ) | (84,593 | ) | |||||||||
Cloudflare Inc., A | United States | (1,224 | ) | (146,513 | ) | |||||||||
Coupa Software Inc. | United States | (365 | ) | (37,095 | ) | |||||||||
Crowdstrike Holdings Inc., A | United States | (908 | ) | (206,189 | ) | |||||||||
Datadog Inc., A | United States | (1,043 | ) | (157,983 | ) | |||||||||
DocuSign Inc. | United States | (899 | ) | (96,301 | ) | |||||||||
| 174 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Liberty Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Reference Entity – Short (continued) | ||||||||||||||
| Software & Services (continued) | ||||||||||||||
Fidelity National Information Services Inc. | United States | (2,725 | ) | $ | (273,644 | ) | ||||||||
Fiserv Inc. | United States | (2,655 | ) | (269,217 | ) | |||||||||
FleetCor Technologies Inc. | United States | (348 | ) | (86,673 | ) | |||||||||
GoDaddy Inc., A | United States | (740 | ) | (61,938 | ) | |||||||||
MongoDB Inc. | United States | (290 | ) | (128,641 | ) | |||||||||
Okta Inc., A | United States | (694 | ) | (104,766 | ) | |||||||||
Palantir Technologies Inc. | United States | (7,841 | ) | (107,657 | ) | |||||||||
PayPal Holdings Inc. | United States | (3,278 | ) | (379,101 | ) | |||||||||
RingCentral Inc., A | United States | (361 | ) | (42,313 | ) | |||||||||
Shopify Inc., A | Canada | (500 | ) | (338,445 | ) | |||||||||
Snowflake Inc. | United States | (1,017 | ) | (233,025 | ) | |||||||||
Splunk Inc. | United States | (799 | ) | (118,739 | ) | |||||||||
Square Inc., A | United States | (2,435 | ) | (330,186 | ) | |||||||||
Twilio Inc., A | United States | (795 | ) | (131,024 | ) | |||||||||
Visa Inc., A | United States | (1,585 | ) | (351,505 | ) | |||||||||
Workday Inc., A | United States | (876 | ) | (209,767 | ) | |||||||||
Worldline SA | France | (1,074 | ) | (47,184 | ) | |||||||||
Zendesk Inc. | United States | (554 | ) | (66,641 | ) | |||||||||
Zoom Video Communications Inc., A | United States | (1,009 | ) | (118,285 | ) | |||||||||
Zscaler Inc. | United States | (398 | ) | (96,029 | ) | |||||||||
|
| |||||||||||||
| (4,563,899 | ) | |||||||||||||
|
| |||||||||||||
| Technology Hardware & Equipment 0.59% | ||||||||||||||
Logitech International SA | Switzerland | (785 | ) | (59,030 | ) | |||||||||
NetApp Inc. | United States | (1,044 | ) | (86,652 | ) | |||||||||
|
| |||||||||||||
| (145,682 | ) | |||||||||||||
|
| |||||||||||||
| Telecommunication Services 2.27% | ||||||||||||||
Cellnex Telecom SA | Spain | (2,287 | ) | (111,226 | ) | |||||||||
Lumen Technologies Inc. | United States | (3,871 | ) | (43,626 | ) | |||||||||
Rogers Communications Inc. | Canada | (1,500 | ) | (84,977 | ) | |||||||||
SoftBank Corp. | Japan | (12,700 | ) | (149,418 | ) | |||||||||
T-Mobile US Inc. | United States | (384 | ) | (49,286 | ) | |||||||||
Tele2 AB, B | Sweden | (2,131 | ) | (32,539 | ) | |||||||||
Telenor ASA | Norway | (3,119 | ) | (45,212 | ) | |||||||||
Telia Co. AB | Sweden | (11,377 | ) | (46,072 | ) | |||||||||
|
| |||||||||||||
| (562,356 | ) | |||||||||||||
|
| |||||||||||||
| Transportation 2.30% | ||||||||||||||
Central Japan Railway Co. | Japan | (700 | ) | (92,074 | ) | |||||||||
East Japan Railway Co. | Japan | (1,400 | ) | (82,010 | ) | |||||||||
Kuehne + Nagel International AG | Switzerland | (232 | ) | (66,329 | ) | |||||||||
Lyft Inc., A | United States | (1,247 | ) | (47,885 | ) | |||||||||
Uber Technologies Inc. | United States | (6,820 | ) | (243,338 | ) | |||||||||
West Japan Railway Co. | Japan | (900 | ) | (37,750 | ) | |||||||||
|
| |||||||||||||
| (569,386 | ) | |||||||||||||
|
| |||||||||||||
| Utilities 2.43% | ||||||||||||||
APA Group | Australia | (5,363 | ) | (42,972 | ) | |||||||||
EDP Renovaveis SA | Spain | (1,316 | ) | (34,175 | ) | |||||||||
Iberdrola SA | Spain | (25,946 | ) | (286,379 | ) | |||||||||
Northland Power Inc. | Canada | (1,000 | ) | (33,273 | ) | |||||||||
Orsted AS | Denmark | (897 | ) | (113,941 | ) | |||||||||
PPL Corp. | United States | (3,223 | ) | (92,049 | ) | |||||||||
|
| |||||||||||||
| (602,789 | ) | |||||||||||||
|
| |||||||||||||
Total Value of Reference Entity – Morgan Stanley Capital Services LLC | $ | (24,762,846 | ) | |||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
See Note 12 regarding other derivative information.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 175 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty U.S. Core Bond ETF
| Year Ended March 31, | ||||||||||||
| 2022 | 2021 | 2020a | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||
Net asset value, beginning of year | $ | 25.14 | $ | 25.44 | $ | 25.00 | ||||||
|
| |||||||||||
| Income from investment operationsb: |
| |||||||||||
Net investment incomec | 0.45 | 0.51 | 0.29 | |||||||||
Net realized and unrealized gains (losses) | (1.61 | ) | 0.03 | 0.49 | ||||||||
|
| |||||||||||
Total from investment operations | (1.16 | ) | 0.54 | 0.78 | ||||||||
|
| |||||||||||
| Less distributions from: |
| |||||||||||
Net investment income | (0.50 | ) | (0.65 | ) | (0.31 | ) | ||||||
Net realized gains | (0.05 | ) | (0.19 | ) | (0.03 | ) | ||||||
|
| |||||||||||
Total Distributions | (0.55 | ) | (0.84 | ) | (0.34 | ) | ||||||
|
| |||||||||||
Net asset value, end of year | $ | 23.43 | $ | 25.14 | $ | 25.44 | ||||||
|
| |||||||||||
Total returnd | (4.72)% | 2.07% | 3.12% | |||||||||
| Ratios to average net assetse |
| |||||||||||
Expenses before waiver and payments by affiliates | 0.16% | 0.17% | 0.19% | |||||||||
Expenses net of waiver and payments by affiliates | 0.15% | 0.15% | 0.15% | |||||||||
Net investment income | 1.80% | 1.95% | 2.14% | |||||||||
| Supplemental data |
| |||||||||||
Net assets, end of year (000’s) | $1,509,961 | $1,460,597 | $853,532 | |||||||||
Portfolio turnover ratef | 69.88% | g | 90.99% | g | 126.68% | g | ||||||
aFor the period September 17, 2019 (commencement of operations) to March 31, 2020.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 69.88% | 90.99% | 126.68% |
| 176 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty U.S. Core Bond ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 26.0% | ||||||||||||||
| Aerospace & Defense 0.3% | ||||||||||||||
The Boeing Co., Sr. Unsecured note, 3.50%, 3/01/39 | United States | 5,000,000 | $ | 4,319,493 | ||||||||||
|
| |||||||||||||
| Air Freight & Logistics 0.1% | ||||||||||||||
FedEx Corp., senior bond, 4.05%, 2/15/48 | United States | 2,000,000 | 1,981,794 | |||||||||||
|
| |||||||||||||
| Airlines 1.1% | ||||||||||||||
American Airlines 2016-3 Class A Pass Through Trust 3.25%, 4/15/30 | United States | 4,552,817 | 4,088,166 | |||||||||||
| a | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 4.50%, 10/20/25 | United States | 7,700,000 | 7,750,794 | ||||||||||
United Airlines 2019-2 Class A Pass Through Trust, Series A, 2.90%, 11/01/29 | United States | 2,325,209 | 2,115,340 | |||||||||||
United Airlines 2020-1 Class A Pass Through Trust, Series 20-1, 5.875%, 4/15/29 | United States | 87,507 | 90,724 | |||||||||||
United Airlines 2020-1 Class B Pass Through Trust, 2020-1 Class B, 4.875%, 7/15/27 | United States | 2,073,600 | 2,049,461 | |||||||||||
|
| |||||||||||||
| 16,094,485 | ||||||||||||||
|
| |||||||||||||
| Banks 3.1% | ||||||||||||||
| a | Banco de Chile, Sr. Unsecured , 144A, 2.99%, 12/09/31 | Chile | 1,200,000 | 1,109,106 | ||||||||||
Bancolombia SA, senior note, 3.00%, 1/29/25 | Colombia | 1,100,000 | 1,071,180 | |||||||||||
Bank of America Corp., | ||||||||||||||
Sr. Unsecured , 1.922%, 10/24/31 | United States | 1,500,000 | 1,304,695 | |||||||||||
Sr. Unsecured note, 2.592%, 4/29/31 | United States | 3,000,000 | 2,772,839 | |||||||||||
Citigroup Inc., | ||||||||||||||
3.057%, 1/25/33 | United States | 1,800,000 | 1,683,715 | |||||||||||
senior bond, 5.875%, 1/30/42 | United States | 1,100,000 | 1,374,406 | |||||||||||
sub. bond, 4.45%, 9/29/27 | United States | 1,500,000 | 1,549,736 | |||||||||||
subordinate, 4.125%, 7/25/28 | United States | 2,300,000 | 2,339,400 | |||||||||||
HSBC Holdings PLC, | ||||||||||||||
senior note, 2.013% to 9/22/27, FRN thereafter, 9/22/28 | United Kingdom | 4,100,000 | 3,722,274 | |||||||||||
senior note, 2.357% to 8/18/30, FRN thereafter, 8/18/31 | United Kingdom | 1,300,000 | 1,155,404 | |||||||||||
Industrial & Commercial Bank of China Ltd., senior note, 3.538%, 11/08/27 | China | 1,200,000 | 1,219,686 | |||||||||||
JPMorgan Chase & Co., | ||||||||||||||
senior bond, 2.522% to 4/22/30, FRN thereafter, 4/22/31 | United States | 2,000,000 | 1,856,380 | |||||||||||
Sr. Unsecured , 1.953%, 2/04/32 | United States | 2,000,000 | 1,754,153 | |||||||||||
subordinated, 2.956%, to 5/13/30 FRN thereafter, 5/13/31 | United States | 5,000,000 | 4,687,158 | |||||||||||
Merrill Lynch & Co. Inc., sub. bond, 7.75%, 5/14/38 | United States | 2,800,000 | 3,919,001 | |||||||||||
| a | Societe Generale SA, Sr. Unsecured , 144A, 1.792%, 6/09/27 | France | 2,300,000 | 2,075,698 | ||||||||||
Truist Bank, sub. Bond, 2.25%, 3/11/30 | United States | 4,300,000 | 3,946,265 | |||||||||||
| a | UniCredit SpA, Sr. Unsecured , 144A, 1.982%, 6/03/27 | Italy | 2,100,000 | 1,895,711 | ||||||||||
Wells Fargo & Co., senior bond, 2.879% to 10/30/29, FRN thereafter, 10/30/30 | United States | 7,700,000 | 7,326,809 | |||||||||||
|
| |||||||||||||
| 46,763,616 | ||||||||||||||
|
| |||||||||||||
| Beverages 0.3% | ||||||||||||||
Anheuser-Busch InBev Worldwide Inc., | ||||||||||||||
senior bond, 3.50%, 6/01/30 | United States | 2,400,000 | 2,437,055 | |||||||||||
senior bond, 5.55%, 1/23/49 | United States | 1,200,000 | 1,468,878 | |||||||||||
|
| |||||||||||||
| 3,905,933 | ||||||||||||||
|
| |||||||||||||
| Biotechnology 0.4% | ||||||||||||||
AbbVie Inc., senior bond, 4.75%, 3/15/45 | United States | 5,000,000 | 5,464,619 | |||||||||||
Bio-Rad Laboratories Inc. 3.30%, 3/15/27 | United States | 500,000 | 492,817 | |||||||||||
|
| |||||||||||||
| 5,957,436 | ||||||||||||||
|
| |||||||||||||
| Building Products 0.6% | ||||||||||||||
Carrier Global Corp., senior note, 3.577%, 4/05/50 | United States | 2,300,000 | 2,112,356 | |||||||||||
MDC Holdings Inc. 2.50%, 1/15/31 | United States | 4,000,000 | 3,498,353 | |||||||||||
| franklintempleton.com | Annual Report | 177 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Building Products (continued) | ||||||||||||||
NVR Inc., Sr. Unsecured , 3.00%, 5/15/30 | United States | 4,500,000 | $ | 4,206,385 | ||||||||||
|
| |||||||||||||
| 9,817,094 | ||||||||||||||
|
| |||||||||||||
| Capital Markets 0.7% | ||||||||||||||
Morgan Stanley, | ||||||||||||||
senior note, 3.622% to 4/01/30, FRN thereafter, 4/01/31 | United States | 4,300,000 | 4,283,167 | |||||||||||
sub. bond, 3.95%, 4/23/27 | United States | 3,600,000 | 3,664,508 | |||||||||||
The Goldman Sachs Group Inc., senior bond, 3.691% to 6/05/27, FRN thereafter, 6/05/28 | United States | 2,500,000 | 2,505,803 | |||||||||||
|
| |||||||||||||
| 10,453,478 | ||||||||||||||
|
| |||||||||||||
| Chemicals 0.7% | ||||||||||||||
CF Industries Inc. 5.15%, 3/15/34 | United States | 4,800,000 | 5,342,304 | |||||||||||
| a | International Flavors & Fragrances Inc., Sr. Unsecured, 144A, 2.30%, 11/01/30 | United States | 6,500,000 | 5,812,614 | ||||||||||
|
| |||||||||||||
| 11,154,918 | ||||||||||||||
|
| |||||||||||||
| Commercial Services & Supplies 0.3% | ||||||||||||||
Boardwalk Pipelines LP, senior note, 4.80%, 5/03/29 | United States | 3,950,000 | 4,089,912 | |||||||||||
|
| |||||||||||||
| Containers & Packaging 0.2% | ||||||||||||||
Bemis Co. Inc., senior note, 2.63%, 6/19/30 | United States | 3,500,000 | 3,231,207 | |||||||||||
|
| |||||||||||||
| Diversified Consumer Services 0.3% | ||||||||||||||
Kohl’s Corp., Sr. Unsecured note, 3.375%, 5/01/31 | United States | 5,000,000 | 4,834,707 | |||||||||||
|
| |||||||||||||
| Diversified Financial Services 0.2% | ||||||||||||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust 3.40%, 10/29/33 | Ireland | 3,500,000 | 3,144,078 | |||||||||||
|
| |||||||||||||
| Diversified Telecommunication Services 1.4% | ||||||||||||||
America Movil SAB de CV, Sr. Unsecured note, 2.875%, 5/07/30 | Mexico | 3,800,000 | 3,633,699 | |||||||||||
AT&T Inc., Sr. Unsecured , 3.50%, 6/01/41 | United States | 4,000,000 | 3,693,260 | |||||||||||
France Telecom SA, senior bond, 9.00%, 3/01/31 | France | 4,300,000 | 5,982,739 | |||||||||||
Verizon Communications Inc., | ||||||||||||||
Sr. Unsecured note, 1.75%, 1/20/31 | United States | 5,000,000 | 4,366,295 | |||||||||||
Sr. Unsecured note, 2.85%, 9/03/41 | United States | 3,900,000 | 3,444,350 | |||||||||||
|
| |||||||||||||
| 21,120,343 | ||||||||||||||
|
| |||||||||||||
| Education Services 0.5% | ||||||||||||||
Rockefeller University, Series 2020, Unsecured, 3.75%, 7/01/51 | United States | 7,000,000 | 7,007,026 | |||||||||||
|
| |||||||||||||
| Electric Utilities 2.6% | ||||||||||||||
Baltimore Gas and Electric Co., senior bond, 3.50%, 8/15/46 | United States | 1,400,000 | 1,359,416 | |||||||||||
| a | Comision Federal de Electricidad, 144A, 3.348%, 2/09/31 | Mexico | 3,800,000 | 3,342,328 | ||||||||||
Duke Energy Corp., senior bond, 3.75%, 9/01/46 | United States | 6,400,000 | 6,059,847 | |||||||||||
| a | EDP Finance BV, senior note, 144A, 1.71%, 1/24/28 | Netherlands | 4,500,000 | 3,976,469 | ||||||||||
Enel Finance International NV, | ||||||||||||||
a 144A, 2.25%, 7/12/31 | Italy | 3,500,000 | 3,105,421 | |||||||||||
a senior bond, 144A, 3.50%, 4/06/28 | Netherlands | 2,700,000 | 2,671,168 | |||||||||||
Exelon Corp., senior bond, 4.05%, 4/15/30 | United States | 3,000,000 | 3,100,910 | |||||||||||
Georgia Power Co., senior bond, 4.75%, 9/01/40 | United States | 1,400,000 | 1,480,988 | |||||||||||
MidAmerican Energy Co., secured bond, 3.65%, 8/01/48 | United States | 1,100,000 | 1,094,668 | |||||||||||
| a | Perusahaan Perseroan Persero PT Perusahaan Listrik Negara, senior bond, 144A, 4.875%, 7/17/49 | Indonesia | 750,000 | 725,014 | ||||||||||
| a | State Grid Overseas Investment 2016 Ltd., senior note, 144A, 3.50%, 5/04/27 | China | 3,300,000 | 3,328,091 | ||||||||||
The Southern Co., senior bond, 3.70%, 4/30/30 | United States | 4,000,000 | 4,016,984 | |||||||||||
Virginia Electric and Power Co., senior bond, 3.80%, 9/15/47 | United States | 5,100,000 | 5,114,602 | |||||||||||
|
| |||||||||||||
| 39,375,906 | ||||||||||||||
|
| |||||||||||||
| 178 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Electronic Equipment, Instruments & Components 0.8% | ||||||||||||||
Flex Ltd., senior note, 4.875%, 5/12/30 | Singapore | 6,300,000 | $ | 6,593,033 | ||||||||||
Teledyne FLIR LLC, Sr. Unsecured note, 2.50%, 8/01/30 | United States | 6,000,000 | 5,473,738 | |||||||||||
|
| |||||||||||||
| 12,066,771 | ||||||||||||||
|
| |||||||||||||
| Energy Equipment & Services 0.9% | ||||||||||||||
Kinder Morgan Inc. 2.00%, 2/15/31 | United States | 8,200,000 | 7,180,338 | |||||||||||
MPLX LP, Sr. Unsecured, 2.65%, 8/15/30 | United States | 5,000,000 | 4,588,803 | |||||||||||
| a | Schlumberger Holdings Corp., senior note, 144A, 3.90%, 5/17/28 | United States | 1,950,000 | 1,972,690 | ||||||||||
|
| |||||||||||||
| 13,741,831 | ||||||||||||||
|
| |||||||||||||
| Entertainment 0.1% | ||||||||||||||
| a | Magallanes Inc., 144A, 4.054%, 3/15/29 | United States | 900,000 | 905,504 | ||||||||||
|
| |||||||||||||
| Equity Real Estate Investment Trusts (REITs) 0.1% | ||||||||||||||
Kimco Realty Corp., Sr. Unsecured , 4.25%, 4/01/45 | United States | 1,000,000 | 1,001,458 | |||||||||||
|
| |||||||||||||
| Food Products 0.8% | ||||||||||||||
| a | Bimbo Bakeries USA Inc., 144A, 4.00%, 5/17/51 | United States | 800,000 | 748,154 | ||||||||||
| a | Cencosud SA, 144A, 5.15%, 2/12/25 | Chile | 6,300,000 | 6,546,739 | ||||||||||
Kraft Heinz Foods Co., senior bond, 3.00%, 6/01/26 | United States | 4,100,000 | 4,049,632 | |||||||||||
|
| |||||||||||||
| 11,344,525 | ||||||||||||||
|
| |||||||||||||
| Health Care Providers & Services 1.2% | ||||||||||||||
Anthem Inc., senior bond, 5.10%, 1/15/44 | United States | 2,000,000 | 2,313,681 | |||||||||||
Centene Corp., Sr. Unsecured , 3.00%, 10/15/30 | United States | 3,000,000 | 2,760,030 | |||||||||||
CVS Health Corp., | ||||||||||||||
senior bond, 4.30%, 3/25/28 | United States | 1,117,000 | 1,170,401 | |||||||||||
senior bond, 4.875%, 7/20/35 | United States | 1,400,000 | 1,540,009 | |||||||||||
HCA Inc., senior secured bond, first lien, 5.50%, 6/15/47 | United States | 900,000 | 1,019,485 | |||||||||||
Quest Diagnostics Inc., senior bond, 2.80%, 6/30/31 | United States | 6,800,000 | 6,369,365 | |||||||||||
STERIS Irish FinCo UnLtd Co. 2.70%, 3/15/31 | Ireland | 3,000,000 | 2,750,745 | |||||||||||
|
| |||||||||||||
| 17,923,716 | ||||||||||||||
|
| |||||||||||||
| Hotels, Restaurants & Leisure 0.3% | ||||||||||||||
Las Vegas Sands Corp., Sr. Unsecured , 3.90%, 8/08/29 | United States | 4,700,000 | 4,315,875 | |||||||||||
|
| |||||||||||||
| Household Durables 0.4% | ||||||||||||||
Mohawk Industries Inc., senior bond, 3.625%, 5/15/30 | United States | 6,200,000 | 6,098,918 | |||||||||||
|
| |||||||||||||
| Independent Power Producers & Energy Traders 0.4% | ||||||||||||||
| a | Colbun SA, senior note, 144A, 3.95%, 10/11/27 | Chile | 5,550,000 | 5,617,599 | ||||||||||
|
| |||||||||||||
| Insurance 1.2% | ||||||||||||||
Arch Capital Group Ltd., senior bond, 3.635%, 6/30/50 | United States | 1,700,000 | 1,562,720 | |||||||||||
AXA SA, Subordinated, 8.60%, 12/15/30 | France | 3,600,000 | 4,768,632 | |||||||||||
Berkshire Hathaway Finance Corp. 3.85%, 3/15/52 | United States | 1,200,000 | 1,228,621 | |||||||||||
| a | Five Corners Funding Trust II, senior note, 144A, 2.85%, 5/15/30 | United States | 4,000,000 | 3,798,143 | ||||||||||
MetLife Inc., senior bond, 5.875%, 2/06/41 | United States | 1,100,000 | 1,365,795 | |||||||||||
Radian Group Inc., Sr. Unsecured , 4.875%, 3/15/27 | United States | 3,700,000 | 3,723,217 | |||||||||||
Reinsurance Group of America Inc., Sr. Unsecured , 3.90%, 5/15/29 | United States | 2,250,000 | 2,274,680 | |||||||||||
|
| |||||||||||||
| 18,721,808 | ||||||||||||||
|
| |||||||||||||
| Internet Software & Services 0.2% | ||||||||||||||
| a | Tencent Holdings Ltd., Sr. Unsecured , 144A, 3.925%, 1/19/38 | Cayman Islands | 4,000,000 | 3,721,085 | ||||||||||
|
| |||||||||||||
| IT Services 0.7% | ||||||||||||||
Fidelity National Information Services Inc., Sr. Unsecured note, 2.25%, 3/01/31 | United States | 4,500,000 | 3,986,259 | |||||||||||
Fiserv Inc., | ||||||||||||||
senior bond, 2.65%, 6/01/30 | United States | 4,700,000 | 4,344,688 | |||||||||||
senior bond, 4.40%, 7/01/49 | United States | 2,400,000 | 2,485,698 | |||||||||||
|
| |||||||||||||
| 10,816,645 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 179 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Media 0.8% | ||||||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, | ||||||||||||||
senior bond, 2.80%, 4/01/31 | United States | 5,000,000 | $ | 4,513,985 | ||||||||||
senior secured note, 3.50%, 3/01/42 | United States | 1,500,000 | 1,244,367 | |||||||||||
Comcast Corp., senior bond, 4.25%, 1/15/33 | United States | 2,000,000 | 2,164,034 | |||||||||||
Fox Corp., senior bond, 5.576%, 1/25/49 | United States | 3,200,000 | 3,731,170 | |||||||||||
NBCUniversal Media LLC, senior bond, 4.45%, 1/15/43 | United States | 1,100,000 | 1,187,128 | |||||||||||
|
| |||||||||||||
| 12,840,684 | ||||||||||||||
|
| |||||||||||||
| Metals & Mining 0.1% | ||||||||||||||
| a | Corp. Nacional del Cobre de Chile, Sr. Unsecured , 144A, 4.50%, 8/01/47 | Chile | 1,160,000 | 1,183,479 | ||||||||||
|
| |||||||||||||
| Oil, Gas & Consumable Fuels 2.0% | ||||||||||||||
Canadian Natural Resources Ltd., senior bond, 3.85%, 6/01/27 | Canada | 3,000,000 | 3,038,538 | |||||||||||
Cheniere Corpus Christi Holdings LLC, senior secured note, first lien, 5.875%, 3/31/25 | United States | 2,200,000 | 2,323,426 | |||||||||||
| a | Continental Resources Inc., senior bond, 144A, 5.75%, 1/15/31 | United States | 3,400,000 | 3,724,088 | ||||||||||
Enable Midstream Partners LP, senior note, 3.90%, 5/15/24 | United States | 2,650,000 | 2,667,840 | |||||||||||
Enterprise Products Operating LLC, senior bond, 4.25%, 2/15/48 | United States | 1,150,000 | 1,158,155 | |||||||||||
Equinor ASA, senior note, 2.375%, 5/22/30 | Norway | 3,000,000 | 2,835,248 | |||||||||||
| a | Lundin Energy Finance B.V., 144A, 3.10%, 7/15/31 | Netherlands | 4,700,000 | 4,359,986 | ||||||||||
MPLX LP, senior bond, 4.70%, 4/15/48 | United States | 1,250,000 | 1,263,098 | |||||||||||
| a | Pertamina Persero PT, senior bond, 144A, 4.70%, 7/30/49 | Indonesia | 1,000,000 | 987,866 | ||||||||||
Phillips 66 3.30%, 3/15/52 | United States | 950,000 | 838,367 | |||||||||||
Sabine Pass Liquefaction LLC, senior secured bond, first lien, 4.20%, 3/15/28 | United States | 4,000,000 | 4,115,135 | |||||||||||
| a | Sinopec Group Overseas Development 2018 Ltd., 144A, 3.35%, 5/13/50 | British Virgin Islands | 1,700,000 | 1,430,431 | ||||||||||
The Williams Cos. Inc., | ||||||||||||||
senior bond, 3.50%, 11/15/30 | United States | 1,000,000 | 990,328 | |||||||||||
senior bond, 5.10%, 9/15/45 | United States | 300,000 | 325,942 | |||||||||||
|
| |||||||||||||
| 30,058,448 | ||||||||||||||
|
| |||||||||||||
| Paper & Forest Products 0.2% | ||||||||||||||
Suzano Austria GmbH 3.125%, 1/15/32 | Austria | 2,700,000 | 2,396,493 | |||||||||||
|
| |||||||||||||
| Pharmaceuticals 0.9% | ||||||||||||||
Bristol-Myers Squibb Co., senior bond, 4.125%, 6/15/39 | United States | 3,200,000 | 3,447,837 | |||||||||||
Royalty Pharma PLC 2.20%, 9/02/30 | United Kingdom | 5,000,000 | 4,379,029 | |||||||||||
Takeda Pharmaceutical Co. Ltd., | ||||||||||||||
senior note, 2.05%, 3/31/30 | Japan | 2,600,000 | 2,350,154 | |||||||||||
senior note, 5.00%, 11/26/28 | Japan | 2,500,000 | 2,713,918 | |||||||||||
|
| |||||||||||||
| 12,890,938 | ||||||||||||||
|
| |||||||||||||
| Real Estate Investment Trusts (REITs) 0.0%† | ||||||||||||||
MPT Operating Partnership LP/MPT Finance Corp., senior bond, 3.50%, 3/15/31 | United States | 400,000 | 372,167 | |||||||||||
|
| |||||||||||||
| Road & Rail 0.3% | ||||||||||||||
Burlington Northern Santa Fe LLC, | ||||||||||||||
senior bond, 4.15%, 4/01/45 | United States | 2,300,000 | 2,444,099 | |||||||||||
senior bond, 4.90%, 4/01/44 | United States | 1,100,000 | 1,268,363 | |||||||||||
CSX Corp., senior bond, 4.25%, 11/01/66 | United States | 1,000,000 | 1,045,599 | |||||||||||
|
| |||||||||||||
| 4,758,061 | ||||||||||||||
|
| |||||||||||||
| Software 0.3% | ||||||||||||||
ServiceNow Inc., senior bond, 1.40%, 9/01/30 | United States | 6,000,000 | 5,106,238 | |||||||||||
|
| |||||||||||||
| 180 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Tobacco 0.8% | ||||||||||||||
Altria Group Inc., senior note, 3.40%, 5/06/30 | United States | 6,600,000 | $ | 6,359,822 | ||||||||||
| a | Imperial Brands Finance PLC, senior note, 144A, 3.50%, 7/26/26 | United Kingdom | 6,000,000 | 5,877,098 | ||||||||||
|
| |||||||||||||
| 12,236,920 | ||||||||||||||
|
| |||||||||||||
| Wireless Telecommunication Services 0.7% | ||||||||||||||
T-Mobile USA Inc., | ||||||||||||||
senior bond, 3.30%, 2/15/51 | United States | 2,000,000 | 1,688,933 | |||||||||||
senior note, 3.75%, 4/15/27 | United States | 5,000,000 | 5,037,600 | |||||||||||
senior secured bond, 3.875%, 4/15/30 | United States | 1,000,000 | 1,005,262 | |||||||||||
Vodafone Group PLC, senior bond, 6.15%, 2/27/37 | United Kingdom | 2,300,000 | 2,761,180 | |||||||||||
|
| |||||||||||||
| 10,492,975 | ||||||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $424,288,017) | 391,863,564 | |||||||||||||
|
| |||||||||||||
| U.S. Government & Agency Securities 41.2% | ||||||||||||||
Federal Home Loan Mortgage Corp., | United States | 5,399,000 | 5,017,612 | |||||||||||
2.50%, 9/01/51 | United States | 5,291,713 | 5,057,328 | |||||||||||
2.50%, 12/01/51 | United States | 4,068,225 | 3,896,023 | |||||||||||
2.50%, 12/01/51 | United States | 1,440,602 | 1,376,948 | |||||||||||
2.50%, 4/01/52 | United States | 14,252,000 | 13,620,738 | |||||||||||
3.50%, 4/01/52 | United States | 3,388,000 | 3,398,415 | |||||||||||
Federal National Mortgage Association, | United States | 5,446,450 | 5,206,779 | |||||||||||
2.50%, 11/01/51 | United States | 5,444,898 | 5,204,738 | |||||||||||
2.50%, 2/01/52 | United States | 5,324,238 | 5,098,959 | |||||||||||
2.50%, 2/01/52 | United States | 5,443,691 | 5,215,061 | |||||||||||
3.00%, 3/01/52 | United States | 830,259 | 813,930 | |||||||||||
3.00%, 3/01/52 | United States | 5,321,885 | 5,218,573 | |||||||||||
Government National Mortgage Association, | United States | 2,924,074 | 2,990,313 | |||||||||||
4.00%, 1/20/52 | United States | 5,024,330 | 5,138,145 | |||||||||||
U.S. Treasury Bond, | United States | 6,900,000 | 5,414,613 | |||||||||||
1.25%, 5/15/50 | United States | 18,743,000 | 14,003,071 | |||||||||||
1.375%, 8/15/50 | United States | 20,400,000 | 15,723,937 | |||||||||||
2.00%, 11/15/41 | United States | 5,100,000 | 4,616,297 | |||||||||||
2.00%, 2/15/50 | United States | 11,100,000 | 10,012,113 | |||||||||||
2.25%, 8/15/46 | United States | 25,354,000 | 23,739,663 | |||||||||||
2.25%, 8/15/49 | United States | 2,050,000 | 1,951,824 | |||||||||||
2.75%, 8/15/42 | United States | 4,387,000 | 4,465,143 | |||||||||||
2.75%, 11/15/42 | United States | 5,924,000 | 6,022,232 | |||||||||||
3.00%, 11/15/44 | United States | 12,595,000 | �� | 13,362,016 | ||||||||||
3.00%, 2/15/49 | United States | 7,293,000 | 8,024,294 | |||||||||||
3.50%, 2/15/39 | United States | 3,175,000 | 3,640,708 | |||||||||||
U.S. Treasury Note, | United States | 24,509,000 | 22,773,744 | |||||||||||
0.375%, 11/30/25 | United States | 91,791,000 | 84,879,783 | |||||||||||
0.375%, 1/31/26 | United States | 62,772,000 | 57,847,095 | |||||||||||
0.50%, 3/31/25 | United States | 51,900,000 | 48,903,586 | |||||||||||
0.875%, 6/30/26 | United States | 24,500,000 | 22,886,924 | |||||||||||
1.25%, 12/31/26 | United States | 34,100,000 | 32,223,168 | |||||||||||
1.375%, 8/31/23 | United States | 20,000,000 | 19,806,641 | |||||||||||
1.50%, 3/31/23 | United States | 30,273,000 | 30,203,535 | |||||||||||
1.50%, 9/30/24 | United States | 9,050,000 | 8,838,598 | |||||||||||
1.50%, 10/31/24 | United States | 5,750,000 | 5,610,967 | |||||||||||
1.875%, 9/30/22 | United States | 6,500,000 | 6,526,314 | |||||||||||
2.125%, 2/29/24 | United States | 100,665,000 | 100,324,862 | |||||||||||
2.125%, 3/31/24 | United States | 3,500,000 | 3,486,055 | |||||||||||
|
| |||||||||||||
Total U.S. Government & Agency Securities (Cost $654,974,415) | 622,540,745 | |||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 181 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Municipal Bonds 4.3% | ||||||||||||||
| Alabama 0.3% | ||||||||||||||
Southeast Alabama Gas Supply District, Series 2018B, Monthly, VRDN, 1.004%, 6/01/49 | 5,000,000 | $ | 4,999,536 | |||||||||||
|
| |||||||||||||
| California 2.5% | ||||||||||||||
California Health Facilities Financing Authority, | ||||||||||||||
State of California Personal Income Tax Revenue, 2.934%, 6/01/32 | 530,000 | 495,633 | ||||||||||||
State of California Personal Income Tax Revenue, 2.984%, 6/01/33 | 460,000 | 426,698 | ||||||||||||
State of California Personal Income Tax Revenue, 3.034%, 6/01/34 | 345,000 | 318,076 | ||||||||||||
California State University, Series 2021B-1, 2.719%, 11/01/52 | 2,195,000 | 1,853,916 | ||||||||||||
Clovis Unified School District, Refunding, Series 2021B, 3.067%, 8/01/39 | 12,580,000 | 11,594,246 | ||||||||||||
Contra Costa Community College District, Refunding, 2.926%, 8/01/38 | 4,000,000 | 3,618,866 | ||||||||||||
Foothill-Eastern Transportation Corridor Agency, Refunding, Series 2019A, 4.094%, 1/15/49 | 275,000 | 275,050 | ||||||||||||
Gilroy Unified School District, Refunding, 3.364%, 8/01/47 | 1,145,000 | 1,146,435 | ||||||||||||
San Bernardino Community College District, | ||||||||||||||
Refunding, 2.686%, 8/01/41 | 6,140,000 | 5,349,805 | ||||||||||||
Refunding, 2.856%, 8/01/49 | 3,575,000 | 3,019,951 | ||||||||||||
State of California, 4.00%, 3/01/46 | 2,500,000 | 2,685,247 | ||||||||||||
Whittier City School District, Refunding, 3.306%, 8/01/43 | 7,500,000 | 7,316,046 | ||||||||||||
|
| |||||||||||||
| 38,099,969 | ||||||||||||||
|
| |||||||||||||
| Florida 0.0%† | ||||||||||||||
County of Broward, Airport System Revenue, Refunding, Series 2019C, 3.477%, 10/01/43 | 560,000 | 528,364 | ||||||||||||
|
| |||||||||||||
| New York 0.3% | ||||||||||||||
Metropolitan Transportation Authority, | 1,095,000 | 1,120,115 | ||||||||||||
Green Bond, Series 2019B, 5.00%, 11/15/52 | 2,655,000 | 2,879,660 | ||||||||||||
|
| |||||||||||||
| 3,999,775 | ||||||||||||||
|
| |||||||||||||
| Ohio 0.1% | ||||||||||||||
Greenville City School District, Refunding, 3.541%, 1/01/51 | 1,295,000 | 1,308,669 | ||||||||||||
|
| |||||||||||||
| Pennsylvania 0.7% | ||||||||||||||
Commonwealth Financing Authority, Series 2021A, 2.991%, 6/01/42 | 7,800,000 | 7,074,417 | ||||||||||||
Pennsylvania State University, Series 2020B, 2.888%, 9/01/50 | 3,500,000 | 3,154,713 | ||||||||||||
|
| |||||||||||||
| 10,229,130 | ||||||||||||||
|
| |||||||||||||
| Texas 0.4% | ||||||||||||||
City of Austin, Electric Utility Revenue, Refunding, 6.262%, 11/15/32 | 940,000 | 1,116,207 | ||||||||||||
Texas Water Development Board, Series 2019A, 4.00%, 10/15/44 | 3,750,000 | 4,022,310 | ||||||||||||
|
| |||||||||||||
| 5,138,517 | ||||||||||||||
|
| |||||||||||||
Total Municipals (Cost $69,609,852) | 64,303,960 | |||||||||||||
|
| |||||||||||||
| Mortgage-Backed Securities 18.4% | ||||||||||||||
| Fannie Mae 5.0% | ||||||||||||||
Federal Home Loan Mortgage Corp., | United States | 5,359,058 | 5,214,771 | |||||||||||
2.00%, 7/01/36 | United States | 4,950,048 | 4,814,757 | |||||||||||
2.00%, 3/01/51 | United States | 5,594,030 | 5,209,351 | |||||||||||
2.50%, 2/01/51 | United States | 5,444,352 | 5,205,264 | |||||||||||
3.00%, 3/01/27 | United States | 4,392,516 | 4,439,419 | |||||||||||
3.00%, 3/01/50 | United States | 16,959,652 | 16,666,100 | |||||||||||
3.00%, 3/01/50 | United States | 6,627,291 | 6,514,628 | |||||||||||
3.50%, 2/01/47 | United States | 1,694,368 | 1,726,266 | |||||||||||
3.50%, 2/01/47 | United States | 3,142,518 | 3,200,852 | |||||||||||
3.50%, 3/01/48 | United States | 4,216,275 | 4,275,711 | |||||||||||
3.50%, 3/01/48 | United States | 2,004,827 | 2,031,440 | |||||||||||
| 182 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Mortgage-Backed Securities (continued) | ||||||||||||||
| Fannie Mae (continued) | ||||||||||||||
4.00%, 11/01/45 | United States | 3,000,227 | $ | 3,124,529 | ||||||||||
4.00%, 6/01/48 | United States | 6,208,827 | 6,433,723 | |||||||||||
4.00%, 5/01/50 | United States | 6,965,966 | 7,190,567 | |||||||||||
|
| |||||||||||||
| 76,047,378 | ||||||||||||||
|
| |||||||||||||
| Freddie Mac 11.5% | ||||||||||||||
Federal National Mortgage Association, | United States | 7,732,051 | 7,344,127 | |||||||||||
2.00%, 5/01/36 | United States | 12,280,881 | 11,946,358 | |||||||||||
2.00%, 7/01/36 | United States | 10,603,588 | 10,314,738 | |||||||||||
2.00%, 8/01/36 | United States | 4,006,349 | 3,897,169 | |||||||||||
2.00%, 11/01/36 | United States | 1,153,611 | 1,122,081 | |||||||||||
2.00%, 12/01/36 | United States | 3,994,883 | 3,885,930 | |||||||||||
2.00%, 1/01/37 | United States | 1,584,985 | 1,542,950 | |||||||||||
2.00%, 6/01/51 | United States | 4,102,199 | 3,817,381 | |||||||||||
2.00%, 7/01/51 | United States | 23,568,690 | 21,927,923 | |||||||||||
2.00%, 8/01/51 | United States | 7,996,904 | 7,448,766 | |||||||||||
2.50%, 12/01/35 | United States | 816,387 | 808,325 | |||||||||||
2.50%, 7/01/36 | United States | 7,560,931 | 7,486,265 | |||||||||||
2.50%, 7/01/51 | United States | 7,955,481 | 7,603,110 | |||||||||||
2.50%, 12/01/51 | United States | 17,354,501 | 16,585,820 | |||||||||||
3.00%, 12/01/32 | United States | 1,587,663 | 1,601,369 | |||||||||||
3.00%, 4/01/33 | United States | 2,236,298 | 2,255,655 | |||||||||||
3.00%, 2/01/35 | United States | 1,824,269 | 1,841,149 | |||||||||||
3.00%, 4/01/50 | United States | 7,089,536 | 6,973,310 | |||||||||||
3.00%, 9/01/50 | United States | 5,671,484 | 5,566,387 | |||||||||||
3.00%, 11/01/51 | United States | 13,478,369 | 13,203,402 | |||||||||||
3.50%, 8/01/49 | United States | 11,836,317 | 11,967,980 | |||||||||||
4.00%, 9/01/48 | United States | 6,827,377 | 7,031,288 | |||||||||||
4.50%, 7/01/47 | United States | 6,492,439 | 6,829,867 | |||||||||||
4.50%, 5/01/48 | United States | 3,306,315 | 3,487,936 | |||||||||||
4.50%, 12/01/48 | United States | 4,788,385 | 5,021,769 | |||||||||||
4.50%, 2/01/50 | United States | 1,938,907 | 2,026,835 | |||||||||||
|
| |||||||||||||
| 173,537,890 | ||||||||||||||
|
| |||||||||||||
| Ginnie Mae 1.9% | ||||||||||||||
Government National Mortgage Association, | ||||||||||||||
2.00%, 5/20/51 | United States | 5,486,901 | 5,242,117 | |||||||||||
2.00%, 7/20/51 | United States | 5,487,662 | 5,242,765 | |||||||||||
2.00%, 12/20/51 | United States | 2,207,424 | 2,108,222 | |||||||||||
2.50%, 6/20/51 | United States | 11,897,247 | 11,558,402 | |||||||||||
2.50%, 11/20/51 | United States | 4,612,047 | 4,480,692 | |||||||||||
|
| |||||||||||||
| 28,632,198 | ||||||||||||||
|
| |||||||||||||
Total Mortgage-Backed Securities (Cost $293,506,279) | 278,217,466 | |||||||||||||
|
| |||||||||||||
| Foreign Government and Agency Securities 3.3% | ||||||||||||||
| Chile 0.1% | ||||||||||||||
Chile Government International Bond, Sr. Unsecured, 3.5%, 1/25/2050 | 1,100,000 | 1,009,734 | ||||||||||||
|
| |||||||||||||
| Colombia 0.3% | ||||||||||||||
Colombia Government International Bond, | ||||||||||||||
senior bond, 5.00%, 6/15/45 | 3,250,000 | 2,747,420 | ||||||||||||
senior bond, 5.625%, 2/26/44 | 2,000,000 | 1,817,940 | ||||||||||||
|
| |||||||||||||
| 4,565,360 | ||||||||||||||
|
| |||||||||||||
| India 0.1% | ||||||||||||||
| a | Export-Import Bank of India, senior note, 144A, 3.25%, 1/15/2030 | 1,000,000 | 948,971 | |||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 183 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Foreign Government and Agency Securities (continued) | ||||||||||||||
| Indonesia 0.4% | ||||||||||||||
Indonesia Government International Bond, | ||||||||||||||
a senior bond, 144A, 4.35%, 1/08/27 | 3,150,000 | $ | 3,353,808 | |||||||||||
a senior note, 144A, 4.125%, 1/15/25 | 3,500,000 | 3,617,247 | ||||||||||||
|
| |||||||||||||
| 6,971,055 | ||||||||||||||
|
| |||||||||||||
| Mexico 0.2% | ||||||||||||||
Mexico Government International Bond, senior bond, 3.6%, 1/30/2025 | 2,700,000 | 2,775,870 | ||||||||||||
|
| |||||||||||||
| Panama 0.4% | ||||||||||||||
Panama Notas del Tesoro, senior note, 3.75%, 4/17/2026 | 5,950,000 | 5,985,700 | ||||||||||||
|
| |||||||||||||
| Peru 0.4% | ||||||||||||||
Peruvian Government International Bond, senior bond, 2.783%, 1/23/2031 | 5,850,000 | 5,522,400 | ||||||||||||
|
| |||||||||||||
| Philippines 0.3% | ||||||||||||||
Philippine Government International Bond, senior bond, 3.95%, 1/20/2040 | 4,620,000 | 4,586,146 | ||||||||||||
|
| |||||||||||||
| Romania 0.1% | ||||||||||||||
| a | Romanian Government International Bond, senior bond, 144A, 5.125%, 6/15/2048 | 2,270,000 | 2,363,338 | |||||||||||
|
| |||||||||||||
| Supranational 0.6% | ||||||||||||||
| a | African Export-Import Bank, senior bond, 144A, 3.994%, 9/21/2029 | 6,100,000 | 5,793,731 | |||||||||||
| a | Banque Ouest Africaine de Developpement, Sr. Unsecured note, 144A, 5.00%, 7/27/2027 | 3,800,000 | 3,841,458 | |||||||||||
|
| |||||||||||||
| 9,635,189 | ||||||||||||||
|
| |||||||||||||
| Uruguay 0.4% | ||||||||||||||
Uruguay Government International Bond, | ||||||||||||||
senior bond, 4.375%, 1/23/31 | 3,875,000 | 4,232,236 | ||||||||||||
senior bond, 4.50%, 8/14/24 | 1,400,000 | 1,443,764 | ||||||||||||
|
| |||||||||||||
| 5,676,000 | ||||||||||||||
|
| |||||||||||||
Total Foreign Government and Agency Securities (Cost $54,700,024) | 50,039,763 | |||||||||||||
|
| |||||||||||||
| Asset-Backed Securities 2.7% | ||||||||||||||
BANK 2021-BNK33, Series 2021-BN33, Class A5, 2.556%, 5/15/64 | 2,780,000 | 2,612,152 | ||||||||||||
Benchmark Mortgage Trust, | ||||||||||||||
Series 2021-B31, Class A5, 2.669%, 12/15/54 | 2,780,000 | 2,631,119 | ||||||||||||
Series 2022-B32, Class A5, 3.002%, 1/15/55 | 5,560,000 | 5,409,032 | ||||||||||||
| a | BX 2021-LBA3 Mortgage Trust, Series 2021-PAC, Class A, 144A, 1.086%, 10/15/36 | 3,090,000 | 3,033,192 | |||||||||||
BX Commercial Mortgage Trust, | ||||||||||||||
a Series 2019-XL, Class A, 144A, 1.317%, 10/15/36 | 4,187,872 | 4,172,426 | ||||||||||||
a 144A, 1.318%, 2/15/39 | 3,200,000 | 3,141,217 | ||||||||||||
a Series 2021-VOLT, Class B, 144A, 1.347%, 9/15/36 | 3,190,000 | 3,126,774 | ||||||||||||
Capital One Multi-Asset Execution Trust, Series 2019-A2, Class A2, 1.72%, 8/15/24 | 5,510,000 | 5,520,213 | ||||||||||||
Citibank Credit Card Issuance Trust, Series 2017-A7 , Class A7, 0.68%, FRN thereafter, 0.68%, 8/08/24 | 2,000,000 | 2,001,910 | ||||||||||||
Discover Card Execution Note Trust, Series 2019-A3, Class A, 1.89%, 10/15/24 | 3,220,000 | 3,227,630 | ||||||||||||
| a | New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1, 144A, 1.91%, 10/20/61 | 6,660,000 | 6,217,128 | |||||||||||
|
| |||||||||||||
Total Asset-Backed Securities (Cost $41,911,050) | 41,092,793 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 1,448,058,291 | |||||||||||||
|
| |||||||||||||
| 184 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Core Bond ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Short Term Investments 3.2% | ||||||||||||||
| Money Market Funds 3.2% | ||||||||||||||
| b,c | Institutional Fiduciary Trust Portfolio, 0.01% | 48,548,641 | $ | 48,548,641 | ||||||||||
|
| |||||||||||||
Total Short Term Investments | 48,548,641 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $1,587,538,278) 99.1% | 1,496,606,932 | |||||||||||||
Other Assets, less Liabilities 0.9% | 13,354,376 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 1,509,961,308 | ||||||||||||
|
| |||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $116,274,566 representing 7.7% of net assets.
bSee Note 3(d) regarding investments in affiliated management investment companies.
cThe rate shown is the annualized seven-day effective yield at period end.
At March 31, 2022, the Fund had the following credit default swap contracts outstanding. See Note 1(c).
| Credit Default Swap Contracts | ||||||||||||||||||||||||||||
| Description | Periodic Payment Rate Received (Paid) | Payment Frequency | Maturity Date | Notional Amount | Value | Unamortized Upfront Payments (Receipts) | Unrealized Appreciation (Depreciation) | |||||||||||||||||||||
Over the counter Swap Contracts Contracts to Sell Protectiond,e | ||||||||||||||||||||||||||||
Long: s25995201 CDS USD R F 1.00000 Mexico Government International Bond | 1% | Quarterly | 6/20/26 | 5,200,000 | $ | 46,281 | $ | 14,678 | $ | 31,603 | ||||||||||||||||||
Long: s26257921 CDS USD R F 1.00000 Nordstrom Inc. | 1% | Quarterly | 12/20/26 | 3,810,000 | (357,130 | ) | (307,499 | ) | (49,631 | ) | ||||||||||||||||||
|
| |||||||||||||||||||||||||||
| $ | (18,028 | ) | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
dThe Fund enters contracts to sell protection to create a long credit position.
ePerformance triggers for settlement of contract include default, bankruptcy or restructuring for single name swaps, and failure to pay or bankruptcy of the underlying securities for traded swaps.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
U.S. Treasury 10 Yr. Note | Long | 46 | $ | 5,652,250 | 6/21/22 | $ | (169,688 | ) | ||||||||||||
U.S. Treasury Bond Ultra | Long | 21 | 3,719,625 | 6/21/22 | (114,056 | ) | ||||||||||||||
U.S. Treasury Bond Long | Short | 40 | 6,002,500 | 6/21/22 | 152,407 | |||||||||||||||
Ultra 10 Yr. U.S. Treasury Note | Short | 100 | 13,546,875 | 6/21/22 | 247,319 | |||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | 115,982 | |||||||||||||||||
|
| |||||||||||||||||||
*As of year end.
See Note 12 regarding other derivative information.
See Abbreviations on page 240.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 185 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty U.S. Low Volatility ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 43.69 | $ | 30.93 | $ | 33.61 | $ | 30.03 | $ | 26.97 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
Net investment incomeb | 0.70 | 0.67 | 0.64 | 0.52 | 0.45 | |||||||||||||||
Net realized and unrealized gains (losses) | 5.39 | 12.73 | (2.84 | ) | 3.88 | 3.06 | ||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 6.09 | 13.40 | (2.20 | ) | 4.40 | 3.51 | ||||||||||||||
|
| |||||||||||||||||||
| Less distributions from: | ||||||||||||||||||||
Net investment income | (0.71 | ) | (0.64 | ) | (0.48 | ) | (0.47 | ) | (0.45 | ) | ||||||||||
Net realized gains | — | — | — | (0.35 | ) | — | ||||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.71 | ) | (0.64 | ) | (0.48 | ) | (0.82 | ) | (0.45 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 49.07 | $ | 43.69 | $ | 30.93 | $ | 33.61 | $ | 30.03 | ||||||||||
|
| |||||||||||||||||||
Total returnc | 13.98% | 43.52% | (6.74)% | 14.98% | 13.08% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.33% | 0.37% | 0.57% | 1.12% | 2.11% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.29% | 0.29% | 0.33% | 0.50% | 0.50% | |||||||||||||||
Net investment income | 1.47% | 1.71% | 1.75% | 1.64% | 1.56% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $134,935 | $139,822 | $74,223 | $13,443 | $6,005 | |||||||||||||||
Portfolio turnover ratee | 21.90% | f | 40.54% | f | 32.61% | f | 46.90% | 65.68% | ||||||||||||
aThe 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 and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal 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.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| fPortfolio turnover rate excluding cash creations was as follows: | 21.90% | 40.54% | 32.61% |
| 186 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty U.S. Low Volatility ETF
| Shares | Value | |||||||||||||
| Common Stocks 99.1% | ||||||||||||||
| Communication Services 8.6% | ||||||||||||||
| a | Alphabet Inc., A | 539 | $ | 1,499,148 | ||||||||||
AT&T Inc. | 63,288 | 1,495,495 | ||||||||||||
| a | Charter Communications Inc., A | 2,545 | 1,388,348 | |||||||||||
Comcast Corp., A | 31,326 | 1,466,683 | ||||||||||||
| a | Liberty Broadband Corp., C | 10,405 | 1,408,005 | |||||||||||
TELUS Corp. | 57,314 | 1,498,188 | ||||||||||||
| a | The Walt Disney Co. | 10,474 | 1,436,614 | |||||||||||
Verizon Communications Inc. | 28,928 | 1,473,592 | ||||||||||||
|
| |||||||||||||
| 11,666,073 | ||||||||||||||
|
| |||||||||||||
| Consumer Discretionary 11.4% | ||||||||||||||
| a | Amazon.com Inc. | 443 | 1,444,158 | |||||||||||
Dollar General Corp. | 6,225 | 1,385,872 | ||||||||||||
McDonald’s Corp. | 5,983 | 1,479,476 | ||||||||||||
NIKE Inc., B | 10,892 | 1,465,628 | ||||||||||||
| a | NVR Inc. | 286 | 1,277,639 | |||||||||||
| a | O’Reilly Automotive Inc. | 2,071 | 1,418,552 | |||||||||||
Starbucks Corp. | 15,953 | 1,451,244 | ||||||||||||
Target Corp. | 6,323 | 1,341,867 | ||||||||||||
The Home Depot Inc. | 4,195 | 1,255,689 | ||||||||||||
The TJX Cos. Inc. | 22,893 | 1,386,858 | ||||||||||||
Tractor Supply Co. | 6,121 | 1,428,458 | ||||||||||||
|
| |||||||||||||
| 15,335,441 | ||||||||||||||
|
| |||||||||||||
| Consumer Staples 5.8% | ||||||||||||||
Mondelez International Inc., A | 24,977 | 1,568,056 | ||||||||||||
PepsiCo Inc. | 9,437 | 1,579,565 | ||||||||||||
The Coca-Cola Co. | 25,563 | 1,584,906 | ||||||||||||
The Procter & Gamble Co. | 10,232 | 1,563,450 | ||||||||||||
Walmart Inc. | 10,563 | 1,573,042 | ||||||||||||
|
| |||||||||||||
| 7,869,019 | ||||||||||||||
|
| |||||||||||||
| Energy 3.9% | ||||||||||||||
Chevron Corp. | 10,325 | 1,681,220 | ||||||||||||
Exxon Mobil Corp. | 21,227 | 1,753,138 | ||||||||||||
Kinder Morgan Inc. | 96,194 | 1,819,028 | ||||||||||||
|
| |||||||||||||
| 5,253,386 | ||||||||||||||
|
| |||||||||||||
| Financials 11.7% | ||||||||||||||
Aflac Inc. | 25,042 | 1,612,454 | ||||||||||||
Arthur J Gallagher & Co. | 9,418 | 1,644,383 | ||||||||||||
BlackRock Inc. | 2,134 | 1,630,739 | ||||||||||||
Intercontinental Exchange Inc. | 11,515 | 1,521,362 | ||||||||||||
JPMorgan Chase & Co. | 11,252 | 1,533,872 | ||||||||||||
Nasdaq Inc. | 8,795 | 1,567,269 | ||||||||||||
S&P Global Inc. | 3,845 | 1,577,142 | ||||||||||||
The Progressive Corp. | 14,173 | 1,615,580 | ||||||||||||
The Travelers Cos. Inc. | 8,742 | 1,597,426 | ||||||||||||
US Bancorp | 27,886 | 1,482,141 | ||||||||||||
|
| |||||||||||||
| 15,782,368 | ||||||||||||||
|
| |||||||||||||
| Health Care 13.5% | ||||||||||||||
Abbott Laboratories | 13,419 | 1,588,273 | ||||||||||||
AbbVie Inc. | 10,321 | 1,673,137 | ||||||||||||
Amgen Inc. | 6,955 | 1,681,858 | ||||||||||||
Becton Dickinson and Co. | 6,270 | 1,667,820 | ||||||||||||
Bristol-Myers Squibb Co. | 23,137 | 1,689,695 | ||||||||||||
Danaher Corp. | 5,623 | 1,649,395 | ||||||||||||
| franklintempleton.com | Annual Report | 187 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Low Volatility ETF (continued)
| Shares | Value | |||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Health Care (continued) | ||||||||||||||
Johnson & Johnson | 9,398 | $ | 1,665,607 | |||||||||||
Medtronic PLC | 14,913 | 1,654,597 | ||||||||||||
Merck & Co. Inc. | 20,771 | 1,704,261 | ||||||||||||
Quest Diagnostics Inc. | 11,327 | 1,550,213 | ||||||||||||
UnitedHealth Group Inc. | 3,246 | 1,655,363 | ||||||||||||
|
| |||||||||||||
| 18,180,219 | ||||||||||||||
|
| |||||||||||||
| Industrials 8.7% | ||||||||||||||
3M Co. | 7,115 | 1,059,281 | ||||||||||||
AMETEK Inc. | 7,831 | 1,042,933 | ||||||||||||
General Dynamics Corp. | 4,584 | 1,105,569 | ||||||||||||
Honeywell International Inc. | 5,420 | 1,054,624 | ||||||||||||
IDEX Corp. | 5,303 | 1,016,744 | ||||||||||||
Illinois Tool Works Inc. | 4,970 | 1,040,718 | ||||||||||||
Lockheed Martin Corp. | 2,476 | 1,092,906 | ||||||||||||
Republic Services Inc. | 8,026 | 1,063,445 | ||||||||||||
Roper Technologies Inc. | 2,252 | 1,063,462 | ||||||||||||
Union Pacific Corp. | 4,038 | 1,103,222 | ||||||||||||
Verisk Analytics Inc. | 5,068 | 1,087,745 | ||||||||||||
|
| |||||||||||||
| 11,730,649 | ||||||||||||||
|
| |||||||||||||
| Information Technology 26.9% | ||||||||||||||
Accenture PLC, A | 6,185 | 2,085,768 | ||||||||||||
Amphenol Corp., A | 26,113 | 1,967,615 | ||||||||||||
Analog Devices Inc. | 12,260 | 2,025,107 | ||||||||||||
| a | ANSYS Inc. | 6,289 | 1,997,701 | |||||||||||
Apple Inc. | 12,220 | 2,133,734 | ||||||||||||
Automatic Data Processing Inc. | 9,334 | 2,123,858 | ||||||||||||
| a | Black Knight Inc. | 33,079 | 1,918,251 | |||||||||||
Cisco Systems Inc. | 35,803 | 1,996,375 | ||||||||||||
Fidelity National Information Services Inc. | 20,913 | 2,100,083 | ||||||||||||
International Business Machines Corp. | 15,563 | 2,023,501 | ||||||||||||
Intuit Inc. | 3,329 | 1,600,716 | ||||||||||||
| a | Keysight Technologies Inc. | 12,415 | 1,961,198 | |||||||||||
Mastercard Inc., A | 5,724 | 2,045,643 | ||||||||||||
Microsoft Corp. | 6,670 | 2,056,428 | ||||||||||||
Oracle Corp. | 24,533 | 2,029,615 | ||||||||||||
| a | Synopsys Inc. | 6,297 | 2,098,601 | |||||||||||
Texas Instruments Inc. | 11,126 | 2,041,399 | ||||||||||||
Visa Inc., A | 9,145 | 2,028,087 | ||||||||||||
|
| |||||||||||||
| 36,233,680 | ||||||||||||||
|
| |||||||||||||
| Materials 2.5% | ||||||||||||||
Air Products and Chemicals Inc. | 4,728 | 1,181,574 | ||||||||||||
Ecolab Inc. | 6,401 | 1,130,161 | ||||||||||||
Linde PLC | 3,514 | 1,122,477 | ||||||||||||
|
| |||||||||||||
| 3,434,212 | ||||||||||||||
|
| |||||||||||||
| Real Estate 3.4% | ||||||||||||||
Crown Castle International Corp. | 8,403 | 1,551,194 | ||||||||||||
Equinix Inc. | 2,006 | 1,487,690 | ||||||||||||
Public Storage | 4,018 | 1,568,145 | ||||||||||||
|
| |||||||||||||
| 4,607,029 | ||||||||||||||
|
| |||||||||||||
| Utilities 2.7% | ||||||||||||||
American Electric Power Co. Inc. | 7,384 | 736,702 | ||||||||||||
Consolidated Edison Inc. | 7,831 | 741,439 | ||||||||||||
Dominion Energy Inc. | 8,547 | 726,239 | ||||||||||||
| 188 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Low Volatility ETF (continued)
| Shares | Value | |||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Utilities (continued) | ||||||||||||||
Duke Energy Corp. | 6,612 | $ | 738,296 | |||||||||||
NextEra Energy Inc. | 8,433 | 714,359 | ||||||||||||
|
| |||||||||||||
| 3,657,035 | ||||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 133,749,111 | |||||||||||||
|
| |||||||||||||
| Country | Principal Amount* | |||||||||||||
| Short Term Investments 0.5% | ||||||||||||||
| U.S. Government & Agency Securities 0.5% | ||||||||||||||
| b | Federal Home Loan Bank Discount Notes, 04/01/2022 | United States | 660,000 | 660,000 | ||||||||||
|
| |||||||||||||
Total Short-Term Investments (Cost $660,000) | 660,000 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $116,214,358) 99.6% | 134,409,111 | |||||||||||||
Other Assets, less Liabilities 0.4% | 526,304 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 134,935,415 | ||||||||||||
|
| |||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aNon-income producing.
bThe security was issued on a discount basis with no stated coupon rate.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 189 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty U.S. Treasury Bond ETF
| Year Ended March 31, | ||||||||
| 2022 | 2021a | |||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||
Net asset value, beginning of year | $ | 23.83 | $ | 25.00 | ||||
|
| |||||||
| Income from investment operationsb: |
| |||||||
Net investment incomec | 0.18 | 0.11 | ||||||
Net realized and unrealized gains (losses) | (0.96 | ) | (0.94 | ) | ||||
|
| |||||||
Total from investment operations | (0.78 | ) | (0.83 | ) | ||||
|
| |||||||
Less distributions from net investment income | (0.38 | ) | (0.34 | ) | ||||
|
| |||||||
Net asset value, end of year | $ | 22.67 | $ | 23.83 | ||||
|
| |||||||
Total returnd | (3.35)% | (3.36)% | ||||||
| Ratios to average net assetse |
| |||||||
Expenses before waiver and payments by affiliates | 0.28% | 0.50% | ||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | ||||||
Net investment income | 0.77% | 0.54% | ||||||
| Supplemental data |
| |||||||
Net assets, end of year (000’s) | $403,543 | $418,199 | ||||||
Portfolio turnover ratef | 13.86% | g | 102.09% | g | ||||
aFor the period June 9, 2020 (commencement of operations) to March 31, 2021.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 13.86% | 102.09% |
| 190 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty U.S. Treasury Bond ETF
| Country | Principal Amount* | Value | ||||||||||||
| U.S. Government & Agency Securities 96.5% | ||||||||||||||
U.S. Treasury Bond, | ||||||||||||||
1.125%, 8/15/40 | United States | 13,770,000 | $ | 10,805,685 | ||||||||||
2.00%, 8/15/51 | United States | 4,648,000 | 4,194,820 | |||||||||||
2.25%, 8/15/46 | United States | 9,339,000 | 8,744,368 | |||||||||||
2.25%, 8/15/49 | United States | 7,922,000 | 7,542,611 | |||||||||||
2.375%, 2/15/42 | United States | 1,616,000 | 1,559,188 | |||||||||||
2.375%, 5/15/51 | United States | 551,000 | 540,593 | |||||||||||
2.50%, 2/15/45 | United States | 8,932,000 | 8,708,002 | |||||||||||
2.75%, 11/15/47 | United States | 8,790,000 | 9,128,037 | |||||||||||
2.875%, 5/15/49 | United States | 4,980,000 | 5,360,795 | |||||||||||
3.00%, 5/15/47 | United States | 1,800,000 | 1,945,371 | |||||||||||
3.375%, 11/15/48 | United States | 8,760,000 | 10,266,652 | |||||||||||
4.375%, 2/15/38 | United States | 3,650,000 | 4,620,529 | |||||||||||
4.50%, 5/15/38 | United States | 6,080,000 | 7,807,337 | |||||||||||
U.S. Treasury Note, | ||||||||||||||
0.125%, 5/31/22 | United States | 35,400,000 | 35,384,829 | |||||||||||
0.50%, 6/30/27 | United States | 30,620,000 | 27,679,403 | |||||||||||
0.625%, 8/15/30 | United States | 2,450,000 | 2,128,772 | |||||||||||
0.75%, 8/31/26 | United States | 1,795,000 | 1,663,916 | |||||||||||
1.125%, 2/29/28 | United States | 7,358,000 | 6,824,258 | |||||||||||
1.25%, 8/31/24 | United States | 12,670,000 | 12,313,656 | |||||||||||
1.25%, 4/30/28 | United States | 18,200,000 | 16,957,992 | |||||||||||
1.375%, 11/15/31 | United States | 500,000 | 458,906 | |||||||||||
1.50%, 9/30/24 | United States | 12,610,000 | 12,315,438 | |||||||||||
1.50%, 11/30/24 | United States | 20,518,000 | 19,991,425 | |||||||||||
1.625%, 8/15/29 | United States | 8,785,000 | 8,333,225 | |||||||||||
1.75%, 7/31/24 | United States | 7,080,000 | 6,970,758 | |||||||||||
1.875%, 7/31/26 | United States | 31,973,000 | 31,159,312 | |||||||||||
1.875%, 2/15/32 | United States | 820,000 | 787,584 | |||||||||||
2.00%, 4/30/24 | United States | 11,369,000 | 11,284,177 | |||||||||||
2.00%, 5/31/24 | United States | 12,230,000 | 12,129,198 | |||||||||||
2.125%, 3/31/24 | United States | 13,131,000 | 13,078,681 | |||||||||||
2.125%, 9/30/24 | United States | 9,390,000 | 9,313,339 | |||||||||||
2.125%, 11/30/24 | United States | 12,920,000 | 12,796,352 | |||||||||||
2.25%, 10/31/24 | United States | 10,600,000 | 10,538,305 | |||||||||||
2.25%, 11/15/24 | United States | 13,470,000 | 13,388,970 | |||||||||||
2.375%, 2/29/24 | United States | 7,789,000 | 7,799,193 | |||||||||||
2.375%, 5/15/27 | United States | 7,000,000 | 6,971,562 | |||||||||||
2.50%, 5/15/24 | United States | 14,085,000 | 14,117,737 | |||||||||||
2.875%, 8/15/28 | United States | 1,764,000 | 1,807,824 | |||||||||||
3.125%, 11/15/28 | United States | 11,527,000 | 12,004,290 | |||||||||||
|
| |||||||||||||
Total U.S. Government & Agency Securities (Cost $419,648,558) | 389,423,090 | |||||||||||||
|
| |||||||||||||
| Mortgage-Backed Securities 1.5% | ||||||||||||||
| Fannie Mae 0.5% | ||||||||||||||
Federal National Mortgage Association | United States | 2,220,733 | 2,122,371 | |||||||||||
|
| |||||||||||||
| Ginnie Mae 1.0% | ||||||||||||||
Government National Mortgage Association | United States | 4,081,715 | 4,044,560 | |||||||||||
|
| |||||||||||||
Total Mortgage-Backed Securities (Cost $6,449,862) | 6,166,931 | |||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 191 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty U.S. Treasury Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Short Term Investments 1.2% | ||||||||||||||
| Money Market Funds 1.2% | ||||||||||||||
| a,b | Institutional Fiduciary Trust Portfolio, 0.01% | United States | 4,633,381 | $ | 4,633,381 | |||||||||
|
| |||||||||||||
Total Short Term Investments (Cost $4,633,381) | 4,633,381 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $430,731,801) 99.2% | 400,223,402 | |||||||||||||
Other Assets, less Liabilities 0.8% | 3,319,315 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 403,542,717 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSee Note 3(d) regarding investments in affiliated management investment companies.
bThe rate shown is the annualized seven-day effective yield at period end.
| 192 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Liberty Ultra Short Bond ETF
| Year Ended March 31, | ||||||||
| 2022 | 2021a | |||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||
Net asset value, beginning of year | $ | 24.88 | $ | 25.00 | ||||
|
| |||||||
| Income from investment operationsb: |
| |||||||
Net investment incomec | 0.14 | 0.10 | ||||||
Net realized and unrealized gains (losses) | (0.33 | ) | 0.13 | |||||
|
| |||||||
Total from investment operations | (0.19 | ) | 0.23 | |||||
|
| |||||||
| Less distributions from: |
| |||||||
Net investment income | (0.14 | ) | (0.33 | ) | ||||
Net realized gains | — | (0.02 | ) | |||||
|
| |||||||
Total Distributions | (0.14 | ) | (0.35 | ) | ||||
|
| |||||||
Net asset value, end of year | $ | 24.55 | $ | 24.88 | ||||
|
| |||||||
Total returnd | (0.78)% | 0.91% | ||||||
| Ratios to average net assetse |
| |||||||
Expenses before waiver and payments by affiliates | 1.71% | 4.17% | ||||||
Expenses net of waiver and payments by affiliates | 0.15% | 0.15% | ||||||
Net investment income | 0.55% | 0.58% | ||||||
| Supplemental data |
| |||||||
Net assets, end of year (000’s) | $3,682 | $2,488 | ||||||
Portfolio turnover ratef | 24.71% | g | 10.49% | g | ||||
aFor the period July 14, 2020 (commencement of operations) to March 31, 2021.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 24.17% | 10.49% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 193 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin Liberty Ultra Short Bond ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 92.6% | ||||||||||||||
| Aerospace & Defense 2.7% | ||||||||||||||
The Boeing Co., senior note, 1.167%, 2/04/23 | United States | 100,000 | $ | 99,248 | ||||||||||
|
| |||||||||||||
| Automobiles 4.1% | ||||||||||||||
| a | Hyundai Capital America, Senior note, 144A, 2.375%, 2/10/23 | United States | 150,000 | 149,579 | ||||||||||
|
| |||||||||||||
| Banks 21.7% | ||||||||||||||
Bank of America Corp., senior note, FRN thereafter, 1.259%, 4/24/23 | United States | 50,000 | 50,014 | |||||||||||
Bank of Montreal, senior note, FRN thereafter, 0.931%, 3/10/23 | Canada | 50,000 | 50,069 | |||||||||||
Canadian Imperial Bank of Commerce, senior note, FRN thereafter, 1.072%, 3/17/23 | Canada | 50,000 | 50,112 | |||||||||||
Citigroup Inc., senior note, FRN thereafter, 1.953%, 9/01/23 | United States | 150,000 | 150,545 | |||||||||||
JPMorgan Chase & Co., senior note, FRN thereafter, 1.158%, 4/25/23 | United States | 100,000 | 100,028 | |||||||||||
M&T Bank Corp., senior note, FRN thereafter, 0.947%, 7/26/23 | United States | 150,000 | 150,687 | |||||||||||
Morgan Stanley, senior unsecured note, FRN thereafter, 0.731%, 4/05/24 | United States | 100,000 | 97,992 | |||||||||||
Sumitomo Mitsui Financial Group Inc., senior note, FRN thereafter, 0.981%, 1/17/23 | Japan | 50,000 | 50,138 | |||||||||||
The Goldman Sachs Group Inc., senior unsecured note, FRN thereafter, 0.737%, 11/17/23 | United States | 100,000 | 99,521 | |||||||||||
|
| |||||||||||||
| 799,106 | ||||||||||||||
|
| |||||||||||||
| Biotechnology 4.1% | ||||||||||||||
Abbvie Inc., senior unsecured, 1.13%, 11/21/22 | United States | 50,000 | 50,125 | |||||||||||
Biogen Inc., senior note, 3.625%, 9/15/22 | United States | 100,000 | 100,881 | |||||||||||
|
| |||||||||||||
| 151,006 | ||||||||||||||
|
| |||||||||||||
| Capital Markets 1.4% | ||||||||||||||
Goldman Sachs Group Inc., senior note, FRN thereafter, 1.214%, 2/23/23 | United States | 50,000 | 50,102 | |||||||||||
|
| |||||||||||||
| Chemicals 4.9% | ||||||||||||||
DuPont de Nemours Inc., senior note, FRN thereafter, 1.616%, 11/15/23 | United States | 150,000 | 151,544 | |||||||||||
LYB International Finance BV, senior note, 4.00%, 7/15/23 | United States | 28,000 | 28,454 | |||||||||||
|
| |||||||||||||
| 179,998 | ||||||||||||||
|
| |||||||||||||
| Consumer Finance 8.1% | ||||||||||||||
Bunge Ltd. Finance Corp. 3.00%, 9/25/22 | United States | 100,000 | 100,533 | |||||||||||
Capital One Financial Corp., senior note, 2.60%, 5/11/23 | United States | 50,000 | 50,175 | |||||||||||
General Motors Financial Co. Inc., senior unsecured, 1.70%, 8/18/23 | United States | 100,000 | 98,971 | |||||||||||
Royalty Pharma PLC 0.75%, 9/02/23 | United Kingdom | 50,000 | 48,570 | |||||||||||
|
| |||||||||||||
| 298,249 | ||||||||||||||
|
| |||||||||||||
| Electric Utilities 1.3% | ||||||||||||||
| a | Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24 | United States | 50,000 | 49,563 | ||||||||||
|
| |||||||||||||
| Energy Equipment & Services 5.5% | ||||||||||||||
Energy Transfer LP, senior unsecured, 3.60%, 2/01/23 | United States | 50,000 | 50,303 | |||||||||||
Kinder Morgan Energy Partners LP 3.95%, 9/01/22 | United States | 100,000 | 100,376 | |||||||||||
| a | Schlumberger Finance Canada Ltd., senior note, 144A, 2.65%, 11/20/22 | Canada | 50,000 | 50,237 | ||||||||||
|
| |||||||||||||
| 200,916 | ||||||||||||||
|
| |||||||||||||
| Entertainment 1.4% | ||||||||||||||
| a | Magallanes Inc., 144A, 3.428%, 3/15/24 | United States | 50,000 | 50,309 | ||||||||||
|
| |||||||||||||
| Food Products 4.0% | ||||||||||||||
BAT Capital Corp., senior note, 2.764%, 8/15/22 | United States | 50,000 | 50,150 | |||||||||||
Hormel Foods Corp., senior unsecured note, 0.65%, 6/03/24 | United States | 100,000 | 96,074 | |||||||||||
|
| |||||||||||||
| 146,224 | ||||||||||||||
|
| |||||||||||||
| Health Care Equipment & Supplies 2.6% | ||||||||||||||
Thermo Fisher Scientific Inc., Sr. Unsecured, 0.797%, 10/18/23 | United States | 100,000 | 97,607 | |||||||||||
|
| |||||||||||||
| 194 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Liberty Ultra Short Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Industrial Conglomerates 1.4% | ||||||||||||||
General Electric Co., senior unsecured, FRN thereafter, 1.826%, 3/15/23 | United States | 50,000 | $ | 50,123 | ||||||||||
|
| |||||||||||||
| Insurance 4.0% | ||||||||||||||
| a | Brighthouse Financial Global Funding, Secured, 144A, 1.20%, 12/15/23 | United States | 100,000 | 97,155 | ||||||||||
| a | Liberty Mutual Group Inc., senior note, 144A, 4.95%, 5/01/22 | United States | 50,000 | 50,120 | ||||||||||
|
| |||||||||||||
| 147,275 | ||||||||||||||
|
| |||||||||||||
| Internet & Direct Marketing Retail 4.1% | ||||||||||||||
eBay Inc., senior note, 1.169%, 1/30/23 | United States | 150,000 | 150,306 | |||||||||||
|
| |||||||||||||
| Multiline Retail 1.3% | ||||||||||||||
Walgreens Boots Alliance Inc., Sr. Unsecured, 0.95%, 11/17/23 | United States | 50,000 | 48,748 | |||||||||||
|
| |||||||||||||
| Oil, Gas & Consumable Fuels 1.4% | ||||||||||||||
| a | Kinder Morgan Inc., 144A, 5.625%, 11/15/23 | United States | 50,000 | 51,638 | ||||||||||
|
| |||||||||||||
| Pharmaceuticals 10.8% | ||||||||||||||
AmerisourceBergen Corp., senior note, 0.737%, 3/15/23 | United States | 150,000 | 147,869 | |||||||||||
AstraZeneca PLC, senior note, 1.134%, 8/17/23 | United Kingdom | 150,000 | 150,572 | |||||||||||
| a | Bristol-Myers Squibb Co., senior note, 144A, 2.60%, 5/16/22 | United States | 50,000 | 50,050 | ||||||||||
GlaxoSmithKline Capital PLC, senior note, 0.534%, 10/01/23 | United Kingdom | 50,000 | 48,867 | |||||||||||
|
| |||||||||||||
| 397,358 | ||||||||||||||
|
| |||||||||||||
| Road & Rail 4.1% | ||||||||||||||
| a | Penske Truck Leasing Co. LP/PTL Finance Corp., senior note, 144A, 2.70%, 3/14/23 | United States | 150,000 | 150,736 | ||||||||||
|
| |||||||||||||
| Semiconductors & Semiconductor Equipment 3.8% | ||||||||||||||
| a | Microchip Technology Inc., senior secured note, 144A, 0.983%, 9/01/24 | United States | 150,000 | 142,145 | ||||||||||
|
| |||||||||||||
Total Corporate Bonds & Notes (Cost $3,452,490) | 3,410,236 | |||||||||||||
|
| |||||||||||||
| Asset-Backed Securities 5.5% | ||||||||||||||
Citibank Credit Card Issuance Trust, Series 2017-A5, Class A5, FRN thereafter, 1.067%, 4/22/26 | United States | 100,000 | 100,567 | |||||||||||
Discover Card Execution Note Trust, Series 2017-A5, Class A5, FRN thereafter, 0.997%, 12/15/26 | United States | 100,000 | 100,731 | |||||||||||
|
| |||||||||||||
Total Asset-Backed Securities (Cost $200,922) | 201,298 | |||||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $3,653,412) | 3,611,534 | |||||||||||||
|
| |||||||||||||
| Short Term Investments 2.2% | ||||||||||||||
| Money Market Funds 2.2% | ||||||||||||||
| b,c | Institutional Fiduciary Trust Portfolio, 0.01% | United States | 81,009 | 81,009 | ||||||||||
|
| |||||||||||||
Total Short Term Investments (Cost $81,009) | 81,009 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $3,734,421) 100.3% | 3,692,543 | |||||||||||||
Other Assets, less Liabilities (0.3)% | (10,562 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 3,681,981 | ||||||||||||
|
| |||||||||||||
See Abbreviations on page 240.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $841,532, representing 22.9% of net assets.
bSee Note 3(d) regarding investments in affiliated management investment companies.
cThe rate shown is the annualized seven-day effective yield at period end.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 195 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
March 31, 2022
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Assets: |
| |||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 20,302,379 | $ | 3,245,418 | $ | 17,138,284 | $ | 9,187,863 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | — | 591 | — | — | ||||||||||||
Value – Unaffiliated issuers | $ | 18,145,175 | $ | 3,435,499 | $ | 14,341,855 | $ | 11,285,786 | ||||||||
Value – Non-controlled affiliates (Note 3c) | — | 591 | — | — | ||||||||||||
Cash | 471,925 | 720 | 487,051 | 323,522 | ||||||||||||
Foreign currency, at value (cost $-,1,175, 901,-) | — | 1,185 | 898 | — | ||||||||||||
Receivables: |
| |||||||||||||||
Dividends | 3,751 | 1 | 10,688 | 4,143 | ||||||||||||
|
| |||||||||||||||
Total assets | 18,620,851 | 3,437,996 | 14,840,492 | 11,613,451 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Investment securities purchased | — | 1 | — | — | ||||||||||||
Management fees | 37,072 | 20,869 | 41,815 | 39,635 | ||||||||||||
|
| |||||||||||||||
Total liabilities | 37,072 | 20,870 | 41,815 | 39,635 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 18,583,779 | $ | 3,417,126 | $ | 14,798,677 | $ | 11,573,816 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 27,036,587 | $ | 3,779,731 | $ | 23,648,235 | $ | 10,143,738 | ||||||||
Total distributable earnings (loss) | (8,452,808 | ) | (362,605 | ) | (8,849,558 | ) | 1,430,078 | |||||||||
|
| |||||||||||||||
Net assets, at value | $ | 18,583,779 | $ | 3,417,126 | $ | 14,798,677 | $ | 11,573,816 | ||||||||
|
| |||||||||||||||
Shares outstanding | 600,000 | 150,000 | 400,000 | 250,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 30.97 | $ | 22.78 | $ | 37.00 | $ | 46.30 | ||||||||
|
| |||||||||||||||
| 196 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
Assets: |
| |||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 77,838,921 | $ | 109,291,453 | $ | 349,513,376 | $ | 190,792,264 | ||||||||
Value – Unaffiliated issuers | $ | 74,158,707 | $ | 103,319,762 | $ | 333,199,486 | $ | 175,138,158 | ||||||||
Cash | 4,019,399 | 1,192,357 | 343,123 | 3,695,255 | ||||||||||||
Foreign currency, at value (cost $-, -, - and $10,217,103 respectively) | — | — | — | 9,637,405 | ||||||||||||
Receivables: |
| |||||||||||||||
Interest | 666,344 | 1,099,701 | 5,217,988 | 851,854 | ||||||||||||
Investment securities sold | — | — | 13,477,687 | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | — | — | 5,190,265 | ||||||||||||
|
| |||||||||||||||
Total assets | 78,844,450 | 105,611,820 | 352,238,284 | 194,512,937 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Investment securities purchased | 1,859,765 | 599,335 | 4,163,807 | — | ||||||||||||
Capital shares redeemed | — | — | 13,619,052 | — | ||||||||||||
Management fees | 25,342 | 26,432 | 169,594 | 107,361 | ||||||||||||
Transfer agent fees | 3,000 | 3,000 | — | — | ||||||||||||
Custodian fees | 312 | 454 | — | — | ||||||||||||
Professional fees | 23,109 | 23,108 | — | — | ||||||||||||
Reports to shareholders | 3,164 | 3,189 | — | — | ||||||||||||
Registration and filing fees | 12,930 | 9,086 | — | — | ||||||||||||
Deferred tax | — | — | — | 1,629 | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | — | — | 436,142 | ||||||||||||
Accrued expenses and other liabilities | 8,407 | 8,674 | — | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 1,936,029 | 673,278 | 17,952,453 | 545,132 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 76,908,421 | $ | 104,938,542 | $ | 334,285,831 | $ | 193,967,805 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 80,746,585 | $ | 112,972,912 | $ | 350,411,948 | $ | 206,925,068 | ||||||||
Total distributable earnings (loss) | (3,838,164 | ) | (8,034,370 | ) | (16,126,117 | ) | (12,957,263 | ) | ||||||||
|
| |||||||||||||||
Net assets, at value | $ | 76,908,421 | $ | 104,938,542 | $ | 334,285,831 | $ | 193,967,805 | ||||||||
|
| |||||||||||||||
Shares outstanding | 3,100,000 | 4,200,000 | 13,500,000 | 8,200,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 24.81 | $ | 24.99 | $ | 24.76 | $ | 23.65 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 197 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETFa | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Assets: |
| |||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 1,030,961,892 | $ | 296,659,319 | $ | 31,430,864 | $ | 1,538,989,637 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | — | — | — | 48,548,641 | ||||||||||||
Value – Unaffiliated issuers | $ | 959,005,938 | $ | 293,416,373 | $ | 34,903,099 | $ | 1,448,058,291 | ||||||||
Value – Non-controlled affiliates (Note 3c) | — | — | — | 48,548,641 | ||||||||||||
Cash | 12,975,736 | 14,373,526 | 16,961,736 | — | ||||||||||||
Foreign currency, at value (cost $-,-,216,873,-) | — | — | 215,743 | — | ||||||||||||
Receivables: |
| |||||||||||||||
Interest | 8,110,286 | 1,161,726 | 111,759 | 6,554,254 | ||||||||||||
Investment securities sold | — | 2,151,349 | — | 263,003 | ||||||||||||
Capital shares sold | 13,040,604 | — | — | 58,568,168 | ||||||||||||
Closed swap contracts | — | — | 48,850,973 | — | ||||||||||||
Deposits with brokers for: |
| |||||||||||||||
Futures contracts | 434,350 | — | 2,883,955 | 248,435 | ||||||||||||
Swap contracts | — | — | 1,130,000 | 290,000 | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | — | 678,673 | — | ||||||||||||
Unrealized appreciation on OTC swap contracts | — | — | 878 | 31,603 | ||||||||||||
OTC swap contracts premiums paid | — | — | — | 14,678 | ||||||||||||
Other assets | — | — | — | 363,049 | ||||||||||||
|
| |||||||||||||||
Total assets | 993,566,914 | 311,102,974 | 105,736,816 | 1,562,940,122 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Closed swap contracts | — | — | 49,647,290 | — | ||||||||||||
Investment securities purchased | 11,563,296 | 18,230,674 | 19 | 52,079,764 | ||||||||||||
Management fees | 334,339 | 150,057 | 128,224 | 300,806 | ||||||||||||
Transfer agent fees | — | — | 2,500 | — | ||||||||||||
Custodian fees | — | — | 391 | — | ||||||||||||
Professional fees | — | — | 333 | — | ||||||||||||
Variation margin on futures contracts | 67,452 | — | 293,789 | 54,139 | ||||||||||||
Funds advanced by custodian | — | — | — | 186,974 | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | — | 405,191 | — | ||||||||||||
Unrealized depreciation on OTC swap contracts | — | — | — | 49,631 | ||||||||||||
OTC swap contracts premiums received | — | — | — | 307,500 | ||||||||||||
Accrued expenses and other liabilities | — | — | 765 | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 11,965,087 | 18,380,731 | 50,478,502 | 52,978,814 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 981,601,827 | $ | 292,722,243 | $ | 55,258,314 | $ | 1,509,961,308 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 1,061,903,112 | $ | 296,622,413 | $ | 64,771,914 | $ | 1,638,586,290 | ||||||||
Total distributable earnings (loss) | (80,301,285 | ) | (3,900,170 | ) | (9,513,600 | ) | (128,624,982 | ) | ||||||||
|
| |||||||||||||||
Net assets, at value | $ | 981,601,827 | $ | 292,722,243 | $ | 55,258,314 | $ | 1,509,961,308 | ||||||||
|
| |||||||||||||||
Shares outstanding | 41,400,000 | 11,850,000 | 2,600,000 | 64,450,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 23.71 | $ | 24.70 | $ | 21.25 | $ | 23.43 | ||||||||
|
| |||||||||||||||
aConsolidated financial statements. See Notes 14.
| 198 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||
Assets: |
| |||||||||||
Investments in securities: |
| |||||||||||
Cost – Unaffiliated issuers | $ | 116,214,358 | $ | 426,098,420 | $ | 3,653,412 | ||||||
Cost – Non-controlled affiliates (Note 3c) | — | 4,633,381 | 81,009 | |||||||||
Value – Unaffiliated issuers | $ | 134,409,111 | $ | 395,590,021 | $ | 3,611,534 | ||||||
Value – Non-controlled affiliates (Note 3c) | — | 4,633,381 | 81,009 | |||||||||
Cash | 440,892 | — | — | |||||||||
Receivables: |
| |||||||||||
Dividends | 130,948 | 1,793,676 | 10,246 | |||||||||
Capital shares sold | — | 14,736,278 | — | |||||||||
|
| |||||||||||
Total assets | 134,980,951 | 416,753,356 | 3,702,789 | |||||||||
|
| |||||||||||
Liabilities: |
| |||||||||||
Payables: |
| |||||||||||
Investment securities purchased | — | 13,132,642 | 1 | |||||||||
Management fees | 45,536 | �� | 77,997 | 20,807 | ||||||||
|
| |||||||||||
Total liabilities | 45,536 | 13,210,639 | 20,808 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 134,935,415 | $ | 403,542,717 | $ | 3,681,981 | ||||||
|
| |||||||||||
Net assets consist of: |
| |||||||||||
Paid-in capital | $ | 117,152,676 | $ | 445,957,096 | $ | 3,742,849 | ||||||
Total distributable earnings (loss) | 17,782,739 | (42,414,379 | ) | (60,868 | ) | |||||||
|
| |||||||||||
Net assets, at value | $ | 134,935,415 | $ | 403,542,717 | $ | 3,681,981 | ||||||
|
| |||||||||||
Shares outstanding | 2,750,000 | 17,800,000 | 150,000 | |||||||||
|
| |||||||||||
Net asset value per share | $ | 49.07 | $ | 22.67 | $ | 24.55 | ||||||
|
| |||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 199 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the year ended March 31, 2022
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 32,199 | $ | 6,525 | $ | 36,995 | $ | 34,760 | ||||||||
Interest: | ||||||||||||||||
Unaffiliated issuers | — | — | 2,193 | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 32,199 | 6,525 | 39,188 | 34,760 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 168,955 | 18,218 | 108,884 | 60,498 | ||||||||||||
Transfer agent fees | 3,000 | 6,081 | 3,000 | 3,000 | ||||||||||||
Custodian fees | 2,993 | 600 | 1,644 | 1,397 | ||||||||||||
Reports to shareholders | 8,424 | 2,700 | 3,290 | 2,846 | ||||||||||||
Registration and filing fees | 4,666 | 2,181 | 5,150 | 4,649 | ||||||||||||
Professional fees | 18,180 | 32,592 | 17,559 | 17,516 | ||||||||||||
Trustee fees (Note 3a) | 995 | 39 | 365 | 258 | ||||||||||||
Other | 3,266 | 755 | 3,260 | 3,230 | ||||||||||||
|
| |||||||||||||||
Total expenses | 210,479 | 63,166 | 143,152 | 93,394 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (41,524 | ) | (49,309 | ) | (34,267 | ) | (32,897 | ) | ||||||||
|
| |||||||||||||||
Net expenses | 168,955 | 13,857 | 108,885 | 60,497 | ||||||||||||
|
| |||||||||||||||
Net investment income | (136,756 | ) | (7,332 | ) | (69,697 | ) | (25,737 | ) | ||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (6,203,705 | ) | (487,283 | ) | (5,875,881 | ) | (667,829 | ) | ||||||||
In-kind redemptions | 2,675,706 | — | 4,609,657 | — | ||||||||||||
Foreign currency transactions | (2,249 | ) | (113 | ) | (2,559 | ) | 243 | |||||||||
|
| |||||||||||||||
Net realized gain (loss) | (3,530,248 | ) | (487,396 | ) | (1,268,783 | ) | (667,586 | ) | ||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (8,910,995 | ) | 292,275 | (5,044,121 | ) | 1,481,770 | ||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 14 | 10 | (7 | ) | (6 | ) | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (8,910,981 | ) | 292,285 | (5,044,128 | ) | 1,481,764 | ||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (12,441,229 | ) | (195,111 | ) | (6,312,911 | ) | 814,178 | |||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (12,577,985 | ) | $ | (202,443 | ) | $ | (6,382,608 | ) | $ | 788,441 | |||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 530 | $ | 120 | $ | 499 | $ | 2,677 | ||||||||
|
| |||||||||||||||
| 200 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
Investment income: | ||||||||||||||||
Interest: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | 1,511,671 | 2,050,094 | 17,990,115 | 893,582 | ||||||||||||
|
| |||||||||||||||
Total investment income | 1,511,671 | 2,050,094 | 17,990,115 | 893,582 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 360,353 | 750,135 | 1,645,939 | 664,897 | ||||||||||||
Transfer agent fees | 9,000 | 8,998 | 3,000 | 3,000 | ||||||||||||
Custodian fees | 1,490 | 1,988 | 3,508 | 51,775 | ||||||||||||
Reports to shareholders | 4,735 | 5,559 | 1,850 | 857 | ||||||||||||
Registration and filing fees | 12,518 | 6,276 | 5,076 | — | ||||||||||||
Professional fees | 32,374 | 42,496 | 28,519 | 27,993 | ||||||||||||
Trustee fees (Note 3a) | 2,051 | 5,299 | 7,692 | 5,028 | ||||||||||||
Other | 9,743 | 10,122 | 2,374 | 2,995 | ||||||||||||
|
| |||||||||||||||
Total expenses | 432,264 | 830,873 | 1,697,958 | 756,545 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (259,294 | ) | (455,793 | ) | (264,348 | ) | (269,445 | ) | ||||||||
|
| |||||||||||||||
Net expenses | 172,970 | 375,080 | 1,433,610 | 487,100 | ||||||||||||
|
| |||||||||||||||
Net investment income | 1,338,701 | 1,675,014 | 16,556,505 | 406,482 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (4,924 | ) | (859,034 | ) | 2,644,036 | (1,120,445 | ) | |||||||||
In-kind redemptions | — | 445,707 | (2,272,357 | ) | — | |||||||||||
Foreign currency transactions | — | — | — | 179,821 | ||||||||||||
Forwards exchange contracts | — | — | — | 11,900,931 | ||||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (4,924 | ) | (413,327 | ) | 371,679 | 10,960,307 | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (5,026,347 | ) | (7,422,486 | ) | (21,274,898 | ) | (16,135,738 | ) | ||||||||
Translation of other assets and liabilities denominated in foreign currencies | — | — | — | (237,072 | ) | |||||||||||
Forward exchange contracts | — | — | — | (2,266,963 | ) | |||||||||||
Change in deferred taxes on unrealized appreciation | — | — | — | (269 | ) | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (5,026,347 | ) | (7,422,486 | ) | (21,274,898 | ) | (18,640,042 | ) | ||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (5,031,271 | ) | (7,835,813 | ) | (20,903,219 | ) | (7,679,735 | ) | ||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (3,692,570 | ) | $ | (6,160,799 | ) | $ | (4,346,714 | ) | $ | (7,273,253 | ) | ||||
|
| |||||||||||||||
aForeign taxes withheld on interest | $ | — | $ | — | $ | — | $ | 1,936 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 201 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETFa | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: | ||||||||||||||||
Unaffiliated issuers | $ | — | $ | — | $ | 733,434 | $ | 3,277 | ||||||||
Interest: (net of foreign taxes)b | ||||||||||||||||
Unaffiliated issuers | 26,853,734 | 8,818,437 | 130 | 31,234,110 | ||||||||||||
|
| |||||||||||||||
Total investment income | 26,853,734 | 8,818,437 | 733,564 | 31,237,387 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 4,236,857 | 1,148,520 | 375,887 | 2,400,004 | ||||||||||||
Transfer agent fees | 3,000 | 3,000 | 10,500 | 3,000 | ||||||||||||
Custodian fees | 13,164 | 32,080 | 4,331 | 5,625 | ||||||||||||
Reports to shareholders | 4,229 | 1,083 | 4,897 | 8,959 | ||||||||||||
Registration and filing fees | 7,835 | 3,489 | 4,570 | 12,401 | ||||||||||||
Professional fees | 22,093 | 30,118 | 15,003 | 20,923 | ||||||||||||
Trustees’ fees and expenses | 24,675 | 4,357 | 1,199 | 37,252 | ||||||||||||
Other | 5,049 | 1,198 | — | 6,790 | ||||||||||||
|
| |||||||||||||||
Total expenses | 4,316,902 | 1,223,845 | 416,387 | 2,494,954 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (731,501 | ) | (271,462 | ) | (58,166 | ) | (92,076 | ) | ||||||||
|
| |||||||||||||||
Net expenses | 3,585,401 | 952,383 | 358,221 | 2,402,878 | ||||||||||||
|
| |||||||||||||||
Net investment income | 23,268,333 | 7,866,054 | 375,343 | 28,834,509 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | 1,282,966 | (374,967 | ) | 2,537,443 | (24,376,427 | ) | ||||||||||
In-kind redemptions | 3,506,071 | — | — | — | ||||||||||||
Foreign currency transactions | — | — | (5,430 | ) | — | |||||||||||
Forwards exchange contracts | — | — | (300,831 | ) | — | |||||||||||
Futures contracts | 1,210,398 | — | 2,480,525 | (700,454 | ) | |||||||||||
Swap contracts | — | — | — | 112,950 | ||||||||||||
|
| |||||||||||||||
Net realized gain (loss) | 5,999,435 | (374,967 | ) | 4,711,707 | (24,963,931 | ) | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (70,433,482 | ) | (2,789,129 | ) | 39,404 | (78,617,679 | ) | |||||||||
Translation of other assets and liabilities denominated in foreign currencies | — | — | (7,692 | ) | — | |||||||||||
Futures contracts | 436,625 | — | (143,048 | ) | (234,420 | ) | ||||||||||
Swap contracts | — | — | (868 | ) | (18,028 | ) | ||||||||||
Forward exchange contracts | — | — | 173,508 | — | ||||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (69,996,857 | ) | (2,789,129 | ) | 61,304 | (78,870,127 | ) | |||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (63,997,422 | ) | (3,164,096 | ) | 4,773,011 | (103,834,058 | ) | |||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (40,729,089 | ) | $ | 4,701,958 | $ | 5,148,354 | $ | (74,999,549 | ) | ||||||
|
| |||||||||||||||
aConsolidated financial statements. See Notes 14.
bForeign taxes withheld on interest | $ | 893 | $ | — | $ | 39,838 | $ | 447 | ||||||||
|
| |||||||||||||||
| 202 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||
Investment income: |
| |||||||||||
Dividends: (net of foreign taxes)a |
| |||||||||||
Unaffiliated issuers | $ | 2,456,203 | $ | 650 | $ | 7 | ||||||
Interest: |
| |||||||||||
Unaffiliated issuers | — | 3,167,746 | 22,469 | |||||||||
Inflation principal adjustments | — | 435,152 | — | |||||||||
|
| |||||||||||
Total investment income | 2,456,203 | 3,603,548 | 22,476 | |||||||||
|
| |||||||||||
Expenses: |
| |||||||||||
Management fees (Note 3a) | 404,547 | 1,147,764 | 11,010 | |||||||||
Transfer agent fees | 3,000 | 3,125 | 3,468 | |||||||||
Custodian fees | 1,056 | 3,056 | 9,441 | |||||||||
Reports to shareholders | 8,294 | 1,907 | 3,273 | |||||||||
Registration and filing fees | 5,290 | 7,714 | 11,932 | |||||||||
Professional fees | 25,847 | 14,692 | 14,739 | |||||||||
Trustee fees (Note 3a) | 3,248 | 10,025 | 59 | |||||||||
Other | 2,859 | 445 | 766 | |||||||||
|
| |||||||||||
Total expenses | 454,141 | 1,188,728 | 54,688 | |||||||||
Expenses waived/paid by affiliates (Note 3c) | (49,593 | ) | (808,161 | ) | (49,917 | ) | ||||||
|
| |||||||||||
Net expenses | 404,548 | 380,567 | 4,771 | |||||||||
|
| |||||||||||
Net investment income | 2,051,655 | 3,222,981 | 17,705 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): |
| |||||||||||
Net realized gain (loss) from: |
| |||||||||||
Investments: |
| |||||||||||
Unaffiliated issuers | 2,411,847 | (939,252 | ) | 1,348 | ||||||||
In-kind redemptions | 15,037,764 | — | — | |||||||||
Foreign currency transactions | (331 | ) | — | — | ||||||||
|
| |||||||||||
Net realized gain (loss) | 17,449,280 | (939,252 | ) | 1,348 | ||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||
Investments: |
| |||||||||||
Unaffiliated issuers | (1,376,857 | ) | (15,335,003 | ) | (51,611 | ) | ||||||
Translation of other assets and liabilities denominated in foreign currencies | 273 | — | — | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | (1,376,584 | ) | (15,335,003 | ) | (51,611 | ) | ||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 16,072,696 | (16,274,255 | ) | (50,263 | ) | |||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 18,124,351 | $ | (13,051,274 | ) | $ | (32,558 | ) | ||||
|
| |||||||||||
aForeign taxes withheld on dividends | $ | 12,252 | $ | — | $ | — | ||||||
|
| |||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 203 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021a | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | (136,756 | ) | $ | (101,622 | ) | $ | (7,332 | ) | $ | (369 | ) | ||||
Net realized gain (loss) | (3,530,248 | ) | 296,353 | (487,396 | ) | (63,877 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | (8,910,981 | ) | 7,116,842 | 292,285 | (102,194 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | (12,577,985 | ) | 7,311,573 | (202,443 | ) | (166,440 | ) | |||||||||
|
| |||||||||||||||
Distributions to shareholders | (222,554 | ) | — | — | — | |||||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (10,442,439 | ) | 32,383,211 | 1,286,009 | 2,500,000 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (23,242,978 | ) | 39,694,784 | 1,083,566 | 2,333,560 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 41,826,757 | 2,131,973 | 2,333,560 | — | ||||||||||||
|
| |||||||||||||||
End of year | $ | 18,583,779 | $ | 41,826,757 | $ | 3,417,126 | $ | 2,333,560 | ||||||||
|
| |||||||||||||||
aFor the period January 12, 2021 (commencement of operations) to March 31, 2021.
| 204 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | (69,697 | ) | $ | (28,033 | ) | $ | (25,737 | ) | $ | (8,296 | ) | ||||
Net realized gain (loss) | (1,268,783 | ) | (90,186 | ) | (667,586 | ) | 1,145,627 | |||||||||
Net change in unrealized appreciation (depreciation) | (5,044,128 | ) | 2,487,194 | 1,481,764 | 1,049,747 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | (6,382,608 | ) | 2,368,975 | 788,441 | 2,187,078 | |||||||||||
|
| |||||||||||||||
Distributions to shareholders | (64,946 | ) | (10,356 | ) | (23,504 | ) | (432 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 6,106,586 | 10,522,838 | — | 6,555,405 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (340,968 | ) | 12,881,457 | 764,937 | 8,742,051 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 15,139,645 | 2,258,188 | 10,808,879 | 2,066,828 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 14,798,677 | $ | 15,139,645 | $ | 11,573,816 | $ | 10,808,879 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 205 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 1,338,701 | $ | 589,886 | $ | 1,675,014 | $ | 995,318 | ||||||||
Net realized gain (loss) | (4,924 | ) | (100,405 | ) | (413,327 | ) | (62,096 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (5,026,347 | ) | 1,451,268 | (7,422,486 | ) | 616,576 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | (3,692,570 | ) | 1,940,749 | (6,160,799 | ) | 1,549,798 | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (1,204,849 | ) | (611,513 | ) | (2,038,684 | ) | (1,352,931 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 39,693,714 | 28,420,573 | (13,082,950 | ) | 97,349,967 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 34,796,295 | 29,749,809 | (21,282,433 | ) | 97,546,834 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 42,112,126 | 12,362,317 | 126,220,975 | 28,674,141 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 76,908,421 | $ | 42,112,126 | $ | 104,938,542 | $ | 126,220,975 | ||||||||
|
| |||||||||||||||
| 206 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 16,556,505 | $ | 9,492,814 | $ | 406,482 | $ | (59,641 | ) | |||||||
Net realized gain (loss) | 371,679 | 259,164 | 10,960,307 | (6,801,787 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) | (21,274,898 | ) | 23,910,684 | (18,640,042 | ) | 7,120,781 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | (4,346,714 | ) | 33,662,662 | (7,273,253 | ) | 259,353 | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (17,355,367 | ) | (11,465,310 | ) | (4,976,496 | ) | (951,028 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 9,401,694 | 194,026,836 | 24,812,593 | 177,107,475 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (12,300,387 | ) | 216,224,188 | 12,562,844 | 176,415,800 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 346,586,218 | 130,362,030 | 181,404,961 | 4,989,161 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 334,285,831 | $ | 346,586,218 | $ | 193,967,805 | $ | 181,404,961 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 207 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 23,268,333 | $ | 21,040,801 | $ | 7,866,054 | $ | 2,113,893 | ||||||||
Net realized gain (loss) | 5,999,435 | 11,641,061 | (374,967 | ) | (660,335 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | (69,996,857 | ) | 18,598,433 | (2,789,129 | ) | 4,290,337 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | (40,729,089 | ) | 51,280,295 | 4,701,958 | 5,743,895 | |||||||||||
|
| |||||||||||||||
Distributions to shareholders | (28,480,201 | ) | (38,161,818 | ) | (6,696,117 | ) | (2,065,367 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 32,171,961 | 452,182,964 | 93,615,229 | 142,589,480 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (37,037,329 | ) | 465,301,441 | 91,621,070 | 146,268,008 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 1,018,639,156 | 553,337,715 | 201,101,173 | 54,833,165 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 981,601,827 | $ | 1,018,639,156 | $ | 292,722,243 | $ | 201,101,173 | ||||||||
|
| |||||||||||||||
| 208 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Liberty Systematic Style Premia ETFa | Franklin Liberty U.S. Core Bond ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 375,343 | $ | 544,672 | $ | 28,834,509 | $ | 30,551,817 | ||||||||
Net realized gain (loss) | 4,711,707 | (15,476,749 | ) | (24,963,931 | ) | 12,812,674 | ||||||||||
Net change in unrealized appreciation (depreciation) | 61,304 | 10,192,871 | (78,870,127 | ) | (20,543,019 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 5,148,354 | (4,739,206 | ) | (74,999,549 | ) | 22,821,472 | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (697,021 | ) | (3,805,981 | ) | (35,701,883 | ) | (51,084,574 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 3,879,642 | 4,524,461 | 160,065,825 | 635,328,246 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 8,330,975 | (4,020,726 | ) | 49,364,393 | 607,065,144 | |||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 46,927,339 | 50,948,065 | 1,460,596,915 | 853,531,771 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 55,258,314 | $ | 46,927,339 | $ | 1,509,961,308 | $ | 1,460,596,915 | ||||||||
|
| |||||||||||||||
aConsolidated financial statements. See Notes 14.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 209 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021a | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: |
| |||||||||||||||
Net investment income | $ | 2,051,655 | $ | 1,950,473 | $ | 3,222,981 | $ | 1,690,423 | ||||||||
Net realized gain (loss) | 17,449,280 | 6,732,931 | (939,252 | ) | (3,618,092 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | (1,376,584 | ) | 28,828,473 | (15,335,003 | ) | (15,173,396 | ) | |||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 18,124,351 | 37,511,877 | (13,051,274 | ) | (17,101,065 | ) | ||||||||||
|
| |||||||||||||||
Distributions to shareholders | (2,063,975 | ) | (1,913,171 | ) | (6,661,686 | ) | (5,600,354 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | (20,946,579 | ) | 30,000,322 | 5,056,701 | 440,900,395 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (4,886,203 | ) | 65,599,028 | (14,656,259 | ) | 418,198,976 | ||||||||||
Net assets: |
| |||||||||||||||
Beginning of year | 139,821,618 | 74,222,590 | 418,198,976 | — | ||||||||||||
|
| |||||||||||||||
End of year | $ | 134,935,415 | $ | 139,821,618 | $ | 403,542,717 | $ | 418,198,976 | ||||||||
|
| |||||||||||||||
aFor the period June 9, 2020 (commencement of operations) to March 31, 2021.
| 210 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Liberty Ultra Short Bond ETF | ||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021a | |||||||
Increase (decrease) in net assets: |
| |||||||
Operations: |
| |||||||
Net investment income | $ | 17,705 | $ | 10,284 | ||||
Net realized gain (loss) | 1,348 | 2,243 | ||||||
Net change in unrealized appreciation (depreciation) | (51,611 | ) | 9,733 | |||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | (32,558 | ) | 22,260 | |||||
|
| |||||||
Distributions to shareholders | (17,586 | ) | (34,619 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | 1,244,484 | 2,500,000 | ||||||
|
| |||||||
Net increase (decrease) in net assets | 1,194,340 | 2,487,641 | ||||||
Net assets: |
| |||||||
Beginning of year | 2,487,641 | — | ||||||
|
| |||||||
End of year | $ | 3,681,981 | $ | 2,487,641 | ||||
|
| |||||||
aFor the period July 14, 2020 (commencement of operations) to March 31, 2021.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 211 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-five separate funds, fifteen 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). Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index.
On November 19, 2021, the Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF’s Board of Trustees, approved a proposal to change the name of the Fund to Franklin Dynamic Municipal Bond ETF, effective January 31, 2022.
On November 19, 2021 the Franklin Liberty Federal Tax-Free Bond ETF’s Board of Trustees, approved a proposal to change the name of the Fund to Franklin Municipal Green Bond ETF, effective May 3, 2022.
The following summarizes the Fund’s 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.
Equity securities and exchange traded funds 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. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its
U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Funds’ pricing services 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 determine 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. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ 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 discounted 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 uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally,
| 212 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds 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 Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination.
Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the
| franklintempleton.com | Annual Report | 213 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
The Funds entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statements of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statements of Operations.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC
derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price 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 a variation margin payable or receivable in the Statements of Assets and Liabilities.
See Note 12 regarding other derivative information.
d. Securities Purchased on a When-Issued and Delayed Delivery Basis
Certain or all Funds purchase securities on a when-issued and delayed delivery 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. Although the Funds will generally purchase these securities with the intention of holding the securities, they may sell the securities before the settlement date.
e. Senior Floating Rate Interests
Certain or all Funds invest in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As
| 214 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
e. Senior Floating Rate Interests (continued)
a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Funds invest are generally readily marketable, but may be subject to certain restrictions on resale. On July 27, 2017, the United Kingdom Financial Conduct Authority announced its intention to cease sustaining LIBOR after 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments that use or may use a floating rate based on LIBOR cannot yet be determined.
f. Income and Deferred 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 be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each 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 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 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.
g. 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. These expenses are paid by the Fund or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
h. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Trust are insured by either a new issue insurance policy or a secondary insurance policy. Some municipal securities in the Funds are secured by collateral guaranteed by an agency of the U.S. government. Depending on the type of coverage, premiums for insurance are either added the cost basis of the security or paid by a third party.
Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.
i. 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
| franklintempleton.com | Annual Report | 215 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
i. Accounting Estimates (continued)
amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
j. 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
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific 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 Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds 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 Funds.
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 Funds’ shares were as follows:
| Franklin Disruptive Commerce ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | 157 | 750,000 | $ | 32,383,211 | ||||||||||||||
Shares redeemed | (250,000 | ) | (10,442,596 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (250,000 | ) | $ | (10,442,439 | ) | 750,000 | $ | 32,383,211 | ||||||||||||
|
| |||||||||||||||||||
| Franklin Exponential Data ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021a | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 50,000 | $ | 1,286,009 | 100,001 | $ | 2,500,025 | ||||||||||||||
Shares redeemed | — | — | (1 | ) | (25 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 50,000 | $ | 1,286,009 | 100,000 | $ | 2,500,000 | ||||||||||||||
|
| |||||||||||||||||||
| 216 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin Genomic Advancements ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 400,000 | $ | 22,040,989 | 250,000 | $ | 10,522,838 | ||||||||||||||
Shares redeemed | (350,000 | ) | (15,934,403 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 50,000 | $ | 6,106,586 | 250,000 | $ | 10,522,838 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Intelligent Machines ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | — | $ | — | 200,000 | $ | 8,928,972 | ||||||||||||||
Shares redeemed | — | — | (50,000 | ) | (2,373,567 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | — | 150,000 | $ | 6,555,405 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Dynamic Municipal Bond ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 1,550,000 | $ | 40,942,801 | 1,100,000 | $ | 28,420,573 | ||||||||||||||
Shares redeemed | (50,000 | ) | (1,249,087 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,500,000 | $ | 39,693,714 | 1,100,000 | $ | 28,420,573 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty Federal Tax-Free Bond | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 1,200,000 | $ | 32,661,307 | 3,650,000 | $ | 98,699,200 | ||||||||||||||
Shares redeemed | (1,700,000 | ) | (45,744,257 | ) | (50,000 | ) | (1,349,233 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (500,000 | ) | $ | (13,082,950 | ) | 3,600,000 | $ | 97,349,967 | ||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty High Yield Corporate ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 4,500,000 | $ | 117,942,112 | 7,500,000 | $ | 194,026,836 | ||||||||||||||
Shares redeemed | (4,250,000 | ) | (108,540,418 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 250,000 | $ | 9,401,694 | 7,500,000 | $ | 194,026,836 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 2,400,000 | $ | 60,490,312 | 9,000,000 | $ | 226,171,307 | ||||||||||||||
Shares redeemed | (1,450,000 | ) | (35,677,719 | ) | (1,950,000 | ) | (49,063,832 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 950,000 | $ | 24,812,593 | 7,050,000 | $ | 177,107,475 | ||||||||||||||
|
| |||||||||||||||||||
| franklintempleton.com | Annual Report | 217 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin Liberty Investment Grade Corporate ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 4,300,000 | $ | 107,793,585 | 22,300,000 | $ | 585,231,109 | ||||||||||||||
Shares redeemed | (2,900,000 | ) | (75,621,624 | ) | (5,150,000 | ) | (133,048,145 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,400,000 | $ | 32,171,961 | 17,150,000 | $ | 452,182,964 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty Senior Loan ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 5,300,000 | $ | 132,222,340 | 5,850,000 | $ | 146,207,760 | ||||||||||||||
Shares redeemed | (1,550,000 | ) | (38,607,111 | ) | (150,000 | ) | (3,618,280 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 3,750,000 | $ | 93,615,229 | 5,700,000 | $ | 142,589,480 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty Systematic Style Premia ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 300,000 | $ | 6,039,974 | 200,000 | $ | 4,524,461 | ||||||||||||||
Shares sold | (100,000 | ) | (2,160,332 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 200,000 | $ | 3,879,642 | 200,000 | $ | 4,524,461 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021a | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 14,950,000 | $ | 373,614,883 | 37,350,000 | $ | 966,046,417 | ||||||||||||||
Shares redeemed | (8,600,000 | ) | (213,549,058 | ) | (12,800,000 | ) | (330,718,171 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 6,350,000 | $ | 160,065,825 | 24,550,000 | $ | 635,328,246 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty U.S. Low Volatility ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 850,000 | $ | 39,828,368 | 1,450,000 | $ | 55,893,889 | ||||||||||||||
Shares redeemed | (1,300,000 | ) | (60,774,947 | (650,000 | ) | (25,893,567 | ) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (450,000 | ) | $ | (20,946,579 | ) | 800,000 | $ | 30,000,322 | ||||||||||||
|
| |||||||||||||||||||
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin Liberty U.S. Treasury Bond ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021b | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 1,850,000 | $ | 43,376,401 | 17,950,001 | $ | 450,866,696 | ||||||||||||||
Shares redeemed | (1,600,000 | ) | (38,319,700 | ) | (400,001 | ) | (9,966,301 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 250,000 | $ | 5,056,701 | 17,550,000 | $ | 440,900,395 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021c | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 50,000 | $ | 1,244,484 | 100,001 | $ | 2,500,025 | ||||||||||||||
Shares redeemed | — | — | (1 | ) | (25 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 50,000 | $ | 1,244,484 | 100,000 | $ | 2,500,000 | ||||||||||||||
|
| |||||||||||||||||||
aFor the period January 12, 2021 (commencement of operations) to March 31, 2021.
bFor the period June 9, 2020 (commencement of operations) to March 31, 2021.
cFor the period July 14, 2020 (commencement of operations) 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:
| Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Templeton Institutional, LLC (FT Institutional) | Investment manager | |
Franklin Templeton Investimentos (Brasil) Ltda. (FTI Brasil) | Investment manager | |
Franklin Templeton Investment Management Limited (FTIML) | Investment manager | |
Franklin Templeton Investment Trust Management Co., Ltd. (FT Korea) | Investment manager | |
Franklin Templeton Investments (ME) Limited (FTIME) | Investment manager | |
Franklin Templeton Investments Corp. (FTIC) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Templeton Asset Management Ltd. (TAML) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, LLC (Distributors) | Principal underwriter | |
a. Management Fees
Effective October 1, 2021, for each Fund except for Franklin Dynamic Municipal Bond ETF and Franklin Liberty Federal Tax-Free Bond (“Unitary Fee Funds”), the Board approved converting to a unitary fee structure as described below.
For the period April 1, 2021 to September 30, 2021, Franklin Disruptive Commerce ETF, Franklin Exponential Data ETF, Franklin Genomic Advancements ETF and Franklin Intelligent Machines ETF Funds pay an investment management fee to Advisers of 0.50%, respectively, per year of the average daily net assets of each of the Funds. Effective October 1, 2021, each of the Funds pay Advisers a unified management fee for managing the Funds’ assets, as approved by the Board. Pursuant to the investment management agreement with the Trust on behalf of the Funds’ effective October 1, 2021, Advisers reimburses
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
the Funds for all acquired fund fees and expenses (such as those associated with the Funds’ investment in a Franklin Templeton money fund) and all expenses related to the Funds’ investments in the Subsidiary, and pays all of the ordinary operating expenses of the Funds, except for (i) the Funds’ management fee, (ii) payments under the Funds’ 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. These Funds pay 0.50% per year of the average daily net assets of each of the Funds.
For the period April 1, 2021 to September 30, 2021, Franklin Liberty Systematic Style Premia ETF, Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Low Volatility ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF pay an investment management fee to Advisers of 0.650%, 0.150%, 0.290%, 0.450% and 0.610%, respectively, per year of the average daily net assets of each of the Funds. Effective October 1, 2021 Franklin Liberty Systematic Style Premia ETF, Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Low Volatility ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF pay Advisers a unified management fee for managing the Funds’ assets, as approved by the Board. Pursuant to the investment management agreement with the Trust on behalf of the Funds’ effective October 1, 2021, Advisers reimburses the Funds for all acquired fund fees and expenses (such as those associated with the Funds’ investment in a Franklin Templeton money fund) and all expenses related to the Funds’ investments in the Subsidiary, and pays all of the ordinary operating expenses of the Funds, except for (i) the Funds’ management fee, (ii) payments under the Funds’ 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. These Funds pay 0.650%, 0.150%, 0.290%, 0.090% and 0.150%, respectively, per year of the average daily net assets of the Funds.
The Franklin Dynamic Municipal Bond ETF and Franklin Liberty Federal Tax-Free Bond Funds pay an investment management fee, calculated daily and paid monthly, to Advisers based on the daily net assets of each of the Funds as follows:
| Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | In excess of $50 billion | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
For the period April 1, 2021 to September 30, 2021, Franklin Liberty High Yield Corporate ETF and Franklin Liberty Investment Grade Corporate ETF Funds pay an investment management fee, calculated daily and paid monthly, to Advisers based on the daily net assets of each of the Funds as follows:
| Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | Over $20 billion, up to and including $35 billion | |
0.355% | Over $35 billion, up to and including $50 billion | |
0.350% | In excess of $50 billion | |
Effective October 1, 2021, the Franklin Liberty High Yield Corporate ETF 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 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 based on the daily net assets of the Fund as follows:
| Annualized Fee Rate | Net Assets | |
0.400% | Up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | Over $20 billion, up to and including $35 billion | |
0.355% | Over $35 billion, up to and including $50 billion | |
0.350% | In excess of $50 billion | |
Effective October 1, 2021, the Franklin Liberty Investment Grade Corporate ETF 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 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. The Fund pays 0.35% per year of the average daily net assets of the Fund.
| franklintempleton.com | Annual Report | 221 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
For the period April 1, 2021 to September 30, 2021, Franklin Liberty International Aggregate Bond ETF pays an investment management fee, calculated daily and paid monthly, to FTIML based on the average daily net assets of the fund as follows:
| Annualized Fee Rate | Net Assets | |
0.450% | Up to and including $1 billion | |
0.400% | Over $1 billion, up to and including $5 billion | |
0.350% | Over $5 billion, up to and including $10 billion | |
0.345% | Over $10 billion, up to and including $15 billion | |
0.340% | Over $15 billion, up to and including $20 billion | |
0.335% | In excess of $20 billion | |
Effective October 1, 2021, the Fund pays FTIML 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, FTIML 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 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. The Fund pays 0.25% per year of the average daily net assets of the Fund.
For the period April 1, 2021 to September 30, 2021, Franklin Liberty Senior Loan ETF pays an investment management fee, calculated daily and paid monthly, to Advisers based on the average daily net assets of the fund as follows:
| Annualized Fee Rate | Net Assets | |
0.650% | Up to and including $500 million | |
0.550% | Over $500 million, up to and including $1 billion | |
0.500% | Over $250 million, up to and including $7.5 billion | |
0.450% | Over $7.5 billion, up to and including $10 billion | |
0.425% | Over $10 billion, up to and including $12.5 billion | |
0.400% | Over $12.5 billion, up to and including $15 billion | |
0.390% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.370% | In excess of $50 billion | |
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 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
| �� | ||||||||||
| 222 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses based on the average daily net assets of the fund as follows:
| Annualized Fee Rate | Net Assets | |
0.450% | Up to and including $6.5 billion | |
0.425% | Over $6.5 billion, up to and including $11.5 billion | |
0.400% | Over $11.5 billion, up to and including $16.5 billion | |
0.390% | Over $16.5 billion, up to and including $19 billion | |
0.380% | Over $19 billion, up to and including $21.5 billion | |
0.370% | In excess of $21.5 billion | |
For the year ended March 31, 2022, each Fund’s annualized effective investment management fee rate based on
average daily net assets was as follows:
| Annualized Fee Rate | ||
Franklin Disruptive Commerce ETF | 0.50% | |
Franklin Exponential Data ETF | 0.50% | |
Franklin Geonomic Advancements ETF | 0.50% | |
Franklin Intelligent Machines ETF | 0.50% | |
Franklin Dynamic Municipal Bond ETF | 0.625% | |
Franklin Liberty Federal Tax-Free Bond | 0.60% | |
Franklin Liberty High Yield Corporate ETF | 0.46% | |
Franklin Liberty International Aggregate Bond ETF | 0.34% | |
Franklin Liberty Investment Grade Corporate ETF | 0.41% | |
Franklin Liberty Senior Loan ETF | 0.54% | |
Franklin Liberty Systematic Style Premia ETF | 0.65% | |
Franklin Liberty U.S. Core Bond ETF | 0.15% | |
Franklin Liberty U.S. Low Volatility ETF | 0.29% | |
Franklin Liberty U.S. Treasury Bond ETF | 0.27% | |
Franklin Liberty Ultra Short Bond ETF | 0.34% | |
b. Administrative Fees
Under an agreement with Advisers and FTIML, FT Services provides administrative services to the Funds. The fee is paid by Advisers and FTIML based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Waiver and Expense Reimbursements
Prior to October 1, 2021, Advisers had contractually agreed to waive or assume certain expenses so that total annual Fund operating expenses (including acquired fund fees and expenses, but excluding certain non-routine expenses) did not exceed 0.50% for the Franklin Disruptive Commerce ETF, Franklin Genomic Advancements ETF, Franklin Intelligent Machine ETF and Franklin Exponential Data ETF Funds until July 31, 2022.
Prior to October 1, 2021, Advisers had contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by Franklin Liberty High Yield Corporate ETF, Franklin Liberty Investment Grade Corporate ETF, Franklin Liberty Senior Loan ETF , Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Low Volatility
| franklintempleton.com | Annual Report | 223 | ||||||||
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
c. Waiver and Expense Reimbursements (continued)
ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF so that the expenses (including acquired fund fees and expenses) of the Funds did not exceed 0.40%, 0.35%, 0.45%, 0.15%, 0.29%, 0.09% and 0.15%, respectively, 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.
Prior to October 1, 2021, FTIML had contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by Franklin Liberty International Aggregate Bond ETF so that the expenses (including acquired fund fees and expenses) of 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.
For Franklin Liberty Systematic Style Premia ETF, prior to October 1, 2021 the investment manager had contractually agreed to waive the management fee it receives from the Fund in an amount equal to the management fee paid by a Cayman Islands-based company that is wholly-owned by the Fund (Subsidiary). Additionally, prior to October 1, 2021 the investment manager had contractually agreed to waive or assume certain expenses so that total annual Fund operating expenses (including acquired fund fees and expenses, but excluding certain non-routine expenses) for the Fund did not exceed 0.65% until July 31, 2022.
For the Franklin Dynamic Municipal Bond ETF, Franklin Liberty Federal Tax-Free Bond ETF, Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by so that the expenses (including acquired fund fees and expenses) of the Funds do not exceed 0.30%, and 0.30%, respectively, 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 Funds’ fiscal year end.
Advisers additionally waived 0.25% of annual Fund operating expenses for the Franklin Exponential Data ETF for the period from the commencement of its operations until September 30, 2021 due to a scrivener’s error which accrued to the benefit of the Fund. As noted above, Advisers may not recover fees previously waived.
d. Investments in Affiliated Management Investment Companies
Certain or all Funds invest 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’s do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements 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, investments in affiliated management investment companies were as follows:
Value at Year | Purchases | Sales | Realized Gain (Loss) | Net Change In (Depreciation) | Value at End of Year | Number of Shares Held at End | Investment Income | |||||||||||||||||||||||||
| Franklin Exponential Data ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 59,857 | $ | 734,286 | $ | (793,552 | ) | $ | — | $ | — | $ | 591 | $ | 591 | $ | — | |||||||||||||||
|
| |||||||||||||||||||||||||||||||
| 224 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
d. Investments in Affiliated Management Investment Companies (continued)
Value at Year | Purchases | Sales | Realized Gain (Loss) | Net Change In (Depreciation) | Value at End of Year | Number of Shares Held at End | Investment Income | |||||||||||||||||||||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 21,162,095 | $ | 599,950,423 | $ | (572,563,877 | ) | $ | — | $ | — | $ | 48,548,641 | $ | 48,548,641 | $ | — | |||||||||||||||
|
| |||||||||||||||||||||||||||||||
| Franklin Liberty U.S. Treasury Bond ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 19,594,757 | $ | 46,530,374 | $ | (61,491,750 | ) | $ | — | $ | — | $ | 4,633,381 | $ | 4,633,381 | $ | — | |||||||||||||||
|
| |||||||||||||||||||||||||||||||
| Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 22,444 | $ | 1,189,681 | $ | (1,131,116 | ) | $ | — | $ | ��— | $ | 81,009 | $ | 81,009 | $ | — | |||||||||||||||
|
| |||||||||||||||||||||||||||||||
e. Other Affiliated Transactions
At March 31, 2022, the shares of the funds were owned by the following investment entities:
| Funds | Shares | Percentage of Outstanding Sharesa | ||||||
| Franklin Exponential Data ETF | ||||||||
Franklin Resources Inc. | 30,000 | 20.0% | ||||||
|
| |||||||
| Franklin Intelligent Machines ETF | ||||||||
Franklin Resources Inc. | 20,000 | 8.0% | ||||||
|
| |||||||
| Franklin Liberty High Yield Corporate ETF | ||||||||
Franklin Conservative Allocation Fund | 2,179,258 | 16.1% | ||||||
Franklin Moderate Allocation Fund | 2,148,845 | 15.9% | ||||||
Franklin Total Return Fund | 2,900,000 | 21.5% | ||||||
Franklin 529 Portfolios | 3,020,643 | 22.4% | ||||||
|
| |||||||
| 10,248,746 | 75.9% | |||||||
|
| |||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||
Franklin Conservative Allocation Fund | 1,032,691 | 12.6% | ||||||
Franklin Moderate Allocation Fund | 971,513 | 11.8% | ||||||
Franklin Growth Allocation Fund | 450,649 | 5.5% | ||||||
Franklin 529 Portfolios | 4,997,261 | 60.9% | ||||||
|
| |||||||
| 7,452,114 | 90.8% | |||||||
|
| |||||||
| Franklin Liberty Investment Grade Corporate ETF | ||||||||
Franklin Total Return Fund | 18,335,000 | 44.3% | ||||||
Franklin 529 Portfolios | 14,057,294 | 34.0% | ||||||
|
| |||||||
| 32,392,294 | 78.3% | |||||||
|
| |||||||
| franklintempleton.com | Annual Report | 225 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
e. Other Affiliated Transactions (continued)
| Funds | Shares | Percentage of Outstanding Sharesa | ||||||
| Franklin Liberty Senior Loan ETF | ||||||||
Franklin Conservative Allocation Fund | 1,223,757 | 10.3% | ||||||
Franklin Moderate Allocation Fund | 1,206,700 | 10.2% | ||||||
Franklin Total Return Fund | 1,737,400 | 14.7% | ||||||
|
| |||||||
| 4,167,857 | 35.2% | |||||||
|
| |||||||
| Franklin Liberty Systematic Style Premia ETF | ||||||||
Franklin Conservative Allocation Fund | 281,751 | 10.8% | ||||||
Franklin Moderate Allocation Fund | 441,748 | 17.0% | ||||||
Franklin Growth Allocation Fund | 307,382 | 11.8% | ||||||
Franklin Managed Income Fund | 1,175,000 | 45.2% | ||||||
Franklin LifeSmart™ 2020 – 2055 Retirement Target Funds | 129,020 | 5.0% | ||||||
|
| |||||||
| 2,334,901 | 89.8% | |||||||
|
| |||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||
Franklin Conservative Allocation Fund | 9,579,466 | 14.9% | ||||||
Franklin Moderate Allocation Fund | 9,445,816 | 14.7% | ||||||
Franklin 529 Portfolios | 29,468,829 | 45.7% | ||||||
|
| |||||||
| 48,494,111 | 75.3% | |||||||
|
| |||||||
| Franklin Liberty U.S. Low Volatility ETF | ||||||||
Franklin Managed Income Fund | 860,000 | 31.3% | ||||||
|
| |||||||
| Franklin Liberty U.S. Treasury Bond ETF | ||||||||
Franklin Conservative Allocation Fund | 2,074,412 | 11.7% | ||||||
Franklin Moderate Allocation Fund | 2,045,447 | 11.5% | ||||||
Franklin 529 Portfolios | 10,824,209 | 60.8% | ||||||
|
| |||||||
| 14,944,068 | 84.0% | |||||||
|
| |||||||
| Franklin Liberty Ultra Short Bond ETF | ||||||||
Franklin Resources Inc. | 33,000 | 22.0% | ||||||
|
| |||||||
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. 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:
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 129,808 | $ | 99,216 | $ | 339,406 | $ | 44,508 | ||||||||
Short term | 6,001,047 | 404,511 | 5,641,835 | 623,321 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 6,130,855 | $ | 503,727 | $ | 5,981,241 | $ | 667,829 | ||||||||
|
| |||||||||||||||
| 226 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax- Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 77,115 | $ | 477,407 | $ | — | $ | 661,680 | ||||||||
Short term | 165,126 | 1,277,016 | — | 621,329 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 242,241 | $ | 1,754,423 | $ | — | $ | 1,283,009 | ||||||||
|
| |||||||||||||||
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | — | $ | 1,148,492 | $ | — | $ | 12,324,674 | ||||||||
Short term | — | 792,621 | 12,077,714 | 16,633,065 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | — | $ | 1,941,113 | $ | 12,077,714 | $ | 28,957,739 | ||||||||
|
| |||||||||||||||
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty ETF | ||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | — | $ | 1,016,578 | $ | 2,468 | ||||||||||
Short term | 599,857 | 6,131,158 | 14,153 | |||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 599,857 | $ | 7,147,736 | $ | 16,621 | ||||||||||
|
| |||||||||||||||
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:
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Post October capital losses | $ | — | $ | — | $ | — | $ | — | ||||||||
Late-year ordinary losses | $ | (8,346 | ) | $ | (1,550 | ) | $ | (70,594 | ) | $ | (3,084 | ) | ||||
Franklin Dynamic Municipal | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield ETF | Franklin Liberty International Aggregate Bond | |||||||||||||
Post October capital losses | $ | — | $ | — | $ | (683,473 | ) | $ | — | |||||||
Late-year ordinary losses | $ | — | $ | — | $ | — | $ | — | ||||||||
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Post October capital losses | $ | (1,223,159 | ) | $ | — | $ | — | $ | — | |||||||
Late-year ordinary losses | $ | — | $ | — | $ | — | $ | — | ||||||||
| franklintempleton.com | Annual Report | 227 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||
Post October capital losses | $ | — | $ | — | $ | — | ||||||||||
Late-year ordinary losses | $ | — | $ | — | $ | — | ||||||||||
The tax character of distributions paid during the years ended March 31, 2022 and 2021, were as follows:
| Franklin Disruptive Commerce ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 206,803 | $ | — | ||||
Long-Term Capital Gain | 15,751 | — | ||||||
|
| |||||||
Total Distributions paid | $ | 222,554 | $ | — | ||||
|
| |||||||
| Franklin Genomic Advancements ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 64,946 | $ | 10,356 | ||||
|
| |||||||
| Franklin Intelligent Machines ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 7,989 | $ | 432 | ||||
Long-Term Capital Gain | 15,515 | — | ||||||
|
| |||||||
Total Distributions paid | $ | 23,504 | $ | 432 | ||||
|
| |||||||
| Franklin Dynamic Municipal Bond ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from tax exempt income | $ | 1,204,849 | $ | 611,513 | ||||
|
| |||||||
| Franklin Liberty Federal Tax-Free Bond ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from tax exempt income | $ | 2,038,684 | $ | 1,352,931 | ||||
|
| |||||||
| Franklin Liberty High Yield Corporate ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 16,174,896 | $ | 11,465,310 | ||||
Long-Term Capital Gain | 1,180,471 | — | ||||||
|
| |||||||
Total Distributions paid | $ | 17,355,367 | $ | 11,465,310 | ||||
|
| |||||||
| 228 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin Liberty International Aggregate Bond ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 4,976,042 | $ | 951,028 | ||||
Long-Term Capital Gain | 454 | — | ||||||
|
| |||||||
Total Distributions paid | $ | 4,976,496 | $ | 951,028 | ||||
|
| |||||||
| Franklin Liberty Investment Grade Corporate ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 26,432,804 | $ | 34,905,788 | ||||
Long-Term Capital Gain | 2,047,397 | 3,256,030 | ||||||
|
| |||||||
Total Distributions paid | $ | 28,480,201 | $ | 38,161,818 | ||||
|
| |||||||
| Franklin Liberty Senior Loan ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 6,696,117 | $ | 2,065,367 | ||||
|
| |||||||
| Franklin Liberty Systematic Style Premia ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 697,021 | $ | 3,805,981 | ||||
|
| |||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||
| 2022 | 2021 | |||||||
| Distributions paid from: | ||||||||
Ordinary income | $ | 32,245,500 | $ | 48,744,964 | ||||
Long-Term Capital Gain | 3,456,383 | 2,339,610 | ||||||
|
| |||||||
Total Distributions paid | $ | 35,701,883 | $ | 51,084,574 | ||||
|
| |||||||
| Franklin Liberty U.S. Low Volatility ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 2,063,975 | $ | 1,913,171 | ||||
|
| |||||||
| Franklin Liberty U.S. Treasury Bond ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 6,661,686 | $ | 5,600,354 | ||||
|
| |||||||
| Franklin Liberty Ultra Short Bond ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 17,586 | $ | 34,619 | ||||
|
| |||||||
| franklintempleton.com | Annual Report | 229 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2022, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Cost of investments | $ | 20,458,775 | $ | 3,293,429 | $ | 17,139,571 | $ | 9,187,863 | ||||||||
|
|
|
| |||||||||||||
Unrealized appreciation | $ | 583,526 | $ | 457,805 | $ | 349,949 | $ | 2,315,043 | ||||||||
Unrealized depreciation | (2,897,126 | ) | (315,144 | ) | (3,147,665 | ) | (217,120 | ) | ||||||||
|
|
|
| |||||||||||||
Net unrealized appreciation (depreciation) | $ | (2,313,600 | ) | $ | 142,661 | $ | (2,797,716 | ) | $ | 2,097,923 | ||||||
|
|
|
| |||||||||||||
Distributable earnings – undistributed ordinary income | $ | — | $ | — | $ | — | $ | — | ||||||||
|
| |||||||||||||||
| Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
Cost of investments | $ | 77,916,334 | $ | 109,776,991 | $ | 350,632,494 | $ | 193,867,770 | ||||||||
|
|
|
| |||||||||||||
Unrealized appreciation | $ | 202,797 | $ | 547,728 | $ | 3,916,236 | $ | 6,886,056 | ||||||||
Unrealized depreciation | (3,960,424 | ) | (7,004,957 | ) | (21,349,244 | ) | (25,615,668 | ) | ||||||||
|
|
|
| |||||||||||||
Net unrealized appreciation (depreciation) | $ | (3,757,627 | ) | $ | (6,457,229 | ) | $ | (17,433,008 | ) | $ | (18,729,612 | ) | ||||
|
|
|
| |||||||||||||
Distributable earnings – undistributed ordinary income | $ | — | $ | — | $ | 1,990,364 | $ | 7,635,056 | ||||||||
|
| |||||||||||||||
Distributable earnings – undistributed tax exempt income | $ | 161,704 | $ | 177,282 | ||||||||||||
|
| |||||||||||||||
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty ETF | Franklin Liberty Systematic Style Premia ETF | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Cost of investments | $ | 1,038,817,266 | $ | 296,715,161 | $ | 35,170,202 | $ | 1,596,332,971 | ||||||||
|
|
|
| |||||||||||||
Unrealized appreciation | $ | 8,893,994 | $ | 405,603 | $ | 4,092,576 | $ | 10,456,472 | ||||||||
Unrealized depreciation | (88,705,322 | ) | (3,704,391 | ) | (4,359,679 | ) | (110,182,511 | ) | ||||||||
|
|
|
| |||||||||||||
Net unrealized appreciation (depreciation) | $ | (79,811,328 | ) | $ | (3,298,788 | ) | $ | (267,103 | ) | $ | (99,726,039 | ) | ||||
|
|
|
| |||||||||||||
Distributable earnings – undistributed ordinary income | $ | 733,202 | $ | 1,339,731 | $ | 2,835,434 | $ | 58,797 | ||||||||
|
| |||||||||||||||
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||
Cost of investments | $ | 116,214,358 | $ | 436,164,401 | $ | 3,736,790 | ||||||||||
|
|
|
| |||||||||||||
Unrealized appreciation | $ | 21,007,063 | $ | 3,416,063 | $ | 2,950 | ||||||||||
Unrealized depreciation | (2,812,310 | ) | (39,357,062 | ) | (47,197 | ) | ||||||||||
|
|
|
| |||||||||||||
Net unrealized appreciation (depreciation) | $ | 18,194,753 | $ | (35,940,999 | ) | $ | (44,247 | ) | ||||||||
|
|
|
| |||||||||||||
Distributable earnings – undistributed ordinary income | $ | 187,469 | $ | 674,356 | $ | — | ||||||||||
|
|
|
| |||||||||||||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of corporate actions, passive foreign investment company shares and wash sales.
| 230 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2022, were as follows:
| Franklin Disruptive Commerce ETF | Franklin Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Purchases | $ | 30,191,020 | $ | 1,837,567 | $ | 13,144,305 | $ | 4,306,639 | ||||||||
Sales | $ | 29,677,695 | $ | 1,765,953 | $ | 13,054,910 | $ | 4,386,381 | ||||||||
Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
Purchases | $ | 53,237,192 | $ | 88,060,091 | $ | 152,552,722 | $ | 58,585,832 | ||||||||
Sales | $ | 15,693,695 | $ | 58,723,684 | $ | 151,976,078 | $ | 42,716,382 | ||||||||
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Purchases | $ | 385,080,364 | $ | 161,660,892 | $ | 79,683,502 | $ | 1,220,494,775 | ||||||||
Sales | $ | 367,704,518 | $ | 73,129,831 | $ | 82,686,050 | $ | 1,095,568,102 | ||||||||
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||
Purchases | $ | 30,355,736 | $ | 75,602,837 | $ | 2,178,280 | ||||||||||
Sales | $ | 31,160,782 | $ | 56,670,487 | $ | 780,516 | ||||||||||
In-kind transactions associated with creation and redemptions for the year ended March 31, 2022, were as follows:
| Franklin Disruptive Commerce ETF | Franklin Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | 1,268,729 | $ | 21,197,239 | $ | — | ||||||||
Value of Securities Delivereda | $ | 10,110,332 | $ | — | $ | 15,497,146 | $ | — | ||||||||
Franklin Dynamic Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
Cost of Securities Received | $ | — | $ | — | $ | 113,055,338 | $ | — | ||||||||
Value of Securities Delivereda | $ | — | $ | 38,022,311 | $ | 108,170,176 | $ | — | ||||||||
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Cost of Securities Received | $ | 74,100,743 | $ | — | $ | — | $ | — | ||||||||
Value of Securities Delivereda | $ | 70,145,501 | $ | — | $ | — | $ | — | ||||||||
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||||||
Cost of Securities Received | $ | 39,371,371 | $ | — | $ | — | ||||||||||
Value of Securities Delivereda | $ | 60,100,881 | $ | — | $ | — | ||||||||||
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
| franklintempleton.com | Annual Report | 231 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
6. Credit Risk
At March 31, 2022, Franklin Dynamic Municipal Bond ETF, Franklin Liberty Federal Tax-Free Bond ETF, Franklin Liberty High Yield Corporate ETF, Franklin Liberty Investment Grade Corporate ETF and Franklin Liberty Senior Loan ETF had 36.59%, 4.89%, 96.68%, 3.53% and 93.06%, respectively, of their portfolio invested in high yield securities, senior secured floating rate notes, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.
7. Global 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 its/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 Statement of Operations. During the reporting year ended March 31, 2022 the Funds did not use the Global Credit Facility.
8. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions,
which may result in greater market volatility. Political and financial uncertainty in many foreign regions may increase market
volatility and the economic risk of investing in foreign securities. In addition, certain foreign securities may not be as liquid as
U.S. securities.
9. 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 fall out and long-term impact form 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.
10. 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.
11. Credit Risk and Defaulted Securities
At March 31, 2022, Franklin Dynamic Municipal Bond ETF had 0.20% of its portfolio invested in high yield securities, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.
| 232 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
11. Credit Risk and Defaulted Securities (continued)
The Fund may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest. At March 31, 2022, the aggregate long value of distressed company securities for which interest recognition has been discontinued representing 36.59% of the Fund’s net assets. For information as to specific securities, see the accompanying Schedule of Investments
12. Other Derivative Information
At March 31, 2022, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
| Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 5,190,265 | Unrealized appreciation on OTC forward exchange contracts | $ | 436,142 | ||||||
|
|
|
| |||||||||
| Franklin Liberty Investment Grade Corporate ETF | ||||||||||||
Equity contracts | Variation margin on futures contracts | $ | 870,886 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
| Franklin Liberty Systematic Style ETF | ||||||||||||
Equity contracts | Swap contracts | $ | 878 | Swap contracts | $ | — | ||||||
Foreign exchange contracts | Unrealized appreciation on OTC forward exchange contracts | 678,673 | Unrealized appreciation on OTC forward exchange contracts | 405,191 | ||||||||
Equity contracts | Variation margin on futures contracts | 867,571 | a | Variation margin on futures contracts | 1,217,359 | a | ||||||
|
|
|
| |||||||||
Total | $ | 1,547,122 | $ | 1,622,550 | ||||||||
|
|
|
| |||||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||||||
Interest rate contracts | Swap contracts | $ | 31,603 | Swap contracts | $ | 49,631 | ||||||
Equity contracts | Variation margin on futures contracts | 399,726 | a | Variation margin on futures contracts | 283,744 | a | ||||||
|
|
|
| |||||||||
Totals | $ | 431,329 | $ | 333,375 | ||||||||
|
|
|
| |||||||||
aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
| franklintempleton.com | Annual Report | 233 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
12. Other Derivative Information (continued)
For the year ended March 31, 2022, the effect of derivative contracts in the Funds’ Statements of Operations was
as follows:
| Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Foreign exchange contract | Forward exchange contracts | $ | 11,900,931 | Forward exchange contracts | $ | (2,266,963 | ) | |||||
|
|
|
| |||||||||
| Franklin Liberty Investment Grade Corporate ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Interest rate contracts | Futures contracts | $ | 1,210,398 | Futures contracts | $ | 436,625 | ||||||
|
|
|
| |||||||||
| Franklin Liberty Systematic Style ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Swap contracts | $ | — | Swap contracts | $ | (868 | ) | |||||
Foreign exchange contracts | Forward exchange contracts | (300,831 | ) | Forward exchange contracts | 173,508 | |||||||
Index contracts | Futures contracts | 2,480,525 | Futures contracts | (143,048 | ) | |||||||
|
|
|
| |||||||||
Toral | $ | 2,179,694 | $ | 29,592 | ||||||||
|
|
|
| |||||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Interest rate contracts | Swap contracts | $ | 112,950 | Swap contracts | $ | (18,028 | ) | |||||
Index contracts | Futures contracts | $ | (700,454 | ) | Futures contracts | $ | (234,420 | ) | ||||
|
|
|
| |||||||||
Totals | $ | (587,504 | ) | $ | (252,448 | ) | ||||||
|
|
|
| |||||||||
| 234 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
12. Other Derivative Information (continued)
For the year ended March 31, 2022, the average month end notional amount of futures and swaps contracts were as follows:
| Franklin Liberty International Aggregate Bond ETF | Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Systematic Style ETF | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Equity contracts | $ | — | $ | — | $ | 27,765,149 | $ | — | ||||||||
Credit Default contracts | $ | — | $ | — | $ | — | $ | 7,587,273 | ||||||||
Futures contracts | $ | — | $ | 52,136,796 | $ | 73,112,996 | $ | 53,587,445 | ||||||||
Forward exchange contracts | $ | 197,246,032 | $ | — | $ | 71,023,226 | $ | — | ||||||||
See Note 1(c) regarding derivative financial instruments.
At March 31, 2022, the Funds’ OTC derivative assets and liabilities are as follows:
| Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities | ||||||||
| Assetsa | Liabilitiesa | |||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||
Foreign exchange contracts | $ | 5,190,265 | $ | 436,142 | ||||
|
| |||||||
| Franklin Liberty Systematic Style ETF | ||||||||
Equity contracts | $ | 878 | $ | — | ||||
Foreign exchange contracts | $ | 678,673 | $ | 405,191 | ||||
|
| |||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||
Interest rate contracts | $ | 31,603 | $ | 49,631 | ||||
|
| |||||||
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At March 31, 2022, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
| Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
| Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
CITI | $ | 5,190,265 | $ | (436,142 | ) | $ | — | $ | — | $ | 4,754,123 | |||||||||
|
| |||||||||||||||||||
| Franklin Liberty Systematic Style ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
MSCO | $ | 678,673 | $ | (405,191 | ) | $ | — | $ | — | $ | 273,482 | |||||||||
MSCS | 878 | — | — | — | 878 | |||||||||||||||
|
| |||||||||||||||||||
Total | $ | 679,551 | $ | (405,191 | ) | $ | — | $ | — | $ | 274,360 | |||||||||
|
| |||||||||||||||||||
| franklintempleton.com | Annual Report | 235 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
12. Other Derivative Information (continued)
At March 31, 2022, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
| Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
Gross and Net Amounts in the Statements of | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero) | ||||||||||||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
CITI | $ | 436,142 | $ | (436,142 | ) | $ | — | $ | — | $ | — | |||||||||
|
| |||||||||||||||||||
| Franklin Liberty Systematic Style ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
MSCO | $ | 405,191 | $ | (405,191 | ) | $ | — | $ | — | $ | — | |||||||||
|
| |||||||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
13. 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.
A summary of inputs used as of March 31, 2022, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Disruptive Commerce ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Equity Investmentsb | $ | 18,145,175 | $ | — | $ | — | $ | 18,145,175 | ||||||||
|
| |||||||||||||||
| Franklin Exponential Data ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Equity Investmentsb | $ | 3,435,499 | $ | — | $ | — | $ | 3,435,499 | ||||||||
Short-Term Investments | 591 | — | — | 591 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 3,436,090 | $ | — | $ | — | $ | 3,436,090 | ||||||||
|
| |||||||||||||||
| 236 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
13. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Genomic Advancements ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Equity Investmentsb | $ | 14,341,855 | $ | — | $ | — | $ | 14,341,855 | ||||||||
|
| |||||||||||||||
| Franklin Intelligent Machines ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Equity Investmentsb | $ | 11,285,786 | $ | — | $ | — | $ | 11,285,786 | ||||||||
|
| |||||||||||||||
| Franklin Dynamic Municipal Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Municipal Bonds | $ | — | $ | 74,158,707 | $ | — | $ | 74,158,707 | ||||||||
|
| |||||||||||||||
| Franklin Liberty Federal Tax-Free Bond | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Municipal Bonds | $ | — | $ | 103,319,762 | $ | — | $ | 103,319,762 | ||||||||
|
| |||||||||||||||
| Franklin Liberty High Yield Corporate ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 315,693,837 | $ | 240 | $ | 315,694,077 | ||||||||
Floating Rate Loans | — | 7,505,409 | — | 7,505,409 | ||||||||||||
Short-Term Investments | — | 10,000,000 | — | 10,000,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 333,199,246 | $ | 240 | $ | 333,199,486 | ||||||||
|
| |||||||||||||||
| Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Foreign Government & Agency Securities | $ | — | $ | 158,298,903 | $ | — | $ | 158,298,903 | ||||||||
Corporate Bonds & Notes | — | 11,319,255 | $ | — | 11,319,255 | |||||||||||
Short-Term Investments | — | 5,520,000 | $ | — | 5,520,000 | |||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 175,138,158 | $ | — | $ | 175,138,158 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 5,190,265 | $ | — | $ | 5,190,265 | ||||||||
|
| |||||||||||||||
| Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 436,142 | $ | — | $ | 436,142 | ||||||||
|
| |||||||||||||||
| Franklin Liberty Investment Grade Corporate ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 937,627,149 | $ | — | $ | 937,627,149 | ||||||||
U.S. Government & Agency Securities | — | 1,938,789 | — | 1,938,789 | ||||||||||||
Short-Term Investments | — | 19,440,000 | — | 19,440,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 959,005,938 | $ | — | $ | 959,005,938 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 870,886 | $ | — | $ | — | $ | 870,886 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | Annual Report | 237 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
13. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Liberty Senior Loan ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 6,198,213 | $ | — | $ | 6,198,213 | ||||||||
Senior Floating Rate Interests | — | 270,251,668 | — | 270,251,668 | ||||||||||||
Asset-Backed Securities | — | 1,966,492 | — | 1,966,492 | ||||||||||||
Short-Term Investments | — | 15,000,000 | — | 15,000,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | — | $ | 293,416,373 | $ | — | $ | 293,416,373 | ||||||||
|
| |||||||||||||||
| Franklin Liberty Systematic Style Premia ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Equity Investmentsb | $ | 34,903,099 | $ | — | $ | — | $ | 34,903,099 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 678,673 | $ | — | $ | 678,673 | ||||||||
Futures Contracts | 867,571 | — | — | 867,571 | ||||||||||||
Swap Contracts | — | 878 | — | 878 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 867,571 | $ | 679,551 | $ | — | $ | 1,547,122 | ||||||||
|
| |||||||||||||||
| Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 405,191 | $ | — | $ | 405,191 | ||||||||
Futures Contracts | 1,217,359 | — | — | 1,217,359 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 1,217,359 | $ | 405,191 | $ | — | $ | 1,622,550 | ||||||||
|
| |||||||||||||||
| Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 391,863,564 | $ | — | $ | 391,863,564 | ||||||||
U.S. Government & Agency Securities | — | 622,540,745 | $ | — | 622,540,745 | |||||||||||
Municipal Bonds | — | 64,303,960 | $ | — | 64,303,960 | |||||||||||
Mortgage-Backed Securities | — | 278,217,466 | $ | — | 278,217,466 | |||||||||||
Foreign Government & Agency Securities | — | 50,039,763 | $ | — | 50,039,763 | |||||||||||
Asset-Backed Securities | — | 41,092,793 | $ | — | 41,092,793 | |||||||||||
Short-Term Investments | 48,548,641 | — | $ | — | 48,548,641 | |||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 48,548,641 | $ | 1,448,058,291 | $ | — | $ | 1,496,606,932 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Swap Contracts | — | 31,603 | — | 31,603 | ||||||||||||
Futures Contracts | 399,726 | — | — | 399,726 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 399,726 | $ | 31,603 | $ | — | $ | 431,329 | ||||||||
|
| |||||||||||||||
| Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Swap Contracts | — | 49,631 | — | 49,631 | ||||||||||||
Futures Contracts | 283,744 | — | — | 283,744 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 283,744 | $ | 49,631 | $ | — | $ | 333,375 | ||||||||
|
| |||||||||||||||
| 238 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
13. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Liberty U.S. Low Volatility ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Equity Investmentsb | $ | 133,749,111 | $ | — | $ | — | $ | 133,749,111 | ||||||||
Short-Term Investments | — | 660,000 | — | 660,000 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 133,749,111 | $ | 660,000 | $ | — | $ | 134,409,111 | ||||||||
|
| |||||||||||||||
| Franklin Liberty U.S. Treasury Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
U.S. Government and Agency Securities | $ | — | $ | 389,423,090 | $ | — | $ | 389,423,090 | ||||||||
Mortgage-Backed Securities | — | 6,166,931 | — | 6,166,931 | ||||||||||||
Short-Term Investments | 4,633,381 | — | — | 4,633,381 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 4,633,381 | $ | 395,590,021 | $ | — | $ | 400,223,402 | ||||||||
|
| |||||||||||||||
| Franklin Liberty Ultra Short Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a |
| |||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 3,410,236 | $ | — | $ | 3,410,236 | ||||||||
Asset-Backed Securities | — | 201,298 | — | 201,298 | ||||||||||||
Short-Term Investments | 81,009 | — | — | 81,009 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 81,009 | $ | 3,611,534 | $ | — | $ | 3,692,543 | ||||||||
|
| |||||||||||||||
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and preferred stocks.
14. Investments in FLSP Holdings Corporation
Franklin Liberty Systematic Style Premia ETF, (the “Fund”), invests in certain financial instruments and commodities/or commodity-linked derivative investments. The FLSP Holdings Corporation is a Cayman Islands exempted company with limited liability, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments and/or commodity-linked derivative investments consistent with the investment objective of the Fund. At March 31, 2022, the Franklin Liberty Systematic Style Premia ETF investment(s) FLSP Holdings Corporation is reflected in the Fund’s Consolidated Schedule of Investments. March 31, 2022, the net assets of the FLSP Holdings Corporation were $4,213,669, representing 7.6% of the Fund’s consolidated net assets. The Fund’s investment(s) in the FLSP Holdings Corporation is limited to 25% of consolidated assets.
15. New Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provides 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 contact 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.
| franklintempleton.com | Annual Report | 239 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
16. Subsequent Events
The Funds have evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
| Selected Portfolio | Currency | |||||
| FHLB | Federal Home Loan Bank Rate | AUD | Australian Dollar | |||
| NCI | National Median Cost of Funds Index | CAD | Canadian Dollar | |||
| PIK | Payment-In-Kind | DKK | Danish Krone | |||
| USD | Unified/Union School District | EUR | Euro | |||
| CAC | Cotation Assistée en Continu | HUF | Hungary | |||
| FRN | Floating Rate Note | IDR | Indonesian Rupiah | |||
| TBD | To be determined | JPY | Japanese Yen | |||
| REIT | Real Estate Investment Trust | MXN | Mexican Peso | |||
| ADR | American Depositary Receipt | USD | United States Dollar | |||
| MTA | Metropolitan Transit Authority | |||||
| CSCDA | California Statewide Communities Development Authority | |||||
| 240 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin Disruptive Commerce ETF, Franklin Exponential Data ETF, Franklin Genomic Advancements ETF, Franklin Intelligent Machines ETF, Franklin Dynamic Municipal Bond ETF, Franklin Municipal Green Bond ETF, Franklin Liberty High Yield Corporate ETF, Franklin Liberty International Aggregate Bond ETF, Franklin Liberty Investment Grade Corporate ETF, Franklin Liberty Senior Loan ETF, Franklin Liberty Systematic Style Premia ETF, Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Low Volatility ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Franklin Disruptive Commerce ETF, Franklin Exponential Data ETF, Franklin Genomic Advancements ETF, Franklin Intelligent Machines ETF, Franklin Dynamic Municipal Bond ETF, Franklin Liberty Federal Tax-Free Bond ETF, Franklin Liberty High Yield Corporate ETF, Franklin Liberty International Aggregate Bond ETF, Franklin Liberty Investment Grade Corporate ETF, Franklin Liberty Senior Loan ETF, Franklin Liberty Systematic Style Premia ETF, Franklin Liberty U.S. Core Bond ETF, Franklin Liberty U.S. Low Volatility ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF (fifteen of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Funds”) as of March 31, 2022, the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (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, the changes in each of their net assets, and each of the financial highlights for each of the periods indicated in the table below in conformity with accounting principles generally accepted in the United States of America.
| Franklin Templeton ETF Trust | Statement of Operations | Statement of Changes in Net Assets | Financial Highlights | |||
Franklin Disruptive Commerce ETF Franklin Genomic Advancements ETF Franklin Intelligent Machines ETF | For the year ended March 31, 2022 | For the years ended March 31, 2022 and 2021 | For the years ended March 31, 2022 and 2021, and the period February 25, 2020 (commencement of operations) through March 31, 2020 | |||
Franklin Exponential Data ETF | For the year ended March 31, 2022 | For the year ended March 31, 2022 and for the period January 12, 2021 (commencement of operations) through March 31, 2021 | For the year ended March 31, 2022 and the period January 12, 2021 (commencement of operations) through March 31, 2021 | |||
Franklin Dynamic Municipal Bond ETF Franklin Liberty Federal Tax-Free Bond ETF | For the year ended March 31, 2022 | For the years ended March 31, 2022 and 2021 | For the years ended March 31, 2022, 2021, 2020 and 2019, and the period August 31, 2017 (commencement of operations) through March 31, 2018 | |||
Franklin Liberty High Yield Corporate ETF Franklin Liberty International Aggregate Bond ETF Franklin Liberty Senior Loan ETF | For the year ended March 31, 2022 | For the years ended March 31, 2022 and 2021 | For the years ended March 31, 2022, 2021 and 2020, and the period from May 30, 2018 (commencement of operations) through March 31, 2019 | |||
Franklin Liberty Investment Grade Corporate ETF Franklin Liberty U.S. Low Volatility ETF | For the year ended March 31, 2022 | For the years ended March 31, 2022 and 2021 | For each of the five years in the period ended March 31, 2022 | |||
Franklin Liberty Systematic Style Premia ETF | For the year ended March 31, 2022 | For the years ended March 31, 2022 and 2021 | For the years ended March 31, 2022 and 2021, and the period December 18, 2019 (commencement of operations) through March 31, 2020 | |||
| franklintempleton.com | Annual Report | 241 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm (continued)
| Franklin Templeton ETF Trust | Statement of Operations | Statement of Changes in Net Assets | Financial Highlights | |||
Franklin Liberty U.S. Core Bond ETF | For the year ended March 31, 2022 | For the years ended March 31, 2022 and 2021 | For the years ended March 31, 2022 and 2021, and the period September 17, 2019 (commencement of operations) through March 31, 2020 | |||
Franklin Liberty U.S. Treasury Bond ETF | For the year ended March 31, 2022 | For the year ended March 31, 2022 and for the period June 9, 2020 (commencement of operations) through March 31, 2021 | For the year ended March 31, 2022 and the period June 9, 2020 (commencement of operations) through March 31, 2021 | |||
Franklin Liberty Ultra Short Bond ETF | For the year ended March 31, 2022 | For the year ended March 31, 2022 and for the period July 14, 2020 (commencement of operations) through March 31, 2021 | For the year ended March 31, 2022 and the period July 14, 2020 (commencement of operations) through March 31, 2021 | |||
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 brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
May 19, 2022
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
| 242 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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 below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended March 31, 2022:
| Pursuant to: | Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | ||||||||||||||||
Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ | 15,751 | $ | — | $ | — | $ | 15,515 | |||||||||||
Dividends Received Deduction (DRD) | §854(b)(1)(A) | $ | 14,777 | $ | — | $ | 13,435 | $ | 7,989 | |||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 20,215 | $ | — | $ | 25,773 | $ | 7,989 | |||||||||||
Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ | 206,803 | $ | — | $ | — | $ | 7,989 | |||||||||||
| Pursuant to: | Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | ||||||||||||||||
Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ | — | $ | — | $ | 1,180,471 | $ | 454 | |||||||||||
Exempt-Interest Dividends | §852(b)(5)(A) | $ | 1,204,849 | $ | 2,038,684 | $ | — | $ | — | |||||||||||
Dividends Received Deduction (DRD) | §854(b)(1)(A) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Interest-Related Dividends | §871(k)(1)(C) | $ | — | $ | — | $ | 12,999,638 | $ | — | |||||||||||
Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ | — | $ | — | $ | — | $ | 1,152,126 | |||||||||||
| Pursuant to: | Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | Franklin Liberty U.S. Core Bond ETF | ||||||||||||||||
Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ | 2,047,397 | $ | — | $ | — | $ | 3,456,383 | |||||||||||
Dividends Received Deduction (DRD) | §854(b)(1)(A) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | — | $ | — | $ | 671,753 | $ | — | |||||||||||
Interest-Related Dividends | §871(k)(1)(C) | $ | 17,896,799 | $ | 6,085,446 | $ | — | $ | 26,275,024 | |||||||||||
| Pursuant to: | Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | |||||||||||||
Dividends Received Deduction (DRD) | §854(b)(1)(A) | $ | 2,063,975 | $ | — | $ | — | |||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 2,063,975 | $ | — | $ | — | |||||||||
Interest-Related Dividends | §871(k)(1)(C) | $ | — | $ | 6,661,686 | $ | 17,586 | |||||||||
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FRANKLIN TEMPLETON ETF TRUST
Tax Information (unaudited) (continued)
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:
| Franklin Disruptive Commerce ETF | Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | Franklin Intelligent Machines ETF | |||||||||||||
Foreign Taxes Paid | $ | — | $ | — | $ | — | $ | — | ||||||||
Foreign Source Income | $ | — | $ | — | $ | — | $ | — | ||||||||
| Franklin Dynamic Municipal Bond ETF | Franklin Liberty Federal Tax-Free Bond ETF | Franklin Liberty High Yield Corporate ETF | Franklin Liberty International Aggregate Bond ETF | |||||||||||||
Foreign Taxes Paid | $ | — | $ | — | $ | — | $ | 1,954 | ||||||||
Foreign Source Income | $ | — | $ | — | $ | — | $ | 2,190,856 | ||||||||
| Franklin Liberty Investment Grade Corporate ETF | Franklin Liberty Senior Loan ETF | Franklin Liberty Systematic Style Premia ETF | Franklin Liberty U.S. Core Bond ETF | |||||||||||||
Foreign Taxes Paid | $ | — | $ | — | $ | — | $ | — | ||||||||
Foreign Source Income | $ | — | $ | — | $ | — | $ | — | ||||||||
| Franklin Liberty U.S. Low Volatility ETF | Franklin Liberty U.S. Treasury Bond ETF | Franklin Liberty Ultra Short Bond ETF | ||||||||||
Foreign Taxes Paid | $ | — | $ | — | $ | — | ||||||
Foreign Source Income | $ | — | $ | — | $ | — | ||||||
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FRANKLIN TEMPLETON ETF TRUST
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) One Franklin Parkway San Mateo, CA 94403-1906 | Lead Independent Trustee | Since 2016 | 61 | 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). | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2020 | 61 | 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). | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2016 | 61 | None | ||||
| 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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FRANKLIN TEMPLETON ETF TRUST
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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee and Chairperson of the Board | Since 2016 | 72 | None | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway | Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| 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) 620 Eighth Avenue, 47th Floor New York, NY 10018 | Chief Compliance Officer | Since July 2021 | Not Applicable | Not Applicable | ||||
| 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) New York, NY 10018 | Vice President – AML Compliance | Since September 2021 | Not Applicable | Not Applicable | ||||
| 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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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| 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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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 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 2016. 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.
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FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
Franklin Exponential Data ETF
Franklin Genomic Advancements ETF
Franklin Intelligent Machines ETF
Franklin Liberty High Yield Corporate ETF
Franklin Liberty International Aggregate Bond ETF
Franklin Liberty Investment Grade Corporate ETF
Franklin Liberty Senior Loan ETF
Franklin Liberty Systematic Style Premia ETF
Franklin Liberty U.S. Core Bond ETF
Franklin Liberty U.S. Low Volatility ETF
Franklin Liberty U.S. Treasury Bond ETF
Franklin Liberty Ultra Short Bond ETF
(each a Fund)
At a meeting held on September 8, 2021 (Meeting), the Board of Trustees (Board) of Franklin Templeton 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. (FAI) and the Trust, on behalf of each Fund (except the Franklin Liberty International Aggregate Bond ETF), and an amended and restated investment management agreement to adopt a Unified Fee between Franklin Templeton Investment Management Limited (FTIML) and the Trust, on behalf of the Franklin Liberty International Aggregate Bond ETF (each an 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 each Amended Management Agreement. Although the Amended Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate. FAI and FTIML are each referred to herein as a Manager.
In considering the approval of each Amended Management Agreement, the Board reviewed and considered information provided by each 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 each Amended Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by each Manager; and (ii) the costs of the services to be provided by each Manager and its affiliates from the relationship with each Fund. The Board further reviewed and considered the form of Amended Management Agreement and the terms of each Amended Management Agreement, which were explained at the Meeting, 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 management agreements for the Funds, and that the Unified Fee is consistent with the Unified Fee structure currently in place for passively managed series of the Trust. The Board noted management’s reasons for proposing the approval of each Amended Management Agreement, including that the Unitary Fee would help promote sales of the Funds 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 each 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 applicable Fund and its shareholders. While attention was given to all information 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 each Manager and its affiliates to each Fund and its shareholders. This information included, among other things, management’s representation that each Amended Management Agreement will not reduce or modify in any way the nature, extent and quality of the services currently provided to each Fund. Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by each Manager and its affiliates to each Fund and its shareholders under the Fund’s Amended Management Agreement.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Fund Performance
The Board noted that each of the Franklin Exponential Data ETF, Franklin Liberty U.S. Treasury Bond ETF and Franklin Liberty Ultra Short Bond ETF had less than two years of performance and thus, the performance of these Funds was not a material factor in considering the approval of each Fund’s Amended Management Agreement. The Board further noted its review and consideration of and conclusions made regarding the performance results of each other Fund in connection with the May 2021 annual contract renewal (Annual Contract Renewal) of the Fund’s investment management 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 management’s representation that changing to the Unified Fee would not result in any increase to a Manager’s management fee. The Board also noted management’s representation that each 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 to each Fund’s Amended Management Agreement, the Manager shall (1) reimburse the Fund for all of its acquired fund fees and expenses (if any), and, with respect to Franklin Liberty Systematic Style Premia ETF, reimburse all expenses related to the Fund’s investment in a Cayman Islands-based company that is wholly-owned by the Fund, 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 a 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 changing to the Unified Fee would not result in any increase to a 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 each Manager had not changed as a result of the proposal to approve each Amended Management Agreement.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved each Amended Management Agreement for an initial two-year period.
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 Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each 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.
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 Templeton ETF Trust | |||||
| Investment Manager | Distributor | Investor Services | ||||
Franklin Advisers, Inc.
Franklin Templeton Investment Management Limited | Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
| © 2022 Franklin Templeton Investments. All rights reserved. | ETF2 A 06/22 | |||||
ANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
March 31, 2022
Franklin FTSE Asia ex Japan ETF | Franklin FTSE Japan ETF | |
Franklin FTSE Australia ETF | Franklin FTSE Japan Hedged ETF | |
Franklin FTSE Brazil ETF | Franklin FTSE Latin America ETF | |
Franklin FTSE Canada ETF | Franklin FTSE Mexico ETF | |
Franklin FTSE China ETF | Franklin FTSE Russia ETF | |
Franklin FTSE Europe ETF | Franklin FTSE Saudi Arabia ETF | |
Franklin FTSE Europe Hedged ETF | Franklin FTSE South Africa ETF | |
Franklin FTSE France ETF | Franklin FTSE South Korea ETF | |
Franklin FTSE Germany ETF | Franklin FTSE Switzerland ETF | |
Franklin FTSE Hong Kong ETF | Franklin FTSE Taiwan ETF | |
Franklin FTSE India ETF | Franklin FTSE United Kingdom ETF | |
Franklin FTSE Italy ETF |
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools.
| Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
| franklintempleton.com | Annual Report | 1 | ||||||||
ANNUAL REPORT
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 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.
The foregoing information reflects our analysis and opinions as of March 31, 2022. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: Morningstar.
See www.franklintempletondatasources.com for additional data provider information.
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Franklin FTSE Asia ex Japan ETF
This annual report for Franklin FTSE Asia ex Japan ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Asia ex Japan RIC Capped Index (the FTSE Asia ex Japan Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Asia ex Japan Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -14.99% based on market price and -13.34% based on net asset value. In comparison, the FTSE Asia ex Japan Capped Index posted a -12.79% total return for the same period.2 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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Asia ex Japan Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 11.6% | |||
Semiconductors & Semiconductor Equipment | 11.0% | |||
Interactive Media & Services | 6.3% | |||
Technology Hardware, Storage & Peripherals | 6.0% | |||
Internet & Direct Marketing Retail | 5.5% | |||
Insurance | 4.5% | |||
Oil, Gas & Consumable Fuels | 3.6% | |||
Real Estate Management & Development | 3.2% | |||
Electronic Equipment, Instruments & Components | 3.2% | |||
Automobiles | 3.1% | |||
Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Asia ex Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Asia ex Japan Capped Index is based on the FTSE Asia ex Japan Index and is designed to measure the performance of large- and mid-capitalization stocks from developed and emerging Asian countries, excluding Japan. The Chinese constituents in the FTSE Asia ex Japan Capped Index are represented by H-shares, B-shares, A-shares, N-shares, Red Chips, P-Chips and S-Chips.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 142.
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FRANKLIN FTSE ASIA EX JAPAN ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 7.4% | |||
Tencent Holdings Ltd. Interactive Media & Services, China | 4.2% | |||
Samsung Electronics Co. Ltd. Interactive Media & Services, China | 4.0% | |||
Alibaba Group Holding Ltd. Internet & Direct Marketing Retail, China | 3.0% | |||
AIA Group Ltd. Insurance, Hong Kong | 1.9% | |||
Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India | 1.7% | |||
Infosys Ltd. IT Services, India | 1.3% | |||
Meituan Dianping, 144A Internet & Direct Marketing Retail, China | 1.1% | |||
China Construction Bank Corp., A, H Banks, China | 1.0% | |||
Hong Kong Exchanges and Clearing Ltd. Capital Markets, Hong Kong | 0.9% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were energy, financials and utilities. Individual holdings that lifted the Fund’s absolute return included Reliance Industries, Infosys and DBS Group Holdings.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, communication services and health care. Individual holdings that hindered the Fund’s absolute return included Alibaba Group Holding, Tencent Holdings and Meituan Dianping.
CFA® is a trademark owned by CFA Institute.
| Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
China | 33.1% | |||
Taiwan | 18.1% | |||
India | 16.0% | |||
South Korea | 14.0% | |||
Hong Kong | 7.6% | |||
Singapore | 3.5% | |||
Thailand | 2.6% | |||
Malaysia | 1.9% | |||
Indonesia | 1.9% | |||
Philippines | 0.9% | |||
Thank you for your participation in Franklin FTSE Asia ex Japan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 4 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
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 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 or redemption 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 mutual 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 (2/9/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -13.34% | -14.99% | -13.34% | -14.99% | ||||||||||||
3-Year | +18.04% | +16.22% | +5.68% | +5.14% | ||||||||||||
Since Inception (2/6/18) | +11.67% | +10.40% | +2.70% | +2.42% | ||||||||||||
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 7 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 5 | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
2/6/18–3/31/22
See page 7 for Performance Summary footnotes.
| 6 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.620223 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of issuers in Asian countries involve risks that are specific to Asia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Asia ex Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Asia ex Japan Capped Index is based on the FTSE Asia ex Japan Index and is designed to measure the performance of large- and mid-capitalization stocks from developed and emerging Asian countries, excluding Japan. The Chinese constituents in the FTSE Asia ex Japan Capped Index are represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips.
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.
| franklintempleton.com | Annual Report | 7 | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 918.30 | $ | 0.91 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
| 8 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Australia ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Australia RIC Capped Index (the FTSE Australia Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Australia Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +12.92% based on market price and +13.93% based on net asset value. In comparison, the FTSE Australia Capped Index posted a +13.93% total return for the same period.2 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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Australia Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Metals & Mining | 24.3% | |||
Banks | 23.3% | |||
Biotechnology | 6.5% | |||
Equity Real Estate Investment Trusts (REITs) | 6.0% | |||
Capital Markets | 4.8% | |||
Food & Staples Retailing | 4.1% | |||
Oil, Gas & Consumable Fuels | 3.8% | |||
Multiline Retail | 3.1% | |||
Transportation Infrastructure | 2.6% | |||
Hotels, Restaurants & Leisure | 2.6% | |||
Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Australia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Australia Capped Index is based on the FTSE Australia Index and is designed to measure the performance of Australian large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 180.
| franklintempleton.com | Annual Report | 9 | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
BHP Group Ltd. Metals & Mining, Australia | 13.2% | |||
Commonwealth Bank of Australia Banks, Australia | 9.2% | |||
CSL Ltd. Biotechnology, Australia | 6.5% | |||
National Australia Bank Ltd. Banks, Australia | 5.3% | |||
Westpac Banking Corp. Banks, Australia | 4.3% | |||
Australia & New Zealand Banking Group Ltd. Banks, Australia | 3.9% | |||
Macquarie Group Ltd. Capital Markets, Australia | 3.6% | |||
Wesfarmers Ltd. Multiline Retail, Australia | 2.9% | |||
Woolworths Group Ltd. Food & Staples Retailing, Australia | 2.3% | |||
Rio Tinto Ltd. Metals & Mining, Australia | 2.2% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were materials, financials and energy. Individual holdings that lifted the Fund’s absolute return included BHP Group, Commonwealth Bank of Australia and National Australia Bank.
For the same period, the sectors that detracted from the Fund’s absolute performance were information technology and health care. Individual holdings that hindered the Fund’s absolute return included Afterpay (not held at period-end), Magellan Financial Group and Xero.
Thank you for your participation in Franklin FTSE Australia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 10 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +13.93% | +12.92% | +13.93% | +12.92% | ||||||||||||
3-Year | +44.34% | +42.72% | +13.01% | +12.59% | ||||||||||||
Since Inception (11/2/17) | +47.04% | +46.04% | +9.14% | +8.97% | ||||||||||||
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 13 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 11 | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 13 for Performance Summary footnotes.
| 12 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.515668 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Australian issuers involve risks that are specific to Australia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Australia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Australia Capped Index is based on the FTSE Australia Index and is designed to measure the performance of Australian large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 13 | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,097.00 | $ | 0.47 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 14 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Brazil ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Brazil RIC Capped Index (the FTSE Brazil Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Brazil Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +22.66% based on market price and +23.03% based on net asset value. In comparison, the FTSE Brazil Capped Index posted a +23.31% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 17.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Brazil Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Metals & Mining | 20.0% | |||
Oil, Gas & Consumable Fuels | 16.2% | |||
Banks | 16.1% | |||
Electric Utilities | 5.8% | |||
Capital Markets | 5.3% | |||
Food Products | 3.8% | |||
Health Care Providers & Services | 3.2% | |||
Road & Rail | 3.1% | |||
Beverages | 2.8% | |||
Electrical Equipment | 2.2% | |||
Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Brazil Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Brazil Capped Index is based on the FTSE Brazil Index and is designed to measure the performance of Brazilian large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 184.
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FRANKLIN FTSE BRAZIL ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Vale SA Metals & Mining, Brazil | 16.6% | |||
Petroleo Brasileiro SA Oil, Gas & Consumable Fuels, Brazil | 7.9% | |||
Itau Unibanco Holding SA Banks, Brazil | 5.6% | |||
Petroleo Brasileiro SA Oil, Gas & Consumable Fuels, Brazil | 5.5% | |||
Banco Bradesco SA Banks, Brazil | 4.4% | |||
B3 SA - Brasil Bolsa Balcao Capital Markets, Brazil | 4.1% | |||
Ambev SA Beverages, Brazil | 2.8% | |||
JBS SA Food Products, United States | 2.3% | |||
WEG SA Electrical Equipment, Brazil | 2.2% | |||
Itausa SA Banks, Brazil | 2.2% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were energy, materials and financials. Individual holdings that lifted the Fund’s absolute return included Petroleo Brasileiro, Vale and Itau Unibanco Holding.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, health care and information technology. Individual holdings that hindered the Fund’s absolute return included Magazine Luiza, Natura & Co. Holding and Via.
Thank you for your participation in Franklin FTSE Brazil ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 16 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE BRAZIL ETF
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 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 or redemption 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 mutual 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 (11/7/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +23.03% | +22.66% | +23.03% | +22.66% | ||||||||||||
3-Year | +5.34% | +6.55% | +1.75% | +2.14% | ||||||||||||
Since Inception (11/3/17) | +16.17% | +16.21% | +3.46% | +3.47% | ||||||||||||
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 19 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 17 | ||||||||
FRANKLIN FTSE BRAZIL ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/3/17–3/31/22
See page 19 for Performance Summary footnotes.
| 18 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE BRAZIL ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.531507 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sector, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. The Brazilian economy has experienced in the past, and may continue to experience, periods of high inflation rates and political unrest. Investments in securities of Brazilian issuers involve risks that are specific to Brazil, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Brazil Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Brazil Capped Index is based on the FTSE Brazil Index and is designed to measure the performance of Brazilian large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 19 | ||||||||
FRANKLIN FTSE BRAZIL ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/21 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,248.20 | $ | 1.06 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
| 20 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Canada ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Canada RIC Capped Index (the FTSE Canada Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Canada Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +22.42% based on market price and +21.95% based on net asset value. In comparison, the FTSE Canada Capped Index posted a +21.79% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 23.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Canada Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
| Banks | 29.4% | |||
| Oil, Gas & Consumable Fuels | 17.1% | |||
| Road & Rail | 8.4% | |||
| Metals & Mining | 7.6% | |||
| Insurance | 7.1% | |||
| IT Services | 5.1% | |||
| Capital Markets | 4.2% | |||
| Food & Staples Retailing | 3.9% | |||
| Chemicals | 3.2% | |||
| Commercial Services & Supplies | 2.0% | |||
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Canada Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Canada Capped Index is based on the FTSE Canada Index and is designed to measure the performance of Canadian large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 188.
| franklintempleton.com | Annual Report | 21 | ||||||||
FRANKLIN FTSE CANADA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
Royal Bank of Canada Banks, Canada | 8.5% | |||
The Toronto-Dominion Bank Banks, Canada | 7.8% | |||
Enbridge Inc. Oil, Gas & Consumable Fuels, Canada | 5.0% | |||
The Bank of Nova Scotia Banks, Canada | 4.7% | |||
Canadian National Railway Co. Road & Rail, Canada | 4.3% | |||
Bank of Montreal Banks, Canada | 4.2% | |||
Shopify Inc., A IT Services, Canada | 4.1% | |||
Canadian Pacific Railway Ltd. Road & Rail, Canada | 4.1% | |||
Brookfield Asset Management Inc., A Capital Markets, Canada | 4.1% | |||
Canadian Natural Resources Ltd. Oil, Gas & Consumable Fuels, Canada | 3.9% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were financials, energy and materials. Individual holdings that lifted the Fund’s absolute return included Canadian Natural Resources, Royal Bank of Canada and The Toronto-Dominion Bank.
For the same period, the sectors that detracted most from the Fund’s absolute performance were information technology, health care and consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Shopify, Canopy Growth (not held at period-end) and Magna International.
Thank you for your participation in Franklin FTSE Canada ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 22 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE CANADA ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +21.95% | +22.42% | +21.95% | +22.42% | ||||||||||||
3-Year | +60.56% | +61.42% | +17.10% | +17.31% | ||||||||||||
Since Inception (11/2/17) | +60.94% | +62.04% | +11.40% | +11.57% | ||||||||||||
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 25 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 23 | ||||||||
FRANKLIN FTSE CANADA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 25 for Performance Summary footnotes.
| 24 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE CANADA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.698467 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Canadian issuers involve risks that are specific to Canada, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Canada Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Canada Capped Index is based on the FTSE Canada Index and is designed to measure the performance of Canadian large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 25 | ||||||||
FRANKLIN FTSE CANADA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,130.70 | $ | 0.48 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 26 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE China ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE China RIC Capped Index (the FTSE China Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE China Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -33.56% based on market price and -31.63% based on net asset value. In comparison, the FTSE China Capped Index posted a -31.53% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 29.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE China Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
| Internet & Direct Marketing Retail | 16.3% | |||
| Interactive Media & Services | 15.8% | |||
| Banks | 11.6% | |||
| Automobiles | 4.7% | |||
| Insurance | 3.8% | |||
| Real Estate Management & Development | 3.8% | |||
| Beverages | 3.1% | |||
| Oil, Gas & Consumable Fuels | 2.4% | |||
| Capital Markets | 2.2% | |||
| Metals & Mining | 2.1% | |||
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE China Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE China Capped Index is based on the FTSE China Index and is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-shares, B-shares, A-shares, N-shares, Red Chips, P-Chips and S-Chips.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 191.
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FRANKLIN FTSE CHINA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
Tencent Holdings Ltd. Interactive Media & Services, China | 12.8% | |||
Alibaba Group Holding Ltd. Internet & Direct Marketing Retail, China | 9.1% | |||
Meituan Dianping, 144A Internet & Direct Marketing Retail, China | 3.4% | |||
China Construction Bank Corp., H Banks, China | 3.1% | |||
Industrial & Commercial Bank of China Ltd., H Banks, China | 2.2% | |||
JD.com Inc., A Internet & Direct Marketing Retail, China | 2.1% | |||
Ping An Insurance Group Co. of China Ltd., H Insurance, China | 1.9% | |||
Baidu Inc., A Interactive Media & Services, China | 1.7% | |||
Bank of China Ltd., H Banks, China | 1.4% | |||
China Merchants Bank Co. Ltd., H Banks, China | 1.3% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the only sector that contributed to the Fund’s absolute performance was energy. Individual holdings that lifted the Fund’s absolute return included China Shenhua Energy, Bank of China and Yanzhou Coal Mining.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, communication services and health care. Individual holdings that hindered the Fund’s absolute return included Alibaba Group Holding, Tencent Holdings and Meituan Dianping.
Thank you for your participation in Franklin FTSE China ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
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FRANKLIN FTSE CHINA ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -31.63% | -33.56% | -31.63% | -33.56% | ||||||||||||
3-Year | -6.67% | -8.91% | -2.27% | -3.06% | ||||||||||||
Since Inception (11/2/17) | -8.55% | -10.04% | -2.01% | -2.37% | ||||||||||||
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 31 for Performance Summary footnotes.
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FRANKLIN FTSE CHINA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 31 for Performance Summary footnotes.
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FRANKLIN FTSE CHINA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.368561 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE China Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE China Capped Index is based on the FTSE China Index and is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips.
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.
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FRANKLIN FTSE CHINA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 813.70 | $ | 0.86 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
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This annual report for Franklin FTSE Europe ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe RIC Capped Index (the FTSE Developed Europe Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Developed Europe Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +2.38% based on market price and +3.30% based on net asset value. In comparison, the FTSE Developed Europe Capped Index posted a +3.10% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 35.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Pharmaceuticals | 11.3% | |||
Banks | 7.1% | |||
Insurance | 5.3% | |||
Oil, Gas & Consumable Fuels | 5.3% | |||
Food Products | 4.5% | |||
Textiles, Apparel & Luxury Goods | 4.5% | |||
Chemicals | 3.6% | |||
Semiconductors & Semiconductor Equipment | 3.4% | |||
Machinery | 2.9% | |||
Metals & Mining | 2.8% | |||
Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Developed Europe Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Index is based on the FTSE Developed Europe Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 213.
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FRANKLIN FTSE EUROPE ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
Nestle SA Food Products, Switzerland | 3.3% | |||
Roche Holding AG, Non-Voting Pharmaceuticals, Switzerland | 2.6% | |||
ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands | 2.4% | |||
Shell PLC Oil, Gas & Consumable Fuels, Netherlands | 2.0% | |||
AstraZeneca PLC Pharmaceuticals, United Kingdom | 1.9% | |||
Novartis AG Pharmaceuticals, Switzerland | 1.7% | |||
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | 1.7% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 1.6% | |||
HSBC Holdings PLC Banks, United Kingdom | 1.3% | |||
SAP SE Software, Germany | 1.2% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were health care, energy and financials. Individual holdings that lifted the Fund’s absolute return included Novo Nordisk, Roche Holding and Nestle.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, information technology and industrials. Individual holdings that hindered the Fund’s absolute return included Prosus, Unilever and Koninklijke Philips.
| Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
United Kingdom | 19.9% | |||
Switzerland | 16.7% | |||
France | 16.0% | |||
Germany | 12.6% | |||
Netherlands | 8.8% | |||
Sweden | 5.4% | |||
Denmark | 3.9% | |||
Spain | 3.7% | |||
Italy | 3.4% | |||
Finland | 2.0% | |||
Thank you for your participation in Franklin FTSE Europe ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 34 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE EUROPE ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +3.30% | +2.38% | +3.30% | +2.38% | ||||||||||||
3-Year | +27.73% | +26.60% | +8.50% | +8.18% | ||||||||||||
Since Inception (11/2/17) | +22.70% | +21.72% | +4.75% | +4.56% | ||||||||||||
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 37 for Performance Summary footnotes.
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FRANKLIN FTSE EUROPE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 37 for Performance Summary footnotes.
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FRANKLIN FTSE EUROPE ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.059355 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in European countries involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. 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 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 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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s the ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Developed Europe Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Index is based on the FTSE Developed Europe Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries.
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.
| franklintempleton.com | Annual Report | 37 | ||||||||
FRANKLIN FTSE EUROPE ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/21 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 975.00 | $ | 0.44 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 38 | Annual Report | franklintempleton.com | ||||||||
Franklin FTSE Europe Hedged ETF
This annual report for Franklin FTSE Europe Hedged ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe RIC Capped Hedged to USD Index (the FTSE Developed Europe Capped Hedged Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Developed Europe Capped Hedged Index and in depositary receipts representing such securities, including indirectly through Franklin FTSE Europe ETF (Underlying Fund).
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +8.10% based on market price and +8.75% based on net asset value. In comparison, the FTSE Developed Europe Capped Hedged Index posted a +8.59% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 41.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe Capped Hedged Index. We seek to achieve, over time, a correlation between the Fund’s
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Pharmaceuticals | 11.4% | |||
Banks | 7.1% | |||
Insurance | 5.4% | |||
Oil, Gas & Consumable Fuels | 5.3% | |||
Textiles, Apparel & Luxury Goods | 4.5% | |||
Food Products | 4.5% | |||
Chemicals | 3.6% | |||
Semiconductors & Semiconductor Equipment | 3.4% | |||
Machinery | 2.9% | |||
Metals & Mining | 2.8% | |||
performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. We intend to enter into monthly foreign currency forward contracts and/or currency futures contracts designed to offset the Fund’s exposure to
1. The FTSE Developed Europe Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Hedged Index is based on the FTSE Developed Europe Hedged to USD Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. The FTSE Developed Europe Capped Hedged Index incorporates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the FTSE Developed Europe Capped Hedged Index.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 227.
| franklintempleton.com | Annual Report | 39 | ||||||||
FRANKLIN FTSE EUROPE HEDGED ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Nestle SA Food Products, Switzerland | 3.3% | |||
Roche Holding AG, Non-Voting Pharmaceuticals, Switzerland | 2.6% | |||
ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands | 2.4% | |||
Shell PLC Oil, Gas & Consumable Fuels, Netherlands | 2.0% | |||
AstraZeneca PLC Pharmaceuticals, United Kingdom | 1.9% | |||
Novartis AG Pharmaceuticals, Switzerland | 1.7% | |||
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | 1.7% | |||
Novo Nordisk AS, B Pharmaceuticals, Denmark | 1.7% | |||
HSBC Holdings PLC Banks, United Kingdom | 1.3% | |||
SAP SE Software, Germany | 1.2% | |||
the component currencies, in order to replicate the hedge impact incorporated in the calculation of the Underlying Index. The Fund’s exposure to foreign currency forward contracts and currency futures contracts is based on the aggregate exposure of the Fund to the component currencies. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were health care, energy and financials. Individual holdings that lifted the Fund’s absolute return included Novo Nordisk, Roche Holding and Nestle.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, information technology and industrials. Individual holdings that hindered the Fund’s absolute return included Prosus, Unilever and Koninklijke Philips.
| Top 10 Countries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
United Kingdom | 20.0% | |||
Switzerland | 16.8% | |||
France | 16.0% | |||
Germany | 12.6% | |||
Netherlands | 8.8% | |||
Sweden | 5.4% | |||
Denmark | 4.0% | |||
Spain | 3.7% | |||
Italy | 3.4% | |||
Finland | 2.0% | |||
Thank you for your participation in Franklin FTSE Europe Hedged ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 40 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE EUROPE HEDGED ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +8.75% | +8.10% | +8.75% | +8.10% | ||||||||||||
3-Year | +33.02% | +33.29% | +9.98% | +10.05% | ||||||||||||
Since Inception (11/2/17) | +35.75% | +35.86% | +7.18% | +7.20% | ||||||||||||
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 43 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 41 | ||||||||
FRANKLIN FTSE EUROPE HEDGED ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 43 for Performance Summary footnotes.
| 42 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE EUROPE HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.870031 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in European countries involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s currency hedging approach is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the currencies. The return of the currency-related derivatives will not perfectly offset the actual fluctuations between the currencies and the U.S. dollar. The Fund’s exposure to the currencies may not be hedged at all times. 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 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 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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s the ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Developed Europe Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Hedged Index is based on the FTSE Developed Europe Hedged to USD Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. The FTSE Developed Europe Capped Hedged Index incorporates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the FTSE Developed Europe Capped Hedged Index.
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.
| franklintempleton.com | Annual Report | 43 | ||||||||
FRANKLIN FTSE EUROPE HEDGED ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,010.30 | $ | 0.45 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 44 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE France ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE France RIC Capped Index (the FTSE France Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE France Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +2.99% based on market price and +4.23% based on net asset value. In comparison, the FTSE France Capped Index posted a +3.92% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 47.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE France Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
% of Total Net Assets | ||||
| Textiles, Apparel & Luxury Goods | 18.4% | |||
| Aerospace & Defense | 7.1% | |||
| Oil, Gas & Consumable Fuels | 6.9% | |||
| Electrical Equipment | 6.6% | |||
| Pharmaceuticals | 6.6% | |||
| Personal Products | 5.6% | |||
| Banks | 5.5% | |||
| Chemicals | 5.1% | |||
| Construction & Engineering | 3.8% | |||
| Insurance | 3.7% | |||
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE France Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE France Capped Index is based on the FTSE France Index and is designed to measure the performance of French large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 241.
| franklintempleton.com | Annual Report | 45 | ||||||||
FRANKLIN FTSE FRANCE ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | 10.2% | |||
TotalEnergies SE Oil, Gas & Consumable Fuels, France | 6.9% | |||
Sanofi Pharmaceuticals, France | 6.3% | |||
L’Oreal SA Personal Products, France | 5.6% | |||
Schneider Electric SE Electrical Equipment, France | 5.1% | |||
Air Liquide SA Chemicals, France | 4.6% | |||
Airbus SE Aerospace & Defense, France | 3.9% | |||
BNP Paribas SA Banks, France | 3.5% | |||
AXA SA Insurance, France | 3.2% | |||
EssilorLuxottica SA Textiles, Apparel & Luxury Goods, France | 3.1% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were industrials, energy and consumer discretionary. Individual holdings that lifted the Fund’s absolute return included LVMH Moet Hennessy Louis Vuitton, TotalEnergies and Schneider Electric.
For the same period, no sectors detracted from the Fund’s absolute performance. Individual holdings that hindered the Fund’s absolute return included Worldline, Alstom and Danone.
Thank you for your participation in Franklin FTSE France ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 46 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE FRANCE ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +4.23% | +2.99% | +4.23% | +2.99% | ||||||||||||
3-Year | +29.19% | +27.33% | +8.91% | +8.39% | ||||||||||||
Since Inception (11/2/17) | +25.55% | +24.30% | +5.30% | +5.06% | ||||||||||||
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 49 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 47 | ||||||||
FRANKLIN FTSE FRANCE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 49 for Performance Summary footnotes.
| 48 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE FRANCE ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.877814 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of French issuers involve risks that are specific to France, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE France Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE France Capped Index is based on the FTSE France Index and is designed to measure the performance of French large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 49 | ||||||||
FRANKLIN FTSE FRANCE ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/21 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 974.30 | $ | 0.44 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 50 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Germany ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Germany RIC Capped Index (the FTSE Germany Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Germany Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -12.75% based on market price and -11.68% based on net asset value. In comparison, the FTSE Germany Capped Index posted a -11.85% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 53.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Germany Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Insurance | 10.8% | |||
Automobiles | 10.7% | |||
Software | 9.5% | |||
Industrial Conglomerates | 7.6% | |||
Pharmaceuticals | 6.9% | |||
Chemicals | 6.7% | |||
Diversified Telecommunication Services | 5.2% | |||
Capital Markets | 4.4% | |||
Real Estate Management & Development | 3.9% | |||
Multi-Utilities | 3.8% | |||
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Germany Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Germany Capped Index is based on the FTSE Germany Index and is designed to measure the performance of German large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 244.
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FRANKLIN FTSE GERMANY ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
SAP SE Software, Germany | 9.0% | |||
Siemens AG Industrial Conglomerates, Germany | 7.6% | |||
Allianz SE Insurance, Germany | 7.2% | |||
Bayer AG Pharmaceuticals, Germany | 4.9% | |||
Deutsche Telekom AG Diversified Telecommunication Services, Germany | 4.6% | |||
Daimler AG Automobiles, Germany | 4.3% | |||
BASF SE Chemicals, Germany | 3.8% | |||
Deutsche Post AG Air Freight & Logistics, Germany | 3.4% | |||
Infineon Technologies AG Semiconductors & Semiconductor Equipment, Germany | 3.2% | |||
adidas AG Textiles, Apparel & Luxury Goods, Germany | 3.1% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were health care, financials and utilities. Individual holdings that lifted the Fund’s absolute return included Bayer, Rheinmetall and Merck.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, materials and industrials. Individual holdings that hindered the Fund’s absolute return included BASF, Volkswagen and Delivery Hero.
Thank you for your participation in Franklin FTSE Germany ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 52 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE GERMANY ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -11.68% | -12.75% | -11.68% | -12.75% | ||||||||||||
3-Year | +17.14% | +15.62% | +5.41% | +4.96% | ||||||||||||
Since Inception (11/2/17) | -2.70% | -3.87% | -0.62% | -0.89% | ||||||||||||
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 55 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 53 | ||||||||
FRANKLIN FTSE GERMANY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 55 for Performance Summary footnotes.
| 54 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE GERMANY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.682316 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of German issuers involve risks that are specific to Germany, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Germany Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Germany Capped Index is based on the FTSE Germany Index and is designed to measure the performance of German large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 55 | ||||||||
FRANKLIN FTSE GERMANY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 877.80 | $ | 0.42 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 56 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Hong Kong ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Hong Kong RIC Capped Index (the FTSE Hong Kong Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Hong Kong Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -15.13% based on market price and -14.41% based on net asset value. In comparison, the FTSE Hong Kong Capped Index posted a -14.36% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 59.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Hong Kong Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Insurance | 20.5% | |||
Real Estate Management & Development | 16.5% | |||
Capital Markets | 11.6% | |||
Industrial Conglomerates | 6.2% | |||
Banks | 5.8% | |||
Electric Utilities | 5.5% | |||
Hotels, Restaurants & Leisure | 4.8% | |||
Machinery | 3.9% | |||
Equity Real Estate Investment Trusts (REITs) | 3.6% | |||
Food Products | 3.1% | |||
replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities
in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Hong Kong Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Hong Kong Capped Index is based on the FTSE Hong Kong Index and is designed to measure the performance of Hong Kong large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 247.
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FRANKLIN FTSE HONG KONG ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
AIA Group Ltd. Insurance, Hong Kong | 20.5% | |||
Hong Kong Exchanges and Clearing Ltd. Capital Markets, Hong Kong | 11.5% | |||
Techtronic Industries Co. Ltd. Machinery, Hong Kong | 3.9% | |||
CK Hutchison Holdings Ltd. Industrial Conglomerates, United Kingdom | 3.8% | |||
Link REIT Equity Real Estate Investment Trusts (REITs), Hong Kong | 3.5% | |||
Sun Hung Kai Properties Ltd. Real Estate Management & Development, Hong Kong | 3.2% | |||
CLP Holdings Ltd. Electric Utilities, Hong Kong | 3.1% | |||
Hang Seng Bank Ltd. Banks, Hong Kong | 2.7% | |||
BOC Hong Kong (Holdings) Ltd. Banks, China | 2.6% | |||
CK Asset Holdings Ltd. Real Estate Management & Development, Hong Kong | 2.6% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the only sector that contributed to the Fund’s absolute performance was communication services. Individual holdings that lifted the Fund’s absolute return included BOC Hong Kong (Holdings), CK Asset Holdings and Power Assets Holdings.
For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, consumer discretionary and health care. Individual holdings that hindered the Fund’s absolute return included Hong Kong Exchanges and Clearing, AIA Group and BeiGene.
Thank you for your participation in Franklin FTSE Hong Kong ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 58 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE HONG KONG ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -14.41% | -15.13% | -14.41% | -15.13% | ||||||||||||
3-Year | -4.45% | -4.94% | -1.51% | �� | -1.68% | |||||||||||
Since Inception (11/2/17) | +4.02% | +4.01% | +0.90% | +0.90% | ||||||||||||
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 61 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 59 | ||||||||
FRANKLIN FTSE HONG KONG ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 61 for Performance Summary footnotes.
| 60 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE HONG KONG ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.690770 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Hong Kong issuers involve risks that are specific to Hong Kong, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Hong Kong Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Hong Kong Capped Index is based on the FTSE Hong Kong Index and is designed to measure the performance of Hong Kong large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 61 | ||||||||
FRANKLIN FTSE HONG KONG ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 927.40 | $ | 0.43 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 62 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE India ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE India RIC Capped Index (the FTSE India Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE India Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +13.89% based on market price and +15.75% based on net asset value. In comparison, the FTSE India Capped Index posted a +18.30% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 65.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE India Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
IT Services | 18.2% | |||
Oil, Gas & Consumable Fuels | 13.3% | |||
Banks | 6.1% | |||
Thrifts & Mortgage Finance | 5.4% | |||
Automobiles | 4.5% | |||
Metals & Mining | 4.5% | |||
Chemicals | 4.4% | |||
Pharmaceuticals | 4.0% | |||
Consumer Finance | 3.3% | |||
Construction Materials | 2.8% | |||
the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE India Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE India Capped Index is based on the FTSE India Index and is designed to measure the performance of Indian large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 251.
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FRANKLIN FTSE INDIA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
| Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India | 10.7% | |||
| Infosys Ltd. IT Services, India | 8.4% | |||
| Housing Development Finance Corp. Ltd. Thrifts & Mortgage Finance, India | 5.2% | |||
| Tata Consultancy Services Ltd. IT Services, India | 4.8% | |||
| Hindustan Unilever Ltd. Household Products, India | 2.3% | |||
| Axis Bank Ltd. Banks, India | 2.1% | |||
| Bharti Airtel Ltd. Wireless Telecommunication Services, India | 2.1% | |||
| Bajaj Finance Ltd. Consumer Finance, India | 2.1% | |||
| Asian Paints Ltd. Chemicals, India | 1.7% | |||
| HCL Technologies Ltd. IT Services, India | 1.6% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were information technology, energy and materials. Individual holdings that lifted the Fund’s absolute return included Infosys, Reliance Industries and Bharti Airtel.
For the same period, no sectors detracted from the Fund’s absolute performance. Individual holdings that hindered the Fund’s absolute return included Hindustan Unilever, Housing Development Finance and HDFC Life Insurance.
Thank you for your participation in Franklin FTSE India ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 64 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE INDIA ETF
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 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 or redemption 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 mutual 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 (2/9/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +15.75% | +13.89% | +15.75% | +13.89% | ||||||||||||
3-Year | +39.70% | +38.52% | +11.79% | +11.47% | ||||||||||||
Since Inception (2/6/18) | +38.83% | +38.07% | +8.24% | +8.09% | ||||||||||||
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 67 for Performance Summary footnotes.
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FRANKLIN FTSE INDIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
2/6/18–3/31/22
See page 67 for Performance Summary footnotes.
| 66 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE INDIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.720710 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. There are special risks associated with investments in India, including exposure to currency fluctuations, less liquidity, expropriation, confiscatory taxation, and exchange control regulations (including currency blockage). Investments in securities of Indian issuers involve risks that are specific to India, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE India Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE India Capped Index is based on the FTSE India Index and is designed to measure the performance of Indian large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 67 | ||||||||
FRANKLIN FTSE INDIA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/21 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 976.60 | $ | 0.94 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
| 68 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Italy ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Italy RIC Capped Index (the FTSE Italy Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Italy Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -4.13% based on market price and -3.15% based on net asset value. In comparison, the FTSE Italy Capped Index posted a -3.39% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 71.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Italy Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 17.4% | |||
Electric Utilities | 14.5% | |||
Automobiles | 13.7% | |||
Insurance | 8.6% | |||
Oil, Gas & Consumable Fuels | 8.1% | |||
Machinery | 5.0% | |||
Gas Utilities | 4.1% | |||
IT Services | 3.4% | |||
Textiles, Apparel & Luxury Goods | 3.1% | |||
Transportation Infrastructure | 2.8% | |||
the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Italy Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Italy Capped Index is based on the FTSE Italy Index and is designed to measure the performance of Italian large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 256.
| franklintempleton.com | Annual Report | 69 | ||||||||
FRANKLIN FTSE ITALY ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
| Enel SpA Electric Utilities, Italy | 11.3% | |||
| Intesa Sanpaolo SpA Banks, Italy | 8.5% | |||
| Eni SpA Oil, Gas & Consumable Fuels, Italy | 8.1% | |||
| Stellantis NV Automobiles, United States | 7.4% | |||
| Assicurazioni Generali SpA Insurance, Italy | 6.8% | |||
| Ferrari NV Automobiles, Italy | 6.3% | |||
| UniCredit SpA Banks, Italy | 4.4% | |||
| CNH Industrial NV Machinery, United Kingdom | 3.5% | |||
| Snam SpA Gas Utilities, Italy | 3.2% | |||
| Terna – Rete Elettrica Nazionale Electric Utilities, Italy |
| 3.2% |
| |
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were energy, industrials and health care. Individual holdings that lifted the Fund’s absolute return included Eni, Assicurazioni Generali and CNH Industrial.
For the same period, the sectors that detracted most from the Fund’s absolute performance were utilities, information technology and communication services. Individual holdings that hindered the Fund’s absolute return included Enel, Nexi and Intesa Sanpaolo.
Thank you for your participation in Franklin FTSE Italy ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 70 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE ITALY ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -3.15% | -4.13% | -3.15% | -4.13% | ||||||||||||
3-Year | +18.55% | +17.27% | +5.84% | +5.45% | ||||||||||||
Since Inception (11/2/17) | +10.50% | +9.59% | +2.29% | +2.10% | ||||||||||||
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 73 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 71 | ||||||||
FRANKLIN FTSE ITALY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 73 for Performance Summary footnotes.
| 72 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE ITALY ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$1.108353 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Italian issuers involve risks that are specific to Italy, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Italy Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Italy Capped Index is based on the FTSE Italy Index and is designed to measure the performance of Italian large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 73 | ||||||||
FRANKLIN FTSE ITALY ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 944.10 | $ | 0.44 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
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This annual report for Franklin FTSE Japan ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan RIC Capped Index (the FTSE Japan Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Japan Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -8.77% based on market price and -7.21% based on net asset value. In comparison, the FTSE Japan Capped Index posted a -7.11% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 77.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Automobiles | 7.8% | |||
Electronic Equipment, Instruments & Components | 5.3% | |||
Pharmaceuticals | 5.2% | |||
Machinery | 5.0% | |||
Banks | 5.0% | |||
Trading Companies & Distributors | 4.6% | |||
Household Durables | 4.6% | |||
Chemicals | 4.4% | |||
Semiconductors & Semiconductor Equipment | 3.6% | |||
Wireless Telecommunication Services | 3.5% | |||
replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Index is based on the FTSE Japan Index and is designed to measure the performance of Japanese large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 258.
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FRANKLIN FTSE JAPAN ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
| Toyota Motor Corp. Automobiles, Japan | 5.4% | |||
| Sony Corp. Household Durables, Japan | 3.1% | |||
| Keyence Corp. Electronic Equipment, Instruments & Components, Japan | 2.1% | |||
| Tokyo Electron Ltd. Semiconductors & Semiconductor Equipment, Japan | 1.9% | |||
| Mitsubishi UFJ Financial Group Inc. Banks, Japan | 1.8% | |||
| Recruit Holdings Co. Ltd. Professional Services, Japan | 1.5% | |||
| Shin-Etsu Chemical Co. Ltd. Chemicals, Japan | 1.5% | |||
| SoftBank Group Corp. Wireless Telecommunication Services, Japan | 1.4% | |||
| KDDI Corp. Wireless Telecommunication Services, Japan | 1.3% | |||
| Nintendo Co. Ltd. Entertainment, Japan | 1.3% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed to the Fund’s absolute performance were financials and energy. Individual holdings that lifted the Fund’s absolute return included Toyota Motor, Tokyo Electron and Mitsubishi UFJ Financial Group.
For the same period, the sectors that detracted most from the Fund’s absolute performance were health care, industrials and communication services. Individual holdings that hindered the Fund’s absolute return included SoftBank Group, Nidec and Fast Retailing.
Thank you for your participation in Franklin FTSE Japan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
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FRANKLIN FTSE JAPAN ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -7.21% | -8.77% | -7.21% | -8.77% | ||||||||||||
3-Year | +20.82% | +19.14% | +6.51% | +6.01% | ||||||||||||
Since Inception (11/2/17) | +14.48% | +13.17% | +3.12% | +2.85% | ||||||||||||
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 79 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 79 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.704939 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Japanese issuers involve risks that are specific to Japan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Index is based on the FTSE Japan Index and is designed to measure the performance of Japanese large and mid-capitalization stocks.
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.
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FRANKLIN FTSE JAPAN ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/21 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 893.90 | $ | 0.42 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
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Franklin FTSE Japan Hedged ETF
This annual report for Franklin FTSE Japan Hedged ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan RIC Capped Hedged to USD Index (the FTSE Japan Capped Hedged Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Japan Capped Hedged Index and in depositary receipts representing such securities, including indirectly through Franklin FTSE Japan ETF (Underlying Fund).
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +0.75% based on market price and +1.93% based on net asset value. In comparison, the FTSE Japan Capped Hedged Index posted a +2.01% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 83.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan Capped Hedged Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Automobiles | 7.9% | |||
Machinery | 5.4% | |||
Electronic Equipment, Instruments & Components | 5.2% | |||
Pharmaceuticals | 5.2% | |||
Banks | 5.1% | |||
Trading Companies & Distributors | 4.6% | |||
Household Durables | 4.6% | |||
Chemicals | 4.3% | |||
Wireless Telecommunication Services | 3.5% | |||
Semiconductors & Semiconductor Equipment | 3.5% | |||
Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. We intend to enter into monthly foreign currency forward contracts and/or currency futures contracts designed to offset the Fund’s exposure to the Japanese yen, in order to replicate the hedge impact incorporated in the calculation of the Underlying Index. The Fund’s exposure to foreign currency forward contracts and currency futures contracts is based on the aggregate exposure of the Fund to the Japanese yen.
1. The FTSE Japan Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Hedged Index is based on the FTSE Japan Hedged to USD Index and is designed to measure the performance of Japanese large- and mid-capitalization stocks. The FTSE Japan Capped Hedged Index incorporates a hedge against fluctuations of the Japanese yen by reflecting the impact of rolling monthly currency forward contracts on the Japanese yen.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 269.
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FRANKLIN FTSE JAPAN HEDGED ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
| Toyota Motor Corp. Automobiles, Japan | 5.4% | |||
| Sony Corp. Household Durables, Japan | 3.1% | |||
| Keyence Corp. Electronic Equipment, Instruments & Components, Japan | 2.1% | |||
| Tokyo Electron Ltd. Semiconductors & Semiconductor Equipment, Japan | 1.9% | |||
| Mitsubishi UFJ Financial Group Inc. Banks, Japan | 1.9% | |||
| Recruit Holdings Co. Ltd. Professional Services, Japan | 1.5% | |||
| Shin-Etsu Chemical Co. Ltd. Chemicals, Japan | 1.5% | |||
| SoftBank Group Corp. Wireless Telecommunication Services, Japan | 1.5% | |||
| KDDI Corp. Wireless Telecommunication Services, Japan | 1.3% | |||
| Nintendo Co. Ltd. Entertainment, Japan | 1.3% | |||
The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed to the Fund’s absolute performance were financials and energy. Individual holdings that lifted the Fund’s absolute return included Toyota Motor, Mitsubishi UFJ Financial Group and Tokyo Electron.
For the same period, the sectors that detracted most from the Fund’s absolute performance were health care, industrials and communication services. Individual holdings that hindered the Fund’s absolute return included SoftBank Group, Nidec and Daiichi Sankyo.
Thank you for your participation in Franklin FTSE Japan Hedged ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 82 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE JAPAN HEDGED ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +1.93% | +0.75% | +1.93% | +0.75% | ||||||||||||
3-Year | +35.40% | +34.41% | +10.63% | +10.36% | ||||||||||||
Since Inception (11/2/17) | +27.88% | +27.09% | +5.74% | +5.59% | ||||||||||||
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 85 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN HEDGED ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 85 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.406233 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Japanese issuers involve risks that are specific to Japan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio, which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s currency hedging approach is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the currencies. The return of currency-related derivatives will not perfectly offset the actual fluctuations between the currencies and the U.S. dollar. The Fund’s exposure to the currencies may not be hedged at all times. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Japan Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Hedged Index is based on the FTSE Japan Hedged to USD Index and is designed to measure the performance of Japanese large- and mid-capitalization stocks. The FTSE Japan Capped Hedged Index incorporates a hedge against fluctuations of the Japanese yen by reflecting the impact of rolling monthly currency forward contracts on the Japanese yen.
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.
| franklintempleton.com | Annual Report | 85 | ||||||||
FRANKLIN FTSE JAPAN HEDGED ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 972.80 | $ | 0.44 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
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Franklin FTSE Latin America ETF
This annual report for Franklin FTSE Latin America ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Latin America RIC Capped Index (the FTSE Latin America Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Latin America Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +20.77% based on market price and +21.12% based on net asset value. In comparison, the FTSE Latin America Capped Index posted a +21.20% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 89.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Latin America Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 17.7% | |||
Metals & Mining | 16.2% | |||
Oil, Gas & Consumable Fuels | 11.9% | |||
Beverages | 5.1% | |||
Food & Staples Retailing | 4.7% | |||
Electric Utilities | 4.6% | |||
Wireless Telecommunication Services | 4.4% | |||
Food Products | 3.9% | |||
Capital Markets | 3.5% | |||
Chemicals | 2.5% | |||
replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Latin America Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Latin America Capped Index is based on the FTSE Latin America Index and is designed to measure the performance of Latin American large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 280.
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FRANKLIN FTSE LATIN AMERICA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
Vale SA Metals & Mining, Brazil | 11.0% | |||
Petroleo Brasileiro SA Oil, Gas & Consumable Fuels, Brazil | 8.9% | |||
America Movil SAB de CV, L Wireless Telecommunication Services, Mexico | 4.1% | |||
Itau Unibanco Holding SA Banks, Brazil | 4.0% | |||
Banco Bradesco SA Banks, Brazil | 3.7% | |||
Grupo Financiero Banorte SAB de CV, O Banks, Mexico | 2.9% | |||
Wal-Mart de Mexico SAB de CV Food & Staples Retailing, Mexico | 2.8% | |||
B3 SA – Brasil Bolsa Balcao Capital Markets, Brazil | 2.7% | |||
Grupo Mexico SAB de CV, B Metals & Mining, Mexico | 2.5% | |||
Fomento Economico Mexicano SAB de CV Beverages, Mexico | 2.0% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were energy, materials and financials. Individual holdings that lifted the Fund’s absolute return included Petroleo Brasileiro, Vale and America Movil.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, health care and real estate. Individual holdings that hindered the Fund’s absolute return included Magazine Luiza, Natura & Co. Holding and Cemex.
| Country Composition | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Brazil | 64.4% | |||
Mexico | 25.0% | |||
Chile | 6.1% | |||
Colombia | 2.6% | |||
United States | 1.5% | |||
Panama | 0.0% | * | ||
*Rounds to less than 0.1%.
Thank you for your participation in Franklin FTSE Latin America ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 88 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE LATIN AMERICA ETF
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 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 or redemption 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 mutual 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 (10/11/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +21.12% | +20.77% | +21.12% | +20.77% | ||||||||||||
3-Year | +8.70% | +9.19% | +2.82% | +2.98% | ||||||||||||
Since Inception (10/9/18) | +10.24% | +10.49% | +2.85% | +2.91% | ||||||||||||
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 91 for Performance Summary footnotes.
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FRANKLIN FTSE LATIN AMERICA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
10/9/18–3/31/22
See page 91 for Performance Summary footnotes.
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FRANKLIN FTSE LATIN AMERICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.521500 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of issuers in Latin American countries involve risks that are specific to Latin America, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Latin America Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Latin America Capped Index is based on the FTSE Latin America Index and is designed to measure the performance of Latin American large- and mid-capitalization stocks.
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.
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FRANKLIN FTSE LATIN AMERICA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,219.40 | $ | 1.05 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
| 92 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Mexico ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Mexico RIC Capped Index (the FTSE Mexico Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Mexico Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +28.10% based on market price and +28.33% based on net asset value. In comparison, the FTSE Mexico Capped Index posted a +28.31% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 95.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Mexico Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying
Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Mexico Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Mexico Capped Index is based on the FTSE Mexico Index and is designed to measure the performance of Mexican large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 286.
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| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 19.0% | |||
Wireless Telecommunication Services | 15.8% | |||
Food & Staples Retailing | 11.8% | |||
Metals & Mining | 10.9% | |||
Beverages | 9.0% | |||
Transportation Infrastructure | 8.5% | |||
Food Products | 5.1% | |||
Construction Materials | 4.0% | |||
Media | 3.6% | |||
Equity Real Estate Investment Trusts (REITs) | 3.2% | |||
FRANKLIN FTSE MEXICO ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
America Movil SAB de CV, L Wireless Telecommunication Services, Mexico | 15.8% | |||
Grupo Financiero Banorte SAB de CV, O Banks, Mexico | 11.3% | |||
Wal-Mart de Mexico SAB de CV Food & Staples Retailing, Mexico | 11.0% | |||
Grupo Mexico SAB de CV, B Metals & Mining, Mexico | 9.8% | |||
Fomento Economico Mexicano SAB de CV Beverages, Mexico | 4.2% | |||
Cemex SAB de CV Construction Materials, Mexico | 3.2% | |||
Grupo Aeroportuario del Pacifico SAB de CV, B Transportation Infrastructure, Mexico | 3.2% | |||
Grupo Bimbo SAB de CV, A Food Products, Mexico | 3.1% | |||
Grupo Televisa SAB Media, Mexico | 3.0% | |||
Grupo Aeroportuario del Sureste SAB de CV, B Transportation Infrastructure, Mexico | 2.8% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were communication services, consumer staples and financials. Individual holdings that lifted the Fund’s absolute return included America Movil, Grupo Financiero Banorte and Wal-Mart de Mexico.
For the same period, no sectors detracted from the Fund’s absolute performance. Individual holdings that hindered the Fund’s absolute return included Cemex, Controladora Vuela Cia de Aviacion and Kimberly-Clark de Mexico.
Thank you for your participation in Franklin FTSE Mexico ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 94 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE MEXICO ETF
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 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 or redemption 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 mutual 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 (11/7/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +28.33% | +28.10% | +28.33% | +28.10% | ||||||||||||
3-Year | +34.67% | +35.78% | +10.43% | +10.73% | ||||||||||||
Since Inception (11/3/17) | +22.94% | +23.17% | +4.80% | +4.84% | ||||||||||||
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 97 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 95 | ||||||||
FRANKLIN FTSE MEXICO ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/3/17–3/31/22
See page 97 for Performance Summary footnotes.
| 96 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE MEXICO ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.785980 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risk related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in Mexican issuers involve risks that are specific to Mexico, including certain legal, regulatory, political, currency, security and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Mexico Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Mexico Capped Index is based on the FTSE Mexico Index and is designed to measure the performance of Mexican large- and mid-capitalization stocks.
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.
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FRANKLIN FTSE MEXICO ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,158.20 | $ | 1.02 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
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This annual report for Franklin FTSE Russia ETF covers the fiscal year ended March 31, 2022. Effective March 1, 2022, the Fund suspended new creations of its shares effective until further notice in light of ongoing issues related to Russia’s invasion of Ukraine. In addition, effective March 4, 2022, NYSE Arca, Inc., the Fund’s primary listing exchange, halted trading of the Fund. Since trading in the Fund’s shares is halted, the Fund no longer has a daily closing price, and a premium/discount to NAV cannot be calculated. Additionally, the value and liquidity of Russian securities and the Russian currency have experienced significant declines, and the Fund is primarily holding cash due to the circumstances related to the conflict. The Russian securities markets did not open for trading on February 28, 2022, and were closed for a period of time before reopening on March 24, 2022, but significant trading limitations have remained. It is impossible to predict when, or if, these circumstances may change. During this time, including while it is primarily holding cash, the Fund will not meet its investment goal and will experience increased tracking error. Further, when the Fund’s shares resume trading on NYSE Arca, Inc., the Fund may experience significant premiums or discounts to the Fund’s net asset value (NAV) and wider bid-ask spreads. Please see below for further discussion of the impact of the Russian/Ukrainian conflict on the Fund as well as related risks.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Russia RIC Capped Index (the FTSE Russia Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Russia Capped Index and in depositary receipts representing such securities.
| Top 10 Sectors/Industries | ||
| 3/31/22 | ||
This disclosure has not been included as all securities of the Fund are valued at zero as of March 31, 2022. As noted, due to the circumstances surrounding the Russian invasion of Ukraine, the Fund is primarily holding cash. Please refer to Note 6 under Notes to Financial Statements.
| Top 10 Holdings | ||
| 3/31/22 | ||
This disclosure has not been included as all securities of the Fund are valued at zero as of March 31, 2022. As noted, due to the circumstances surrounding the Russian invasion of Ukraine, the Fund is primarily holding cash. Please refer to Note 6 under Notes to Financial Statements.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -64.74% based on market price and -100.00% based on net asset value. In comparison, the FTSE Russia Capped Index posted a -31.28% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 101.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Russia Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and
1. The FTSE Russia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Russia Capped Index is based on the FTSE Russia Index and is designed to measure the performance of Russian large- and mid-capitalization stocks. FTSE Russell has temporarily suspended rebalancings/reconstitutions of the FTSE Russia Capped Index, including application of the capping methodology.
2. Source: FactSet. The Fund’s returns based on net asset value include the Fund’s valuation of its Russian securities based on fair value prices. The value of the FTSE Russia Capped Index, on the other hand, is based on securities’ last closing prices on local foreign markets (i.e., the value of the FTSE Russia Capped Index is not based on fair value prices). With regards to the Fund’s returns based on market price, the Fund suspended new creations of its shares effective March 1, 2022, and NYSE Arca, Inc. halted trading of the Fund effective March 4, 2022. Therefore, from March 4, 2022, through March 31, 2022, the Fund did not have a daily closing market price.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 288.
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FRANKLIN FTSE RUSSIA ETF
expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
Manager’s Discussion
For the fiscal year ended March 31, 2022, no sectors or holdings contributed to the Fund’s absolute performance, as all holdings other than cash received a fair valuation of $0.00 following Russia’s invasion of Ukraine during the reporting period.
For the same period prior to the Russian invasion of Ukraine and fair valuation described above, the sectors that detracted most from the Fund’s absolute performance were energy, materials and utilities. Individual holdings that hindered the Fund’s absolute return included Gazprom, LUKOIL and MMC Norilsk Nickel.
Thank you for your participation in Franklin FTSE Russia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
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FRANKLIN FTSE RUSSIA ETF
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 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 or redemption 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 mutual 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 (2/9/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -100.00% | -64.74% | -100.00% | -64.74% | ||||||||||||
3-Year | -100.00% | -53.80% | -100.00% | -22.69% | ||||||||||||
Since Inception (2/6/18) | -100.00% | -53.30% | -100.00% | -16.78% | ||||||||||||
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 103 for Performance Summary footnotes.
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FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
2/6/18–3/31/22
See page 103 for Performance Summary footnotes.
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FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.383319 |
Total Annual Operating Expenses5,6
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Russian issuers involve significant risks that are specific to Russia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 has increased volatility and uncertainty in the financial markets and adversely affected the Fund. The United States and other countries and certain international organizations have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to Russia’s invasion of Ukraine. These sanctions froze certain Russian assets and prohibited, among other things, trading in certain Russian securities and doing business with specific Russian corporate entities, large financial institutions, officials and oligarchs. The sanctions also included the removal of some Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), the electronic network that connects banks globally, and imposed restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. A number of large corporations and U.S. states have also announced plans to divest interests or otherwise curtail business dealings with certain Russian businesses. In response, the government of Russia has imposed capital controls to restrict movements of capital entering and exiting the country. These sanctions and any additional sanctions or other intergovernmental actions that may be undertaken against Russia in the future may result in the devaluation of the Russian currency, a downgrade in the country’s credit rating, and a decline in the value and liquidity of Russian securities. These, as well as any other economic consequences to Russia, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on the Russian government, companies or individuals, along with any retaliatory actions or countermeasures that may be taken by Russia (including cyberattacks on other governments, corporations or individuals), may further decrease the value and liquidity of Russian securities.
As a result, the Fund’s ability to price, buy, sell, receive or deliver Russian investments has been impaired. For example, the Fund may be prohibited from investing in or acquiring securities issued by companies subject to such sanctions. In addition, the sanctions may require the Fund to freeze its existing investments in companies operating in or having dealings with Russia, which would prevent the Fund from selling or delivering these investments. Further, any exposure that the Fund may have to Russian counterparties could negatively impact the Fund’s portfolio. The liquidation of Fund assets during this time may also result in the Fund receiving substantially lower prices for its securities. The extent and duration of Russia’s military actions and the repercussions of such actions are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events have adversely affected the value and liquidity of the Fund’s holdings and may continue to significantly impact the Fund’s performance and the value of an investment in the Fund. The Fund’s Underlying Index may also remove securities as a result of the actions described above. Unusual market conditions may cause the index provider of the Underlying Index to postpone a scheduled rebalance or reconstitution, which could cause the Underlying Index to vary from its normal or expected composition. Additionally, due to current and potential future sanctions or market closures impacting the ability to trade or transfer Russian securities, the Fund may experience higher transaction costs. During this time, the Fund will not meet its investment goal and will experience increased tracking error. Further, when the Fund’s shares resume trading on NYSE Arca, Inc., the Fund may experience significant premiums or discounts to the Fund’s net asset value (NAV) and wider bid-ask spreads.
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. 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.
2. Assumes reinvestment of distributions based on net asset value. The Fund’s returns based on net asset value include the Fund’s valuation of its Russian securities based on fair value prices.
3. Assumes reinvestment of distributions based on market price. Regarding the Fund’s returns based on market price, the Fund suspended new creations of its shares effective March 1, 2022, and NYSE Arca, Inc. halted trading of the Fund effective March 4, 2022. Therefore, from March 4, 2022, through March 31, 2022, the Fund did not have a daily closing market price.
4. Source: FactSet. The FTSE Russia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Russia Capped Index is based on the FTSE Russia Index and is designed to measure the performance of Russian large and mid-capitalization stocks. The Fund’s returns based on net asset value include the Fund’s valuation of its Russian securities based on fair value prices. The value of the FTSE Russia Capped Index, on the other hand, is based on securities’ last closing prices on local foreign markets (i.e., the value of the FTSE Russia Capped Index is not based on fair value prices). FTSE Russell has temporarily suspended rebalancings/reconstitutions of the FTSE Russia Capped Index, including application of the capping methodology.
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.
6. Effective March 1, 2022, Franklin Advisory Services, LLC (the Fund’s investment manager) has implemented a voluntary waiver of its management fee for the Fund. This voluntary waiver may be eliminated by the investment manager at any time.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN FTSE RUSSIA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2,3 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2,3 | |||||||||||||||||
| $1,000.00 | $ | 0.00 | $ | 0.95 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
3. “Effective March 1, 2022, Franklin Advisory Services, LLC (the fund’s investment manager) has implemented a voluntary waiver of its management fee for the Fund. This voluntary waiver may be eliminated by the investment manager at any time”.
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Franklin FTSE Saudi Arabia ETF
This annual report for Franklin FTSE Saudi Arabia ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Saudi Arabia RIC Capped Index (the FTSE Saudi Arabia Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Saudi Arabia Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +37.99% based on market price and +38.99% based on net asset value. In comparison, the FTSE Saudi Arabia Capped Index posted a +39.44% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 107.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Saudi Arabia Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of
the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Saudi Arabia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Saudi Arabia Capped Index is based on the FTSE Saudi Arabia Index and is designed to measure the performance of Saudi Arabian large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 290.
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| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Banks | 43.9% | |||
Chemicals | 18.6% | |||
Oil, Gas & Consumable Fuels | 8.6% | |||
Diversified Telecommunication Services | 5.7% | |||
Metals & Mining | 4.8% | |||
Health Care Providers & Services | 2.8% | |||
Food Products | 2.2% | |||
Wireless Telecommunication Services | 1.9% | |||
Electric Utilities | 1.8% | |||
Independent Power and Renewable Electricity Producers | 1.7% | |||
FRANKLIN FTSE SAUDI ARABIA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
Al-Rajhi Bank Banks, Saudi Arabia | 13.8% | |||
Saudi National Bank Banks, Saudi Arabia | 11.0% | |||
Saudi Arabian Oil Co., 144A Oil, Gas & Consumable Fuels, Saudi Arabia | 8.0% | |||
Saudi Basic Industries Corp. Chemicals, Saudi Arabia | 7.9% | |||
Saudi Telecom Co. Diversified Telecommunication Services, Saudi Arabia | 5.7% | |||
Saudi Arabian Mining Co. Metals & Mining, Saudi Arabia | 4.8% | |||
Riyad Bank Banks, Saudi Arabia | 4.7% | |||
Alinma Bank Banks, Saudi Arabia | 3.4% | |||
Saudi British Bank Banks, Saudi Arabia | 3.2% | |||
Saudi Arabian Fertilizer Co. Chemicals, Saudi Arabia | 3.2% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were financials, materials and energy. Individual holdings that lifted the Fund’s absolute return included Al-Rajhi Bank, Saudi National Bank and Saudi Arabian Mining.
For the same period, the sectors that detracted from the Fund’s absolute performance were consumer staples and information technology. Individual holdings that hindered the Fund’s absolute return included Saudi Telecom, Southern Province Cement and Mobile Telecommunications Co. Saudi Arabia.
Thank you for your participation in Franklin FTSE Saudi Arabia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
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FRANKLIN FTSE SAUDI ARABIA ETF
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 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 or redemption 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 mutual 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 (10/11/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +38.99% | +37.99% | +38.99% | +37.99% | ||||||||||||
3-Year | +59.57% | +57.04% | +16.86% | +16.23% | ||||||||||||
Since Inception (10/9/18) | +80.10% | +80.11% | +18.46% | +18.46% | ||||||||||||
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 109 for Performance Summary footnotes.
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FRANKLIN FTSE SAUDI ARABIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
10/9/18–3/31/22
See page 109 for Performance Summary footnotes.
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FRANKLIN FTSE SAUDI ARABIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.683759 |
Total Annual Operating Expenses5
0.39% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Saudi Arabian issuers involve risks that are specific to Saudi Arabia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Saudi Arabia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Saudi Arabia Capped Index is based on the FTSE Saudi Arabia Index and is designed to measure the performance of Saudi Arabian large- and mid-capitalization stocks.
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.
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FRANKLIN FTSE SAUDI ARABIA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/21 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Ending Account | Expenses Paid During 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,171.40 | $ | 2.11 | $ | 1,022.99 | $ | 1.97 | 0.39 | % | ||||||||||||
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.
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Franklin FTSE South Africa ETF
This annual report for Franklin FTSE South Africa ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE/JSE South Africa RIC Capped Index (the FTSE/JSE South Africa Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE/JSE South Africa Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +16.31% based on market price and +16.82% based on net asset value. In comparison, the FTSE/JSE South Africa Capped Index posted a +17.00% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 113.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE/JSE South Africa Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Metals & Mining | 21.2% | |||
Banks | 14.0% | |||
Diversified Financial Services | 9.6% | |||
Wireless Telecommunication Services | 9.2% | |||
Food & Staples Retailing | 7.6% | |||
Internet & Direct Marketing Retail | 7.4% | |||
Insurance | 7.0% | |||
Chemicals | 4.1% | |||
Specialty Retail | 3.4% | |||
Equity Real Estate Investment Trusts (REITs) | 2.5% | |||
Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE/JSE South Africa Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE/JSE South Africa Capped Index is based on the FTSE South Africa Index and is designed to measure the performance of South African large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 293.
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| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
| FirstRand Ltd. Diversified Financial Services, South Africa | 8.0% | |||
| Naspers Ltd., N Internet & Direct Marketing Retail, South Africa | 7.4% | |||
| MTN Group Ltd. Wireless Telecommunication Services, South Africa | 7.2% | |||
| Standard Bank Group Ltd. Banks, South Africa | 5.1% | |||
| Gold Fields Ltd. Metals & Mining, South Africa | 4.2% | |||
| Sasol Ltd. Chemicals, South Africa | 4.1% | |||
| Capitec Bank Holdings Ltd. Banks, South Africa | 4.1% | |||
| Impala Platinum Holdings Ltd. Metals & Mining, South Africa | 3.8% | |||
| Sibanye Stillwater Ltd. Metals & Mining, South Africa | 3.5% | |||
| AngloGold Ashanti Ltd. Metals & Mining, South Africa | 3.1% | |||
FRANKLIN FTSE SOUTH AFRICA ETF
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were financials, communication services and materials. Individual holdings that lifted the Fund’s absolute return included MTN Group, FirstRand and Gold Fields.
For the same period, the only sector that detracted from the Fund’s absolute performance was consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Naspers, Impala Platinum Holdings and Northam Platinum.
Thank you for your participation in Franklin FTSE South Africa ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 112 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE SOUTH AFRICA ETF
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 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 or redemption 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 mutual 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 (10/11/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +16.82% | +16.31% | +16.82% | +16.31% | ||||||||||||
3-Year | +33.17% | +32.58% | +10.02% | +9.86% | ||||||||||||
Since Inception (10/10/18) | +45.51% | +45.41% | +11.41% | +11.39% | ||||||||||||
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 115 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 113 | ||||||||
FRANKLIN FTSE SOUTH AFRICA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
10/10/18–3/31/22
See page 115 for Performance Summary footnotes.
| 114 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE SOUTH AFRICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.724156 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of South African issuers involve risks that are specific to South Africa, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE/JSE South Africa Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE/JSE South Africa Capped Index is based on the FTSE South Africa Index and is designed to measure the performance of South African large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 115 | ||||||||
FRANKLIN FTSE SOUTH AFRICA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,194.30 | $ | 1.04 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
| 116 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE South Korea ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE South Korea RIC Capped Index (the FTSE South Korea Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE South Korea Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -18.78% based on market price and -17.15% based on net asset value. In comparison, the FTSE South Korea Capped Index posted a -17.10% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 119.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE South Korea Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE South Korea Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE South Korea Capped Index is based on the FTSE South Korea Index and is designed to measure the performance of South Korean large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 296.
| franklintempleton.com | Annual Report | 117 | ||||||||
FRANKLIN FTSE SOUTH KOREA ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
| Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea | 19.1% | |||
| SK Hynix Inc. Semiconductors & Semiconductor Equipment, South Korea | 6.3% | |||
| Naver Corp. Interactive Media & Services, South Korea | 4.8% | |||
| Samsung SDI Co. Ltd. Electronic Equipment, Instruments & Components, South Korea | 3.3% | |||
| Hyundai Motor Co. Automobiles, South Korea | 3.1% | |||
| Kakao Corp. Interactive Media & Services, South Korea | 3.0% | |||
| LG Chem Ltd. Chemicals, South Korea | 2.8% | |||
| KB Financial Group Inc. Banks, South Korea | 2.5% | |||
| Shinhan Financial Group Co. Ltd. Banks, South Korea | 2.1% | |||
| Kia Motors Corp. Automobiles, South Korea | 2.0% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the only sector that contributed to the Fund’s absolute performance was financials. Individual holdings that lifted the Fund’s absolute return included Woori Financial Group, LG Innotek and KB Financial Group.
For the same period, the sectors that detracted most from the Fund’s absolute performance were information technology, consumer discretionary and health care. Individual holdings that hindered the Fund’s absolute return included Samsung Electronics, LG Chem and Celltrion.
Thank you for your participation in Franklin FTSE South Korea ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 118 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE SOUTH KOREA ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | -17.15% | -18.78% | -17.15% | -18.78% | ||||||||||||
3-Year | +27.24% | +27.02% | +8.36% | +8.30% | ||||||||||||
Since Inception (11/2/17) | +7.78% | +6.84% | +1.71% | +1.51% | ||||||||||||
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 121 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 119 | ||||||||
FRANKLIN FTSE SOUTH KOREA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 121 for Performance Summary footnotes.
| 120 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE SOUTH KOREA ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
Net Investment Income |
$0.588976 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of South Korean issuers involve risks that are specific to South Korea, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE South Korea Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE South Korea Capped Index is based on the FTSE South Korea Index and is designed to measure the performance of South Korean large- and mid-capitalization stocks.
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.
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FRANKLIN FTSE SOUTH KOREA ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 894.90 | $ | 0.43 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
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This annual report for Franklin FTSE Switzerland ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Switzerland RIC Capped Index (the FTSE Switzerland Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Switzerland Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +14.19% based on market price and +14.22% based on net asset value. In comparison, the FTSE Switzerland Capped Index posted a +13.92% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 125.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Switzerland Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Pharmaceuticals | 27.7% | |||
Food Products | 21.9% | |||
Insurance | 8.1% | |||
Capital Markets | 7.5% | |||
Chemicals | 6.0% | |||
Textiles, Apparel & Luxury Goods | 4.6% | |||
Health Care Equipment & Supplies | 4.5% | |||
Life Sciences Tools & Services | 3.6% | |||
Electrical Equipment | 3.3% | |||
Machinery | 1.7% | |||
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Switzerland Capped Index is a free float-adjusted market-capitalization weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Switzerland Capped Index is based on the FTSE Switzerland Index and is designed to measure the performance of Swiss large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 301.
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FRANKLIN FTSE SWITZERLAND ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Nestle SA Food Products, Switzerland | 19.8% | |||
Roche Holding AG, Non-Voting Pharmaceuticals, Switzerland | 15.9% | |||
Novartis AG Pharmaceuticals, Switzerland | 10.6% | |||
Zurich Insurance Group AG Insurance, Switzerland | 4.5% | |||
Cie Financiere Richemont SA Textiles, Apparel & Luxury Goods, Switzerland | 4.0% | |||
UBS Group AG Capital Markets, Switzerland | 3.8% | |||
Lonza Group AG Life Sciences Tools & Services, Switzerland | 3.3% | |||
ABB Ltd. Electrical Equipment, Switzerland | 3.3% | |||
Sika AG Chemicals, Switzerland | 3.1% | |||
Givaudan AG Chemicals, Switzerland | 2.3% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were health care, consumer staples and financials. Individual holdings that lifted the fund’s absolute return included Nestle, Roche Holding and Cie Financiere Richemont.
For the same period, the only sector that detracted from the Fund’s absolute performance was information technology. Individual holdings that hindered the Fund’s absolute return included Credit Suisse Group, Logitech International and LafargeHolcim.
Thank you for your participation in Franklin FTSE Switzerland ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 124 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE SWITZERLAND ETF
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 performance table and graphs 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 or redemption 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 mutual 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 (2/9/18), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +14.22% | +14.19% | +14.22% | +14.19% | ||||||||||||
3-Year | +51.06% | +49.94% | +14.74% | +14.46% | ||||||||||||
Since Inception (2/6/18) | +57.26% | +56.35% | +11.54% | +11.39% | ||||||||||||
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 127 for Performance Summary footnotes.
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FRANKLIN FTSE SWITZERLAND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
2/6/18–3/31/22
See page 127 for Performance Summary footnotes.
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FRANKLIN FTSE SWITZERLAND ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.674519 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Swiss issuers involve risks that are specific to Switzerland, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Switzerland Capped Index is a free float-adjusted market-capitalization weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Switzerland Capped Index is based on the FTSE Switzerland Index and is designed to measure the performance of Swiss large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 127 | ||||||||
FRANKLIN FTSE SWITZERLAND ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,054.60 | $ | 0.46 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
| 128 | Annual Report | franklintempleton.com | ||||||||
This annual report for Franklin FTSE Taiwan ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Taiwan RIC Capped Index (the FTSE Taiwan Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Taiwan Capped Index and in depositary receipts representing such securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +5.88% based on market price and +8.72% based on net asset value. In comparison, the FTSE Taiwan Capped Index posted a +9.05% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 131.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Taiwan Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Semiconductors & Semiconductor Equipment | 36.1% | |||
Electronic Equipment, Instruments & Components | 13.3% | |||
Banks | 11.6% | |||
Technology Hardware, Storage & Peripherals | 6.5% | |||
Insurance | 5.8% | |||
Chemicals | 5.4% | |||
Marine | 2.7% | |||
Diversified Financial Services | 2.5% | |||
Diversified Telecommunication Services | 1.8% | |||
Metals & Mining | 1.8% | |||
component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE Taiwan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Taiwan Capped Index is based on the FTSE Taiwan Index and is designed to measure the performance of Taiwanese large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 304.
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FRANKLIN FTSE TAIWAN ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
Company Sector/Industry, Country | % of Total Net Assets | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | 20.2% | |||
| MediaTek Inc. Semiconductors & Semiconductor Equipment, Taiwan | 5.1% | |||
| Hon Hai Precision Industry Co. Ltd. Electronic Equipment, Instruments & Components, Taiwan | 4.8% | |||
| United Microelectronics Corp. Semiconductors & Semiconductor Equipment, Taiwan | 2.4% | |||
| Delta Electronics Inc. Electronic Equipment, Instruments & Components, Taiwan | 2.2% | |||
| Fubon Financial Holding Co. Ltd. Insurance, Taiwan | 2.0% | |||
| CTBC Financial Holding Co. Ltd. Banks, Taiwan | 2.0% | |||
| Cathay Financial Holding Co. Ltd. Insurance, Taiwan | 2.0% | |||
| Nan Ya Plastics Corp. Chemicals, Taiwan | 2.0% | |||
| Formosa Plastics Corp. Chemicals, Taiwan | 2.0% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were financials, industrials and materials. Individual holdings that lifted the Fund’s absolute return included Fubon Financial Holding, Evergreen Marine Corp. Taiwan and Unimicron Technology.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer staples, health care and consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Hon Hai Precision Industry, Largan Precision and Novatek Microelectronics.
Thank you for your participation in Franklin FTSE Taiwan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 130 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE TAIWAN ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +8.72% | +5.88% | +8.72% | +5.88% | ||||||||||||
3-Year | +90.68% | +88.19% | +24.00% | +23.46% | ||||||||||||
Since Inception (11/2/17) | +86.16% | +83.80% | +15.14% | +14.81% | ||||||||||||
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 133 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 131 | ||||||||
FRANKLIN FTSE TAIWAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 133 for Performance Summary footnotes.
| 132 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE TAIWAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$1.073757 |
Total Annual Operating Expenses5
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Taiwanese issuers involve risks that are specific to Taiwan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a Fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE Taiwan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Taiwan Capped Index is based on the FTSE Taiwan Index and is designed to measure the performance of Taiwanese large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 133 | ||||||||
FRANKLIN FTSE TAIWAN ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,017.00 | $ | 0.96 | $ | 1,023.98 | $ | 0.96 | 0.19 | % | ||||||||||||
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.
| 134 | Annual Report | franklintempleton.com | ||||||||
Franklin FTSE United Kingdom ETF
This annual report for Franklin FTSE United Kingdom ETF covers the fiscal year ended March 31, 2022.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE UK RIC Capped Index (the FTSE UK Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE UK Capped Index and in depositary receipts representing such securities.
Performance Overview
For the 12-month period, the Fund posted cumulative total returns of +9.11% based on market price and +10.27% based on net asset value. In comparison, the FTSE UK Capped Index posted a +10.33% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 137.
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.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE UK Capped Index. We seek to achieve, over time, a correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index of 0.95 or better. A figure of 1.00 would indicate perfect correlation. Our
| Top 10 Sectors/Industries | ||||
| 3/31/22 | ||||
| % of Total Net Assets | ||||
Pharmaceuticals | 12.1% | |||
Oil, Gas & Consumable Fuels | 11.4% | |||
Banks | 9.3% | |||
Metals & Mining | 9.2% | |||
Beverages | 4.5% | |||
Personal Products | 4.3% | |||
Tobacco | 4.3% | |||
Insurance | 4.0% | |||
Professional Services | 3.9% | |||
Hotels, Restaurants & Leisure | 3.5% | |||
intention is to replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their respective weightings in the Underlying Index). However, under various circumstances, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a “representative sampling” strategy whereby we would invest in what we believe to be a representative sample of the component securities of the Underlying Index, but may not track the Underlying Index with the same degree of accuracy as would an investment vehicle replicating the entire Underlying Index. Under the representative sampling technique, we will select securities that collectively have an investment profile similar to that of the Underlying Index, including securities that resemble those included in the Underlying Index in terms of risk factors, performance attributes and other characteristics, such as market capitalization and industry weightings. The Fund will concentrate its investments (i.e., hold 25% or more of its net assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.
1. The FTSE UK Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE UK Capped Index is based on the FTSE UK Index and is designed to measure the performance of U.K. large- and mid-capitalization stocks.
2. Source: FactSet.
The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
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 308.
| franklintempleton.com | Annual Report | 135 | ||||||||
FRANKLIN FTSE UNITED KINGDOM ETF
| Top 10 Holdings | ||||
| 3/31/22 | ||||
| Company Sector/Industry, Country | % of Total Net Assets | |||
| Shell PLC Oil, Gas & Consumable Fuels, Netherlands | 7.9% | |||
| AstraZeneca PLC Pharmaceuticals, United Kingdom | 7.7% | |||
| HSBC Holdings PLC Banks, United Kingdom | 5.3% | |||
| Diageo PLC Beverages, United Kingdom | 4.3% | |||
| Unilever PLC Personal Products, United Kingdom | 4.3% | |||
| GlaxoSmithKline PLC Pharmaceuticals, United Kingdom | 4.0% | |||
| British American Tobacco PLC Tobacco, United Kingdom | 3.6% | |||
| BP PLC Oil, Gas & Consumable Fuels, United Kingdom | 3.5% | |||
| Rio Tinto PLC Metals & Mining, Australia | 3.2% | |||
| Glencore PLC Metals & Mining, Switzerland | 3.2% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2022, the sectors that contributed most to the Fund’s absolute performance were energy, health care and materials. Individual holdings that lifted the Fund’s absolute return included AstraZeneca, Shell and Glencore.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, information technology and communication services. Individual holdings that hindered the Fund’s absolute return included Unilever, Flutter Entertainment and Prudential.
Thank you for your participation in Franklin FTSE United Kingdom ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2022, the end of the reporting period. 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.
| 136 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE UNITED KINGDOM ETF
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 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 or redemption 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 mutual 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 (11/6/17), 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 reinvested 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 operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/22
| Cumulative Total Return1 | Average Annual Total Return1 | |||||||||||||||
| Based on NAV2 | Based on market price3 | Based on NAV2 | Based on market price3 | |||||||||||||
1-Year | +10.27% | +9.11% | +10.27% | +9.11% | ||||||||||||
3-Year | +16.52% | +15.66% | +5.23% | +4.97% | ||||||||||||
Since Inception (11/2/17) | +18.02% | +17.34% | +3.83% | +3.69% | ||||||||||||
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 139 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 137 | ||||||||
FRANKLIN FTSE UNITED KINGDOM ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the period shown. It includes any applicable maximum sales charge, Fund expenses, account fees 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.
11/2/17–3/31/22
See page 139 for Performance Summary footnotes.
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FRANKLIN FTSE UNITED KINGDOM ETF
PERFORMANCE SUMMARY
Distributions (4/1/21–3/31/22)
| Net Investment Income |
$0.743002 |
Total Annual Operating Expenses5
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in U.K. countries involve risks that are specific to the U.K., including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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 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 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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s the ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by 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. 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.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. Source: FactSet. The FTSE UK Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE UK Capped Index is based on the FTSE UK Index and is designed to measure the performance of U.K. large- and mid-capitalization stocks.
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.
| franklintempleton.com | Annual Report | 139 | ||||||||
FRANKLIN FTSE UNITED KINGDOM ETF
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 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 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 compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| 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 10/1/21–3/31/221,2 | Ending Account Value 3/31/22 | Expenses Paid During Period 10/1/21–3/31/221,2 | Net Annualized Expense Ratio2 | |||||||||||||||||
| $1,000.00 | $ | 1,049.30 | $ | 0.46 | $ | 1,024.48 | $ | 0.45 | 0.09 | % | ||||||||||||
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.
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FRANKLIN TEMPLETON ETF TRUST
Franklin FTSE Asia ex Japan ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 28.60 | $ | 18.39 | $ | 21.86 | $ | 23.63 | $ | 23.64 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.55 | 0.44 | 0.49 | 0.51 | 0.04 | |||||||||||||||
Net realized and unrealized gains (losses) | (4.31 | ) | 10.21 | (3.46 | ) | (1.82 | ) | (0.05 | ) | |||||||||||
|
| |||||||||||||||||||
Total from investment operations | (3.76 | ) | 10.65 | (2.97 | ) | (1.31 | ) | (0.01 | ) | |||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.62 | ) | (0.44 | ) | (0.50 | ) | (0.46 | ) | — | |||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 24.22 | $ | 28.60 | $ | 18.39 | $ | 21.86 | $ | 23.63 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (13.34)% | 58.16% | (13.88)% | (5.34)% | (0.04)% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | —% | —% | |||||||||||||||
Net investment income | 2.01% | 1.78% | 2.32% | 2.34% | �� | 1.06% | ||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $38,751 | $34,317 | $14,712 | $17,488 | $9,451 | |||||||||||||||
Portfolio turnover ratef | 10.09% | g | 11.45% | g | 11.42% | g | 7.11% | 0.96% | ||||||||||||
aFor the period February 6, 2018 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 9.63% | 11.45% | 11.42% | |||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 141 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE Asia ex Japan ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests 99.5% | ||||||||||||||
| Cambodia 0.0%† | ||||||||||||||
NagaCorp Ltd. | Hotels, Restaurants & Leisure | 8,000 | $ | 7,141 | ||||||||||
|
| |||||||||||||
| China 33.1% | ||||||||||||||
360 DigiTech Inc. | Consumer Finance | 792 | 12,189 | |||||||||||
| a | 360 Security Technology Inc., A | Software | 2,800 | 4,402 | ||||||||||
| a,b | 3SBio Inc., 144A | Biotechnology | 7,000 | 5,721 | ||||||||||
| a | 51job Inc., ADR | Professional Services | 160 | 9,368 | ||||||||||
| b | A-Living Services Co. Ltd., 144A | Commercial Services & Supplies | 2,000 | 2,799 | ||||||||||
AAC Technologies Holdings Inc. | Electronic Equipment, Instruments & Components | 4,000 | 9,694 | |||||||||||
Addsino Co. Ltd., A | Communications Equipment | 800 | 1,371 | |||||||||||
| a | Advanced Micro-Fabrication Equipment Inc. China, A | Semiconductors & Semiconductor Equipment | 200 | 3,669 | ||||||||||
AECC Aero-Engine Control Co. Ltd. | Aerospace & Defense | 400 | 1,462 | |||||||||||
AECC Aviation Power Co. Ltd., A | Aerospace & Defense | 1,200 | 8,488 | |||||||||||
Agile Group Holdings Ltd. | Real Estate Management & Development | 8,000 | 4,055 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 38,000 | 18,437 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 177,000 | 68,030 | |||||||||||
Aier Eye Hospital Group Co. Ltd. | Health Care Providers & Services | 2,159 | 10,730 | |||||||||||
| a | Air China Ltd., A | Airlines | 2,400 | 3,444 | ||||||||||
| a | Air China Ltd., H | Airlines | 10,000 | 7,010 | ||||||||||
Airtac International Group | Machinery | 920 | 29,894 | |||||||||||
| a,b | Akeso Inc., 144A | Biotechnology | 4,000 | 8,520 | ||||||||||
| a | Alibaba Group Holding Ltd. | Internet & Direct Marketing Retail | 81,700 | 1,169,468 | ||||||||||
| a | Alpha Group, A | Leisure Products | 400 | 313 | ||||||||||
| a | Aluminum Corp. of China Ltd., A | Metals & Mining | 4,800 | 4,401 | ||||||||||
| a | Aluminum Corp. of China Ltd., H | Metals & Mining | 22,000 | 12,922 | ||||||||||
An Hui Wenergy Co. Ltd. | Independent Power and Renewable Electricity Producers | 1,200 | 743 | |||||||||||
Angang Steel Co. Ltd. | Metals & Mining | 2,000 | 1,118 | |||||||||||
Angang Steel Co. Ltd., H | Metals & Mining | 8,000 | 3,688 | |||||||||||
Angel Yeast Co. Ltd., A | Food Products | 400 | 2,626 | |||||||||||
Anhui Anke Biotechnology Group Co. Ltd. | Biotechnology | 532 | 825 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 1,600 | 9,953 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 7,160 | 36,845 | |||||||||||
Anhui Expressway Co. Ltd., A | Transportation Infrastructure | 400 | 488 | |||||||||||
Anhui Expressway Co. Ltd., H | Transportation Infrastructure | 4,000 | 3,907 | |||||||||||
Anhui Gujing Distillery Co. Ltd., A | Beverages | 200 | 5,399 | |||||||||||
Anhui Gujing Distillery Co. Ltd., B | Beverages | 700 | 9,049 | |||||||||||
Anhui Zhongding Sealing Parts Co. Ltd., A | Auto Components | 400 | 946 | |||||||||||
Anker Innovations Technology Co. Ltd., A | Technology Hardware, Storage & Peripherals | 100 | 1,066 | |||||||||||
Anta Sports Products Ltd. | Textiles, Apparel & Luxury Goods | 6,400 | 80,415 | |||||||||||
Apeloa Pharmaceutical Co. Ltd., A | Pharmaceuticals | 400 | 1,970 | |||||||||||
Autohome Inc., ADR | Interactive Media & Services | 349 | 10,613 | |||||||||||
Avary Holding Shenzhen Co. Ltd., A | Electronic Equipment, Instruments & Components | 400 | 1,816 | |||||||||||
Avic Capital Co. Ltd., A | Diversified Financial Services | 3,600 | 2,348 | |||||||||||
AVIC Electromechanical Systems Co. Ltd. | Aerospace & Defense | 1,600 | 2,727 | |||||||||||
AviChina Industry & Technology Co. Ltd., H | Aerospace & Defense | 14,000 | 7,776 | |||||||||||
AVICOPTER PLC, A | Aerospace & Defense | 400 | 3,207 | |||||||||||
| b | BAIC Motor Corp. Ltd., 144A | Automobiles | 14,000 | 4,702 | ||||||||||
| a | Baidu Inc., A | Interactive Media & Services | 12,800 | 231,274 | ||||||||||
Bank of Beijing Co. Ltd., A | Banks | 8,000 | 5,772 | |||||||||||
Bank of Changsha Co. Ltd., A | Banks | 1,200 | 1,446 | |||||||||||
Bank of Chengdu Co. Ltd., A | Banks | 400 | 946 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Bank of China Ltd., A | Banks | 18,000 | $ | 9,272 | ||||||||||
Bank of China Ltd., H | Banks | 437,000 | 175,773 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 16,000 | 12,879 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 42,000 | 30,140 | |||||||||||
Bank of Guiyang Co. Ltd., A | Banks | 1,200 | 1,202 | |||||||||||
Bank of Hangzhou Co. Ltd., A | Banks | 2,400 | 5,327 | |||||||||||
Bank of Jiangsu Co. Ltd., A | Banks | 2,280 | 2,532 | |||||||||||
Bank of Nanjing Co. Ltd., A | Banks | 4,400 | 7,396 | |||||||||||
Bank of Ningbo Co. Ltd., A | Banks | 2,780 | 16,374 | |||||||||||
Bank of Qingdao Co. Ltd., A | Banks | 400 | 250 | |||||||||||
Bank of Shanghai Co. Ltd., A | Banks | 6,080 | 6,360 | |||||||||||
| a | Bank of Zhengzhou Co. Ltd. | Banks | 3,484 | 1,614 | ||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 7,200 | 7,656 | |||||||||||
BBMG Corp., A | Construction Materials | 2,400 | 1,157 | |||||||||||
BBMG Corp., H | Construction Materials | 16,000 | 2,595 | |||||||||||
| a | BeiGene Ltd. | Biotechnology | 3,800 | 58,809 | ||||||||||
Beijing Capital Co. Ltd., A | Water Utilities | 3,200 | 1,588 | |||||||||||
Beijing Capital Development Co. Ltd., A | Real Estate Management & Development | 800 | 832 | |||||||||||
| a | Beijing Capital International Airport Co. Ltd. | Transportation Infrastructure | 10,000 | 5,861 | ||||||||||
Beijing Dabeinong Technology Group Co. Ltd. | Food Products | 1,200 | 1,645 | |||||||||||
Beijing E-Hualu Information Technology Co. Ltd., A | Software | 400 | 1,328 | |||||||||||
Beijing Easpring Material Technology Co. Ltd., A | Chemicals | 200 | 2,369 | |||||||||||
Beijing Enlight Media Co. Ltd. | Entertainment | 1,200 | 1,550 | |||||||||||
Beijing Enterprises Holdings Ltd. | Gas Utilities | 3,000 | 9,519 | |||||||||||
| a | Beijing Jetsen Technology Co. Ltd., A | Software | 1,200 | 1,112 | ||||||||||
Beijing Jingneng Clean Energy Co. Ltd., H | Independent Power and Renewable Electricity Producers | 10,000 | 2,273 | |||||||||||
Beijing Kingsoft Office Software Inc., A | Software | 141 | 4,168 | |||||||||||
Beijing New Building Materials PLC | Building Products | 800 | 3,820 | |||||||||||
| a | Beijing Orient National Communication Science &Technology Co. Ltd. | Software | 400 | 713 | ||||||||||
Beijing Originwater Technology Co. Ltd. | Commercial Services & Supplies | 800 | 756 | |||||||||||
| a | Beijing Sanju Environmental Protection and New Material Co. Ltd. | Chemicals | 800 | 827 | ||||||||||
Beijing Shiji Information Technology Co. Ltd. | Software | 800 | 2,508 | |||||||||||
| a | Beijing Shougang Co. Ltd. | Metals & Mining | 2,000 | 1,638 | ||||||||||
Beijing Shunxin Agriculture Co. Ltd., A | Beverages | 400 | 1,472 | |||||||||||
Beijing Sinnet Technology Co. Ltd., A | IT Services | 800 | 1,671 | |||||||||||
Beijing SL Pharmaceutical Co. Ltd. | Biotechnology | 400 | 674 | |||||||||||
Beijing Tiantan Biological Products Corp. Ltd., A | Biotechnology | 440 | 1,711 | |||||||||||
| a | Beijing Ultrapower Software Co. Ltd. | IT Services | 800 | 583 | ||||||||||
Beijing United Information Technology Co. Ltd., A | Trading Companies & Distributors | 100 | 1,762 | |||||||||||
Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., A | Biotechnology | 100 | 4,379 | |||||||||||
Beijing Yanjing Brewery Co. Ltd. | Beverages | 800 | 916 | |||||||||||
Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 100 | 2,024 | |||||||||||
Beijing Zhong Ke San Huan High-Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 445 | 873 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Beijing-Shanghai High Speed Railway Co. Ltd. | Road & Rail | 11,600 | $ | 8,735 | ||||||||||
BGI Genomics Co. Ltd., A | Biotechnology | 100 | 1,271 | |||||||||||
| a | Bilibili Inc., Z | Entertainment | 1,440 | 39,791 | ||||||||||
| b | Blue Moon Group Holdings Ltd., 144A | Household Products | 4,000 | 2,860 | ||||||||||
Blue Sail Medical Co. Ltd., A | Health Care Equipment & Supplies | 400 | 832 | |||||||||||
| a | Bluefocus Intelligent Communications Group Co. Ltd. | Media | 800 | 1,055 | ||||||||||
Bluestar Adisseo Co., A | Chemicals | 400 | 622 | |||||||||||
BOC Hong Kong (Holdings) Ltd. | Banks | 20,500 | 77,745 | |||||||||||
BOC International China Co. Ltd., A | Capital Markets | 400 | 844 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 15,600 | 10,592 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 5,600 | 2,524 | |||||||||||
Boya Bio-pharmaceutical Group Co. Ltd., A | Biotechnology | 400 | 1,855 | |||||||||||
Bright Dairy & Food Co. Ltd., A | Food Products | 400 | 721 | |||||||||||
| a | BTG Hotels Group Co. Ltd., A | Hotels, Restaurants & Leisure | 400 | 1,444 | ||||||||||
| b | Budweiser Brewing Co. APAC Ltd., 144A | Beverages | 9,600 | 25,559 | ||||||||||
By-health Co. Ltd., A | Personal Products | 800 | 2,683 | |||||||||||
BYD Co. Ltd. | Automobiles | 800 | 28,960 | |||||||||||
BYD Co. Ltd., H | Automobiles | 5,000 | 143,269 | |||||||||||
BYD Electronic International Co. Ltd. | Communications Equipment | 4,500 | 9,079 | |||||||||||
C&S Paper Co. Ltd., A | Household Products | 400 | 756 | |||||||||||
Caitong Securities Co. Ltd., A | Capital Markets | 400 | 534 | |||||||||||
Camel Group Co. Ltd., A | Electrical Equipment | 460 | 816 | |||||||||||
| a,b,c | CanSino Biologics Inc., 144A, Reg S | Pharmaceuticals | 400 | 6,431 | ||||||||||
| a | CanSino Biologics Inc., A | Pharmaceuticals | 26 | 951 | ||||||||||
CECEP Solar Energy Co. Ltd. | Independent Power and Renewable Electricity Producers | 1,200 | 1,656 | |||||||||||
CECEP Wind-Power Corp | Independent Power and Renewable Electricity Producers | 2,000 | 1,446 | |||||||||||
| a | Central China Securities Co. Ltd., A | Capital Markets | 1,200 | 875 | ||||||||||
| a | Central China Securities Co. Ltd., H | Capital Markets | 4,000 | 715 | ||||||||||
CGN Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 3,200 | 1,376 | |||||||||||
| b | CGN Power Co. Ltd., H, 144A | Independent Power and Renewable Electricity Producers | 64,000 | 16,753 | ||||||||||
Changchun High & New Technology Industry Group Inc. | Pharmaceuticals | 200 | 5,288 | |||||||||||
Changjiang Securities Co. Ltd. | Capital Markets | 2,400 | 2,355 | |||||||||||
Changzhou Xingyu Automotive LightingSystems Co. Ltd., A | Auto Components | 100 | 2,047 | |||||||||||
Chaozhou Three-Circle Group Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 3,527 | |||||||||||
Chengdu Xingrong Environment Co. Ltd., A | Water Utilities | 1,600 | 1,253 | |||||||||||
| a | Chengxin Lithium Group Co. Ltd., A | Paper & Forest Products | 400 | 3,203 | ||||||||||
China Baoan Group Co. Ltd. | Industrial Conglomerates | 1,200 | 2,115 | |||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 52,000 | 8,898 | |||||||||||
China CITIC Bank Corp. Ltd., A | Banks | 4,400 | 3,528 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 54,000 | 27,374 | |||||||||||
China Coal Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,000 | 2,549 | |||||||||||
China Coal Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 12,000 | 9,025 | |||||||||||
China Communications Services Corp. Ltd., H | Construction & Engineering | 14,000 | 6,346 | |||||||||||
| a | China Conch Environment Protection Holdings Ltd. | Commercial Services & Supplies | 9,500 | 11,888 | ||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 9,500 | 27,779 | |||||||||||
China Construction Bank Corp., A | Banks | 4,000 | 3,963 | |||||||||||
China Construction Bank Corp., H | Banks | 537,000 | 403,878 | |||||||||||
| 144 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| a | China COSCO Holdings Co. Ltd., A | Marine | 5,200 | $ | 12,697 | |||||||||
| a | China CSSC Holdings Ltd., A | Machinery | 1,800 | 4,900 | ||||||||||
| b,c | China East Education Holdings Ltd., 144A, Reg S | Diversified Consumer Services | 2,000 | 1,167 | ||||||||||
| a | China Eastern Airlines Corp. Ltd., A | Airlines | 4,400 | 3,244 | ||||||||||
| a | China Eastern Airlines Corp. Ltd., H | Airlines | 8,000 | 2,697 | ||||||||||
| a | China Energy Engineering Corp. Ltd. | Construction & Engineering | 13,200 | 5,074 | ||||||||||
China Everbright Bank Co. Ltd., A | Banks | 17,200 | 8,941 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 17,000 | 6,447 | |||||||||||
| d | China Evergrande Group | Real Estate Management & Development | 24,000 | 5,057 | ||||||||||
| b,c | China Feihe Ltd., 144A, Reg S | Food Products | 15,000 | 14,863 | ||||||||||
China Galaxy Securities Co. Ltd., A | Capital Markets | 800 | 1,254 | |||||||||||
China Galaxy Securities Co. Ltd., H | Capital Markets | 21,000 | 11,772 | |||||||||||
China Great Wall Securities Co. Ltd., A | Capital Markets | 800 | 1,200 | |||||||||||
China Greatwall Technology Group Co. Ltd. | Technology Hardware, Storage & Peripherals | 1,200 | 2,176 | |||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 12,500 | 16,696 | |||||||||||
China International Capital Corp. Ltd., A | Capital Markets | 400 | 2,622 | |||||||||||
| b | China International Capital Corp. Ltd., H, 144A | Capital Markets | 8,500 | 18,972 | ||||||||||
China International Marine Containers (Group) Co. Ltd., H | Machinery | 2,800 | 4,584 | |||||||||||
China International Marine Containers Group Co. Ltd. | Machinery | 500 | 1,094 | |||||||||||
China Jinmao Holdings Group Ltd. | Real Estate Management & Development | 36,000 | 10,711 | |||||||||||
China Jushi Co. Ltd., A | Construction Materials | 1,771 | 4,252 | |||||||||||
China Lesso Group Holdings Ltd. | Building Products | 5,000 | 6,078 | |||||||||||
China Life Insurance Co. Ltd., H | Insurance | 43,000 | 66,108 | |||||||||||
| a,b | China Literature Ltd., 144A | Media | 2,400 | 10,006 | ||||||||||
China Lodging Group Ltd., ADR | Hotels, Restaurants & Leisure | 1,252 | 41,303 | |||||||||||
China Longyuan Power Group Corp. | Independent Power and Renewable Electricity Producers | 19,000 | 43,282 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 7,000 | 11,030 | |||||||||||
China Meheco Co. Ltd., A | Trading Companies & Distributors | 400 | 2,291 | |||||||||||
China Meidong Auto Holdings Ltd. | Specialty Retail | 2,000 | 7,661 | |||||||||||
China Merchants Bank Co. Ltd., A | Banks | 8,400 | 61,927 | |||||||||||
China Merchants Bank Co. Ltd., H | Banks | 22,000 | 172,906 | |||||||||||
China Merchants Expressway Network & Technology Holdings Co. Ltd. | Transportation Infrastructure | 400 | 492 | |||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 8,000 | 14,506 | |||||||||||
China Merchants Property Operation & Service Co. Ltd., A | Real Estate Management & Development | 400 | 1,112 | |||||||||||
| b | China Merchants Securities Co. Ltd., 144A | Capital Markets | 2,400 | 2,832 | ||||||||||
China Merchants Securities Co. Ltd., A | Capital Markets | 3,020 | 6,884 | |||||||||||
China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | Real Estate Management & Development | 2,800 | 6,687 | |||||||||||
China Minmetals Rare Earth Co. Ltd., A | Metals & Mining | 400 | 1,836 | |||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 14,000 | 8,425 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 35,500 | 13,372 | |||||||||||
China Molybdenum Co. Ltd., A | Metals & Mining | 4,000 | 3,283 | |||||||||||
China Molybdenum Co. Ltd., H | Metals & Mining | 24,000 | 12,534 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 22,000 | 27,362 | |||||||||||
China National Chemical Engineering Co. Ltd., A | Construction & Engineering | 2,400 | 3,645 | |||||||||||
China National Medicines Corp. Ltd., A | Health Care Providers & Services | 400 | 1,848 | |||||||||||
| franklintempleton.com | Annual Report | 145 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
China National Nuclear Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 6,600 | $ | 8,432 | ||||||||||
| a | China Nonferrous Metal Industry’s Foreign Engineeringand Construction Co. Ltd. | Metals & Mining | 800 | 581 | ||||||||||
China Northern Rare Earth Group High-Tech Co. Ltd., A | Metals & Mining | 1,600 | 9,762 | |||||||||||
China Oilfield Services Ltd., A | Energy Equipment & Services | 800 | 1,719 | |||||||||||
China Oilfield Services Ltd., H | Energy Equipment & Services | 10,000 | 10,254 | |||||||||||
China Orient Securities Co. Ltd., A | Capital Markets | 2,400 | 4,151 | |||||||||||
China Overseas Land & Investment Ltd. | Real Estate Management & Development | 22,000 | 65,876 | |||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 2,800 | 10,109 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 15,200 | 37,110 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 14,400 | 9,799 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 148,000 | 74,270 | |||||||||||
China Railway Group Ltd., A | Construction & Engineering | 8,800 | 8,359 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 22,000 | 12,332 | |||||||||||
| b,c | China Railway Signal & Communication Corp. Ltd., 144A, Reg S | Electronic Equipment, Instruments & Components | 8,000 | 2,544 | ||||||||||
China Railway Signal & Communication Corp. Ltd., A | Electronic Equipment, Instruments & Components | 2,666 | 1,869 | |||||||||||
China Reinsurance Group Corp., H | Insurance | 37,000 | 3,402 | |||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 12,000 | 10,006 | |||||||||||
China Resources Double Crane Pharmaceutical Co. Ltd., A | Pharmaceuticals | 400 | 1,071 | |||||||||||
China Resources Microelectronics Ltd., A | Semiconductors & Semiconductor Equipment | 392 | 3,382 | |||||||||||
| b | China Resources Mixc Lifestyle Services Ltd., 144A | Real Estate Management & Development | 3,400 | 16,823 | ||||||||||
| b | China Resources Pharmaceutical Group Ltd., 144A | Pharmaceuticals | 10,000 | 5,210 | ||||||||||
China Resources Power Holdings Co. Ltd. | Independent Power and Renewable Electricity Producers | 11,300 | 21,268 | |||||||||||
China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 2,858 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,800 | 13,131 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 19,500 | 62,498 | |||||||||||
China Shipping Container Lines Co. Ltd., A | Trading Companies & Distributors | 3,200 | 1,663 | |||||||||||
China Shipping Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,000 | 2,016 | |||||||||||
China South Publishing & Media Group Co. Ltd., A | Media | 800 | 1,195 | |||||||||||
| a | China Southern Airlines Co. Ltd., A | Airlines | 4,400 | 4,290 | ||||||||||
| a | China Southern Airlines Co. Ltd., H | Airlines | 8,000 | 4,658 | ||||||||||
China Southern Power Grid Energy Efficiency&Clean Energy Co. Ltd., A | Commercial Services & Supplies | 1,200 | 1,267 | |||||||||||
China State Construction Engineering Corp. Ltd., A | Construction & Engineering | 16,800 | 14,397 | |||||||||||
China Suntien Green Energy Corp. Ltd., H | Oil, Gas & Consumable Fuels | 10,000 | 5,657 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 8,000 | 9,796 | |||||||||||
China Three Gorges Renewables Group Co. Ltd., A | Independent Power and Renewable Electricity Producers | 10,000 | 9,672 | |||||||||||
China Tourism Group Duty Free Corp. Ltd., A | Specialty Retail | 800 | 20,714 | |||||||||||
| b,c | China Tower Corp. Ltd., H, 144A, Reg S | Diversified Telecommunication Services | 272,000 | 30,564 | ||||||||||
| 146 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
China TransInfo Technology Co. Ltd. | IT Services | 400 | $ | 674 | ||||||||||
| a | China Travel International Investment Hong Kong Ltd. | Hotels, Restaurants & Leisure | 16,000 | 3,044 | ||||||||||
China United Network Communications Ltd., A | Wireless Telecommunication Services | 11,600 | 6,524 | |||||||||||
China Vanke Co. Ltd., A | Real Estate Management & Development | 4,000 | 12,067 | |||||||||||
China Vanke Co. Ltd., H | Real Estate Management & Development | 11,200 | 25,371 | |||||||||||
China World Trade Center Co. Ltd., A | Real Estate Management & Development | 400 | 1,021 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 9,200 | 31,884 | |||||||||||
China Zhenhua Group Science & Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 3,573 | |||||||||||
China Zheshang Bank Co. Ltd., A | Banks | 2,800 | 1,464 | |||||||||||
Chinalin Securities Co. Ltd., A | Capital Markets | 400 | 914 | |||||||||||
Chinese Universe Publishing and Media Group Co. Ltd., A | Media | 400 | 713 | |||||||||||
| a | Chongqing Brewery Co. Ltd., A | Beverages | 200 | 3,378 | ||||||||||
Chongqing Changan Automobile Co. Ltd. | Automobiles | 2,800 | 4,997 | |||||||||||
Chongqing Changan Automobile Co. Ltd., B | Automobiles | 7,260 | 2,818 | |||||||||||
Chongqing Fuling Zhacai Group Co. Ltd., A | Food Products | 400 | 2,048 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A | Banks | 2,000 | 1,254 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H | Banks | 13,000 | 5,113 | |||||||||||
Chongqing Water Group Co. Ltd., A | Water Utilities | 400 | 399 | |||||||||||
Chongqing Zhifei Biological Products Co. Ltd. | Biotechnology | 600 | 13,043 | |||||||||||
Chow Tai Fook Jewellery Co. Ltd. | Specialty Retail | 10,400 | 18,937 | |||||||||||
CIFI Holdings Group Co. Ltd. | Real Estate Management & Development | 22,000 | 12,950 | |||||||||||
| a | CITIC Guoan Information Industry Co. Ltd. | Media | 800 | 286 | ||||||||||
Citic Pacific Ltd. | Industrial Conglomerates | 28,000 | 31,141 | |||||||||||
Citic Pacific Special Steel Group Co. Ltd., A | Metals & Mining | 2,080 | 6,537 | |||||||||||
CITIC Securities Co. Ltd., A | Capital Markets | 4,995 | 16,445 | |||||||||||
CITIC Securities Co. Ltd., H | Capital Markets | 15,000 | 34,630 | |||||||||||
CMST Development Co. Ltd., A | Air Freight & Logistics | 400 | 337 | |||||||||||
CNOOC Energy Technology & Services Ltd. | Energy Equipment & Services | 2,800 | 1,160 | |||||||||||
Contemporary Amperex Technology Co. Ltd. | Electrical Equipment | 900 | 72,631 | |||||||||||
COSCO SHIPPING Development Co. Ltd., H | Trading Companies & Distributors | 24,000 | 4,873 | |||||||||||
COSCO SHIPPING Energy Transportation Co. Ltd., H | Oil, Gas & Consumable Fuels | 8,000 | 3,708 | |||||||||||
| a | COSCO Shipping Holdings Co. Ltd. | Marine | 18,950 | 33,054 | ||||||||||
Country Garden Holdings Co. Ltd. | Real Estate Management & Development | 45,000 | 34,649 | |||||||||||
Country Garden Services Holdings Co. Ltd. | Commercial Services & Supplies | 10,600 | 45,478 | |||||||||||
CRRC Corp. Ltd., A | Machinery | 10,400 | 8,847 | |||||||||||
CRRC Corp. Ltd., H | Machinery | 24,000 | 9,623 | |||||||||||
| b | CSC Financial Co. Ltd., 144A | Capital Markets | 5,000 | 4,737 | ||||||||||
CSC Financial Co. Ltd., A | Capital Markets | 2,000 | 7,334 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 800 | 935 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 6,101 | 2,275 | |||||||||||
| franklintempleton.com | Annual Report | 147 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
CSPC Pharmaceutical Group Ltd. | Pharmaceuticals | 48,000 | $ | 55,469 | ||||||||||
Daan Gene Co. Ltd. | Biotechnology | 612 | 1,798 | |||||||||||
| a | Dada Nexus Ltd., ADR | Internet & Direct Marketing Retail | 392 | 3,579 | ||||||||||
| b | Dali Foods Group Co. Ltd., 144A | Food Products | 12,500 | 6,560 | ||||||||||
Daqin Railway Co. Ltd., A | Road & Rail | 6,000 | 6,493 | |||||||||||
Datang International Power Generation Co. Ltd., A | Independent Power and Renewable Electricity Producers | 3,200 | 1,200 | |||||||||||
Datang International Power Generation Co. Ltd., H | Independent Power and Renewable Electricity Producers | 16,000 | 2,309 | |||||||||||
DHC Software Co. Ltd. | IT Services | 1,200 | 1,342 | |||||||||||
Dian Diagnostics Group Co. Ltd. | Health Care Providers & Services | 400 | 1,829 | |||||||||||
| a | DiDi Global Inc., ADR | Road & Rail | 14,400 | 36,000 | ||||||||||
Digital China Information Service Co. Ltd. | IT Services | 400 | 790 | |||||||||||
Do-Fluoride Chemicals Co. Ltd., A | Chemicals | 400 | 2,479 | |||||||||||
Dong-E-E-Jiao Co. Ltd., A | Pharmaceuticals | 400 | 2,136 | |||||||||||
Dongfang Electric Corp. Ltd., A | Electrical Equipment | 1,200 | 2,563 | |||||||||||
Dongfang Electric Corp. Ltd., H | Electrical Equipment | 2,000 | 2,240 | |||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 16,000 | 12,034 | |||||||||||
Dongguan Development Holdings Co. Ltd., A | Transportation Infrastructure | 400 | 687 | |||||||||||
Dongxing Securities Co. Ltd., A | Capital Markets | 1,200 | 1,845 | |||||||||||
East Group Co. Ltd., A | Electrical Equipment | 400 | 491 | |||||||||||
East Money Information Co. Ltd. | Capital Markets | 4,240 | 16,925 | |||||||||||
Easyhome New Retail Group Co. Ltd., A | Multiline Retail | 1,200 | 843 | |||||||||||
Ecovacs Robotics Co. Ltd., A | Household Durables | 200 | 3,423 | |||||||||||
ENN Ecological Holdings Co. Ltd., A | Gas Utilities | 1,200 | 3,348 | |||||||||||
ENN Energy Holdings Ltd. | Gas Utilities | 4,300 | 64,516 | |||||||||||
| a,b | ESR Cayman Ltd., 144A | Real Estate Management & Development | 9,600 | 29,849 | ||||||||||
Eternal Asia Supply Chain Management Ltd., A | Commercial Services & Supplies | 1,000 | 770 | |||||||||||
Eve Energy Co. Ltd. | Electrical Equipment | 780 | 9,912 | |||||||||||
| b | Everbright Securities Co. Ltd., 144A | Capital Markets | 1,600 | 1,097 | ||||||||||
Everbright Securities Co. Ltd., A | Capital Markets | 1,600 | 3,140 | |||||||||||
| a,b,d | Evergrande Property Services Group Ltd., 144A | Real Estate Management & Development | 24,000 | 7,049 | ||||||||||
Fangda Carbon New Material Co. Ltd. | Electrical Equipment | 1,660 | 2,210 | |||||||||||
Faw Jiefang Group Co. Ltd. | Automobiles | 1,200 | 1,633 | |||||||||||
Fiberhome Telecommunication Technologies Co. Ltd., A | Communications Equipment | 400 | 953 | |||||||||||
| a | FIH Mobile Ltd. | Electronic Equipment, Instruments & Components | 20,000 | 2,758 | ||||||||||
Financial Street Holdings Co. Ltd., A | Real Estate Management & Development | 1,200 | 1,159 | |||||||||||
First Capital Securities Co. Ltd. | Capital Markets | 1,600 | 1,477 | |||||||||||
Flat Glass Group Co Ltd., H | Semiconductors & Semiconductor Equipment | 3,000 | 11,607 | |||||||||||
Flat Glass Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 400 | 2,835 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 6,200 | 5,967 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 1,542 | 21,235 | |||||||||||
Fosun International Ltd. | Industrial Conglomerates | 13,000 | 14,160 | |||||||||||
Founder Securities Co. Ltd., A | Capital Markets | 3,400 | 3,610 | |||||||||||
Foxconn Industrial Internet Co. Ltd., A | Electronic Equipment, Instruments & Components | 5,200 | 8,314 | |||||||||||
Fu Jian Anjoy Foods Co. Ltd., A | Food Products | 100 | 1,738 | |||||||||||
Fujian Funeng Co. Ltd., A | Independent Power and Renewable Electricity Producers | 400 | 699 | |||||||||||
Fujian Longking Co. Ltd., A | Machinery | 400 | 669 | |||||||||||
| a | Fujian Sunner Development Co. Ltd. | Food Products | 400 | 1,249 | ||||||||||
| 148 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| a | Full Truck Alliance Co. Ltd., Sponsored ADR | Road & Rail | 3,256 | $ | 21,718 | |||||||||
Fuyao Glass Industry Group Co. Ltd., A | Auto Components | 800 | 4,484 | |||||||||||
| b | Fuyao Group Glass Industries Co. Ltd., 144A | Auto Components | 3,600 | 14,802 | ||||||||||
Ganfeng Lithium Co. Ltd. | Metals & Mining | 500 | 9,897 | |||||||||||
| b | Ganfeng Lithium Co. Ltd., H, 144A | Metals & Mining | 1,000 | 14,301 | ||||||||||
| a | GCL System Integration Technology Co. Ltd. | Semiconductors & Semiconductor Equipment | 1,600 | 905 | ||||||||||
GD Power Development Co. Ltd., A | Independent Power and Renewable Electricity Producers | 6,400 | 2,541 | |||||||||||
| a | GDS Holdings Ltd., A | IT Services | 5,200 | 26,527 | ||||||||||
GEM Co. Ltd. | Metals & Mining | 2,000 | 2,640 | |||||||||||
Gemdale Corp., A | Real Estate Management & Development | 2,000 | 4,499 | |||||||||||
| a | Genscript Biotech Corp. | Life Sciences Tools & Services | 6,000 | 19,230 | ||||||||||
GF Securities Co. Ltd. | Capital Markets | 2,500 | 6,923 | |||||||||||
GF Securities Co. Ltd., H | Capital Markets | 9,200 | 13,063 | |||||||||||
Gigadevice Semiconductor Beijing Inc., A | Semiconductors & Semiconductor Equipment | 300 | 6,665 | |||||||||||
Ginlong Technologies Co. Ltd., A | Electrical Equipment | 100 | 3,302 | |||||||||||
Glarun Technology Co. Ltd., A | Communications Equipment | 400 | 1,006 | |||||||||||
GoerTek Inc. | Electronic Equipment, Instruments & Components | 1,600 | 8,670 | |||||||||||
| a | GOME Retail Holdings Ltd. | Specialty Retail | 68,000 | 4,255 | ||||||||||
Gongniu Group Co. Ltd., A | Electrical Equipment | 100 | 2,023 | |||||||||||
| a | Grandjoy Holdings Group Co. Ltd., A | Real Estate Management & Development | 800 | 591 | ||||||||||
Great Wall Motor Co. Ltd., A | Automobiles | 1,200 | 5,179 | |||||||||||
Great Wall Motor Co. Ltd., H | Automobiles | 18,000 | 28,868 | |||||||||||
Greattown Holdings Ltd., A | Real Estate Management & Development | 400 | 267 | |||||||||||
Greendland Holdings Corp. Ltd., A | Real Estate Management & Development | 2,905 | 2,467 | |||||||||||
Greentown China Holdings Ltd. | Real Estate Management & Development | 4,500 | 8,228 | |||||||||||
GRG Banking Equipment Co. Ltd. | Technology Hardware, Storage & Peripherals | 800 | 1,340 | |||||||||||
Guangdong Baolihua New Energy Stock Co. Ltd. | Independent Power and Renewable Electricity Producers | 1,200 | 915 | |||||||||||
Guangdong Electric Power Development Co. Ltd., A | Independent Power and Renewable Electricity Producers | 1,200 | 904 | |||||||||||
Guangdong Electric Power Development Co. Ltd., B | Independent Power and Renewable Electricity Producers | 3,600 | 970 | |||||||||||
| a | Guangdong Golden Dragon Development Inc. | Capital Markets | 400 | 943 | ||||||||||
Guangdong Haid Group Co. Ltd. | Food Products | 800 | 6,919 | |||||||||||
| a | Guangdong HEC Technology Holding Co. Ltd., A | Metals & Mining | 800 | 925 | ||||||||||
Guangdong Kinlong Hardware Products Co. Ltd. | Building Products | 100 | 1,690 | |||||||||||
| a | Guangdong LY Intelligent Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 3,200 | 2,561 | ||||||||||
Guangdong Xinbao Electrical Appliances Holdings Co. Ltd. | Household Durables | 400 | 1,051 | |||||||||||
| a | Guanghui Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 2,400 | 3,100 | ||||||||||
| a | Guangshen Railway Co. Ltd., A | Road & Rail | 3,600 | 1,214 | ||||||||||
| a | Guangshen Railway Co. Ltd., H | Road & Rail | 8,000 | 1,359 | ||||||||||
Guangxi Guiguan Electric Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 1,200 | 1,008 | |||||||||||
Guangxi Liugong Machinery Co. Ltd. | Machinery | 500 | 511 | |||||||||||
Guangxi Wuzhou Zhongheng Group Co. Ltd., A | Pharmaceuticals | 2,000 | 1,093 | |||||||||||
Guangzhou Automobile Group Co. Ltd., A | Automobiles | 1,200 | 2,123 | |||||||||||
Guangzhou Automobile Group Co. Ltd., H | Automobiles | 18,000 | 15,032 | |||||||||||
| franklintempleton.com | Annual Report | 149 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., A | Pharmaceuticals | 400 | $ | 1,976 | ||||||||||
Guangzhou Baiyunshan Pharmceutical Holdings Co. Ltd. | Pharmaceuticals | 1,200 | 3,179 | |||||||||||
Guangzhou Haige Communications Group Inc. Co. | Communications Equipment | 800 | 1,289 | |||||||||||
Guangzhou Kingmed Diagnostics Group Co. Ltd. | Health Care Providers & Services | 200 | 2,314 | |||||||||||
Guangzhou R&F Properties Co. Ltd., H | Real Estate Management & Development | 9,600 | 3,408 | |||||||||||
Guangzhou Shiyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 100 | 1,010 | |||||||||||
Guangzhou TInc.i Materials Technology Co. Ltd. | Chemicals | 410 | 6,071 | |||||||||||
Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A | Capital Markets | 800 | 1,006 | |||||||||||
Guangzhou Zhujiang Brewery Co. Ltd. | Beverages | 400 | 485 | |||||||||||
Guizhou Panjiang Refined Coal Co. Ltd., A | Oil, Gas & Consumable Fuels | 800 | 1,085 | |||||||||||
| a | Guizhou Xinbang Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 409 | ||||||||||
Guolian Securities Co. Ltd., A | Capital Markets | 800 | 1,663 | |||||||||||
Guosen Securities Co. Ltd. | Capital Markets | 1,800 | 2,818 | |||||||||||
| a | Guosheng Financial Holding Inc. | Electrical Equipment | 400 | 573 | ||||||||||
| a,b | Guotai Junan Securities Co. Ltd., 144A | Capital Markets | 4,000 | 5,404 | ||||||||||
Guotai Junan Securities Co. Ltd., A | Capital Markets | 3,200 | 7,919 | |||||||||||
| a | Guoxuan High-Tech Co. Ltd. | Electrical Equipment | 800 | 4,336 | ||||||||||
Guoyuan Securities Co. Ltd. | Capital Markets | 2,120 | 2,388 | |||||||||||
| b,c | Haidilao International Holding Ltd., 144A, Reg S | Hotels, Restaurants & Leisure | 6,200 | 12,160 | ||||||||||
Haier Smart Home Co. Ltd., A | Household Durables | 2,400 | 8,733 | |||||||||||
Haier Smart Home Co. Ltd., H | Household Durables | 13,600 | 44,196 | |||||||||||
Haisco Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 400 | 1,005 | |||||||||||
Haitian International Holdings Ltd. | Machinery | 3,000 | 7,796 | |||||||||||
Haitong Securities Co. Ltd., A | Capital Markets | 3,600 | 5,841 | |||||||||||
Haitong Securities Co. Ltd., H | Capital Markets | 19,200 | 14,661 | |||||||||||
Han’s Laser Technology Industry Group Co. Ltd., A | Machinery | 400 | 2,417 | |||||||||||
| a | Hang Zhou Great Star Industrial Co. Ltd. | Household Durables | 400 | 1,037 | ||||||||||
Hangzhou Binjiang Real Estate Group Co. Ltd. | Real Estate Management & Development | 800 | 865 | |||||||||||
Hangzhou Chang Chuan Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 400 | 2,307 | |||||||||||
Hangzhou First Applied Material Co. Ltd., A | Semiconductors & Semiconductor Equipment | 160 | 2,860 | |||||||||||
Hangzhou Oxygen Plant Group Co. Ltd. | Machinery | 400 | 1,807 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 400 | 1,839 | |||||||||||
Hangzhou Shunwang Technology Co. Ltd. | Entertainment | 400 | 820 | |||||||||||
Hangzhou Silan Microelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 600 | 4,584 | |||||||||||
Hangzhou Tigermed Consulting Co. Ltd. | Life Sciences Tools & Services | 300 | 5,085 | |||||||||||
| b,c | Hangzhou Tigermed Consulting Co. Ltd., H, 144A, Reg S | Life Sciences Tools & Services | 700 | 8,527 | ||||||||||
| b | Hansoh Pharmaceutical Group Co. Ltd., 144A | Pharmaceuticals | 6,000 | 10,052 | ||||||||||
Haohua Chemical Science & Technology Co. Ltd., A | Chemicals | 400 | 2,377 | |||||||||||
Hefei Meiya Optoelectronic Technology Inc. | Machinery | 400 | 1,687 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 800 | 1,908 | |||||||||||
Hello Group Inc., ADR | Interactive Media & Services | 928 | 5,364 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 1,300 | 5,951 | |||||||||||
Hengan International Group Co. Ltd. | Personal Products | 4,000 | 18,490 | |||||||||||
Hengdian Group DMEGC Magnetics Co. Ltd. | Electronic Equipment, Instruments & Components | 800 | 1,705 | |||||||||||
Hengli Petrochemical Co. Ltd., A | Chemicals | 1,360 | 4,454 | |||||||||||
| a | HengTen Networks Group Ltd. | Internet & Direct Marketing Retail | 16,000 | 4,331 | ||||||||||
Hengtong Optic-electric Co. Ltd., A | Communications Equipment | 800 | 1,634 | |||||||||||
| 150 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Hengyi Petrochemical Co. Ltd., A | Chemicals | 1,200 | $ | 1,607 | ||||||||||
Hesteel Co. Ltd. | Metals & Mining | 5,200 | 1,950 | |||||||||||
Hithink RoyalFlush Information Network Co. Ltd., A | Capital Markets | 200 | 3,018 | |||||||||||
| a | Holitech Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 800 | 411 | ||||||||||
Hongfa Technology Co. Ltd., A | Electrical Equipment | 400 | 2,976 | |||||||||||
Hongta Securities Co. Ltd., A | Capital Markets | 400 | 654 | |||||||||||
Hopson Development Holdings Ltd. | Real Estate Management & Development | 3,870 | 7,363 | |||||||||||
Hoshine Silicon Industry Co. Ltd., A | Chemicals | 200 | 3,297 | |||||||||||
| a,b | Hua Hong Semiconductor Ltd., 144A | Semiconductors & Semiconductor Equipment | 2,000 | 8,504 | ||||||||||
Huadian Power International Corp. Ltd., A | Independent Power and Renewable Electricity Producers | 2,000 | 1,115 | |||||||||||
Huadian Power International Corp. Ltd., H | Independent Power and Renewable Electricity Producers | 10,000 | 3,077 | |||||||||||
Huadong Medicine Co. Ltd., A | Health Care Providers & Services | 800 | 4,212 | |||||||||||
Huafa Industrial Co. Ltd. Zhuhai, A | Real Estate Management & Development | 800 | 911 | |||||||||||
Huafon Chemical Co. Ltd. | Chemicals | 1,600 | 2,296 | |||||||||||
Huagong Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 400 | 1,271 | |||||||||||
Huaibei Mining Holdings Co. Ltd., A | Metals & Mining | 800 | 1,989 | |||||||||||
Hualan Biological Engineering Inc. | Biotechnology | 800 | 2,560 | |||||||||||
Huaneng Power International Inc., A | Independent Power and Renewable Electricity Producers | 3,200 | 3,483 | |||||||||||
Huaneng Power International Inc., H | Independent Power and Renewable Electricity Producers | 24,000 | 10,266 | |||||||||||
Huapont Life Sciences Co. Ltd. | Chemicals | 1,200 | 1,159 | |||||||||||
| b | Huatai Securities Co. Ltd., 144A | Capital Markets | 9,200 | 14,168 | ||||||||||
Huatai Securities Co. Ltd., A | Capital Markets | 3,000 | 7,032 | |||||||||||
Huaxi Securities Co. Ltd. | Capital Markets | 800 | 1,057 | |||||||||||
Huaxia Bank Co. Ltd., A | Banks | 5,600 | 4,905 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 400 | 1,245 | |||||||||||
| a | Huaxin Cement Co. Ltd., H | Construction Materials | 1,500 | 2,601 | ||||||||||
Huayu Automotive Systems Co. Ltd. | Auto Components | 1,200 | 3,771 | |||||||||||
Hubei Biocause Pharmaceutical Co. Ltd. | Insurance | 800 | 399 | |||||||||||
Hubei Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 2,400 | 1,622 | |||||||||||
Hubei Xingfa Chemicals Group Co. Ltd., A | Chemicals | 400 | 2,094 | |||||||||||
Hubei Xinyangfeng Fertilizer Co. Ltd. | Chemicals | 400 | 1,082 | |||||||||||
Huizhou Desay Sv Automotive Co. Ltd. | Household Durables | 200 | 3,989 | |||||||||||
Humanwell Healthcare Group Co. Ltd., A | Pharmaceuticals | 800 | 2,174 | |||||||||||
| a | Hunan Gold Corp. Ltd. | Metals & Mining | 400 | 669 | ||||||||||
Hunan Valin Steel Co. Ltd., A | Metals & Mining | 2,800 | 2,426 | |||||||||||
Hundsun Technologies Inc., A | Software | 520 | 3,642 | |||||||||||
Huolinhe Opencut Coal Industry Corp. Ltd. of Inner Mongolia | Oil, Gas & Consumable Fuels | 400 | 1,093 | |||||||||||
| a | HUTCHMED China Ltd. | Biotechnology | 3,000 | 11,530 | ||||||||||
| b | Hygeia Healthcare Holdings Co. Ltd., 144A | Health Care Providers & Services | 2,000 | 7,802 | ||||||||||
Hytera Communications Corp. Ltd., A | Communications Equipment | 400 | 337 | |||||||||||
| a | I-Mab, ADR | Biotechnology | 144 | 2,339 | ||||||||||
Iflytek Co. Ltd. | Software | 900 | 6,602 | |||||||||||
Imeik Technology Development Co. Ltd., A | Biotechnology | 100 | 7,483 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 30,400 | 22,843 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 453,000 | 278,230 | |||||||||||
Industrial Bank Co. Ltd., A | Banks | 8,400 | 27,351 | |||||||||||
Industrial Securities Co. Ltd., A | Capital Markets | 2,800 | 3,387 | |||||||||||
| franklintempleton.com | Annual Report | 151 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Ingenic Semiconductor Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | $ | 2,882 | ||||||||||
Inmyshow Digital Technology Group Co. Ltd. | Media | 800 | 1,156 | |||||||||||
| a | Inner Mongolia BaoTou Steel Union Co. Ltd., A | Metals & Mining | 15,200 | 5,340 | ||||||||||
Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | Chemicals | 3,200 | 2,314 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 2,500 | 14,528 | |||||||||||
Inner Mongolia Yitai Coal Co. Ltd., B | Oil, Gas & Consumable Fuels | 6,400 | 6,950 | |||||||||||
| a,b | Innovent Biologics Inc., 144A | Biotechnology | 7,500 | 25,810 | ||||||||||
Inspur Electronic Information Industry Co. Ltd. | Technology Hardware, Storage & Peripherals | 400 | 1,711 | |||||||||||
Intco Medical Technology Co. Ltd. | Health Care Equipment & Supplies | 150 | 1,093 | |||||||||||
| a,e | Iqiyi Inc., ADR | Entertainment | 1,830 | 8,308 | ||||||||||
JA Solar Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 600 | 7,437 | |||||||||||
Jafron Biomedical Co. Ltd., A | Health Care Equipment & Supplies | 400 | 2,860 | |||||||||||
Jason Furniture Hangzhou Co. Ltd., A | Household Durables | 200 | 1,932 | |||||||||||
| a,b | JD Health International Inc., 144A | Internet & Direct Marketing Retail | 4,200 | 25,796 | ||||||||||
| a,b | JD Logistics Inc., 144A | Air Freight & Logistics | 10,000 | 24,695 | ||||||||||
| a | JD.com Inc., A | Internet & Direct Marketing Retail | 9,052 | 270,471 | ||||||||||
Jiajiayue Group Co. Ltd., A | Food & Staples Retailing | 400 | 807 | |||||||||||
Jiangsu Changjiang Electronics Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 800 | 3,098 | |||||||||||
Jiangsu Eastern Shenghong Co. Ltd. | Chemicals | 1,600 | 3,579 | |||||||||||
Jiangsu Expressway Co. Ltd., A | Transportation Infrastructure | 400 | 530 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 8,000 | 8,377 | |||||||||||
Jiangsu Hengli Hydraulic Co. Ltd., A | Machinery | 496 | 4,067 | |||||||||||
Jiangsu Hengrui Medicine Co. Ltd., A | Pharmaceuticals | 2,632 | 15,266 | |||||||||||
Jiangsu King’s Luck Brewery JSC Ltd | Beverages | 500 | 3,316 | |||||||||||
Jiangsu Linyang Energy Co. Ltd., A | Electrical Equipment | 800 | 1,088 | |||||||||||
Jiangsu Yanghe Brewery JST Co. Ltd., A | Beverages | 600 | 12,819 | |||||||||||
Jiangsu Yangnong Chemical Co. Ltd., A | Chemicals | 100 | 1,902 | |||||||||||
Jiangsu Yoke Technology Co. Ltd., A | Chemicals | 400 | 3,229 | |||||||||||
Jiangsu Yuyue Medical Equipment & Supply Co. Ltd. | Health Care Equipment & Supplies | 400 | 1,754 | |||||||||||
Jiangsu Zhangjiagang Rural Commercial Bank Co. Ltd. | Banks | 400 | 393 | |||||||||||
Jiangsu Zhongnan Construction Group Co. Ltd. | Real Estate Management & Development | 2,000 | 1,380 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 1,200 | 3,214 | |||||||||||
Jiangxi Copper Co. Ltd., A | Metals & Mining | 800 | 2,430 | |||||||||||
Jiangxi Copper Co. Ltd., H | Metals & Mining | 7,000 | 11,745 | |||||||||||
| a | Jiangxi Special Electric Motor Co. Ltd., A | Electrical Equipment | 800 | 2,546 | ||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 800 | 972 | |||||||||||
Jilin Aodong Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 400 | 1,116 | |||||||||||
Jinke Properties Group Co. Ltd. | Real Estate Management & Development | 2,800 | 2,166 | |||||||||||
Jinke Smart Services Group Co. Ltd., H | Real Estate Management & Development | 1,600 | 5,782 | |||||||||||
| a,b,c | Jinxin Fertility Group Ltd., 144A, Reg S | Health Care Providers & Services | 8,500 | 6,545 | ||||||||||
JiuGui Liquor Co. Ltd., A | Beverages | 100 | 2,330 | |||||||||||
| b | Jiumaojiu International Holdings Ltd., 144A | Hotels, Restaurants & Leisure | 4,000 | 8,581 | ||||||||||
Jizhong Energy Resources Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,200 | 1,333 | |||||||||||
| 152 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
JoInc.are Pharmaceutical Group Industry Co. Ltd., A | Pharmaceuticals | 800 | $ | 1,543 | ||||||||||
Joinn Laboratories China Co. Ltd., A | Life Sciences Tools & Services | 100 | 1,813 | |||||||||||
| b | Joinn Laboratories China Co. Ltd., H, 144A | Life Sciences Tools & Services | 400 | 3,700 | ||||||||||
Jointo Energy Investment Co. Ltd. | Independent Power and Renewable Electricity Producers | 400 | 258 | |||||||||||
Jointown Pharmaceutical Group Co. Ltd., A | Health Care Providers & Services | 800 | 1,674 | |||||||||||
Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., A | Food Products | 400 | 1,774 | |||||||||||
Joyoung Co. Ltd. | Household Durables | 400 | 1,029 | |||||||||||
JOYY Inc., ADR | Interactive Media & Services | 316 | 11,607 | |||||||||||
Juewei Food Co. Ltd., A | Food Products | 100 | 664 | |||||||||||
Juneyao Airlines Co. Ltd., A | Airlines | 400 | 862 | |||||||||||
Kaishan Group Co. Ltd., A | Machinery | 400 | 890 | |||||||||||
| a | Kanzhun Ltd., ADR | Interactive Media & Services | 1,680 | 41,849 | ||||||||||
| a | KE Holdings Inc., ADR | Real Estate Management & Development | 1,352 | 16,724 | ||||||||||
Keda Industrial Group Co. Ltd. | Machinery | 800 | 2,270 | |||||||||||
Kerry Logistics Network Ltd. | Air Freight & Logistics | 1,000 | 2,293 | |||||||||||
Kingboard Holdings Ltd. | Electronic Equipment, Instruments & Components | 4,000 | 19,460 | |||||||||||
| a | Kingdee International Software Group Co. Ltd. | Software | 15,000 | 33,366 | ||||||||||
Kingfa Sci & Tech Co. Ltd., A | Chemicals | 1,200 | 1,841 | |||||||||||
| a | Kingsoft Cloud Holdings Ltd., ADR | IT Services | 561 | 3,405 | ||||||||||
Kingsoft Corp. Ltd. | Software | 5,000 | 16,217 | |||||||||||
| a,b | Kuaishou Technology, 144A, B | Interactive Media & Services | 9,200 | 87,167 | ||||||||||
| a | Kuang-Chi Technologies Co. Ltd. | Auto Components | 800 | 2,164 | ||||||||||
Kunlun Tech Co. Ltd. | Entertainment | 400 | 1,061 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 500 | 135,395 | |||||||||||
KWG Group Holdings Ltd. | Real Estate Management & Development | 8,000 | 3,310 | |||||||||||
Lakala Payment Co. Ltd., A | IT Services | 400 | 1,491 | |||||||||||
Lao Feng Xiang Co. Ltd., B | Textiles, Apparel & Luxury Goods | 1,200 | 4,003 | |||||||||||
Laobaixing Pharmacy Chain JSC | Food & Staples Retailing | 100 | 570 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 8,000 | 4,178 | |||||||||||
| b,d | Legend Holdings Corp., 144A | Technology Hardware, Storage & Peripherals | 3,000 | 3,777 | ||||||||||
Lenovo Group Ltd. | Technology Hardware, Storage & Peripherals | 42,000 | 45,693 | |||||||||||
Lens Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 2,000 | 3,677 | |||||||||||
Leo Group Co. Ltd. | Media | 2,400 | 790 | |||||||||||
Lepu Medical Technology Beijing Co. Ltd. | Health Care Equipment & Supplies | 800 | 2,542 | |||||||||||
Levima Advanced Materials Corp., A | Chemicals | 400 | 1,618 | |||||||||||
Leyard Optoelectronic Co. Ltd. | Electronic Equipment, Instruments & Components | 800 | 899 | |||||||||||
| a | Li Auto Inc., ADR | Automobiles | 2,364 | 61,015 | ||||||||||
Li Ning Co. Ltd. | Textiles, Apparel & Luxury Goods | 13,000 | 112,215 | |||||||||||
LianChuang Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 400 | 936 | |||||||||||
Lianhe Chemical Technology Co. Ltd. | Chemicals | 400 | 859 | |||||||||||
Liaoning Port Co. Ltd., A | Transportation Infrastructure | 7,600 | 2,059 | |||||||||||
Liuzhou Iron & Steel Co. Ltd., A | Metals & Mining | 400 | 315 | |||||||||||
Livzon Pharmaceutical Group Inc. | Pharmaceuticals | 400 | 2,426 | |||||||||||
Livzon Pharmaceutical Group Inc., H | Pharmaceuticals | 900 | 3,235 | |||||||||||
Logan Group Co. Ltd. | Real Estate Management & Development | 6,000 | 1,709 | |||||||||||
Lomon Billions Group Co. Ltd. | Chemicals | 1,000 | 3,644 | |||||||||||
| b,c | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 10,660 | 54,856 | ||||||||||
LONGi Green Energy Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 2,180 | 24,791 | |||||||||||
| franklintempleton.com | Annual Report | 153 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Longshine Technology Group Co. Ltd., A | Software | 400 | $ | 1,752 | ||||||||||
Luenmei Quantum Co. Ltd., A | Water Utilities | 800 | 901 | |||||||||||
| a | Lufax Holding Ltd., ADR | Consumer Finance | 3,168 | 17,646 | ||||||||||
Luolai Lifestyle Technology Co. Ltd., A | Textiles, Apparel & Luxury Goods | 400 | 817 | |||||||||||
Luxi Chemical Group Co. Ltd., A | Chemicals | 800 | 2,258 | |||||||||||
Luxshare Precision Industry Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,800 | 13,982 | |||||||||||
| a,b | Luye Pharma Group Ltd., 144A | Pharmaceuticals | 10,500 | 4,022 | ||||||||||
Luzhou Laojiao Co. Ltd., A | Beverages | 600 | 17,569 | |||||||||||
Maanshan Iron & Steel Co. Ltd., A | Metals & Mining | 2,000 | 1,248 | |||||||||||
Maanshan Iron & Steel Co. Ltd., H | Metals & Mining | 4,000 | 1,609 | |||||||||||
Mango Excellent Media Co. Ltd. | Entertainment | 640 | 3,141 | |||||||||||
Maxscend Microelectronics Co. Ltd., A | Electronic Equipment, Instruments & Components | 100 | 3,307 | |||||||||||
| a | Meinian Onehealth Healthcare Holdings Co. Ltd. | Health Care Providers & Services | 1,720 | 1,596 | ||||||||||
| a,b | Meituan Dianping, 144A | Internet & Direct Marketing Retail | 22,300 | 443,073 | ||||||||||
Metallurgical Corp. of China Ltd. | Construction & Engineering | 17,000 | 4,602 | |||||||||||
Metallurgical Corp. of China Ltd., A | Construction & Engineering | 6,400 | 3,781 | |||||||||||
Microport Scientific Corp. | Health Care Equipment & Supplies | 2,900 | 6,584 | |||||||||||
Ming Yang Smart Energy Group Ltd., A | Electrical Equipment | 800 | 2,794 | |||||||||||
Ming Yuan Cloud Group Holdings Ltd. | Software | 4,000 | 5,506 | |||||||||||
MINISO Group Holding Ltd., ADR | Multiline Retail | 416 | 3,245 | |||||||||||
Minth Group Ltd. | Auto Components | 4,000 | 9,868 | |||||||||||
| a | MMG Ltd. | Metals & Mining | 16,000 | 6,456 | ||||||||||
Montage Technology Co. Ltd. | Semiconductors & Semiconductor Equipment | 339 | 3,594 | |||||||||||
| a | Montnets Rongxin Technology Group Co. Ltd. | Software | 400 | 780 | ||||||||||
Muyuan Foods Co. Ltd. | Food Products | 2,096 | 18,774 | |||||||||||
NanJi E-Commerce Co. Ltd. | Media | 800 | 686 | |||||||||||
Nanjing Hanrui Cobalt Co. Ltd., A | Metals & Mining | 100 | 998 | |||||||||||
Nanjing Iron & Steel Co. Ltd., A | Metals & Mining | 1,600 | 910 | |||||||||||
Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 1,977 | |||||||||||
Nanjing Securities Co. Ltd., A | Capital Markets | 1,200 | 1,554 | |||||||||||
Nanyang Topsec Technologies Group Inc., A | Electrical Equipment | 400 | 713 | |||||||||||
Nari Technology Development Co. Ltd., A | Electrical Equipment | 2,400 | 11,905 | |||||||||||
| a | National Silicon Industry Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 712 | 2,460 | ||||||||||
NAURA Technology Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 8,632 | |||||||||||
| a | NavInfo Co. Ltd. | Household Durables | 800 | 1,761 | ||||||||||
NetEase Inc. | Entertainment | 8,700 | 159,749 | |||||||||||
New China Life Insurance Co. Ltd., A | Insurance | 800 | 4,452 | |||||||||||
New China Life Insurance Co. Ltd., H | Insurance | 5,600 | 15,660 | |||||||||||
| a | New Hope Liuhe Co. Ltd. | Food Products | 2,000 | 5,350 | ||||||||||
| a | New Oriental Education & Technology Group Inc., ADR | Diversified Consumer Services | 7,916 | 9,103 | ||||||||||
Newland Digital Technology Co. Ltd. | Software | 400 | 1,061 | |||||||||||
Nexteer Automotive Group Ltd. | Auto Components | 5,000 | 3,192 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 9,000 | 7,861 | |||||||||||
Ninestar Corp. | Technology Hardware, Storage & Peripherals | 400 | 2,693 | |||||||||||
Ningbo Deye Technology Co. Ltd., A | Machinery | 100 | 3,353 | |||||||||||
Ningbo Joyson Electronic Corp. | Auto Components | 500 | 1,113 | |||||||||||
Ningbo Orient Wires & Cables Co. Ltd., A | Electrical Equipment | 300 | 2,436 | |||||||||||
Ningbo Sanxing Medical Electric Co. Ltd., A | Electrical Equipment | 400 | 691 | |||||||||||
Ningbo Shanshan Co. Ltd., A | Chemicals | 800 | 3,519 | |||||||||||
Ningbo Tuopu Group Co. Ltd., A | Auto Components | 400 | 3,579 | |||||||||||
Ningbo Zhoushan Port Co. Ltd., A | Transportation Infrastructure | 3,600 | 2,229 | |||||||||||
Ningxia Baofeng Energy Group Co. Ltd., A | Chemicals | 1,200 | 2,809 | |||||||||||
| a | NIO Inc., ADR | Automobiles | 7,468 | 157,201 | ||||||||||
| b | Nongfu Spring Co. Ltd., H, 144A | Beverages | 10,000 | 53,311 | ||||||||||
| 154 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
North Huajin Chemical Industries Co. Ltd. | Chemicals | 400 | $ | 394 | ||||||||||
| a | North Industries Group Red Arrow Co. Ltd., A | Machinery | 400 | 1,418 | ||||||||||
Northeast Securities Co. Ltd. | Capital Markets | 800 | 975 | |||||||||||
NSFOCUS Information Technology Co. Ltd. | Software | 400 | 775 | |||||||||||
| a | Oceanwide Holdings Co. Ltd. | Diversified Financial Services | 800 | 248 | ||||||||||
| a | Offcn Education Technology Co. Ltd., A | Diversified Consumer Services | 800 | 707 | ||||||||||
Offshore Oil Engineering Co. Ltd., A | Energy Equipment & Services | 2,000 | 1,348 | |||||||||||
| a | OFILM Group Co. Ltd. | Electronic Equipment, Instruments & Components | 1,600 | 1,795 | ||||||||||
Oppein Home Group Inc., A | Household Durables | 100 | 1,843 | |||||||||||
ORG Technology Co. Ltd. | Containers & Packaging | 800 | 625 | |||||||||||
| b | Orient Securities Co. Ltd. of China, 144A | Capital Markets | 4,000 | 2,620 | ||||||||||
Oriental Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 800 | 1,157 | |||||||||||
| a | Ourpalm Co. Ltd. | Entertainment | 1,600 | 917 | ||||||||||
Ovctek China Inc., A | Health Care Equipment & Supplies | 400 | 2,302 | |||||||||||
| a | Pangang Group Vanadium Titanium & Resources Co. Ltd., A | Metals & Mining | 2,800 | 1,650 | ||||||||||
People.cn Co. Ltd. | Media | 400 | 693 | |||||||||||
Perfect World Co. Ltd. | Entertainment | 400 | 810 | |||||||||||
PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 118,000 | 61,174 | |||||||||||
Pharmaron Beijing Co. Ltd., A | Life Sciences Tools & Services | 100 | 1,859 | |||||||||||
| b,c | Pharmaron Beijing Co. Ltd., H, 144A, Reg S | Life Sciences Tools & Services | 800 | 9,750 | ||||||||||
PICC Property and Casualty Co. Ltd., H | Insurance | 38,000 | 38,915 | |||||||||||
| a | Pinduoduo Inc., ADR | Internet & Direct Marketing Retail | 2,144 | 85,996 | ||||||||||
Ping An Bank Co. Ltd., A | Banks | 8,000 | 19,382 | |||||||||||
| a,b,c | Ping An Healthcare and Technology Co. Ltd., 144A, Reg S | Health Care Technology | 2,200 | 5,787 | ||||||||||
Ping An Insurance Group Co. of China Ltd., A | Insurance | 4,400 | 33,582 | |||||||||||
Ping An Insurance Group Co. of China Ltd., H | Insurance | 34,500 | 245,157 | |||||||||||
Pingdingshan Tianan Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 800 | 2,157 | |||||||||||
Poly Developments and Holdings Group Co. Ltd., A | Real Estate Management & Development | 4,800 | 13,384 | |||||||||||
Poly Property Services Co. Ltd., H | Real Estate Management & Development | 800 | 5,792 | |||||||||||
| b | Pop Mart International Group Ltd., 144A | Specialty Retail | 4,000 | 17,570 | ||||||||||
| b | Postal Savings Bank of China Co. Ltd., 144A | Banks | 54,000 | 43,785 | ||||||||||
Postal Savings Bank of China Co. Ltd., A | Banks | 8,400 | 7,132 | |||||||||||
Power Construction Corp. of China Ltd. | Construction & Engineering | 4,400 | 5,053 | |||||||||||
Proya Cosmetics Co. Ltd. | Personal Products | 100 | 2,970 | |||||||||||
Qingdao Port International Co. Ltd., A | Transportation Infrastructure | 400 | 350 | |||||||||||
Qingdao TGOOD Electric Co. Ltd. | Electrical Equipment | 400 | 1,177 | |||||||||||
Qinhuangdao Port Co. Ltd., A | Transportation Infrastructure | 800 | 349 | |||||||||||
Raytron Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 126 | 894 | |||||||||||
| a,b | Red Star Macalline Group Corp. Ltd., 144A | Real Estate Management & Development | 4,000 | 1,798 | ||||||||||
| a | Red Star Macalline Group Corp. Ltd., A | Real Estate Management & Development | 420 | 537 | ||||||||||
| a,b | Remegen Co. Ltd., H, 144A | Biotechnology | 1,000 | 5,938 | ||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 1,200 | 843 | |||||||||||
| a | RLX Technology Inc., ADR | Tobacco | 4,372 | 7,826 | ||||||||||
Rongsheng Petro Chemical Co. Ltd. | Chemicals | 1,350 | 3,041 | |||||||||||
| franklintempleton.com | Annual Report | 155 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
SAIC Motor Corp Ltd | Automobiles | 4,000 | $ | 10,712 | ||||||||||
Sailun Group Co. Ltd., A | Auto Components | 1,200 | 1,864 | |||||||||||
Sangfor Technologies Inc. | Software | 100 | 1,757 | |||||||||||
Sansteel Minguang Co. Ltd. | Metals & Mining | 800 | 902 | |||||||||||
Sany Heavy Industry Co. Ltd., A | Machinery | 3,600 | 9,936 | |||||||||||
SDIC Capital Co. Ltd., A | Capital Markets | 2,012 | 2,234 | |||||||||||
SDIC Power Holdings Co. Ltd., A | Independent Power and Renewable Electricity Producers | 2,800 | 4,120 | |||||||||||
Sealand Securities Co. Ltd. | Capital Markets | 1,380 | 813 | |||||||||||
Seazen Group Ltd. | Real Estate Management & Development | 10,000 | 5,389 | |||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 900 | 4,561 | |||||||||||
SF Holding Co. Ltd. | Air Freight & Logistics | 2,000 | 14,398 | |||||||||||
SG Micro Corp., A | Semiconductors & Semiconductor Equipment | 100 | 5,144 | |||||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 2,800 | 7,256 | |||||||||||
Shaanxi International Trust Co. Ltd. | Capital Markets | 800 | 398 | |||||||||||
Shandong Chenming Paper Holdings Ltd., A | Paper & Forest Products | 800 | 807 | |||||||||||
Shandong Chenming Paper Holdings Ltd., B | Paper & Forest Products | 4,000 | 1,517 | |||||||||||
Shandong Chenming Paper Holdings Ltd., H | Paper & Forest Products | 3,000 | 1,191 | |||||||||||
Shandong Denghai Seeds Co. Ltd. | Food Products | 400 | 1,504 | |||||||||||
| b | Shandong Gold Mining Co. Ltd., 144A | Metals & Mining | 4,000 | 7,999 | ||||||||||
Shandong Gold Mining Co. Ltd., A | Metals & Mining | 1,600 | 5,419 | |||||||||||
Shandong Hi-speed Co. Ltd., A | Transportation Infrastructure | 1,200 | 1,021 | |||||||||||
Shandong Himile Mechanical Science & Technology Co. Ltd. | Machinery | 400 | 1,218 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 800 | 4,105 | |||||||||||
Shandong Humon Smelting Co. Ltd. | Metals & Mining | 400 | 675 | |||||||||||
Shandong Linglong Tyre Co. Ltd., A | Auto Components | 400 | 1,391 | |||||||||||
Shandong Nanshan Aluminum Co. Ltd., A | Metals & Mining | 5,600 | 3,590 | |||||||||||
Shandong Pharmaceutical Glass Co. Ltd., A | Health Care Equipment & Supplies | 400 | 1,671 | |||||||||||
Shandong Publishing & Media Co. Ltd., A | Media | 800 | 815 | |||||||||||
Shandong Shida Shenghua Chemical Group Co. Ltd., A | Chemicals | 100 | 2,320 | |||||||||||
Shandong Sun Paper Industry JSC Ltd., A | Paper & Forest Products | 800 | 1,437 | |||||||||||
Shandong Weigao Group Medical Polymer Co. Ltd., H | Health Care Equipment & Supplies | 13,400 | 14,356 | |||||||||||
| a | Shanghai 2345 Network Holding Group Co. Ltd. | Software | 1,200 | 431 | ||||||||||
Shanghai AJ Group Co. Ltd., A | Diversified Financial Services | 400 | 415 | |||||||||||
Shanghai Bailian Group Co. Ltd., B | Food & Staples Retailing | 1,600 | 1,198 | |||||||||||
Shanghai Bairun Investment Holding Group Co. Ltd. | Beverages | 280 | 1,589 | |||||||||||
Shanghai Baosight Software Co. Ltd., A | Software | 400 | 3,072 | |||||||||||
Shanghai Baosight Software Co. Ltd., B | Software | 2,240 | 9,117 | |||||||||||
Shanghai Construction Group Co. Ltd., A | Construction & Engineering | 2,800 | 1,438 | |||||||||||
Shanghai Dazhong Public Utilities Group Co. Ltd., A | Gas Utilities | 800 | 444 | |||||||||||
Shanghai Electric Group Co. Ltd., A | Electrical Equipment | 4,400 | 2,800 | |||||||||||
Shanghai Electric Group Co. Ltd., H | Electrical Equipment | 16,000 | 4,209 | |||||||||||
Shanghai Electric Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 1,200 | 1,834 | |||||||||||
Shanghai Environment Group Co. Ltd., A | Commercial Services & Supplies | 400 | 669 | |||||||||||
| 156 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., A | Pharmaceuticals | 800 | $ | 6,721 | ||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., H | Pharmaceuticals | 3,000 | 14,672 | |||||||||||
Shanghai Huayi Group Co. Ltd., B | Chemicals | 800 | 570 | |||||||||||
| a | Shanghai International Airport Co. Ltd., A | Transportation Infrastructure | 800 | 6,200 | ||||||||||
Shanghai International Port Group Co. Ltd., A | Transportation Infrastructure | 4,000 | 3,447 | |||||||||||
Shanghai Jahwa United Co. Ltd., A | Personal Products | 400 | 2,173 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd. | Hotels, Restaurants & Leisure | 800 | 1,597 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd., A | Hotels, Restaurants & Leisure | 400 | 3,134 | |||||||||||
Shanghai Jinqiao Export Processing Zone Development Co. Ltd., A | Real Estate Management & Development | 400 | 939 | |||||||||||
Shanghai Jinqiao Export Processing Zone Development Co. Ltd., B | Real Estate Management & Development | 2,000 | 1,874 | |||||||||||
| a,b | Shanghai Junshi Biosciences Co. Ltd., H, 144A | Biotechnology | 1,000 | 7,112 | ||||||||||
Shanghai Lingang Holdings Corp. Ltd. | Real Estate Management & Development | 920 | 2,043 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A | Real Estate Management & Development | 800 | 1,468 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | Real Estate Management & Development | 6,880 | 6,440 | |||||||||||
Shanghai M&G Stationery Inc., A | Commercial Services & Supplies | 400 | 3,080 | |||||||||||
Shanghai Mechanical and Electrical Industry Co. Ltd., A | Machinery | 400 | 820 | |||||||||||
Shanghai Mechanical and Electrical Industry Co. Ltd., B | Machinery | 1,600 | 1,976 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., A | Health Care Providers & Services | 800 | 3,089 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 5,000 | 9,641 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A | Banks | 12,000 | 15,123 | |||||||||||
Shanghai Putailai New Energy Technology Co. Ltd., A | Chemicals | 320 | 7,084 | |||||||||||
Shanghai RAAS Blood Products Co. Ltd., A | Biotechnology | 2,000 | 1,887 | |||||||||||
Shanghai Shibei Hi-Tech Co. Ltd., B | Real Estate Management & Development | 3,600 | 1,037 | |||||||||||
Shanghai Shimao Co. Ltd., A | Real Estate Management & Development | 1,600 | 945 | |||||||||||
Shanghai Tunnel Engineering Co. Ltd., A | Construction & Engineering | 1,600 | 1,336 | |||||||||||
Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd. | Trading Companies & Distributors | 1,600 | 1,483 | |||||||||||
Shanghai Yuyuan Tourist Mart Group Co. Ltd., A | Specialty Retail | 1,600 | 2,563 | |||||||||||
Shanghai Zhangjiang High-Tech Park Development Co. Ltd., A | Real Estate Management & Development | 800 | 1,726 | |||||||||||
| a | Shanghai Zhenhua Port Machinery Co. Ltd., B | Machinery | 4,400 | 1,096 | ||||||||||
| a | Shangri-La Asia Ltd. | Hotels, Restaurants & Leisure | 4,000 | 3,146 | ||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,200 | 3,138 | |||||||||||
| a | Shanxi Meijin Energy Co. Ltd., A | Metals & Mining | 1,600 | 3,229 | ||||||||||
Shanxi Securities Co. Ltd. | Capital Markets | 920 | 820 | |||||||||||
Shanxi Taigang Stainless Steel Co. Ltd., A | Metals & Mining | 2,400 | 2,533 | |||||||||||
Shanxi Xinghuacun Fen Wine Factory Co. Ltd., A | Beverages | 500 | 20,077 | |||||||||||
Shanxi Xishan Coal & Electricity Power Co. Ltd. | Oil, Gas & Consumable Fuels | 1,380 | 2,700 | |||||||||||
Shanying International Holding Co. Ltd., A | Paper & Forest Products | 1,200 | 571 | |||||||||||
Shenghe Resources Holding Co. Ltd., A | Metals & Mining | 800 | 2,139 | |||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 2,031 | |||||||||||
Shenwan Hongyuan Group Co. Ltd. | Capital Markets | 9,600 | 6,624 | |||||||||||
| b,c | Shenwan Hongyuan Group Co. Ltd., 144A, Reg S | Capital Markets | 9,600 | 2,145 | ||||||||||
Shenzhen Accord Pharmaceutical Co. Ltd., B | Health Care Providers & Services | 400 | 908 | |||||||||||
Shenzhen Agricultural Products Group Co. Ltd. | Food & Staples Retailing | 400 | 390 | |||||||||||
| franklintempleton.com | Annual Report | 157 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| a | Shenzhen Airport Co. Ltd. | Transportation Infrastructure | 800 | $ | 873 | |||||||||
Shenzhen Aisidi Co. Ltd. | Electronic Equipment, Instruments & Components | 400 | 542 | |||||||||||
Shenzhen Capchem Technology Co. Ltd., A | Chemicals | 200 | 2,569 | |||||||||||
Shenzhen Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 2,080 | 2,107 | |||||||||||
Shenzhen Everwin Precision Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 460 | 712 | |||||||||||
Shenzhen Expressway Co. Ltd., H | Transportation Infrastructure | 4,000 | 4,214 | |||||||||||
Shenzhen Gas Corporation Ltd., A | Gas Utilities | �� | 1,200 | 1,348 | ||||||||||
Shenzhen Goodix Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 100 | 1,117 | |||||||||||
| b | Shenzhen Hepalink Pharmaceutical Group Co. Ltd., 144A | Pharmaceuticals | 500 | 368 | ||||||||||
Shenzhen Huaqiang Industry Co. Ltd. | Real Estate Management & Development | 400 | 795 | |||||||||||
Shenzhen Infogem Technologies Co. Ltd., A | Software | 400 | 802 | |||||||||||
Shenzhen Inovance Technology Co. Ltd. | Machinery | 1,200 | 10,775 | |||||||||||
Shenzhen International Holdings Ltd. | Transportation Infrastructure | 5,000 | 5,286 | |||||||||||
Shenzhen Investment Ltd. | Real Estate Management & Development | 12,000 | 2,681 | |||||||||||
Shenzhen Jinjia Group Co. Ltd. | Containers & Packaging | 400 | 870 | |||||||||||
Shenzhen Kaifa Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 400 | 715 | |||||||||||
Shenzhen Kangtai Biological Products Co. Ltd. | Biotechnology | 300 | 4,407 | |||||||||||
Shenzhen Kingdom Sci-Tech Co. Ltd., A | Software | 400 | 846 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 500 | 24,200 | |||||||||||
| a | Shenzhen MTC Co. Ltd. | Household Durables | 2,400 | 1,380 | ||||||||||
Shenzhen Overseas Chinese Town Co. Ltd. | Hotels, Restaurants & Leisure | 2,800 | 3,246 | |||||||||||
| a | Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 400 | 1,384 | ||||||||||
Shenzhen SC New Energy Technology Corp., A | Semiconductors & Semiconductor Equipment | 100 | 1,156 | |||||||||||
Shenzhen Sunway Communication Co. Ltd. | Communications Equipment | 400 | 1,136 | |||||||||||
Shenzhen Transsion Holdings Co. Ltd., A | Technology Hardware, Storage & Peripherals | 246 | 3,705 | |||||||||||
Shenzhen Yan Tian Port Holding Co. Ltd., A | Transportation Infrastructure | 800 | 645 | |||||||||||
Shenzhen YUTO Packaging Technology Co. Ltd. | Containers & Packaging | 400 | 1,643 | |||||||||||
Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., A | Metals & Mining | 1,200 | 837 | |||||||||||
Shenzhou International Group Holdings Ltd. | Textiles, Apparel & Luxury Goods | 4,300 | 57,543 | |||||||||||
| a | Shijiazhuang Changshan BeiMing Technology Co. Ltd. | Textiles, Apparel & Luxury Goods | 400 | 418 | ||||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd. | Pharmaceuticals | 820 | 4,327 | |||||||||||
Shimao Group Holdings Ltd. | Real Estate Management & Development | 8,500 | 4,797 | |||||||||||
| b | Shimao Services Holdings Ltd., 144A | Real Estate Management & Development | 4,000 | 2,145 | ||||||||||
Shui On Land Ltd. | Real Estate Management & Development | 20,500 | 3,141 | |||||||||||
| a | Siasun Robot & Automation Co. Ltd. | Machinery | 400 | 575 | ||||||||||
Sichuan Chuantou Energy Co Ltd., A | Independent Power and Renewable Electricity Producers | 1,600 | 2,707 | |||||||||||
| a | Sichuan Hebang Biotechnology Co. Ltd., A | Chemicals | 4,000 | 2,212 | ||||||||||
Sichuan Kelun Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 1,092 | |||||||||||
| a | Sichuan New Energy Power Co. Ltd. | Trading Companies & Distributors | 400 | 1,227 | ||||||||||
| 158 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Sichuan Road & Bridge Co. Ltd., A | Construction & Engineering | 2,000 | $ | 3,292 | ||||||||||
Sichuan Swellfun Co. Ltd., A | Beverages | 200 | 2,595 | |||||||||||
Sichuan Yahua Industrial Group Co. Ltd., A | Chemicals | 400 | 1,818 | |||||||||||
Sieyuan Electric Co. Ltd. | Electrical Equipment | 400 | 2,067 | |||||||||||
Silergy Corp. | Semiconductors & Semiconductor Equipment | 360 | 43,097 | |||||||||||
Sino-Ocean Land Holdings Ltd. | Real Estate Management & Development | 16,000 | 3,412 | |||||||||||
Sinolink Securities Co. Ltd., A | Capital Markets | 1,200 | 1,815 | |||||||||||
Sinoma International Engineering Co. | Construction & Engineering | 800 | 1,207 | |||||||||||
Sinoma Science & Technology Co. Ltd. | Chemicals | 800 | 3,060 | |||||||||||
Sinopec Engineering Group Co. Ltd. | Construction & Engineering | 8,500 | 4,341 | |||||||||||
| a | Sinopec Oilfield Service Corp. | Energy Equipment & Services | 16,000 | 1,308 | ||||||||||
| a | Sinopec Oilfield Service Corp., A | Energy Equipment & Services | 1,200 | 374 | ||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., A | Chemicals | 1,600 | 887 | |||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., H | Chemicals | 20,000 | 4,163 | |||||||||||
Sinopharm Group Co. Ltd., H | Health Care Providers & Services | 7,200 | 16,438 | |||||||||||
Sinotrans Ltd., A | Air Freight & Logistics | 2,000 | 1,260 | |||||||||||
Sinotrans Ltd., H | Air Freight & Logistics | 12,000 | 3,754 | |||||||||||
Sinotruk Hong Kong Ltd. | Machinery | 4,000 | 6,129 | |||||||||||
SITC International Holdings Co. Ltd. | Marine | 7,000 | 24,804 | |||||||||||
Skshu Paint Co. Ltd., A | Chemicals | 100 | 1,396 | |||||||||||
Skyworth Digital Co. Ltd., A | Communications Equipment | 400 | 890 | |||||||||||
| b | Smoore International Holdings Ltd., 144A | Tobacco | 10,000 | 24,006 | ||||||||||
Songcheng Performance Development Co. Ltd. | Hotels, Restaurants & Leisure | 1,200 | 2,497 | |||||||||||
SooChow Securities Co. Ltd., A | Capital Markets | 2,086 | 2,461 | |||||||||||
Southwest Securities Co. Ltd., A | Capital Markets | 2,800 | 1,919 | |||||||||||
StarPower Semiconductor Ltd., A | Semiconductors & Semiconductor Equipment | 100 | 6,090 | |||||||||||
| a | STO Express Co. Ltd. | Air Freight & Logistics | 400 | 468 | ||||||||||
Sun Art Retail Group Ltd. | Food & Staples Retailing | 8,500 | 3,093 | |||||||||||
Sunac China Holdings Ltd. | Real Estate Management & Development | 18,000 | 10,527 | |||||||||||
| a,b | Sunac Services Holdings Ltd., 144A | Real Estate Management & Development | 4,000 | 2,477 | ||||||||||
Sungrow Power Supply Co. Ltd. | Electrical Equipment | 600 | 10,138 | |||||||||||
| a | Suning Universal Co. Ltd. | Real Estate Management & Development | 2,000 | 1,405 | ||||||||||
| a | Suning.com Co. Ltd. | Specialty Retail | 3,200 | 1,739 | ||||||||||
Sunny Optical Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 3,700 | 59,577 | |||||||||||
Sunwoda Electronic Co. Ltd., A | Electrical Equipment | 800 | 3,466 | |||||||||||
Suofeiya Home Collection Co. Ltd. | Household Durables | 400 | 1,212 | |||||||||||
Suzhou Dongshan Precision Manufacturing Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 2,354 | |||||||||||
Suzhou Gold Mantis Construction Decoration Co. Ltd. | Construction & Engineering | 800 | 689 | |||||||||||
Suzhou TA&A Ultra Clean Technology Co. Ltd., A | Chemicals | 200 | 2,256 | |||||||||||
Taiji Computer Corp. Ltd. | IT Services | 400 | 1,341 | |||||||||||
| a | TAL Education Group, ADR | Diversified Consumer Services | 2,680 | 8,067 | ||||||||||
Tangshan Jidong Cement Co. Ltd. | Construction Materials | 1,200 | 2,263 | |||||||||||
TangShan Port Group Co. Ltd., A | Transportation Infrastructure | 1,600 | 751 | |||||||||||
Tangshan Sanyou Chemical Industries Co. Ltd., A | Chemicals | 800 | 1,013 | |||||||||||
TBEA Co. Ltd., A | Electrical Equipment | 1,600 | 5,137 | |||||||||||
TCL Corp. | Household Durables | 5,200 | 4,022 | |||||||||||
Tencent Holdings Ltd. | Interactive Media & Services | 34,400 | 1,643,701 | |||||||||||
| a | Tencent Music Entertainment Group, ADR | Entertainment | 3,352 | 16,324 | ||||||||||
The People’s Insurance Co. Group of China Ltd., H | Insurance | 46,000 | 15,096 | |||||||||||
Thunder Software Technology Co. Ltd. | Software | 200 | 3,125 | |||||||||||
Tian Di Science & Technology Co. Ltd., A | Machinery | 1,600 | 1,238 | |||||||||||
| franklintempleton.com | Annual Report | 159 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Tianfeng Securities Co. Ltd., A | Capital Markets | 3,840 | $ | 2,099 | ||||||||||
Tianjin Chase Sun Pharmaceutical Co. Ltd. | Pharmaceuticals | 1,200 | 1,501 | |||||||||||
Tianjin Guangyu Development Co. Ltd., A | Real Estate Management & Development | 800 | 2,144 | |||||||||||
Tianjin Zhonghuan Semiconductor Co. Ltd. | Semiconductors & Semiconductor Equipment | 1,200 | 8,072 | |||||||||||
Tianma Microelectronics Co. Ltd. | Electronic Equipment, Instruments & Components | 900 | 1,482 | |||||||||||
Tianshan Aluminum Group Co. Ltd., A | Machinery | 800 | 973 | |||||||||||
Tianshui Huatian Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 1,200 | 1,987 | |||||||||||
| a | Tibet Summit Resources Co. Ltd., A | Metals & Mining | 400 | 1,667 | ||||||||||
Tingyi Cayman Islands Holding Corp. | Food Products | 10,000 | 16,855 | |||||||||||
Titan Wind Energy Suzhou Co. Ltd., A | �� | Electrical Equipment | 800 | 1,674 | ||||||||||
| a,c | Tongcheng-Elong Holdings Ltd., Reg S | Internet & Direct Marketing Retail | 4,800 | 8,581 | ||||||||||
TongFu Microelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 400 | 1,045 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 800 | 2,203 | |||||||||||
Tongling Nonferrous Metals Group Co. Ltd. | Metals & Mining | 4,400 | 2,578 | |||||||||||
Tongwei Co. Ltd., A | Food Products | 2,000 | 13,450 | |||||||||||
| a | Topchoice Medical Investment Corp., A | Health Care Providers & Services | 100 | 2,254 | ||||||||||
| b | Topsports International Holdings Ltd., 144A | Specialty Retail | 10,000 | 8,364 | ||||||||||
| a | Towngas China Co. Ltd. | Gas Utilities | 6,000 | 3,157 | ||||||||||
TravelSky Technology Ltd., H | IT Services | 5,000 | 7,215 | |||||||||||
Trina Solar Co. Ltd., A | Semiconductors & Semiconductor Equipment | 844 | 7,831 | |||||||||||
| a | Trip.com Group Ltd., ADR | Internet & Direct Marketing Retail | 3,060 | 70,747 | ||||||||||
Tsingtao Brewery Co. Ltd., A | Beverages | 300 | 3,734 | |||||||||||
Tsingtao Brewery Co. Ltd., H | Beverages | 3,200 | 25,456 | |||||||||||
| a | Tuya Inc., ADR | Software | 1,192 | 3,528 | ||||||||||
Uni-President China Holdings Ltd. | Food Products | 7,000 | 6,105 | |||||||||||
Unigroup Guoxin Microelectronics Co. Ltd. | Semiconductors & Semiconductor Equipment | 300 | 9,666 | |||||||||||
Unisplendour Corp. Ltd. | Electronic Equipment, Instruments & Components | 560 | 1,725 | |||||||||||
Universal Scientific Industrial Shanghai Co. Ltd., A | Electronic Equipment, Instruments & Components | 400 | 764 | |||||||||||
Valiant Co. Ltd., A | Chemicals | 400 | 1,140 | |||||||||||
| a | Vipshop Holdings Ltd., ADR | Internet & Direct Marketing Retail | 2,464 | 22,176 | ||||||||||
Walvax Biotechnology Co. Ltd. | Biotechnology | 800 | 6,915 | |||||||||||
Wangsu Science & Technology Co. Ltd. | IT Services | 800 | 752 | |||||||||||
Wanhua Chemical Group Co. Ltd., A | Chemicals | 1,300 | 16,565 | |||||||||||
Want Want China Holdings Ltd. | Food Products | 30,000 | 27,734 | |||||||||||
Wanxiang Qianchao Co. Ltd. | Auto Components | 1,600 | 1,369 | |||||||||||
| a | Weibo Corp., ADR | Interactive Media & Services | 404 | 9,902 | ||||||||||
Weichai Power Co. Ltd., A | Machinery | 2,800 | 5,888 | |||||||||||
Weichai Power Co. Ltd., H | Machinery | 11,000 | 17,389 | |||||||||||
Weifu High-Technology Co. Ltd., B | Auto Components | 800 | 1,559 | |||||||||||
Weifu High-Technology Group Co. Ltd., A | Auto Components | 400 | 1,251 | |||||||||||
Weihai Guangwei Composites Co. Ltd., A | Chemicals | 200 | 1,858 | |||||||||||
| a | Wens Foodstuffs Group Co. Ltd. | Food Products | 800 | 2,779 | ||||||||||
Western Mining Co. Ltd., A | Metals & Mining | 800 | 1,734 | |||||||||||
Western Securities Co. Ltd. | Capital Markets | 2,000 | 2,278 | |||||||||||
Western Superconducting Technologies Co. Ltd., A | Metals & Mining | 135 | 1,842 | |||||||||||
Westone Information Industry Inc. | Electronic Equipment, Instruments & Components | 400 | 2,861 | |||||||||||
Will Semiconductor Ltd., A | Semiconductors & Semiconductor Equipment | 300 | 9,140 | |||||||||||
Wingtech Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 500 | 6,403 | |||||||||||
Winning Health Technology Group Co. Ltd. | Health Care Technology | 800 | 1,183 | |||||||||||
Wolong Electric Group Co. Ltd., A | Electrical Equipment | 400 | 827 | |||||||||||
Wuchan Zhongda Group Co. Ltd., A | Distributors | 2,000 | 1,682 | |||||||||||
Wuhan Guide Infrared Co. Ltd. | Electronic Equipment, Instruments & Components | 816 | 2,192 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 400 | 1,478 | |||||||||||
| 160 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Wuliangye Yibin Co. Ltd., A | Beverages | 1,600 | $ | 39,082 | ||||||||||
WUS Printed Circuit Kunshan Co. Ltd. | Electronic Equipment, Instruments & Components | 800 | 1,669 | |||||||||||
| b | WuXi AppTec Co. Ltd., 144A | Life Sciences Tools & Services | 1,940 | 30,841 | ||||||||||
WuXi AppTec Co. Ltd., A | Life Sciences Tools & Services | 1,000 | 17,703 | |||||||||||
| a,b | WuXi Biologics (Cayman) Inc., 144A | Life Sciences Tools & Services | 19,000 | 157,820 | ||||||||||
Wuxi Lead Intelligent Equipment Co. Ltd. | Electronic Equipment, Instruments & Components | 280 | 2,578 | |||||||||||
Wuxi Shangji Automation Co. Ltd., A | Machinery | 100 | 2,160 | |||||||||||
XCMG Construction Machinery Co. Ltd. | Machinery | 2,800 | 2,272 | |||||||||||
Xiamen C & D Inc., A | Trading Companies & Distributors | 1,200 | 2,404 | |||||||||||
Xiamen Faratronic Co. Ltd., A | Electronic Equipment, Instruments & Components | 100 | 3,166 | |||||||||||
Xiamen ITG Group Corp. Ltd., A | Trading Companies & Distributors | 800 | 975 | |||||||||||
Xiamen Tungsten Co. Ltd., A | Metals & Mining | 400 | 1,166 | |||||||||||
Xiangcai Co. Ltd., A | Real Estate Management & Development | 800 | 1,043 | |||||||||||
| a,b | Xiaomi Corp., B, 144A | Technology Hardware, Storage & Peripherals | 76,000 | 135,281 | ||||||||||
Xinhua Winshare Publishing and Media Co. Ltd., H | Distributors | 2,000 | 1,453 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd. | Electrical Equipment | 1,200 | 2,482 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd., H | Electrical Equipment | 4,000 | 6,037 | |||||||||||
Xinjiang Tianshan Cement Co. Ltd., A | Construction Materials | 800 | 1,661 | |||||||||||
Xinjiang Zhongtai Chemical Co. Ltd., A | Chemicals | 1,200 | 1,707 | |||||||||||
Xinxing Ductile Iron Pipes Co. Ltd. | Metals & Mining | 2,000 | 1,575 | |||||||||||
Xinyi Solar Holdings Ltd. | Semiconductors & Semiconductor Equipment | 24,000 | 42,353 | |||||||||||
| a | XPeng Inc., ADR | Automobiles | 2,836 | 78,245 | ||||||||||
Xuji Electric Co. Ltd., A | Electrical Equipment | 400 | 1,202 | |||||||||||
| b,c | Yadea Group Holdings Ltd., 144A, Reg S | Automobiles | 5,300 | 8,202 | ||||||||||
Yang Quan Coal Industry Group Co. Ltd., A | Oil, Gas & Consumable Fuels | 1,200 | 2,282 | |||||||||||
Yango Group Co. Ltd. | Real Estate Management & Development | 2,400 | 1,607 | |||||||||||
| b,c | Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., 144A, Reg S | Communications Equipment | 1,000 | 1,379 | ||||||||||
Yangzhou Yangjie Electronic Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 2,332 | |||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | Machinery | 12,000 | 13,566 | |||||||||||
Yantai Changyu Pioneer Wine Co. Ltd., B | Beverages | 1,200 | 1,707 | |||||||||||
Yantai Eddie Precision Machinery Co. Ltd., A | Machinery | 440 | 1,653 | |||||||||||
Yantai Jereh Oilfield Services Group Co. Ltd. | Energy Equipment & Services | 400 | 2,656 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 400 | 2,416 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 10,000 | 29,688 | |||||||||||
| a | Yatsen Holding Ltd., ADR | Personal Products | 414 | 284 | ||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 300 | 3,674 | |||||||||||
Yifan Pharmaceutical Co. Ltd. | Pharmaceuticals | 400 | 939 | |||||||||||
Yifeng Pharmacy Chain Co. Ltd. | Food & Staples Retailing | 260 | 1,638 | |||||||||||
| a | Yihai International Holding Ltd. | Food Products | 2,600 | 7,470 | ||||||||||
Yihai Kerry Arawana Holdings Co. Ltd., A | Food Products | 800 | 6,248 | |||||||||||
Yintai Gold Co. Ltd. | Metals & Mining | 800 | 1,173 | |||||||||||
Yonghui Superstores Co. Ltd., A | Food & Staples Retailing | 4,000 | 2,659 | |||||||||||
YongXing Special Materials Technology Co. Ltd., A | Metals & Mining | 200 | 3,737 | |||||||||||
Yonyou Network Technology Co. Ltd., A | Software | 1,380 | 4,978 | |||||||||||
Youngor Group Co. Ltd., A | Real Estate Management & Development | 2,000 | 2,136 | |||||||||||
YTO Express Group Co. Ltd., A | Air Freight & Logistics | 1,200 | 3,261 | |||||||||||
| a | Yuan Longping High-tech Agriculture Co. Ltd. | Food Products | 400 | 1,221 | ||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 7,000 | 6,963 | |||||||||||
Yunda Holding Co. Ltd., A | Air Freight & Logistics | 400 | 1,106 | |||||||||||
| a | Yunnan Aluminium Co. Ltd. | Metals & Mining | 1,200 | 2,586 | ||||||||||
| franklintempleton.com | Annual Report | 161 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Yunnan Baiyao Group Co. Ltd. | Pharmaceuticals | 500 | $ | 6,444 | ||||||||||
Yunnan Botanee Bio-Technology Group Co. Ltd., A | Personal Products | 100 | 2,946 | |||||||||||
Yunnan Copper Co. Ltd. | Metals & Mining | 800 | 1,416 | |||||||||||
Yunnan Energy New Material Co. Ltd. | Containers & Packaging | 300 | 10,397 | |||||||||||
Yunnan Hongxiang Yixintang Pharmaceutical Co. Ltd. | Food & Staples Retailing | 200 | 749 | |||||||||||
| a | Yunnan Tin Co. Ltd. | Metals & Mining | 600 | 1,979 | ||||||||||
| a | Zai Lab Ltd., ADR | Biotechnology | 349 | 15,349 | ||||||||||
Zhangzhou Pientzehuang Pharmaceutical Co. Ltd. | Pharmaceuticals | 300 | 14,992 | |||||||||||
Zhaojin Mining Industry Co. Ltd., H | Metals & Mining | 6,000 | 5,294 | |||||||||||
Zhefu Holding Group Co. Ltd. | Electrical Equipment | 2,400 | 2,008 | |||||||||||
| a | Zhejiang Century Huatong Group Co. Ltd., A | Entertainment | 3,200 | 3,161 | ||||||||||
Zhejiang China Commodities City Group Co. Ltd., A | Real Estate Management & Development | 2,400 | 1,902 | |||||||||||
Zhejiang Chint Electrics Co. Ltd., A | Electrical Equipment | 500 | 3,117 | |||||||||||
Zhejiang Crystal-Optech Co. Ltd. | Electronic Equipment, Instruments & Components | 580 | 1,020 | |||||||||||
Zhejiang Dahua Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 1,200 | 3,128 | |||||||||||
Zhejiang Dingli Machinery Co. Ltd. | Machinery | 100 | 707 | |||||||||||
Zhejiang Expressway Co. Ltd., H | Transportation Infrastructure | 8,000 | 6,722 | |||||||||||
Zhejiang Hailiang Co. Ltd., A | Metals & Mining | 400 | 663 | |||||||||||
Zhejiang Hisoar Pharmaceutical Co. Ltd., A | Pharmaceuticals | 400 | 455 | |||||||||||
Zhejiang Huace Film & TV Co. Ltd., A | Entertainment | 400 | 320 | |||||||||||
Zhejiang Huahai Pharmaceutical Co. Ltd., A | Pharmaceuticals | 800 | 2,648 | |||||||||||
Zhejiang Huayou Cobalt Co. Ltd., A | Metals & Mining | 500 | 7,703 | |||||||||||
Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., A | Semiconductors & Semiconductor Equipment | 500 | 4,726 | |||||||||||
Zhejiang Jiuzhou Pharmaceutical Co. Ltd., A | Pharmaceuticals | 400 | 3,055 | |||||||||||
Zhejiang Juhua Co. Ltd., A | Chemicals | 1,200 | 2,469 | |||||||||||
Zhejiang Longsheng Group Co. Ltd., A | Chemicals | 1,600 | 2,747 | |||||||||||
Zhejiang Medicine Co. Ltd., A | Pharmaceuticals | 400 | 984 | |||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 1,120 | 5,589 | |||||||||||
Zhejiang Runtu Co. Ltd. | Chemicals | 400 | 543 | |||||||||||
Zhejiang Sanhua Intelligent Controls Co. Ltd. | Machinery | 800 | 2,094 | |||||||||||
Zhejiang Satellite Petrochemical Co. Ltd. | Chemicals | 620 | 3,848 | |||||||||||
Zhejiang Semir Garment Co. Ltd. | Textiles, Apparel & Luxury Goods | 400 | 428 | |||||||||||
Zhejiang Supor Co. Ltd. | Household Durables | 200 | 1,576 | |||||||||||
Zhejiang Wanfeng Auto Wheel Co. Ltd. | Auto Components | 400 | 269 | |||||||||||
Zhejiang Wanliyang Co. Ltd. | Machinery | 400 | 478 | |||||||||||
Zhejiang Weiming Environment Protection Co. Ltd., A | Commercial Services & Supplies | 400 | 1,837 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd., A | Building Products | 800 | 2,578 | |||||||||||
Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., A | Pharmaceuticals | 200 | 1,222 | |||||||||||
Zhejiang Yasha Decoration Co. Ltd. | Diversified Consumer Services | 400 | 364 | |||||||||||
| a | Zhejiang Yongtai Technology Co. Ltd., A | Chemicals | 400 | 2,410 | ||||||||||
Zhengzhou Coal Mining Machinery Group Co. Ltd., A | Machinery | 400 | 866 | |||||||||||
Zheshang Securities Co. Ltd., A | Capital Markets | 400 | 662 | |||||||||||
| a | Zhihu Inc., ADR | Interactive Media & Services | 332 | 803 | ||||||||||
| a,b,c | ZhongAn Online P & C Insurance Co. Ltd., 144A, Reg S | Insurance | 4,400 | 15,001 | ||||||||||
Zhongji Innolight Co. Ltd. | Communications Equipment | 400 | 1,992 | |||||||||||
Zhongshan Public Utilities Group Co. Ltd., A | Water Utilities | 800 | 1,016 | |||||||||||
Zhongsheng Group Holdings Ltd. | Specialty Retail | 4,000 | 28,296 | |||||||||||
| 162 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Zhongtai Securities Co. Ltd., A | Capital Markets | 1,200 | $ | 1,541 | ||||||||||
Zhuzhau CRRC Times Electric Co., A | Electrical Equipment | 228 | 1,966 | |||||||||||
Zhuzhou CRRC Times Electric Co. Ltd., H | Electrical Equipment | 3,000 | 11,779 | |||||||||||
Zhuzhou Hongda Electronics Corp. Ltd., A | Electronic Equipment, Instruments & Components | 200 | 2,114 | |||||||||||
Zhuzhou Kibing Group Co. Ltd., A | Building Products | 800 | 1,672 | |||||||||||
Zijin Mining Group Co. Ltd., A | Metals & Mining | 8,400 | 15,005 | |||||||||||
Zijin Mining Group Co. Ltd., H | Metals & Mining | 32,000 | 49,279 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. | Machinery | 3,200 | 3,347 | |||||||||||
Zoomlion Heavy Industry Science and Technology Development Co. Ltd., H | Machinery | 8,800 | 5,607 | |||||||||||
ZTE Corp. | Communications Equipment | 1,600 | 6,024 | |||||||||||
ZTE Corp., H | Communications Equipment | 4,400 | 9,001 | |||||||||||
ZTO Express Cayman Inc. | Air Freight & Logistics | 720 | 18,351 | |||||||||||
|
| |||||||||||||
| 12,817,677 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 7.6% | ||||||||||||||
AIA Group Ltd. | Insurance | 69,600 | 732,758 | |||||||||||
| a | Alibaba Health Information Technology Ltd. | Health Care Technology | 26,000 | 16,865 | ||||||||||
| a | Alibaba Pictures Group Ltd. | Entertainment | 80,000 | 6,640 | ||||||||||
ASM Pacific Technology Ltd. | Semiconductors & Semiconductor Equipment | 1,800 | 18,273 | |||||||||||
Beijing Enterprises Water Group Ltd. | Water Utilities | 32,000 | 9,848 | |||||||||||
Bosideng International Holdings Ltd. | Textiles, Apparel & Luxury Goods | 16,000 | 7,478 | |||||||||||
Cafe de Coral Holdings Ltd. | Hotels, Restaurants & Leisure | 2,000 | 3,345 | |||||||||||
| a | Cathay Pacific Airways Ltd. | Airlines | 5,000 | 4,922 | ||||||||||
Champion REIT | Equity Real Estate Investment Trusts (REITs | ) | 12,000 | 5,455 | ||||||||||
China Everbright Environment Group Ltd. | Commercial Services & Supplies | 21,000 | 12,710 | |||||||||||
China Everbright Ltd. | Capital Markets | 4,000 | 3,963 | |||||||||||
China Gas Holdings Ltd. | Gas Utilities | 16,800 | 21,538 | |||||||||||
| a | China Mengniu Dairy Co. Ltd. | Food Products | 18,000 | 96,994 | ||||||||||
China Power International Development Ltd. | Independent Power and Renewable Electricity Producers | 32,000 | 17,039 | |||||||||||
China Resources Beer Holdings Co. Ltd. | Beverages | 9,200 | 56,447 | |||||||||||
China Resources Gas Group Ltd. | Gas Utilities | 6,000 | 25,474 | |||||||||||
China Resources Land Ltd. | Real Estate Management & Development | 16,000 | 74,572 | |||||||||||
China State Construction International Holdings Ltd. | Construction & Engineering | 10,000 | 13,382 | |||||||||||
China Traditional Chinese Medicine Co. Ltd. | Pharmaceuticals | 14,000 | 7,329 | |||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 11,500 | 78,856 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 3,300 | 22,101 | |||||||||||
CLP Holdings Ltd. | Electric Utilities | 9,500 | 92,618 | |||||||||||
COSCO SHIPPING Ports Ltd. | Transportation Infrastructure | 10,000 | 7,789 | |||||||||||
Dah Sing Banking Group Ltd. | Banks | 2,400 | 2,133 | |||||||||||
Dah Sing Financial Group | Banks | 800 | 2,605 | |||||||||||
Dairy Farm International Holdings Ltd. | Food & Staples Retailing | 1,700 | 4,794 | |||||||||||
Far East Horizon Ltd. | Diversified Financial Services | 13,000 | 11,620 | |||||||||||
Geely Automobile Holdings Ltd. | Automobiles | 31,000 | 48,926 | |||||||||||
Guangdong Investment Ltd. | Water Utilities | 16,000 | 21,902 | |||||||||||
Guotai Junan International Holdings Ltd. | Capital Markets | 14,000 | 1,573 | |||||||||||
Haitong International Securities Group Ltd. | Capital Markets | 16,000 | 2,881 | |||||||||||
Hang Lung Group Ltd. | Real Estate Management & Development | 5,000 | 10,624 | |||||||||||
| franklintempleton.com | Annual Report | 163 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Hong Kong (continued) | ||||||||||||||
Hang Lung Properties Ltd. | Real Estate Management & Development | 12,000 | $ | 24,210 | ||||||||||
Hang Seng Bank Ltd. | Banks | 4,200 | 81,089 | |||||||||||
Henderson Land Development Co. Ltd. | Real Estate Management & Development | 8,000 | 33,302 | |||||||||||
Hong Kong and China Gas Co. Ltd. | Gas Utilities | 63,000 | 76,343 | |||||||||||
Hong Kong Exchanges and Clearing Ltd. | Capital Markets | 7,300 | 346,199 | |||||||||||
Hongkong Land Holdings Ltd. | Real Estate Management & Development | 6,800 | 33,320 | |||||||||||
Huabao International Holdings Ltd. | Chemicals | 5,000 | 2,790 | |||||||||||
Hutchison Port Holdings Trust | Transportation Infrastructure | 30,000 | 7,350 | |||||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | Wireless Telecommunication Services | 8,000 | 1,287 | |||||||||||
Hysan Development Co. Ltd. | Real Estate Management & Development | 4,000 | 11,696 | |||||||||||
Jardine Matheson Holdings Ltd. | Industrial Conglomerates | 1,180 | 64,900 | |||||||||||
Jiayuan International Group Ltd. | Real Estate Management & Development | 4,000 | 802 | |||||||||||
| a | Jinmao Property Services Co. Ltd. | Real Estate Management & Development | 422 | 267 | ||||||||||
Johnson Electric Holdings Ltd. | Auto Components | 2,000 | 2,768 | |||||||||||
Kerry Properties Ltd. | Real Estate Management & Development | 3,000 | 8,485 | |||||||||||
Kingboard Laminates Holdings Ltd. | Electronic Equipment, Instruments & Components | 6,000 | 9,883 | |||||||||||
Kunlun Energy Co. Ltd. | Gas Utilities | 22,000 | 19,187 | |||||||||||
| a | Lifestyle International Holdings Ltd. | Multiline Retail | 3,000 | 1,452 | ||||||||||
Link REIT | Equity Real Estate Investment Trusts (REITs | ) | 12,000 | 102,664 | ||||||||||
Man Wah Holdings Ltd. | Household Durables | 8,800 | 9,652 | |||||||||||
| a | Melco International Development Ltd. | Hotels, Restaurants & Leisure | 4,000 | 3,698 | ||||||||||
MTR Corp. Ltd. | Road & Rail | 8,500 | 45,966 | |||||||||||
New World Development Co. Ltd. | Real Estate Management & Development | 8,000 | 32,536 | |||||||||||
NWS Holdings Ltd. | Industrial Conglomerates | 8,000 | 7,355 | |||||||||||
Orient Overseas International Ltd. | Marine | 500 | 13,369 | |||||||||||
PCCW Ltd. | Diversified Telecommunication Services | 23,000 | 12,981 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 8,000 | 52,149 | |||||||||||
Shanghai Industrial Holdings Ltd. | Industrial Conglomerates | 3,000 | 4,505 | |||||||||||
Shougang Fushan Resources Group Ltd. | Metals & Mining | 20,000 | 7,866 | |||||||||||
| a | Shun Tak Holdings Ltd. | Industrial Conglomerates | 10,000 | 2,196 | ||||||||||
Sino Biopharmaceutical Ltd. | Pharmaceuticals | 56,000 | 34,967 | |||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 20,000 | 25,947 | |||||||||||
Sun Hung Kai Properties Ltd. | Real Estate Management & Development | 8,000 | 95,615 | |||||||||||
Swire Pacific Ltd., A | Real Estate Management & Development | 3,000 | 18,349 | |||||||||||
Swire Pacific Ltd., B | Real Estate Management & Development | 7,500 | 7,566 | |||||||||||
Swire Properties Ltd. | Real Estate Management & Development | 6,400 | 15,903 | |||||||||||
Techtronic Industries Co. Ltd. | Machinery | 7,000 | 113,428 | |||||||||||
The Bank of East Asia Ltd. | Banks | 7,400 | 11,622 | |||||||||||
The Wharf Holdings Ltd. | Real Estate Management & Development | 8,000 | 24,415 | |||||||||||
United Energy Group Ltd. | Oil, Gas & Consumable Fuels | 48,000 | 5,516 | |||||||||||
Vinda International Holdings Ltd. | Household Products | 1,000 | 2,263 | |||||||||||
Vitasoy International Holdings Ltd. | Food Products | 5,300 | 10,057 | |||||||||||
VTech Holdings Ltd. | Communications Equipment | 900 | 6,551 | |||||||||||
| b | WH Group Ltd., 144A | Food Products | 45,494 | 28,755 | ||||||||||
Wharf Real Estate Investment Co. Ltd. | Real Estate Management & Development | 9,333 | 46,299 | |||||||||||
Xinyi Glass Holdings Ltd. | Building Products | 12,000 | 29,114 | |||||||||||
| a | Yue Yuen Industrial Holdings Ltd. | Textiles, Apparel & Luxury Goods | 4,000 | 6,456 | ||||||||||
|
| |||||||||||||
| 2,946,544 | ||||||||||||||
|
| |||||||||||||
| India 16.0% | ||||||||||||||
| a | 3M India Ltd. | Industrial Conglomerates | 16 | 4,159 | ||||||||||
Aarti Industries Ltd. | Chemicals | 1,064 | 13,433 | |||||||||||
ABB India Ltd. | Electrical Equipment | 308 | 8,771 | |||||||||||
ACC Ltd. | Construction Materials | 488 | 13,855 | |||||||||||
Adani Enterprises Ltd. | Trading Companies & Distributors | 1,524 | 40,521 | |||||||||||
| a | Adani Green Energy Ltd. | Independent Power and Renewable Electricity Producers | 2,248 | 56,803 | ||||||||||
| 164 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Adani Ports And Special Economic Zone Ltd. | Transportation Infrastructure | 4,388 | $ | 44,833 | ||||||||||
| a | Adani Power Ltd. | Independent Power and Renewable Electricity Producers | 5,116 | 12,497 | ||||||||||
Adani Total Gas Ltd | Gas Utilities | 1,608 | 45,620 | |||||||||||
| a | Adani Transmission Ltd. | Electric Utilities | 1,444 | 45,128 | ||||||||||
| a | Aditya Birla Capital Ltd. | Diversified Financial Services | 2,745 | 3,900 | ||||||||||
Alkem Laboratories Ltd. | Pharmaceuticals | 148 | 7,072 | |||||||||||
Ambuja Cements Ltd. | Construction Materials | 3,908 | 15,433 | |||||||||||
Apollo Hospitals Enterprise Ltd. | Health Care Providers & Services | 576 | 34,329 | |||||||||||
Ashok Leyland Ltd. | Machinery | 8,080 | 12,503 | |||||||||||
Asian Paints Ltd. | Chemicals | �� | 2,592 | 105,354 | ||||||||||
Astral Poly Technik Ltd. | Building Products | 500 | 13,348 | |||||||||||
| a,b | AU Small Finance Bank Ltd., 144A | Banks | 872 | 14,342 | ||||||||||
Aurobindo Pharma Ltd. | Pharmaceuticals | 1,504 | 13,270 | |||||||||||
| a,b | Avenue Supermarts Ltd., 144A | Food & Staples Retailing | 856 | 45,224 | ||||||||||
| a | Axis Bank Ltd. | Banks | 13,028 | 130,865 | ||||||||||
Bajaj Auto Ltd. | Automobiles | 396 | 19,091 | |||||||||||
Bajaj Finance Ltd. | Consumer Finance | 1,348 | 129,151 | |||||||||||
Bajaj Finserv Ltd. | Diversified Financial Services | 220 | 49,532 | |||||||||||
Bajaj Holdings & Investment Ltd. | Diversified Financial Services | 160 | 10,581 | |||||||||||
Balkrishna Industries Ltd. | Auto Components | 476 | 13,419 | |||||||||||
| b | Bandhan Bank Ltd, 144A | Banks | 4,504 | 18,272 | ||||||||||
| a | Bank of Baroda | Banks | 5,904 | 8,695 | ||||||||||
| a | Bank of India | Banks | 2,744 | 1,660 | ||||||||||
Bata India Ltd. | Textiles, Apparel & Luxury Goods | 332 | 8,594 | |||||||||||
Bayer Cropscience Ltd. | Chemicals | 80 | 5,246 | |||||||||||
Berger Paints India Ltd. | Chemicals | 1,380 | 12,743 | |||||||||||
Bharat Electronics Ltd. | Aerospace & Defense | 6,228 | 17,326 | |||||||||||
Bharat Forge Ltd. | Auto Components | 1,416 | 13,092 | |||||||||||
| a | Bharat Heavy Electricals Ltd. | Electrical Equipment | 7,456 | 4,856 | ||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 5,672 | 26,898 | |||||||||||
| a | Bharti Airtel Ltd. | Wireless Telecommunication Services | 13,120 | 130,715 | ||||||||||
| a | Bharti Infratel Ltd. | Diversified Telecommunication Services | 7,192 | 21,075 | ||||||||||
| a | Biocon Ltd. | Biotechnology | 2,520 | 11,161 | ||||||||||
Bosch Ltd. | Auto Components | 52 | 9,908 | |||||||||||
Britannia Industries Ltd. | Food Products | 692 | 29,282 | |||||||||||
Cadila Healthcare Ltd. | Pharmaceuticals | 1,352 | 6,218 | |||||||||||
| a | Canara Bank Ltd. | Banks | 2,128 | 6,396 | ||||||||||
Castrol India Ltd. | Chemicals | 2,816 | 3,752 | |||||||||||
Cholamandalam Investment and Finance Co. Ltd. | Consumer Finance | 2,284 | 21,655 | |||||||||||
Cipla Ltd. | Pharmaceuticals | 2,956 | 39,714 | |||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 11,016 | 26,611 | |||||||||||
Coforge Ltd. | IT Services | 140 | 8,236 | |||||||||||
Colgate-Palmolive (India) Ltd. | Personal Products | 784 | 15,957 | |||||||||||
Container Corp. of India Ltd. | Road & Rail | 1,564 | 13,873 | |||||||||||
Coromandel International Ltd. | Chemicals | 632 | 6,669 | |||||||||||
Cummins India Ltd. | Machinery | 812 | 12,016 | |||||||||||
Dabur India Ltd. | Personal Products | 3,044 | 21,540 | |||||||||||
Dalmia Bharat Ltd. | Construction Materials | 496 | 9,790 | |||||||||||
Deepak Nitrite Ltd. | Chemicals | 424 | 12,555 | |||||||||||
Divi’s Laboratories Ltd. | Life Sciences Tools & Services | 732 | 42,525 | |||||||||||
Dixon Technologies India Ltd. | Household Durables | 204 | 11,600 | |||||||||||
DLF Ltd. | Real Estate Management & Development | 3,348 | 16,810 | |||||||||||
| b | Dr Lal PathLabs Ltd., 144A | Health Care Providers & Services | 200 | 6,891 | ||||||||||
Dr Reddy’s Laboratories Ltd. | Pharmaceuticals | 700 | 39,681 | |||||||||||
| franklintempleton.com | Annual Report | 165 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Eicher Motors Ltd. | Automobiles | 768 | $ | 24,904 | ||||||||||
Emami Ltd. | Personal Products | 1,240 | 7,317 | |||||||||||
Embassy Office Parks REIT | Equity Real Estate Investment Trusts (REITs | ) | 3,053 | 14,978 | ||||||||||
Exide Industries Ltd. | Auto Components | 2,508 | 5,001 | |||||||||||
Federal Bank Ltd. | Banks | 9,168 | 11,784 | |||||||||||
GAIL India Ltd. | Gas Utilities | 10,204 | 20,960 | |||||||||||
| a,b | General Insurance Corp. of India, 144A | Insurance | 592 | 889 | ||||||||||
Gillette India Ltd. | Personal Products | 40 | 2,560 | |||||||||||
GlaxoSmithKline Pharmaceuticals Ltd. | Pharmaceuticals | 228 | 5,016 | |||||||||||
Glenmark Pharmaceuticals Ltd. | Pharmaceuticals | 808 | 4,713 | |||||||||||
| a | GMR Infrastructure Ltd. | Transportation Infrastructure | 13,596 | 6,630 | ||||||||||
| a | GMR Power & Urban Infra Ltd. - Spun Off | Construction & Engineering | 1,019 | 452 | ||||||||||
| a | Godrej Consumer Products Ltd. | Personal Products | 2,100 | 20,710 | ||||||||||
| a | Godrej Industries Ltd. | Industrial Conglomerates | 480 | 2,939 | ||||||||||
| a | Godrej Properties Ltd. | Real Estate Management & Development | 504 | 11,122 | ||||||||||
Grasim Industries Ltd. | Construction Materials | 2,200 | 48,311 | |||||||||||
Gujarat Gas Ltd. | Gas Utilities | 1,176 | 7,810 | |||||||||||
Havell’s India Ltd. | Electrical Equipment | 1,364 | 20,747 | |||||||||||
HCL Technologies Ltd. | IT Services | 6,236 | 95,772 | |||||||||||
| b,c | HDFC Asset Management Co. Ltd., 144A, Reg S | Capital Markets | 320 | 9,063 | ||||||||||
| b | HDFC Life Insurance Co. Ltd., 144A | Insurance | 5,568 | 39,547 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 752 | 22,767 | |||||||||||
Hindalco Industries Ltd. | Metals & Mining | 8,108 | 60,937 | |||||||||||
Hindustan Aeronautics Ltd. | Aerospace & Defense | 220 | 4,311 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 3,952 | 14,048 | |||||||||||
Hindustan Unilever Ltd. | Household Products | 5,096 | 137,775 | |||||||||||
Hindustan Zinc Ltd. | Metals & Mining | 1,380 | 5,648 | |||||||||||
Honeywell Automation India Ltd. | Electronic Equipment, Instruments & Components | 13 | 6,807 | |||||||||||
Housing Development Finance Corp. Ltd. | Thrifts & Mortgage Finance | 10,036 | 316,596 | |||||||||||
ICICI Bank Ltd. | Banks | 8,948 | 86,239 | |||||||||||
| b,c | ICICI Lombard General Insurance Co. Ltd., 144A, Reg S | Insurance | 1,408 | 24,682 | ||||||||||
| b,c | ICICI Prudential Life Insurance Co. Ltd., 144A, Reg S | Insurance | 2,040 | 13,485 | ||||||||||
| a | IDFC First Bank Ltd. | Banks | 17,076 | 8,946 | ||||||||||
Indiabulls Housing Finance Ltd. | Thrifts & Mortgage Finance | 2,068 | 4,307 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 15,968 | 25,066 | |||||||||||
Indian Railway Catering and Tourism Corp. Ltd. | Commercial Services & Supplies | 1,540 | 15,744 | |||||||||||
| b | Indian Railway Finance Corp. Ltd., 144A | Diversified Financial Services | 10,936 | 3,096 | ||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 1,948 | 9,593 | |||||||||||
Info Edge India Ltd. | Interactive Media & Services | 444 | 26,423 | |||||||||||
Infosys Ltd. | IT Services | 20,400 | 513,359 | |||||||||||
| a,b,c | InterGlobe Aviation Ltd., 144A, Reg S | Airlines | 572 | 15,204 | ||||||||||
Ipca Laboratories Ltd. | Pharmaceuticals | 792 | 11,139 | |||||||||||
ITC Ltd. | Tobacco | 16,980 | 56,167 | |||||||||||
Jindal Steel & Power Ltd. | Metals & Mining | 2,244 | 15,780 | |||||||||||
JSW Energy Ltd. | Independent Power and Renewable Electricity Producers | 2,124 | 8,471 | |||||||||||
JSW Steel Ltd. | Metals & Mining | 5,744 | 55,537 | |||||||||||
Jubilant Foodworks Ltd. | Hotels, Restaurants & Leisure | 416 | 14,474 | |||||||||||
Kansai Nerolac Paints Ltd. | Chemicals | 772 | 4,765 | |||||||||||
| a | L&T Finance Holdings Ltd. | Diversified Financial Services | 5,140 | 5,467 | ||||||||||
| b | L&T Technology Services Ltd., 144A | Professional Services | 152 | 10,241 | ||||||||||
| b,c | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | IT Services | 256 | 20,796 | ||||||||||
| 166 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Larsen & Toubro Ltd. | Construction & Engineering | 3,940 | $ | 91,911 | ||||||||||
| b | Laurus Labs Ltd., 144A | Pharmaceuticals | 2,064 | 16,073 | ||||||||||
LIC Housing Finance Ltd. | Thrifts & Mortgage Finance | 1,808 | 8,565 | |||||||||||
Lupin Ltd. | Pharmaceuticals | 1,404 | 13,842 | |||||||||||
| a | Macrotech Developers Ltd. | Real Estate Management & Development | 304 | 4,518 | ||||||||||
Mahindra & Mahindra Financial Services Ltd. | Consumer Finance | 3,256 | 6,839 | |||||||||||
Mahindra & Mahindra Ltd. | Automobiles | 5,276 | 56,158 | |||||||||||
| a | Mangalore Refinery and Petrochemicals Ltd. | Oil, Gas & Consumable Fuels | 892 | 490 | ||||||||||
Marico Ltd. | Personal Products | 3,020 | 20,075 | |||||||||||
Maruti Suzuki India Ltd. | Automobiles | 760 | 75,838 | |||||||||||
| a | Max Financial Services Ltd. | Insurance | 1,372 | 13,650 | ||||||||||
| a | Max Healthcare Institute Ltd. | Health Care Providers & Services | 2,128 | 9,763 | ||||||||||
Minda Industries Ltd. | Auto Components | 484 | 5,955 | |||||||||||
Mindtree Ltd. | IT Services | 240 | 13,628 | |||||||||||
Motherson Sumi Systems Ltd. | Auto Components | 8,348 | 15,363 | |||||||||||
| a | Motherson Sumi Wiring India Ltd. | Auto Components | 5,199 | 4,422 | ||||||||||
Mphasis Ltd. | IT Services | 516 | 22,995 | |||||||||||
MRF Ltd. | Auto Components | 16 | 13,730 | |||||||||||
Muthoot Finance Ltd. | Consumer Finance | 576 | 10,117 | |||||||||||
Nestle India Ltd. | Food Products | 208 | 47,709 | |||||||||||
NHPC Ltd. | Independent Power and Renewable Electricity Producers | 13,216 | 4,849 | |||||||||||
| b | Nippon Life India Asset Management Ltd., 144A | Capital Markets | 904 | 4,147 | ||||||||||
NMDC Ltd. | Metals & Mining | 4,180 | 8,967 | |||||||||||
NTPC Ltd. | Independent Power and Renewable Electricity Producers | 25,360 | 45,181 | |||||||||||
| a | Oberoi Realty Ltd. | Real Estate Management & Development | 648 | 8,037 | ||||||||||
Oil & Natural Gas Corp. Ltd. | Oil, Gas & Consumable Fuels | 21,184 | 45,821 | |||||||||||
Oil India Ltd. | Oil, Gas & Consumable Fuels | 1,756 | 5,525 | |||||||||||
Oracle Financial Services Software Ltd. | Software | 136 | 6,439 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 33 | 18,809 | |||||||||||
Persistent Systems Ltd. | IT Services | 280 | 17,609 | |||||||||||
Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 4,420 | 11,302 | |||||||||||
PI Industries Ltd. | Chemicals | 416 | 15,480 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 880 | 28,503 | |||||||||||
Piramal Enterprises Ltd. | Diversified Financial Services | 724 | 20,895 | |||||||||||
Polycab India Ltd. | Electrical Equipment | 152 | 4,743 | |||||||||||
Power Finance Corp. Ltd. | Diversified Financial Services | 6,560 | 9,748 | |||||||||||
Power Grid Corp. of India Ltd. | Electric Utilities | 17,996 | 51,488 | |||||||||||
| a | Punjab National Bank Ltd. | Banks | 6,412 | 2,966 | ||||||||||
Rajesh Exports Ltd. | Textiles, Apparel & Luxury Goods | 788 | 7,187 | |||||||||||
| a,b,c | RBL Bank Ltd., 144A, Reg S | Banks | 2,720 | 4,674 | ||||||||||
REC Ltd. | Diversified Financial Services | 5,620 | 9,126 | |||||||||||
Relaxo Footwears Ltd. | Textiles, Apparel & Luxury Goods | 420 | 5,910 | |||||||||||
Reliance Industries Ltd. | Oil, Gas & Consumable Fuels | 18,820 | 654,385 | |||||||||||
SBI Cards & Payment Services Ltd. | Consumer Finance | 1,688 | 18,973 | |||||||||||
| b | SBI Life Insurance Co. Ltd., 144A | Insurance | 2,440 | 36,111 | ||||||||||
Shree Cement Ltd. | Construction Materials | 76 | 24,104 | |||||||||||
Shriram Transport Finance Co. Ltd. | Consumer Finance | 1,124 | 16,834 | |||||||||||
Siemens Ltd. | Industrial Conglomerates | 484 | 15,126 | |||||||||||
| b | Sona Blw Precision Forgings Ltd., 144A | Auto Components | 1,048 | 9,397 | ||||||||||
SRF Ltd. | Chemicals | 816 | 28,853 | |||||||||||
State Bank of India | Banks | 10,228 | 66,619 | |||||||||||
Steel Authority of India Ltd. | Metals & Mining | 5,456 | 7,096 | |||||||||||
Sun Pharmaceutical Industries Ltd. | Pharmaceuticals | 6,248 | 75,425 | |||||||||||
| franklintempleton.com | Annual Report | 167 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Sun TV Network Ltd. | Media | 500 | $ | 3,232 | ||||||||||
Tata Communications Ltd. | Diversified Telecommunication Services | 680 | 11,025 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 5,928 | 292,582 | |||||||||||
Tata Consumer Products Ltd. | Food Products | 3,508 | 35,990 | |||||||||||
Tata Elxsi Ltd. | Software | 200 | 23,333 | |||||||||||
| a | Tata Motors Ltd. | Automobiles | 10,584 | 60,585 | ||||||||||
| a | Tata Motors Ltd., A | Automobiles | 2,328 | 6,344 | ||||||||||
Tata Power Co. Ltd. | Electric Utilities | 11,612 | 36,571 | |||||||||||
Tata Steel Ltd. | Metals & Mining | 4,644 | 80,114 | |||||||||||
| a | Tata Teleservices Maharashtra Ltd. | Diversified Telecommunication Services | 2,920 | 6,424 | ||||||||||
Tech Mahindra Ltd. | IT Services | 3,464 | 68,546 | |||||||||||
Titan Co. Ltd. | Textiles, Apparel & Luxury Goods | 2,392 | 80,059 | |||||||||||
Torrent Pharmaceuticals Ltd. | Pharmaceuticals | 288 | 10,611 | |||||||||||
Torrent Power Ltd. | Electric Utilities | 1,188 | 7,711 | |||||||||||
Trent Ltd. | Multiline Retail | 1,040 | 17,506 | |||||||||||
Tube Investments of India Ltd. | Auto Components | 560 | 12,007 | |||||||||||
TVS Motor Co. Ltd. | Automobiles | 1,116 | 9,214 | |||||||||||
UltraTech Cement Ltd. | Construction Materials | 656 | 57,157 | |||||||||||
| a | Union Bank of India Ltd. | Banks | 2,568 | 1,312 | ||||||||||
United Breweries Ltd. | Beverages | 412 | 8,099 | |||||||||||
| a | United Spirits Ltd. | Beverages | 1,636 | 19,180 | ||||||||||
UPL Ltd. | Chemicals | 3,088 | 31,363 | |||||||||||
Varun Beverages Ltd. | Beverages | 768 | 9,540 | |||||||||||
Vedanta Ltd. | Metals & Mining | 7,108 | 37,836 | |||||||||||
| a | Vodafone Idea Ltd. | Wireless Telecommunication Services | 49,480 | 6,301 | ||||||||||
Voltas Ltd. | Construction & Engineering | 1,320 | 21,695 | |||||||||||
Whirlpool of India Ltd. | Household Durables | 180 | 3,736 | |||||||||||
Wipro Ltd. | IT Services | 7,248 | 56,616 | |||||||||||
| a | Yes Bank Ltd. | Banks | 71,244 | 11,565 | ||||||||||
Zee Entertainment Enterprises Ltd. | Media | 4,876 | 18,555 | |||||||||||
| a | Zomato Ltd. | Internet & Direct Marketing Retail | 8,000 | 8,689 | ||||||||||
|
| |||||||||||||
| 6,219,609 | ||||||||||||||
|
| |||||||||||||
| Indonesia 1.9% | ||||||||||||||
Adaro Energy Tbk PT | Oil, Gas & Consumable Fuels | 72,400 | 13,560 | |||||||||||
Astra Agro Lestari Tbk PT | Food Products | 2,800 | 2,447 | |||||||||||
Astra International Tbk PT | Automobiles | 116,000 | 53,104 | |||||||||||
Bank Central Asia Tbk PT | Banks | 276,800 | 153,698 | |||||||||||
| d | Bank Danamon Indonesia Tbk PT | Banks | 4,800 | 815 | ||||||||||
Bank Mandiri Persero Tbk PT | Banks | 106,400 | 58,525 | |||||||||||
Bank Negara Indonesia Persero Tbk PT | Banks | 42,400 | 24,355 | |||||||||||
Bank Rakyat Indonesia Persero Tbk PT | Banks | 372,800 | 120,957 | |||||||||||
| a | Bank Syariah Indonesia Tbk PT | Banks | 16,800 | 1,877 | ||||||||||
Bukit Asam Tbk PT | Oil, Gas & Consumable Fuels | 23,200 | 5,314 | |||||||||||
| a | Bumi Serpong Damai Tbk PT | Real Estate Management & Development | 50,400 | 3,579 | ||||||||||
Charoen Pokphand Indonesia Tbk PT | Food Products | 42,000 | 16,522 | |||||||||||
| a | Elang Mahkota Teknologi Tbk PT | Media | 170,000 | 28,999 | ||||||||||
First Pacific Co. Ltd. | Food Products | 12,000 | 4,857 | |||||||||||
Gudang Garam Tbk PT | Tobacco | 2,800 | 6,161 | |||||||||||
Hanjaya Mandala Sampoerna Tbk PT | Tobacco | 44,400 | 2,860 | |||||||||||
Indah Kiat Pulp & Paper Corp Tbk PT | Paper & Forest Products | 14,400 | 7,921 | |||||||||||
Indocement Tunggal Prakarsa Tbk PT | Construction Materials | 10,400 | 7,802 | |||||||||||
Indofood CBP Sukses Makmur Tbk PT | Food Products | 13,600 | 6,960 | |||||||||||
Indofood Sukses Makmur Tbk PT | Food Products | 24,400 | 10,108 | |||||||||||
| a | Jasa Marga Persero Tbk PT | Transportation Infrastructure | 12,800 | 3,431 | ||||||||||
Kalbe Farma Tbk PT | Pharmaceuticals | 105,600 | 11,838 | |||||||||||
| 168 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Indonesia (continued) | ||||||||||||||
Mayora Indah Tbk PT | Food Products | 22,400 | $ | 2,745 | ||||||||||
Media Nusantara Citra Tbk PT | Media | 24,800 | 1,718 | |||||||||||
| a | Perusahaan Gas Negara Tbk PT | Gas Utilities | 63,600 | 6,222 | ||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | Diversified Telecommunication Services | 266,400 | 84,951 | |||||||||||
PT Barito Pacific Tbk | Chemicals | 138,000 | 8,696 | |||||||||||
PT XL Axiata Tbk | Wireless Telecommunication Services | 21,600 | 3,985 | |||||||||||
Sarana Menara Nusantara Tbk PT | Diversified Telecommunication Services | 141,600 | 10,549 | |||||||||||
Semen Indonesia (Persero) Tbk PT | Construction Materials | 18,000 | 8,334 | |||||||||||
| a | Smartfren Telecom Tbk PT | Wireless Telecommunication Services | 581,655 | 3,118 | ||||||||||
| a | Surya Citra Media Tbk PT | Media | 160,000 | 3,253 | ||||||||||
Tower Bersama Infrastructure Tbk PT | Diversified Telecommunication Services | 58,000 | 11,590 | |||||||||||
Unilever Indonesia Tbk PT | Household Products | 34,000 | 8,664 | |||||||||||
United Tractors Tbk PT | Oil, Gas & Consumable Fuels | 9,000 | 16,010 | |||||||||||
Vale Indonesia Tbk PT | Metals & Mining | 12,000 | 5,598 | |||||||||||
|
| |||||||||||||
| 721,123 | ||||||||||||||
|
| |||||||||||||
| Italy 0.0%† | ||||||||||||||
Prada SpA | Textiles, Apparel & Luxury Goods | 3,000 | 19,058 | |||||||||||
|
| |||||||||||||
| Luxembourg 0.0%† | ||||||||||||||
L’Occitane International SA | Personal Products | 2,500 | 8,124 | |||||||||||
|
| |||||||||||||
| Macau 0.3% | ||||||||||||||
Galaxy Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 12,400 | 74,418 | |||||||||||
| a | MGM China Holdings Ltd. | Hotels, Restaurants & Leisure | 4,800 | 3,058 | ||||||||||
| a | Sands China Ltd. | Hotels, Restaurants & Leisure | 13,600 | 32,961 | ||||||||||
| a | SJM Holdings Ltd. | Hotels, Restaurants & Leisure | 10,000 | 4,967 | ||||||||||
| a | Wynn Macau Ltd. | Hotels, Restaurants & Leisure | 8,400 | 6,157 | ||||||||||
|
| |||||||||||||
| 121,561 | ||||||||||||||
|
| |||||||||||||
| Malaysia 1.9% | ||||||||||||||
Alliance Bank Malaysia Bhd. | Banks | 6,800 | 6,081 | |||||||||||
| a | AMMB Holdings Bhd. | Banks | 11,000 | 9,706 | ||||||||||
Astro Malaysia Holdings Bhd. | Media | 6,800 | 1,779 | |||||||||||
Axiata Group Bhd. | Wireless Telecommunication Services | 26,000 | 23,435 | |||||||||||
British American Tobacco Malaysia Bhd. | Tobacco | 800 | 2,367 | |||||||||||
CIMB Group Holdings Bhd. | Banks | 37,200 | 47,155 | |||||||||||
Dialog Group Bhd. | Energy Equipment & Services | 24,800 | 16,161 | |||||||||||
Digi.com Bhd. | Wireless Telecommunication Services | 18,000 | 16,695 | |||||||||||
FGV Holdings Bhd. | Food Products | 3,600 | 1,695 | |||||||||||
Fraser & Neave Holdings Bhd. | Beverages | 600 | 2,997 | |||||||||||
Gamuda Bhd. | Construction & Engineering | 12,400 | 10,204 | |||||||||||
Genting Bhd. | Hotels, Restaurants & Leisure | 13,600 | 15,137 | |||||||||||
Genting Malaysia Bhd. | Hotels, Restaurants & Leisure | 16,600 | 11,765 | |||||||||||
Hartalega Holdings Bhd. | Health Care Equipment & Supplies | 9,000 | 10,381 | |||||||||||
Hong Leong Bank Bhd. | Banks | 3,600 | 17,295 | |||||||||||
Hong Leong Financial Group Bhd. | Banks | 1,200 | 5,594 | |||||||||||
IHH Healthcare Bhd. | Health Care Providers & Services | 15,200 | 22,413 | |||||||||||
IJM Corp. Bhd. | Construction & Engineering | 19,800 | 7,864 | |||||||||||
IOI Corp. Bhd. | Food Products | 18,000 | 17,637 | |||||||||||
Kuala Lumpur Kepong Bhd. | Food Products | 2,400 | 14,384 | |||||||||||
Malayan Banking Bhd. | Banks | 40,400 | 85,897 | |||||||||||
| a | Malaysia Airports Holdings Bhd. | Transportation Infrastructure | 5,200 | 8,595 | ||||||||||
Maxis Bhd. | Wireless Telecommunication Services | 11,600 | 10,842 | |||||||||||
MISC Bhd. | Marine | 10,000 | 17,480 | |||||||||||
| b | MR DIY Group M Bhd., 144A | Specialty Retail | 5,800 | 4,773 | ||||||||||
Nestle (Malaysia) Bhd. | Food Products | 400 | 12,710 | |||||||||||
| franklintempleton.com | Annual Report | 169 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Malaysia (continued) | ||||||||||||||
Petronas Chemicals Group Bhd. | Chemicals | 16,400 | $ | 37,443 | ||||||||||
Petronas Dagangan Bhd. | Oil, Gas & Consumable Fuels | 1,600 | 7,770 | |||||||||||
Petronas Gas Bhd. | Gas Utilities | 3,300 | 13,075 | |||||||||||
PPB Group Bhd. | Food Products | 4,000 | 16,267 | |||||||||||
Press Metal Aluminium Holdings Bhd. | Metals & Mining | 18,800 | 27,721 | |||||||||||
Public Bank Bhd. | Banks | 81,600 | 90,629 | |||||||||||
QL Resources Bhd. | Food Products | 6,500 | 7,760 | |||||||||||
RHB Bank Bhd | Banks | 9,200 | 13,041 | |||||||||||
Sime Darby Bhd. | Industrial Conglomerates | 21,000 | 11,986 | |||||||||||
Sime Darby Plantation Bhd. | Food Products | 20,400 | 24,113 | |||||||||||
Supermax Corp. Bhd | Health Care Equipment & Supplies | 10,250 | 2,877 | |||||||||||
Telekom Malaysia Bhd. | Diversified Telecommunication Services | 6,800 | 7,908 | |||||||||||
Tenaga Nasional Bhd. | Electric Utilities | 18,400 | 39,384 | |||||||||||
Top Glove Corp. Bhd. | Health Care Equipment & Supplies | 30,000 | 13,699 | |||||||||||
Westports Holdings Bhd. | Transportation Infrastructure | 6,400 | 6,088 | |||||||||||
YTL Corp. Bhd. | Multi-Utilities | 23,613 | 3,313 | |||||||||||
|
| |||||||||||||
| 724,116 | ||||||||||||||
|
| |||||||||||||
| Pakistan 0.0%† | ||||||||||||||
Fauji Fertilizer Co. Ltd. | Chemicals | 4,000 | 2,481 | |||||||||||
Habib Bank Ltd. | Banks | 4,000 | 2,463 | |||||||||||
Oil & Gas Development Co. Ltd. | Oil, Gas & Consumable Fuels | 4,000 | 1,814 | |||||||||||
Pakistan Petroleum Ltd. | Oil, Gas & Consumable Fuels | 4,008 | 1,591 | |||||||||||
|
| |||||||||||||
| 8,349 | ||||||||||||||
|
| |||||||||||||
| Philippines 0.9% | ||||||||||||||
Aboitiz Power Corp. | Independent Power and Renewable Electricity Producers | 9,200 | 6,401 | |||||||||||
AC Energy Corp. | Independent Power and Renewable Electricity Producers | 32,000 | 5,399 | |||||||||||
Alliance Global Group Inc. | Industrial Conglomerates | 22,000 | 5,323 | |||||||||||
Ayala Corp. | Industrial Conglomerates | 1,880 | 29,938 | |||||||||||
Ayala Land Inc. | Real Estate Management & Development | 45,600 | 30,888 | |||||||||||
Bank of the Philippine Islands | Banks | 10,160 | 19,556 | |||||||||||
BDO Unibank Inc. | Banks | 11,280 | 28,928 | |||||||||||
| a | Bloomberry Resorts Corp. | Hotels, Restaurants & Leisure | 17,200 | 2,274 | ||||||||||
| a | Converge Information and Communications Technology Solutions Inc. | Diversified Telecommunication Services | 11,600 | 6,770 | ||||||||||
DMCI Holdings Inc. | Industrial Conglomerates | 20,400 | 3,560 | |||||||||||
Globe Telecom Inc. | Wireless Telecommunication Services | 160 | 7,854 | |||||||||||
GT Capital Holdings Inc. | Industrial Conglomerates | 520 | 5,547 | |||||||||||
International Container Terminal Services Inc. | Transportation Infrastructure | 6,320 | 27,456 | |||||||||||
JG Summit Holdings Inc. | Industrial Conglomerates | 17,160 | 20,329 | |||||||||||
Jollibee Foods Corp. | Hotels, Restaurants & Leisure | 2,320 | 10,088 | |||||||||||
LT Group Inc. | Industrial Conglomerates | 18,000 | 3,096 | |||||||||||
Manila Electric Co. | Electric Utilities | 1,520 | 10,974 | |||||||||||
Megaworld Corp. | Real Estate Management & Development | 72,000 | 4,188 | |||||||||||
Metro Pacific Investments Corp. | Diversified Financial Services | 72,000 | 5,287 | |||||||||||
Metropolitan Bank & Trust Co. | Banks | 10,260 | 11,302 | |||||||||||
| a,b | Monde Nissin Corp., 144A | Food Products | 32,400 | 8,578 | ||||||||||
PLDT Inc. | Wireless Telecommunication Services | 525 | 18,770 | |||||||||||
Puregold Price Club Inc. | Food & Staples Retailing | 6,060 | 4,187 | |||||||||||
San Miguel Corp. | Industrial Conglomerates | 2,180 | 4,634 | |||||||||||
San Miguel Pure Foods Co. Inc. | Food Products | 3,980 | 4,749 | |||||||||||
Semirara Mining and Power Corp. | Oil, Gas & Consumable Fuels | 6,400 | 3,797 | |||||||||||
SM Prime Holdings Inc. | Real Estate Management & Development | 52,400 | 38,329 | |||||||||||
Universal Robina Corp. | Food Products | 5,160 | 12,066 | |||||||||||
|
| |||||||||||||
| 340,268 | ||||||||||||||
|
| |||||||||||||
| 170 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Singapore 3.5% | ||||||||||||||
Ascendas REIT | Equity Real Estate Investment Trusts (REITs | ) | 19,600 | $ | 42,434 | |||||||||
Ascott Residence Trust | Equity Real Estate Investment Trusts (REITs | ) | 10,400 | 8,684 | ||||||||||
| b | BOC Aviation Ltd., 144A | Trading Companies & Distributors | 1,200 | 9,493 | ||||||||||
| a | Capitaland Investment Ltd. | Real Estate Management & Development | 14,800 | 43,634 | ||||||||||
CapitaLand Mall Trust | Equity Real Estate Investment Trusts (REITs | ) | 28,000 | 46,551 | ||||||||||
City Developments Ltd. | Real Estate Management & Development | 2,800 | 16,283 | |||||||||||
ComfortDelGro Corp. Ltd. | Road & Rail | 11,600 | 12,771 | |||||||||||
DBS Group Holdings Ltd. | Banks | 10,300 | 272,693 | |||||||||||
Frasers Logistics & Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 16,000 | 17,261 | ||||||||||
Genting Singapore Ltd. | Hotels, Restaurants & Leisure | 32,800 | 19,752 | |||||||||||
Golden Agri-Resources Ltd. | Food Products | 38,100 | 8,586 | |||||||||||
Jardine Cycle & Carriage Ltd. | Distributors | 500 | 9,247 | |||||||||||
Keppel Corp. Ltd. | Industrial Conglomerates | 8,500 | 40,322 | |||||||||||
Keppel DC REIT | Equity Real Estate Investment Trusts (REITs | ) | 7,200 | 12,130 | ||||||||||
Keppel REIT | Equity Real Estate Investment Trusts (REITs | ) | 12,800 | 11,539 | ||||||||||
Mapletree Commercial Trust | Equity Real Estate Investment Trusts (REITs | ) | 12,400 | 17,317 | ||||||||||
| c | Mapletree Greater China Commercial Trust, Reg S | Equity Real Estate Investment Trusts (REITs | ) | 13,600 | 12,360 | |||||||||
Mapletree Industrial Trust | Equity Real Estate Investment Trusts (REITs | ) | 10,800 | 21,467 | ||||||||||
Mapletree Logistics Trust | Equity Real Estate Investment Trusts (REITs | ) | 18,400 | 25,152 | ||||||||||
| c | NetLink NBN Trust, Reg S | Diversified Telecommunication Services | 17,400 | 12,536 | ||||||||||
Olam Group Ltd. | Food & Staples Retailing | 4,500 | 5,819 | |||||||||||
Oversea-Chinese Banking Corp. Ltd. | Banks | 20,000 | 182,953 | |||||||||||
| a | SATS Ltd. | Transportation Infrastructure | 3,700 | 11,865 | ||||||||||
SembCorp Industries Ltd. | Multi-Utilities | 5,400 | 10,654 | |||||||||||
| a | SembCorp Marine Ltd. | Machinery | 90,000 | 6,517 | ||||||||||
| a | SIA Engineering Co. Ltd. | Transportation Infrastructure | 1,600 | 3,015 | ||||||||||
| a | Singapore Airlines Ltd. | Airlines | 7,200 | 29,261 | ||||||||||
Singapore Exchange Ltd. | Capital Markets | 4,800 | 35,361 | |||||||||||
Singapore Post Ltd. | Air Freight & Logistics | 8,800 | 4,227 | |||||||||||
Singapore Press Holdings Ltd. | Media | 9,400 | 16,322 | |||||||||||
Singapore Technologies Engineering Ltd. | Aerospace & Defense | 9,000 | 27,399 | |||||||||||
Singapore Telecommunications Ltd. | Diversified Telecommunication Services | 43,200 | 84,271 | |||||||||||
StarHub Ltd. | Wireless Telecommunication Services | 3,200 | 3,050 | |||||||||||
Suntec REIT | Equity Real Estate Investment Trusts (REITs | ) | 12,000 | 15,517 | ||||||||||
United Overseas Bank Ltd. | Banks | 7,400 | 175,083 | |||||||||||
UOL Group Ltd. | Real Estate Management & Development | 2,900 | 15,085 | |||||||||||
Venture Corp. Ltd. | Electronic Equipment, Instruments & Components | 1,500 | 19,474 | |||||||||||
Wilmar International Ltd. | Food Products | 12,000 | 41,763 | |||||||||||
Wing Tai Holdings Ltd. | Real Estate Management & Development | 2,400 | 3,174 | |||||||||||
Yanlord Land Group Ltd. | Real Estate Management & Development | 3,200 | 2,932 | |||||||||||
|
| |||||||||||||
| 1,353,954 | ||||||||||||||
|
| |||||||||||||
| South Korea 13.2% | ||||||||||||||
| a | Alteogen Inc. | Biotechnology | 160 | 7,472 | ||||||||||
| a | Amorepacific Corp. | Personal Products | 180 | 23,761 | ||||||||||
AmorePacific Group | Personal Products | 168 | 6,085 | |||||||||||
BGF Retail Co. Ltd. | Food & Staples Retailing | 32 | 4,607 | |||||||||||
BNK Financial Group Inc. | Banks | 1,628 | 10,692 | |||||||||||
Celltrion Healthcare Co. Ltd. | Health Care Providers & Services | 420 | 22,524 | |||||||||||
Celltrion Inc. | Biotechnology | 616 | 87,161 | |||||||||||
| a | Celltrion Pharm Inc. | Pharmaceuticals | 109 | 8,795 | ||||||||||
Cheil Worldwide Inc. | Media | 408 | 7,927 | |||||||||||
CJ CheilJedang Corp. | Food Products | 44 | 13,414 | |||||||||||
CJ Corp. | Industrial Conglomerates | 80 | 5,571 | |||||||||||
CJ ENM Co. Ltd. | Internet & Direct Marketing Retail | 62 | 6,721 | |||||||||||
| franklintempleton.com | Annual Report | 171 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| South Korea (continued) | ||||||||||||||
| a | CJ Logistics Corp. | Road & Rail | 48 | $ | 5,128 | |||||||||
Coway Co. Ltd. | Household Durables | 320 | 18,085 | |||||||||||
Daelim Industrial Co. Ltd. | Construction & Engineering | 72 | 3,635 | |||||||||||
| a | Daewoo Engineering & Construction Co. Ltd. | Construction & Engineering | 976 | 5,637 | ||||||||||
| a | Daewoo Shipbuilding & Marine Engineering Co. Ltd. | Machinery | 280 | 5,729 | ||||||||||
DB Insurance Co. Ltd. | Insurance | 264 | 15,225 | |||||||||||
DGB Financial Group Inc. | Banks | 832 | 6,411 | |||||||||||
| a | DL E&C Co. Ltd. | Construction & Engineering | 88 | 9,620 | ||||||||||
Dongsuh Cos. Inc. | Food & Staples Retailing | 176 | 3,979 | |||||||||||
| a | Doosan Bobcat Inc. | Machinery | 152 | 4,872 | ||||||||||
| a | Doosan Heavy Industries and Construction Co. Ltd. | Electrical Equipment | 1,986 | 33,508 | ||||||||||
| a | Doosan Infracore Co. Ltd. | Machinery | 740 | 4,054 | ||||||||||
Doosan Solus Co. Ltd. | Electronic Equipment, Instruments & Components | 72 | 4,099 | |||||||||||
| a | E-MART Inc. | Food & Staples Retailing | 112 | 13,029 | ||||||||||
Ecopro BM Co. Ltd. | Electrical Equipment | 50 | 16,406 | |||||||||||
| a | F&F Co. Ltd. | Textiles, Apparel & Luxury Goods | 18 | 11,064 | ||||||||||
Fila Holdings Corp. | Textiles, Apparel & Luxury Goods | 312 | 8,096 | |||||||||||
Green Cross Corp. | Biotechnology | 32 | 5,333 | |||||||||||
GS Engineering & Construction Corp. | Construction & Engineering | 352 | 13,475 | |||||||||||
GS Holdings Corp. | Oil, Gas & Consumable Fuels | 308 | 11,156 | |||||||||||
GS Retail Co. Ltd. | Food & Staples Retailing | 216 | 5,052 | |||||||||||
Hana Financial Group Inc. | Banks | 1,648 | 66,080 | |||||||||||
| a | Hanjin Kal Corp. | Airlines | 126 | 6,435 | ||||||||||
Hankook Tire & Technology Co. Ltd. | Auto Components | 416 | 11,549 | |||||||||||
| a | Hanmi Pharm Co. Ltd. | Pharmaceuticals | 44 | 9,947 | ||||||||||
| a | Hanmi Science Co. Ltd. | Pharmaceuticals | 89 | 3,279 | ||||||||||
Hanon Systems | Auto Components | 956 | 9,307 | |||||||||||
Hanssem Co. Ltd. | Household Durables | 60 | 4,218 | |||||||||||
Hanwha Aerospace Co. Ltd. | Aerospace & Defense | 192 | 8,269 | |||||||||||
Hanwha Corp. | Industrial Conglomerates | 160 | 2,073 | |||||||||||
Hanwha Corp. | Industrial Conglomerates | 260 | 6,746 | |||||||||||
| a | Hanwha Life Insurance Co. Ltd. | Insurance | 1,644 | 4,273 | ||||||||||
| a | Hanwha Solutions Corp. | Chemicals | 536 | 15,898 | ||||||||||
HDC Hyundai Development Co-Engineering & Construction | Construction & Engineering | 292 | 3,638 | |||||||||||
| a | Helixmith Co. Ltd. | Biotechnology | 157 | 2,766 | ||||||||||
| a | Hite Jinro Co. Ltd. | Beverages | 176 | 5,438 | ||||||||||
| a | HLB Inc. | Leisure Products | 496 | 12,543 | ||||||||||
| a | HMM Co. Ltd. | Marine | 2,412 | 58,009 | ||||||||||
Hotel Shilla Co. Ltd. | Specialty Retail | 180 | 12,059 | |||||||||||
| a | HYBE Co. Ltd. | Entertainment | 104 | 26,557 | ||||||||||
Hyundai Department Store Co. Ltd. | Multiline Retail | 84 | 5,246 | |||||||||||
Hyundai Engineering & Construction Co. Ltd. | Construction & Engineering | 408 | 16,124 | |||||||||||
Hyundai Glovis Co. Ltd. | Air Freight & Logistics | 104 | 16,517 | |||||||||||
| a | Hyundai Heavy Industries Co. Ltd. | Machinery | 80 | 7,887 | ||||||||||
Hyundai Heavy Industries Holdings Co. Ltd. | Machinery | 298 | 13,227 | |||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | Insurance | 349 | 9,257 | |||||||||||
| a | Hyundai Mipo Dockyard Co. Ltd. | Machinery | 117 | 7,558 | ||||||||||
Hyundai Mobis Co. Ltd. | Auto Components | 364 | 64,568 | |||||||||||
Hyundai Motor Co. | Automobiles | 800 | 119,137 | |||||||||||
Hyundai Steel Co. | Metals & Mining | 424 | 14,535 | |||||||||||
Hyundai Wia Corp. | Auto Components | 96 | 5,093 | |||||||||||
Iljin Materials Co. Ltd. | Electronic Equipment, Instruments & Components | 100 | 7,970 | |||||||||||
| a | Industrial Bank of Korea | Banks | 1,404 | 12,568 | ||||||||||
| 172 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| South Korea (continued) | ||||||||||||||
| a | Kakao Corp. | Interactive Media & Services | 1,560 | $ | 137,074 | |||||||||
| a | Kakao Games Corp. | Entertainment | 156 | 10,078 | ||||||||||
| a | KakaoBank Corp. | Banks | 776 | 33,036 | ||||||||||
| a | Kangwon Land Inc. | Hotels, Restaurants & Leisure | 596 | 13,695 | ||||||||||
KB Financial Group Inc. | Banks | 2,220 | 112,278 | |||||||||||
KCC Corp. | Chemicals | 25 | 7,054 | |||||||||||
| a | KEPCO Plant Service and Engineering Co. Ltd. | Commercial Services & Supplies | 132 | 4,552 | ||||||||||
Kia Motors Corp. | Automobiles | 1,492 | 91,092 | |||||||||||
| a | Korea Aerospace Industries Ltd. | Aerospace & Defense | 384 | 13,401 | ||||||||||
| a | Korea Electric Power Corp. | Electric Utilities | 1,476 | 27,583 | ||||||||||
| a | Korea Gas Corp. | Gas Utilities | 152 | 4,966 | ||||||||||
Korea Investment Holdings Co. Ltd. | Capital Markets | 225 | 14,554 | |||||||||||
| a | Korea Shipbuilding & Offshore Engineering Co Ltd. | Machinery | 244 | 17,897 | ||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 56 | 27,029 | |||||||||||
| a | Korean Air Lines Co. Ltd. | Airlines | 1,000 | 24,916 | ||||||||||
| a | Krafton Inc. | Entertainment | 156 | 35,459 | ||||||||||
| a | KT&G Corp. | Tobacco | 628 | 41,813 | ||||||||||
| a | Kumho Petrochemical Co. Ltd. | Chemicals | 104 | 13,300 | ||||||||||
| a | L&F Co. Ltd. | Electronic Equipment, Instruments & Components | 124 | 23,101 | ||||||||||
LG Chem Ltd. | Chemicals | 266 | 116,754 | |||||||||||
LG Corp. | Industrial Conglomerates | 508 | 32,021 | |||||||||||
| a | LG Display Co. Ltd. | Electronic Equipment, Instruments & Components | 1,264 | 21,535 | ||||||||||
| a | LG Electronics Inc. | Household Durables | 616 | 61,242 | ||||||||||
LG Household & Health Care Ltd. | Personal Products | 50 | 35,395 | |||||||||||
LG Innotek Co. Ltd. | Electronic Equipment, Instruments & Components | 80 | 25,543 | |||||||||||
LG Uplus Corp. | Diversified Telecommunication Services | 1,204 | 13,907 | |||||||||||
Lotte Chemical Corp. | Chemicals | 88 | 15,211 | |||||||||||
Lotte Chilsung Beverage Co. Ltd. | Beverages | 16 | 2,403 | |||||||||||
Lotte Corp. | Industrial Conglomerates | 152 | 4,063 | |||||||||||
LOTTE Fine Chemical Co. Ltd. | Chemicals | 108 | 7,057 | |||||||||||
Lotte Shopping Co. Ltd. | Multiline Retail | 64 | 5,059 | |||||||||||
LS Corp. | Electrical Equipment | 108 | 4,705 | |||||||||||
| a | Mando Corp. | Auto Components | 196 | 8,134 | ||||||||||
| a | Medytox Inc. | Biotechnology | 29 | 3,132 | ||||||||||
Meritz Financial Group Inc. | Diversified Financial Services | 156 | 5,232 | |||||||||||
Mirae Asset Daewoo Co. Ltd. | Capital Markets | 708 | 2,626 | |||||||||||
Mirae Asset Daewood Co. Ltd. | Capital Markets | 1,900 | 13,419 | |||||||||||
Naver Corp. | Interactive Media & Services | 780 | 219,125 | |||||||||||
NCSoft Corp. | Entertainment | 95 | 36,642 | |||||||||||
| b | Netmarble Corp., 144A | Entertainment | 100 | 9,199 | ||||||||||
| a | NH Investment & Securities Co. Ltd. | Capital Markets | 776 | 7,299 | ||||||||||
| a | NHN Corp. | Entertainment | 120 | 3,648 | ||||||||||
Nongshim Co. Ltd. | Food Products | 20 | 4,942 | |||||||||||
| a | OCI Co. Ltd. | Chemicals | 108 | 9,356 | ||||||||||
Orion Corp. | Food Products | 128 | 9,378 | |||||||||||
Ottogi Corp. | Food Products | 8 | 2,947 | |||||||||||
Pan Ocean Co. Ltd. | Marine | 1,132 | 6,528 | |||||||||||
| a | Paradise Co. Ltd. | Hotels, Restaurants & Leisure | 272 | 3,714 | ||||||||||
| a | Pearl Abyss Corp. | Entertainment | 172 | 14,120 | ||||||||||
POSCO | Metals & Mining | 372 | 89,927 | |||||||||||
POSCO Chemical Co. Ltd. | Construction Materials | 152 | 15,112 | |||||||||||
Posco International Corp. | Trading Companies & Distributors | 296 | 5,251 | |||||||||||
S-1 Corp. | Commercial Services & Supplies | 116 | 6,824 | |||||||||||
S-Oil Corp. | Oil, Gas & Consumable Fuels | 232 | 18,509 | |||||||||||
| a,b | Samsung Biologics Co. Ltd., 144A | Life Sciences Tools & Services | 77 | 52,538 | ||||||||||
| franklintempleton.com | Annual Report | 173 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| South Korea (continued) | ||||||||||||||
Samsung C&T Corp. | Industrial Conglomerates | 484 | $ | 45,523 | ||||||||||
Samsung Card Co. Ltd. | Consumer Finance | 176 | 4,690 | |||||||||||
Samsung Electro-Mechanics Co. Ltd. | Electronic Equipment, Instruments & Components | 316 | 43,018 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 27,120 | 1,557,322 | |||||||||||
| a | Samsung Engineering Co. Ltd. | Construction & Engineering | 896 | 19,368 | ||||||||||
Samsung Fire & Marine Insurance Co. Ltd. | Insurance | 188 | 33,969 | |||||||||||
| a | Samsung Heavy Industries Co. Ltd. | Machinery | 3,422 | 16,036 | ||||||||||
Samsung Life Insurance Co. Ltd. | Insurance | 356 | 19,356 | |||||||||||
Samsung SDI Co. Ltd. | Electronic Equipment, Instruments & Components | 301 | 148,010 | |||||||||||
Samsung SDS Co. Ltd. | IT Services | 184 | 21,026 | |||||||||||
Samsung Securities Co. Ltd. | Capital Markets | 368 | 12,722 | |||||||||||
SD Biosensor Inc. | Health Care Equipment & Supplies | 196 | 9,023 | |||||||||||
Seegene Inc. | Biotechnology | 168 | 7,083 | |||||||||||
| a | Shin Poong Pharmaceutical Co. Ltd. | Pharmaceuticals | 196 | 6,258 | ||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 2,844 | 97,377 | |||||||||||
| a | Shinsegae Co. Ltd. | Multiline Retail | 40 | 8,465 | ||||||||||
| a,d | SillaJen Inc. | Biotechnology | 196 | — | ||||||||||
| a | SK Biopharmaceuticals Co. Ltd. | Pharmaceuticals | 144 | 10,669 | ||||||||||
| a | SK Bioscience Co. Ltd. | Biotechnology | 112 | 14,508 | ||||||||||
SK Chemicals Co. Ltd. | Chemicals | 80 | 8,977 | |||||||||||
SK Holdings Co. Ltd. | Industrial Conglomerates | 208 | 41,530 | |||||||||||
| a | SK Hynix Inc. | Semiconductors & Semiconductor Equipment | 2,964 | 288,562 | ||||||||||
| a,b | SK IE Technology Co. Ltd., 144A | Chemicals | 148 | 15,447 | ||||||||||
| a | SK Innovation Co. Ltd. | Oil, Gas & Consumable Fuels | 308 | 54,635 | ||||||||||
SK Networks Co. Ltd. | Trading Companies & Distributors | 832 | 3,240 | |||||||||||
| a | SK Square Co. Ltd. | Semiconductors & Semiconductor Equipment | 564 | 26,431 | ||||||||||
SK Telecom Co. Ltd. | Wireless Telecommunication Services | 320 | 15,022 | |||||||||||
SKC Co. Ltd. | Chemicals | 108 | 13,767 | |||||||||||
Ssangyong Cement Industrial Co. Ltd. | Construction Materials | 656 | 4,454 | |||||||||||
Wemade Co. Ltd. | Entertainment | 96 | 8,198 | |||||||||||
Woori Financial Group Inc. | Banks | 3,620 | 45,845 | |||||||||||
Yuhan Corp. | Pharmaceuticals | 280 | 13,491 | |||||||||||
|
| |||||||||||||
| 5,136,491 | ||||||||||||||
|
| |||||||||||||
| Taiwan 18.1% | ||||||||||||||
Accton Technology Corp. | Communications Equipment | 3,200 | 24,850 | |||||||||||
Acer Inc. | Technology Hardware, Storage & Peripherals | 17,000 | 17,770 | |||||||||||
Advanced Energy Solution Holding Co. Ltd. | Electrical Equipment | 120 | 5,319 | |||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 2,600 | 33,531 | |||||||||||
ASE Industrial Holding Co. Ltd. | Semiconductors & Semiconductor Equipment | 20,000 | 72,248 | |||||||||||
Asia Cement Corp. | Construction Materials | 14,330 | 24,307 | |||||||||||
ASMedia Technology Inc. | Semiconductors & Semiconductor Equipment | 240 | 16,292 | |||||||||||
ASPEED Technology Inc. | Semiconductors & Semiconductor Equipment | 200 | 22,756 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 4,000 | 52,144 | |||||||||||
AU Optronics Corp. | Electronic Equipment, Instruments & Components | 50,000 | 34,640 | |||||||||||
Capital Securities Corp. | Capital Markets | 12,000 | 6,890 | |||||||||||
Catcher Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 4,270 | 21,535 | |||||||||||
Cathay Financial Holding Co. Ltd. | Insurance | 48,000 | 108,057 | |||||||||||
Chailease Holding Co. Ltd. | Diversified Financial Services | 7,600 | 67,243 | |||||||||||
Chang Hwa Commercial Bank Ltd. | Banks | 37,300 | 24,931 | |||||||||||
Cheng Shin Rubber Industry Co. Ltd. | Auto Components | 11,000 | 13,610 | |||||||||||
Chicony Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 3,000 | 9,403 | |||||||||||
| a | China Airlines Ltd. | Airlines | 16,000 | 14,882 | ||||||||||
China Development Financial Holding Corp. | Insurance | 92,000 | 61,651 | |||||||||||
| d | China Motor Corp. | Automobiles | 1,060 | 2,242 | ||||||||||
China Steel Corp. | Metals & Mining | 71,000 | 96,520 | |||||||||||
| 174 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Taiwan (continued) | ||||||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 21,660 | $ | 96,010 | ||||||||||
Compal Electronics Inc. | Technology Hardware, Storage & Peripherals | 24,000 | 22,449 | |||||||||||
CTBC Financial Holding Co. Ltd. | Banks | 104,000 | 106,717 | |||||||||||
Delta Electronics Inc. | Electronic Equipment, Instruments & Components | 12,000 | 112,455 | |||||||||||
E Ink Holdings Inc. | Electronic Equipment, Instruments & Components | 5,000 | 32,285 | |||||||||||
E.Sun Financial Holding Co. Ltd. | Banks | 73,000 | 84,207 | |||||||||||
Eclat Textile Co. Ltd. | Textiles, Apparel & Luxury Goods | 1,160 | 19,332 | |||||||||||
eMemory Technology Inc. | Semiconductors & Semiconductor Equipment | 400 | 25,828 | |||||||||||
| a | ENNOSTAR Inc. | Semiconductors & Semiconductor Equipment | 3,330 | 8,310 | ||||||||||
Eternal Materials Co. Ltd. | Chemicals | 6,000 | 7,612 | |||||||||||
| a | EVA Airways Corp. | Airlines | 14,000 | 15,758 | ||||||||||
Evergreen Marine Corp. Taiwan Ltd. | Marine | 15,000 | 70,677 | |||||||||||
Far Eastern International Bank | Banks | 13,191 | 5,617 | |||||||||||
Far Eastern New Century Corp. | Industrial Conglomerates | 23,000 | 24,404 | |||||||||||
Far EasTone Telecommunications Co. Ltd. | Wireless Telecommunication Services | 9,000 | 23,088 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 2,640 | 17,645 | |||||||||||
First Financial Holding Co. Ltd. | Banks | 59,000 | 58,585 | |||||||||||
| a,b | FIT Hon Teng Ltd., 144A | Electronic Equipment, Instruments & Components | 8,000 | 1,195 | ||||||||||
Formosa Chemicals & Fibre Corp. | Chemicals | 20,000 | 55,145 | |||||||||||
Formosa Petrochemical Corp. | Oil, Gas & Consumable Fuels | 8,000 | 26,330 | |||||||||||
Formosa Plastics Corp. | Chemicals | 28,000 | 104,078 | |||||||||||
Formosa Sumco Technology Corp. | Semiconductors & Semiconductor Equipment | 400 | 4,042 | |||||||||||
Formosa Taffeta Co. Ltd. | Textiles, Apparel & Luxury Goods | 6,000 | 5,905 | |||||||||||
Foxconn Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 6,660 | 14,598 | |||||||||||
Fubon Financial Holding Co. Ltd. | Insurance | 40,000 | 106,801 | |||||||||||
Genius Electronic Optical Co. Ltd. | Electronic Equipment, Instruments & Components | 520 | 8,267 | |||||||||||
Giant Manufacturing Co. Ltd. | Leisure Products | 1,730 | 15,729 | |||||||||||
Globalwafers Co. Ltd. | Semiconductors & Semiconductor Equipment | 1,240 | 29,040 | |||||||||||
Hiwin Technologies Corp. | Machinery | 1,636 | 13,704 | |||||||||||
Hon Hai Precision Industry Co. Ltd. | Electronic Equipment, Instruments & Components | 69,000 | 255,275 | |||||||||||
Hotai Motor Co. Ltd. | Specialty Retail | 1,880 | 39,238 | |||||||||||
| a | HTC Corp. | Technology Hardware, Storage & Peripherals | 4,000 | 8,265 | ||||||||||
Hua Nan Financial Holdings Co. Ltd. | Banks | 56,000 | 47,593 | |||||||||||
Innolux Corp. | Electronic Equipment, Instruments & Components | 52,000 | 30,491 | |||||||||||
Inventec Corp. | Technology Hardware, Storage & Peripherals | 18,000 | 15,518 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 600 | 39,474 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 12,000 | 28,522 | |||||||||||
MediaTek Inc. | Semiconductors & Semiconductor Equipment | 8,480 | 267,853 | |||||||||||
Mega Financial Holding Co. Ltd. | Banks | 63,000 | 94,330 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 4,000 | 18,149 | |||||||||||
momo.com Inc. | Internet & Direct Marketing Retail | 280 | 9,196 | |||||||||||
Nan Ya Plastics Corp. | Chemicals | 32,000 | 104,092 | |||||||||||
Nan Ya Printed Circuit Board Corp. | Electronic Equipment, Instruments & Components | 1,330 | 24,324 | |||||||||||
Nanya Technology Corp. | Semiconductors & Semiconductor Equipment | 4,330 | 10,458 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 880 | 10,335 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 3,300 | 49,123 | |||||||||||
| a | OBI Pharma Inc. | Biotechnology | 1,112 | 4,308 | ||||||||||
| a | Oneness Biotech Co. Ltd. | Pharmaceuticals | 1,600 | 11,978 | ||||||||||
Parade Technologies Ltd. | Semiconductors & Semiconductor Equipment | 400 | 25,269 | |||||||||||
Pegatron Corp. | Technology Hardware, Storage & Peripherals | 12,000 | 30,323 | |||||||||||
Pou Chen Corp. | Textiles, Apparel & Luxury Goods | 15,000 | 16,517 | |||||||||||
Powertech Technology Inc. | Semiconductors & Semiconductor Equipment | 4,000 | 13,263 | |||||||||||
President Chain Store Corp. | Food & Staples Retailing | 3,000 | 27,538 | |||||||||||
Quanta Computer Inc. | Technology Hardware, Storage & Peripherals | 15,000 | 46,228 | |||||||||||
Realtek Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 2,800 | 42,071 | |||||||||||
Ruentex Development Co. Ltd. | Real Estate Management & Development | 9,000 | 24,910 | |||||||||||
| franklintempleton.com | Annual Report | 175 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Taiwan (continued) | ||||||||||||||
Shin Kong Financial Holding Co. Ltd. | Insurance | 73,041 | $ | 27,532 | ||||||||||
Sino-American Silicon Products Inc. | Semiconductors & Semiconductor Equipment | 3,060 | 18,904 | |||||||||||
SinoPac Financial Holdings Co. Ltd. | Banks | 60,000 | 38,532 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 8,000 | 21,025 | |||||||||||
Taishin Financial Holding Co. Ltd. | Banks | 62,180 | 44,490 | |||||||||||
Taiwan Business Bank | Banks | 31,000 | 13,903 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 31,000 | 53,990 | |||||||||||
Taiwan Cooperative Financial Holding Co. Ltd. | Banks | 56,000 | 57,756 | |||||||||||
Taiwan Fertilizer Co. Ltd. | Chemicals | 4,000 | 10,233 | |||||||||||
Taiwan Glass Industry Corp. | Building Products | 9,000 | 7,916 | |||||||||||
Taiwan High Speed Rail Corp. | Transportation Infrastructure | 12,000 | 12,083 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 9,330 | 34,192 | |||||||||||
Taiwan Secom Co. Ltd. | Commercial Services & Supplies | 1,330 | 5,060 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 138,130 | 2,878,160 | |||||||||||
Teco Electric & Machinery Co. Ltd. | Electrical Equipment | 11,000 | 12,343 | |||||||||||
The Shanghai Commercial & Savings Bank Ltd. | Banks | 19,000 | 33,290 | |||||||||||
Transcend Information Inc. | Technology Hardware, Storage & Peripherals | 1,330 | 3,454 | |||||||||||
U-Ming Marine Transport Corp. | Marine | 2,000 | 4,125 | |||||||||||
Uni-President Enterprises Corp. | Food Products | 28,000 | 64,108 | |||||||||||
Unimicron Technology Corp. | Electronic Equipment, Instruments & Components | 7,000 | 60,835 | |||||||||||
United Microelectronics Corp. | Semiconductors & Semiconductor Equipment | 67,000 | 126,276 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 5,330 | 23,161 | |||||||||||
Voltronic Power Technology Corp. | Electrical Equipment | 300 | 15,287 | |||||||||||
Walsin Lihwa Corp. | Electrical Equipment | 18,000 | 18,470 | |||||||||||
| a | Walsin Technology Corp. | Electronic Equipment, Instruments & Components | 2,800 | 13,877 | ||||||||||
Wan Hai Lines Ltd. | Marine | 4,400 | 24,341 | |||||||||||
Win Semiconductors Corp. | Semiconductors & Semiconductor Equipment | 2,560 | 23,767 | |||||||||||
Winbond Electronics Corp. | Semiconductors & Semiconductor Equipment | 17,000 | 18,512 | |||||||||||
Wistron Corp. | Technology Hardware, Storage & Peripherals | 17,000 | 17,652 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 480 | 17,088 | |||||||||||
Yageo Corp. | Electronic Equipment, Instruments & Components | 2,660 | 40,293 | |||||||||||
| a | Yang Ming Marine Transport Corp. | Marine | 9,000 | 39,108 | ||||||||||
Yuanta Financial Holding Co. Ltd. | Diversified Financial Services | 67,000 | 61,735 | |||||||||||
Yulon Motor Co. Ltd. | Automobiles | 3,271 | 4,647 | |||||||||||
Zhen Ding Technology Holding Ltd. | Electronic Equipment, Instruments & Components | 4,000 | 15,008 | |||||||||||
|
| |||||||||||||
| 7,002,428 | ||||||||||||||
|
| |||||||||||||
| Thailand 2.6% | ||||||||||||||
Advanced Info Service PCL, NVDR | Wireless Telecommunication Services | 6,400 | 44,848 | |||||||||||
| a | Airports of Thailand Public Co. Ltd., NVDR | Transportation Infrastructure | 24,400 | 48,617 | ||||||||||
| a | Asset World Corp PCL, NVDR | Hotels, Restaurants & Leisure | 42,400 | 6,503 | ||||||||||
B Grimm Power PCL, NVDR | Independent Power and Renewable Electricity Producers | 4,400 | 4,665 | |||||||||||
Bangkok Bank PCL, fgn. | Banks | 3,200 | 13,185 | |||||||||||
Bangkok Bank PCL, NVDR | Banks | 1,200 | 4,944 | |||||||||||
Bangkok Dusit Medical Services PCL, NVDR | Health Care Providers & Services | 51,600 | 38,797 | |||||||||||
Bangkok Expressway and Metro PCL, NVDR | Transportation Infrastructure | 47,200 | 12,350 | |||||||||||
Bangkok Life Assurance PCL, NVDR | Insurance | 3,000 | 3,902 | |||||||||||
Banpu PCL, NVDR | Oil, Gas & Consumable Fuels | 32,000 | 10,586 | |||||||||||
Berli Jucker PCL, NVDR | Food & Staples Retailing | 5,600 | 6,063 | |||||||||||
| 176 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Thailand (continued) | ||||||||||||||
BTS Group Holdings PCL, NVDR | Road & Rail | 48,000 | $ | 13,281 | ||||||||||
Bumrungrad Hospital PCL, NVDR | Health Care Providers & Services | 2,000 | 9,413 | |||||||||||
Carabao Group PCL, NVDR | Beverages | 2,100 | 6,821 | |||||||||||
Central Pattana PCL, NVDR | Real Estate Management & Development | 15,600 | 27,681 | |||||||||||
Central Retail Corp. PCL, NVDR | Multiline Retail | 16,000 | 19,128 | |||||||||||
Charoen Pokphand Foods PCL, NVDR | Food Products | 28,400 | 20,585 | |||||||||||
CP ALL PCL, NVDR | Food & Staples Retailing | 34,000 | 66,466 | |||||||||||
Delta Electronics Thailand PCL, NVDR | Electronic Equipment, Instruments & Components | 1,600 | 18,671 | |||||||||||
Digital Telecommunications Infrastructure Fund, fgn. | Diversified Financial Services | 29,700 | 12,684 | |||||||||||
Electricity Generating PCL, NVDR | Independent Power and Renewable Electricity Producers | 1,600 | 8,180 | |||||||||||
Energy Absolute PCL, NVDR | Independent Power and Renewable Electricity Producers | 9,700 | 28,589 | |||||||||||
Global Power Synergy PCL, NVDR | Independent Power and Renewable Electricity Producers | 4,000 | 8,692 | |||||||||||
Gulf Energy Development PCL, NVDR | Independent Power and Renewable Electricity Producers | 24,400 | 37,609 | |||||||||||
Home Product Center PCL, NVDR, NVDR | Specialty Retail | 31,600 | 15,111 | |||||||||||
Indorama Ventures PCL, NVDR | Chemicals | 10,000 | 13,985 | |||||||||||
Intouch Holdings PCL, NVDR | Wireless Telecommunication Services | 8,000 | 18,707 | |||||||||||
IRPC PCL, NVDR | Oil, Gas & Consumable Fuels | 62,800 | 6,724 | |||||||||||
Kasikornbank PCL, fgn. | Banks | 6,800 | 33,131 | |||||||||||
Kasikornbank PCL, NVDR | Banks | 2,200 | 10,686 | |||||||||||
Krung Thai Bank PCL, NVDR | Banks | 35,200 | 14,609 | |||||||||||
Krungthai Card PCL, NVDR | Consumer Finance | 7,200 | 13,317 | |||||||||||
Land and Houses PCL, NVDR | Real Estate Management & Development | 46,000 | 13,143 | |||||||||||
| a | Minor International PCL, NVDR | Hotels, Restaurants & Leisure | 22,800 | 22,971 | ||||||||||
Muangthai Capital PCL, NVDR | Consumer Finance | 4,000 | 6,316 | |||||||||||
Osotspa PCL, NVDR | Beverages | 7,600 | 8,571 | |||||||||||
PTT Exploration and Production PCL, NVDR | Oil, Gas & Consumable Fuels | 8,000 | 34,647 | |||||||||||
PTT Global Chemical PCL, NVDR | Chemicals | 12,000 | 18,316 | |||||||||||
PTT Oil & Retail Business PCL, NVDR | Specialty Retail | 15,600 | 11,729 | |||||||||||
PTT PCL, NVDR | Oil, Gas & Consumable Fuels | 82,000 | 94,947 | |||||||||||
Ratch Group PCL, NVDR | Independent Power and Renewable Electricity Producers | 4,400 | 5,823 | |||||||||||
SCG Packaging PCL, NVDR | Containers & Packaging | 7,200 | 13,101 | |||||||||||
Siam City Cement PCL, NVDR | Construction Materials | 400 | 1,847 | |||||||||||
Siam Commercial Bank PCL, NVDR | Banks | 13,600 | 46,629 | |||||||||||
Siam Makro Public Company Ltd., NVDR | Food & Staples Retailing | 8,000 | 9,564 | |||||||||||
Sri Trang Gloves Thailand PCL, NVDR | Health Care Equipment & Supplies | 5,600 | 4,253 | |||||||||||
Srisawad Corp. PCL, NVDR | Consumer Finance | 3,700 | 6,343 | |||||||||||
Thai Oil PCL, NVDR | Oil, Gas & Consumable Fuels | 5,600 | 8,716 | |||||||||||
Thai Union Group PCL, NVDR | Food Products | 16,400 | 9,322 | |||||||||||
The Siam Cement PCL, NVDR | Construction Materials | 4,800 | 55,290 | |||||||||||
TMB Bank PCL, NVDR | Banks | 240,000 | 9,528 | |||||||||||
Total Access Communication PCL, NVDR | Wireless Telecommunication Services | 3,600 | 5,332 | |||||||||||
True Corporation PCL, NVDR | Diversified Telecommunication Services | 62,000 | 9,603 | |||||||||||
|
| |||||||||||||
| 994,521 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 0.3% | ||||||||||||||
CK Hutchison Holdings Ltd. | Industrial Conglomerates | 15,500 | 113,904 | |||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 177 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United States 0.1% | ||||||||||||||
| b | JS Global Lifestyle Co. Ltd., 144A | Household Durables | 4,000 | $ | 4,704 | |||||||||
| a,b | Samsonite International SA, 144A | Textiles, Apparel & Luxury Goods | 7,200 | 16,292 | ||||||||||
|
| |||||||||||||
| 20,996 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $37,963,155) | 38,555,864 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 0.8% | ||||||||||||||
| South Korea 0.8% | ||||||||||||||
| f | Amorepacific Corp., 1.239%, pfd. | Personal Products | 60 | 3,935 | ||||||||||
| f | CJ CheilJedang Corp., 3.006%, pfd. | Food Products | 8 | 1,109 | ||||||||||
| f | Hyundai Motor Co., 5.889%, pfd. | Automobiles | 208 | 14,861 | ||||||||||
| f | Hyundai Motor Co., 5.858%, pfd. | Automobiles | 132 | 9,388 | ||||||||||
| f | LG Chem Ltd., 4.414%, pfd. | Chemicals | 45 | 10,136 | ||||||||||
| f | LG Electronics Inc., 1.538%, pfd. | Household Durables | 108 | 5,213 | ||||||||||
| f | LG Household & Health Care Ltd., 2.377%, pfd. | Personal Products | 12 | 5,020 | ||||||||||
| f | Samsung Electronics Co. Ltd., 1.721%, pfd. | Technology Hardware, Storage & Peripherals | 4,728 | 245,752 | ||||||||||
| f | Samsung Fire & Marine Insurance Co. Ltd., 7.298%, pfd. | Insurance | 16 | 2,171 | ||||||||||
| f | Samsung SDI Co. Ltd., 0.343%, pfd. | Electronic Equipment, Instruments & Components | 8 | 2,020 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $283,157) | 299,605 | |||||||||||||
|
| |||||||||||||
| Rights 0.0%† | ||||||||||||||
| South Korea 0.0%† | ||||||||||||||
| a | Samsung Biologics Co. Ltd., rts. | Life Sciences Tools & Services | 3 | 465 | ||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments (Cost $38,246,312) | 38,855,934 | |||||||||||||
|
| |||||||||||||
| Short Term Investments 0.0%† | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.0%† | ||||||||||||||
| United States 0.0%† | ||||||||||||||
| g,h | Institutional Fiduciary Trust Portfolio, 0.01% | Money Market Funds | 6,825 | 6,825 | ||||||||||
|
| |||||||||||||
Total Investments | 38,862,759 | |||||||||||||
Other Assets, less Liabilities (0.3)% | (111,708 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 38,751,051 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $1,996,167, representing 5.2% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $301,302, representing 0.8% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eA portion or all of the security is on loan at March 31, 2022.
fVariable rate security. The rate shown represents the yield at period end.
gSee Note 3(c) regarding investments in affiliated management investment companies.
hThe rate shown is the annualized seven-day effective yield at period end.
| 178 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Australia ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 29.12 | $ | 17.38 | $ | 24.63 | $ | 24.67 | $ | 25.23 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 1.48 | 0.81 | 1.07 | 1.29 | 0.52 | |||||||||||||||
Net realized and unrealized gains (losses) | 2.47 | 11.55 | (7.18 | ) | (0.37 | ) | (1.03 | ) | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 3.95 | 12.36 | (6.11 | ) | 0.92 | (0.51 | ) | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.52 | ) | (0.62 | ) | (1.14 | ) | (0.96 | ) | (0.05 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 31.55 | $ | 29.12 | $ | 17.38 | $ | 24.63 | $ | 24.67 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 13.93% | 71.72% | (26.23)% | 4.00% | (2.05)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 4.93% | 3.25% | 4.28% | 5.30% | 4.96% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $29,968 | $23,295 | $7,820 | $7,389 | $2,467 | |||||||||||||||
Portfolio turnover ratef | 15.26% | g | 6.98% | g | 8.16% | g | 4.56% | 1.63% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 15.26% | 6.98% | 8.16% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 179 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.9% | ||||||||||||||
| Australia 96.9% | ||||||||||||||
Adbri Ltd. | Construction Materials | 9,348 | $ | 21,270 | ||||||||||
AGL Energy Ltd. | Multi-Utilities | 13,186 | 76,444 | |||||||||||
| a | Allkem Ltd. | Metals & Mining | 11,685 | 100,297 | ||||||||||
ALS Ltd. | Professional Services | 9,652 | 97,125 | |||||||||||
Altium Ltd. | Software | 2,223 | 56,992 | |||||||||||
Alumina Ltd. | Metals & Mining | 51,471 | 77,691 | |||||||||||
| a | AMP Ltd. | Diversified Financial Services | 66,614 | 48,273 | ||||||||||
Ampol Ltd. | Oil, Gas & Consumable Fuels | 4,807 | 110,605 | |||||||||||
Ansell Ltd. | Health Care Equipment & Supplies | 2,584 | 50,006 | |||||||||||
Apa Group | Gas Utilities | 23,940 | 191,823 | |||||||||||
Appen Ltd. | IT Services | 2,280 | 11,848 | |||||||||||
Aristocrat Leisure Ltd. | Hotels, Restaurants & Leisure | 13,547 | 373,353 | |||||||||||
Atlas Arteria Ltd. | Transportation Infrastructure | 19,380 | 95,325 | |||||||||||
Aurizon Holdings Ltd. | Road & Rail | 35,606 | 98,664 | |||||||||||
Australia & New Zealand Banking Group Ltd. | Banks | 57,019 | 1,181,788 | |||||||||||
Australian Stock Exchange Ltd | Capital Markets | 3,914 | 240,428 | |||||||||||
Bank of Queensland Ltd. | Banks | 13,053 | 85,083 | |||||||||||
Beach Energy Ltd. | Oil, Gas & Consumable Fuels | 36,138 | 42,199 | |||||||||||
Bendigo and Adelaide Bank Ltd. | Banks | 11,267 | 87,063 | |||||||||||
BHP Group Ltd. | Metals & Mining | 101,745 | 3,953,979 | |||||||||||
BlueScope Steel Ltd. | Metals & Mining | 9,899 | 155,066 | |||||||||||
Boral Ltd. | Construction Materials | 8,208 | 21,327 | |||||||||||
Brambles Ltd. | Commercial Services & Supplies | 29,070 | 216,336 | |||||||||||
carsales.com Ltd. | Interactive Media & Services | 5,415 | 85,069 | |||||||||||
Challenger Ltd. | Diversified Financial Services | 13,680 | 69,343 | |||||||||||
Charter Hall Group | Equity Real Estate Investment Trusts (REITs | ) | 9,519 | 118,018 | ||||||||||
Cimic Group Ltd. | Construction & Engineering | 1,900 | 31,390 | |||||||||||
Cleanaway Waste Management Ltd. | Commercial Services & Supplies | 27,778 | 64,248 | |||||||||||
Cochlear Ltd. | Health Care Equipment & Supplies | 1,292 | 218,621 | |||||||||||
Coles Group Ltd. | Food & Staples Retailing | 25,707 | 345,747 | |||||||||||
Commonwealth Bank of Australia | Banks | 34,561 | 2,745,110 | |||||||||||
Computershare Ltd. | IT Services | 10,868 | 201,585 | |||||||||||
| a | Crown Resorts Ltd. | Hotels, Restaurants & Leisure | 7,125 | 68,273 | ||||||||||
CSL Ltd. | Biotechnology | 9,671 | 1,947,422 | |||||||||||
CSR Ltd. | Construction Materials | 9,956 | 45,980 | |||||||||||
Deterra Royalties Ltd. | Metals & Mining | 8,607 | 31,218 | |||||||||||
Dexus | Equity Real Estate Investment Trusts (REITs | ) | 21,812 | 179,358 | ||||||||||
Domain Holdings Australia Ltd. | Interactive Media & Services | 4,769 | 14,361 | |||||||||||
Domino’s Pizza Enterprises Ltd. | Hotels, Restaurants & Leisure | 1,235 | 81,474 | |||||||||||
Downer EDI Ltd. | Commercial Services & Supplies | 14,060 | 56,910 | |||||||||||
Endeavour Group Ltd. | Food & Staples Retailing | 25,707 | 140,731 | |||||||||||
Evolution Mining Ltd. | Metals & Mining | 34,922 | 115,389 | |||||||||||
| a | Flight Centre Travel Group Ltd. | Hotels, Restaurants & Leisure | 2,850 | 42,162 | ||||||||||
Fortescue Metals Group Ltd. | Metals & Mining | 32,186 | 499,354 | |||||||||||
Goodman Group | Equity Real Estate Investment Trusts (REITs | ) | 37,145 | 638,494 | ||||||||||
GPT Group | Equity Real Estate Investment Trusts (REITs | ) | 38,817 | 150,995 | ||||||||||
Harvey Norman Holdings Ltd. | Multiline Retail | 12,103 | 48,625 | |||||||||||
IDP Education Ltd. | Diversified Consumer Services | 3,686 | 87,414 | |||||||||||
IGO Ltd. | Metals & Mining | 12,578 | 132,803 | |||||||||||
Iluka Resources Ltd. | Metals & Mining | 8,569 | 72,650 | |||||||||||
Incitec Pivot Ltd. | Chemicals | 39,102 | 111,288 | |||||||||||
Insurance Australia Group Ltd. | �� | Insurance | 49,894 | 164,109 | ||||||||||
IOOF Holdings Ltd. | Capital Markets | 13,053 | 36,268 | |||||||||||
JB Hi-Fi Ltd. | Specialty Retail | 2,280 | 92,834 | |||||||||||
Lendlease Corp. Ltd. | Real Estate Management & Development | 13,908 | 116,975 | |||||||||||
| a | Lynas Rare Earths Ltd. | Metals & Mining | 18,202 | 147,076 | ||||||||||
Macquarie Group Ltd. | Capital Markets | 7,030 | 1,073,098 | |||||||||||
Magellan Financial Group Ltd. | Capital Markets | 2,812 | 33,660 | |||||||||||
| 180 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Australia ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Australia (continued) | ||||||||||||||
Medibank Private Ltd. | Insurance | 55,803 | $ | 129,068 | ||||||||||
Metcash Ltd. | Food & Staples Retailing | 19,342 | 65,943 | |||||||||||
Mineral Resources Ltd. | Metals & Mining | 2,812 | 111,306 | |||||||||||
Mirvac Group | Equity Real Estate Investment Trusts (REITs | ) | 79,667 | 148,967 | ||||||||||
National Australia Bank Ltd. | Banks | 65,645 | 1,594,729 | |||||||||||
Newcrest Mining Ltd. | Metals & Mining | 18,050 | 362,451 | |||||||||||
| a | NEXTDC Ltd. | IT Services | 9,082 | 79,523 | ||||||||||
Northern Star Resources Ltd. | Metals & Mining | 23,047 | 185,879 | |||||||||||
Nufarm Ltd. | Chemicals | 6,498 | 30,888 | |||||||||||
Orica Ltd. | Chemicals | 8,189 | 98,085 | |||||||||||
Origin Energy Ltd. | Electric Utilities | 35,530 | 166,224 | |||||||||||
Orora Ltd. | Containers & Packaging | 17,366 | 47,078 | |||||||||||
OZ Minerals Ltd. | Metals & Mining | 6,555 | 131,282 | |||||||||||
Perpetual Ltd. | Capital Markets | 1,140 | 29,749 | |||||||||||
| a | Pilbara Minerals Ltd. | Metals & Mining | 53,200 | 127,842 | ||||||||||
Platinum Asset Management Ltd. | Capital Markets | 10,716 | 17,784 | |||||||||||
Pro Medicus Ltd. | Health Care Technology | 855 | 31,455 | |||||||||||
| a | Qantas Airways Ltd. | Airlines | 15,010 | 58,726 | ||||||||||
QBE Insurance Group Ltd. | Insurance | 29,830 | 257,610 | |||||||||||
Qube Logistics Holdings Ltd. | Transportation Infrastructure | 29,450 | 69,221 | |||||||||||
Ramsay Health Care Ltd. | Health Care Providers & Services | 3,534 | 172,899 | |||||||||||
REA Group Ltd. | Interactive Media & Services | 1,026 | 104,376 | |||||||||||
Reece Ltd. | Trading Companies & Distributors | 5,339 | 76,418 | |||||||||||
Rio Tinto Ltd. | Metals & Mining | 7,524 | 672,989 | |||||||||||
Santos Ltd. | Oil, Gas & Consumable Fuels | 62,130 | 361,121 | |||||||||||
Scentre Group | Equity Real Estate Investment Trusts (REITs | ) | 104,994 | 240,478 | ||||||||||
SEEK Ltd. | Interactive Media & Services | 7,068 | 158,276 | |||||||||||
Seven Group Holdings Ltd. | Trading Companies & Distributors | 2,869 | 45,696 | |||||||||||
Shopping Centres Australasia Property Group | Equity Real Estate Investment Trusts (REITs | ) | 22,629 | 49,620 | ||||||||||
Sonic Healthcare Ltd. | Health Care Providers & Services | 9,671 | 257,671 | |||||||||||
South32 Ltd. | Metals & Mining | 94,468 | 356,122 | |||||||||||
| a | Star Entertainment Grp Ltd. | Hotels, Restaurants & Leisure | 17,537 | 42,801 | ||||||||||
Stockland | Equity Real Estate Investment Trusts (REITs | ) | 48,298 | 154,870 | ||||||||||
Suncorp-Metway Ltd. | Insurance | 25,536 | 213,240 | |||||||||||
Tabcorp Holdings Ltd. | Hotels, Restaurants & Leisure | 42,104 | 168,840 | |||||||||||
Telstra Corp. Ltd. | Diversified Telecommunication Services | 83,372 | 247,928 | |||||||||||
TPG Telecom Limited | Diversified Telecommunication Services | 7,467 | 33,924 | |||||||||||
Transurban Group | Transportation Infrastructure | 61,598 | 626,782 | |||||||||||
Treasury Wine Estates Ltd. | Beverages | 14,630 | 127,222 | |||||||||||
Vicinity Centres | Equity Real Estate Investment Trusts (REITs | ) | 76,133 | 106,626 | ||||||||||
Washington H Soul Pattinson & Co. Ltd. | Oil, Gas & Consumable Fuels | 5,358 | 115,155 | |||||||||||
Wesfarmers Ltd. | Multiline Retail | 22,914 | 867,418 | |||||||||||
Westpac Banking Corp. | Banks | 70,889 | 1,290,394 | |||||||||||
Whitehaven Coal Ltd. | Oil, Gas & Consumable Fuels | 17,670 | 55,068 | |||||||||||
WiseTech Global Ltd. | Software | 3,192 | 122,440 | |||||||||||
Woodside Petroleum Ltd. | Oil, Gas & Consumable Fuels | 19,456 | 468,996 | |||||||||||
Woolworths Group Ltd. | Food & Staples Retailing | 24,510 | 685,799 | |||||||||||
Worley Ltd. | Energy Equipment & Services | 7,619 | 73,864 | |||||||||||
|
| |||||||||||||
| 29,041,880 | ||||||||||||||
|
| |||||||||||||
| New Zealand 0.7% | ||||||||||||||
| a | Xero Ltd. | Software | 2,527 | 194,983 | ||||||||||
|
| |||||||||||||
| United Kingdom 1.2% | ||||||||||||||
Amcor PLC, IDR | Containers & Packaging | 31,236 | 359,122 | |||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 181 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Australia ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States 1.1% | ||||||||||||||
James Hardie Industries PLC, CDI | Construction Materials | 8,987 | $ | 274,001 | ||||||||||
Sims Ltd. | Metals & Mining | 3,325 | 53,833 | |||||||||||
|
| |||||||||||||
| 327,834 | ||||||||||||||
|
| |||||||||||||
Total Investments | 29,923,819 | |||||||||||||
Other Assets, less Liabilities 0.1% | 44,365 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 29,968,184 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
See Abbreviations on page 365
| 182 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Brazil ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 20.70 | $ | 14.46 | $ | 25.72 | $ | 27.87 | $ | 24.37 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 1.84 | 0.46 | 1.07 | 0.80 | 0.50 | |||||||||||||||
Net realized and unrealized gains (losses) | 2.55 | 6.31 | (11.33 | ) | (2.07 | ) | 3.11 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.39 | 6.77 | (10.26 | ) | (1.27 | ) | 3.61 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.53 | ) | (0.53 | ) | (1.00 | ) | (0.88 | ) | (0.11 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 23.56 | $ | 20.70 | $ | 14.46 | $ | 25.72 | $ | 27.87 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 23.03% | 46.83% | (41.69)% | (3.98)% | 14.86% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.19% | 0.19% | 0.23% | 0.19% | 0.19% | |||||||||||||||
Net investment income | 8.87% | 2.43% | 4.26% | 3.37% | 4.53% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $527,820 | $107,656 | $102,700 | $20,579 | $44,593 | |||||||||||||||
Portfolio turnover ratef | 17.71% | g | 21.01% | g | 36.07% | g | 39.76% | 4.79% | ||||||||||||
aFor the period November 3, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 14.95% | 9.31% | 17.47% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 183 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 73.6% | ||||||||||||||
| Brazil 71.3% | ||||||||||||||
Ambev SA | Beverages | 4,636,820 | $ | 15,026,890 | ||||||||||
Americanas SA | Internet & Direct Marketing Retail | 696,805 | 4,787,652 | |||||||||||
Americanas SA RCP | Internet & Direct Marketing Retail | 11,982 | 80,990 | |||||||||||
Armac Locacao Logistica E Servicos SA | Trading Companies & Distributors | 67,200 | 270,670 | |||||||||||
Atacadao Distribuicao Comercio Industria Ltd. | Food & Staples Retailing | 268,800 | 1,273,872 | |||||||||||
Auren Energia SA | Electric Utilities | 295,543 | 994,484 | |||||||||||
| a | Azul SA | Airlines | 291,200 | 1,465,820 | ||||||||||
B3 SA—Brasil Bolsa Balcao | Capital Markets | 6,496,000 | 21,475,849 | |||||||||||
Banco Bradesco SA | Banks | 1,500,840 | 5,770,336 | |||||||||||
Banco BTG Pactual SA | Capital Markets | 1,232,000 | 6,751,182 | |||||||||||
Banco do Brasil SA | Banks | 896,004 | 6,542,859 | |||||||||||
Banco Inter SA | Banks | 492,800 | 707,267 | |||||||||||
Banco Santander Brasil SA | Banks | 380,800 | 2,955,398 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 716,800 | 3,855,556 | |||||||||||
| a | BR Malls Participacoes SA | Real Estate Management & Development | 873,600 | 1,706,038 | ||||||||||
Bradespar SA | Metals & Mining | 27,030 | 168,484 | |||||||||||
| a | BRF SA | Food Products | 1,142,400 | 4,469,158 | ||||||||||
Caixa Seguridade Participacoes SA | Insurance | 470,400 | 880,029 | |||||||||||
CCR SA | Transportation Infrastructure | 1,187,200 | 3,422,730 | |||||||||||
Centrais Eletricas Brasileiras SA | Electric Utilities | 649,600 | 5,191,933 | |||||||||||
Cia Brasileira de Distribuicao | Food & Staples Retailing | 156,877 | 797,268 | |||||||||||
Cia Paranaense de Energia | Electric Utilities | 336,000 | 480,813 | |||||||||||
Cia Siderurgica Nacional SA | Metals & Mining | 694,400 | 3,803,750 | |||||||||||
Cielo SA | IT Services | 1,232,000 | 806,305 | |||||||||||
Companhia de Locacao das Americas | Road & Rail | 358,400 | 2,048,453 | |||||||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | Water Utilities | 358,400 | 3,598,368 | |||||||||||
Companhia Energetica de Minas Gerais | Electric Utilities | 268,862 | 1,150,257 | |||||||||||
Cosan SA | Oil, Gas & Consumable Fuels | 1,276,800 | 6,354,511 | |||||||||||
CPFL Energia SA | Electric Utilities | 201,600 | 1,369,045 | |||||||||||
CSN Mineracao SA | Metals & Mining | 560,000 | 710,614 | |||||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | Household Durables | 291,200 | 1,071,789 | |||||||||||
Dexco SA | Paper & Forest Products | 317,530 | 980,932 | |||||||||||
EDP—Energias do Brasil SA | Electric Utilities | 291,200 | 1,441,308 | |||||||||||
| a | Embraer SA | Aerospace & Defense | 784,000 | 2,468,174 | ||||||||||
Energisa SA | Electric Utilities | 268,880 | 2,761,821 | |||||||||||
| a | Eneva SA | Independent Power and Renewable Electricity Producers | 1,052,800 | 3,274,526 | ||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 179,200 | 1,630,617 | |||||||||||
Equatorial Energia SA | Electric Utilities | 963,200 | 5,515,351 | |||||||||||
Getnet Adquirencia e Servicos para Meios de Pagamento SA | IT Services | 116,650 | 89,600 | |||||||||||
| b | GPS Participacoes e Empreendimentos SA, 144A | Commercial Services & Supplies | 448,000 | 1,619,680 | ||||||||||
Grendene SA | Textiles, Apparel & Luxury Goods | 358,400 | 753,462 | |||||||||||
| a | GRUPO DE MODA SOMA SA | Textiles, Apparel & Luxury Goods | 470,400 | 1,508,622 | ||||||||||
| a | Grupo Mateus SA | Food & Staples Retailing | 436,700 | 490,741 | ||||||||||
| b,c | Hapvida Participacoes e Investimentos SA, 144A, Reg S | Health Care Providers & Services | 4,256,020 | 10,604,336 | ||||||||||
Hypera SA | Pharmaceuticals | 425,600 | 3,466,993 | |||||||||||
Itau Unibanco Holding SA | Banks | 470,400 | 2,336,186 | |||||||||||
Klabin SA | Containers & Packaging | 851,200 | 4,320,530 | |||||||||||
Localiza Rent a Car SA | Road & Rail | 627,200 | 8,064,462 | |||||||||||
| a,b | Locaweb Servicos de Internet SA, 144A | IT Services | 448,000 | 952,199 | ||||||||||
| 184 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Brazil ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Brazil (continued) | ||||||||||||||
Lojas Renner SA | Multiline Retail | 1,030,424 | $ | 5,963,165 | ||||||||||
M Dias Branco SA | Food Products | 134,400 | 696,331 | |||||||||||
Magazine Luiza SA | Multiline Retail | 3,225,644 | 4,629,445 | |||||||||||
Marfrig Global Foods SA | Food Products | 358,400 | 1,614,024 | |||||||||||
Multiplan Empreendimentos Imobiliarios SA | Real Estate Management & Development | 291,200 | 1,500,137 | |||||||||||
| a | Natura & Co. Holding SA | Personal Products | 1,030,416 | 5,648,699 | ||||||||||
Neoenergia SA | Electric Utilities | 246,400 | 892,898 | |||||||||||
Odontoprev SA | Health Care Providers & Services | 291,200 | 768,453 | |||||||||||
| a | Petro Rio SA | Oil, Gas & Consumable Fuels | 716,800 | 3,591,580 | ||||||||||
Petroleo Brasileiro SA | Oil, Gas & Consumable Fuels | 3,920,040 | 29,070,636 | |||||||||||
Porto Seguro SA | Insurance | 191,400 | 850,273 | |||||||||||
Raia Drogasil SA | Food & Staples Retailing | 1,142,443 | 5,755,550 | |||||||||||
| b | Rede D’Or Sao Luiz SA, 144A | Health Care Providers & Services | 502,800 | 5,279,879 | ||||||||||
| a | Rumo SA | Road & Rail | 1,344,060 | 5,246,754 | ||||||||||
Sao Martinho SA | Food Products | 169,100 | 1,578,568 | |||||||||||
Sendas Distribuidora SA | Food & Staples Retailing | 828,885 | 2,841,473 | |||||||||||
SIMPAR SA | Road & Rail | 236,000 | 583,053 | |||||||||||
| a | Smartfit Escola de Ginastica e Danca SA | Hotels, Restaurants & Leisure | 112,000 | 506,739 | ||||||||||
Sul America SA | Insurance | 425,641 | 3,079,481 | |||||||||||
Suzano SA | Paper & Forest Products | 761,672 | 8,839,784 | |||||||||||
Telefonica Brasil SA | Diversified Telecommunication Services | 470,400 | 5,314,824 | |||||||||||
TIM SA | Wireless Telecommunication Services | 873,600 | 2,535,158 | |||||||||||
Totvs SA | Software | 470,400 | 3,601,290 | |||||||||||
Transmissora Alianca de Energia Eletrica SA | Electric Utilities | 224,000 | 2,080,695 | |||||||||||
Ultrapar Participacoes SA | Oil, Gas & Consumable Fuels | 940,862 | 2,801,628 | |||||||||||
Usinas Siderurgicas de Minas Gerais SA Usiminas | Metals & Mining | 179,200 | 491,749 | |||||||||||
Vale SA | Metals & Mining | 4,357,659 | 87,667,631 | |||||||||||
Vamos Locacao de Caminhoes Maquinas e Equipamentos SA | Road & Rail | 201,600 | 542,612 | |||||||||||
| a | Via SA | Specialty Retail | 1,657,600 | 1,454,601 | ||||||||||
Vibra Energia SA | Specialty Retail | 1,209,600 | 5,951,335 | |||||||||||
WEG SA | Electrical Equipment | 1,568,000 | 11,506,047 | |||||||||||
YDUQS Participacoes SA | Diversified Consumer Services | 313,600 | 1,381,914 | |||||||||||
|
| |||||||||||||
| 376,534,316 | ||||||||||||||
|
| |||||||||||||
| United States 2.3% | ||||||||||||||
JBS SA | Food Products | 1,523,200 | 11,933,782 | |||||||||||
|
| |||||||||||||
Total Common Stocks | 388,468,098 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 25.7% | ||||||||||||||
| Brazil 25.7% | ||||||||||||||
| d | Alpargatas SA, 1.669%, pfd. | Textiles, Apparel & Luxury Goods | 179,200 | 983,121 | ||||||||||
| d | Banco Bradesco SA, 4.514%, pfd. | Banks | 5,017,661 | 23,462,458 | ||||||||||
| b,d | Banco Inter SA, 0.376%, pfd., 144A | Banks | 851,200 | 1,286,128 | ||||||||||
| d | Banco Pan SA, 2.115%, pfd. | Banks | 358,000 | 797,824 | ||||||||||
| d | Bradespar SA, 32.252%, pfd. | Metals & Mining | 268,884 | 1,871,796 | ||||||||||
| d | Braskem SA, 17.018%, pfd., A | Chemicals | 201,600 | 1,879,414 | ||||||||||
| d | Centrais Eletricas Brasileiras SA, 5.651%, pfd. | Electric Utilities | 291,200 | 2,298,004 | ||||||||||
| d | Cia de Transmissao de Energia Eletrica Paulista, 7.515%, pfd. | Electric Utilities | 201,600 | 1,121,709 | ||||||||||
| franklintempleton.com | Annual Report | 185 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Brazil ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Preferred Stocks (continued) | ||||||||||||||
| Brazil (continued) | ||||||||||||||
| d | Companhia Energetica de Minas Gerais, 8.271%, pfd. | Electric Utilities | 1,030,474 | $ | 3,298,332 | |||||||||
| d | Companhia Paranaense de Energia, 17.328%, pfd. | Electric Utilities | 1,411,200 | 2,245,115 | ||||||||||
| d | Gerdau SA, 10.191%, pfd. | Metals & Mining | 1,142,400 | 7,406,926 | ||||||||||
| d | Itau Unibanco Holding SA, 2.533%, pfd. | Banks | 5,084,800 | 29,404,835 | ||||||||||
| d | Itausa SA, 5.293%, pfd. | Banks | 5,062,478 | 11,452,485 | ||||||||||
| d | Metalurgica Gerdau SA, 17.374%, pfd. | Metals & Mining | 761,600 | 1,964,923 | ||||||||||
| d | Petroleo Brasileiro SA, 16.900%, pfd. | Oil, Gas & Consumable Fuels | 5,936,040 | 41,785,065 | ||||||||||
| d | Raizen SA, 0.309%, pfd. | Oil, Gas & Consumable Fuels | 1,254,400 | 1,855,750 | ||||||||||
| d | Unipar Carbocloro SA, 14.844%, pfd., B | Chemicals | 44,800 | 980,953 | ||||||||||
| d | Usinas Siderurgicas de Minas Gerais SA Usiminas, 10.208%, pfd., A | Metals & Mining | 492,800 | 1,448,756 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $125,050,461) | 135,543,594 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $480,558,386) 99.3% | 524,011,692 | |||||||||||||
Other Assets, less Liabilities 0.7% | 3,807,811 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 527,819,503 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $19,742,222, representing 3.7% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the value of this security was $10,604,336, representing 2.0% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
Bovespa Index | Long | 125 | $ | 3,166,569 | 4/13/22 | $ | 210,014 | |||||||||||||
Mini Bovespa Index | Long | 17 | 86,141 | 4/13/22 | 3,488 | |||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | 213,502 | |||||||||||||||||
|
| |||||||||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| 186 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Canada ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 30.20 | $ | 19.50 | $ | 24.13 | $ | 23.77 | $ | 24.80 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.80 | 0.75 | 0.69 | 0.67 | 0.24 | |||||||||||||||
Net realized and unrealized gains (losses) | 5.77 | 10.63 | (4.72 | ) | 0.33 | (1.25 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 6.57 | 11.38 | (4.03 | ) | 1.00 | (1.01 | ) | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.70 | ) | (0.68 | ) | (0.60 | ) | (0.64 | ) | (0.02 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 36.07 | $ | 30.20 | $ | 19.50 | $ | 24.13 | $ | 23.77 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 21.95% | 59.10% | (17.25)% | 4.48% | (4.06)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 2.37% | 2.88% | 2.73% | 2.79% | 2.39% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $43,289 | $24,160 | $4,876 | $4,827 | $2,377 | |||||||||||||||
Portfolio turnover ratef | 5.63% | g | 3.14% | g | 4.57% | g | 6.95% | 1.26% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 5.63% | 3.14% | 4.57% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 187 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.9% | ||||||||||||||
| Canada 97.5% | ||||||||||||||
Agnico Eagle Mines Ltd. | Metals & Mining | 10,536 | $ | 645,294 | ||||||||||
Alimentation Couche-Tard Inc. | Food & Staples Retailing | 18,456 | 832,186 | |||||||||||
Bank of Montreal | Banks | 15,504 | 1,826,022 | |||||||||||
The Bank of Nova Scotia | Banks | 28,272 | 2,028,078 | |||||||||||
Barrick Gold Corp. | Metals & Mining | 41,280 | 1,013,286 | |||||||||||
BCE Inc. | Diversified Telecommunication Services | 7,032 | 390,151 | |||||||||||
Brookfield Asset Management Inc., A | Capital Markets | 31,032 | 1,756,008 | |||||||||||
Canadian Imperial Bank of Commerce | Banks | 10,200 | 1,239,222 | |||||||||||
Canadian National Railway Co. | Road & Rail | 13,800 | 1,852,816 | |||||||||||
Canadian Natural Resources Ltd. | Oil, Gas & Consumable Fuels | 27,048 | 1,676,302 | |||||||||||
Canadian Pacific Railway Ltd. | Road & Rail | 21,624 | 1,786,289 | |||||||||||
Canadian Tire Corp. Ltd., A | Multiline Retail | 1,320 | 199,482 | |||||||||||
Canadian Utilities Ltd., A | Multi-Utilities | 2,808 | 86,147 | |||||||||||
Cenovus Energy Inc. | Oil, Gas & Consumable Fuels | 29,352 | 489,729 | |||||||||||
| a | CGI Inc., A | IT Services | 5,064 | 403,766 | ||||||||||
Constellation Software Inc. | Software | 444 | 759,640 | |||||||||||
Dollarama Inc. | Multiline Retail | 6,576 | 373,274 | |||||||||||
Enbridge Inc. | Oil, Gas & Consumable Fuels | 47,160 | 2,172,898 | |||||||||||
Fairfax Financial Holdings Ltd. | Insurance | 501 | 273,565 | |||||||||||
Fortis Inc. | Electric Utilities | 10,944 | 541,746 | |||||||||||
Franco-Nevada Corp. | Metals & Mining | 4,416 | 703,350 | |||||||||||
George Weston Ltd. | Food & Staples Retailing | 1,656 | 204,108 | |||||||||||
Great-West Lifeco Inc. | Insurance | 6,288 | 185,461 | |||||||||||
| b | Hydro One Ltd., 144A | Electric Utilities | 7,320 | 197,380 | ||||||||||
IGM Financial Inc. | Capital Markets | 1,872 | 66,199 | |||||||||||
Imperial Oil Ltd. | Oil, Gas & Consumable Fuels | 4,920 | 238,309 | |||||||||||
Intact Financial Corp. | Insurance | 3,312 | 489,806 | |||||||||||
Loblaw Cos. Ltd. | Food & Staples Retailing | 3,672 | 329,791 | |||||||||||
Magna International Inc. | Auto Components | 6,528 | 419,469 | |||||||||||
Manulife Financial Corp. | Insurance | 45,288 | 966,637 | |||||||||||
Metro Inc., A | Food & Staples Retailing | 5,616 | 323,548 | |||||||||||
National Bank of Canada | Banks | 7,848 | 602,117 | |||||||||||
Nutrien Ltd. | Chemicals | 13,296 | 1,375,533 | |||||||||||
Pembina Pipeline Corp. | Oil, Gas & Consumable Fuels | 12,816 | 481,940 | |||||||||||
Power Corp. of Canada | Insurance | 12,648 | 391,880 | |||||||||||
Restaurant Brands International Inc. | Hotels, Restaurants & Leisure | 7,056 | 412,610 | |||||||||||
Rogers Communications Inc., B | Wireless Telecommunication Services | 8,160 | 462,273 | |||||||||||
Royal Bank of Canada | Banks | 33,216 | 3,660,262 | |||||||||||
Saputo Inc. | Food Products | 5,616 | 133,133 | |||||||||||
Shaw Communications Inc. | Media | 9,984 | 310,139 | |||||||||||
| a | Shopify Inc., A | IT Services | 2,649 | 1,793,083 | ||||||||||
Sun Life Financial Inc. | Insurance | 13,656 | 763,131 | |||||||||||
Suncor Energy Inc. | Oil, Gas & Consumable Fuels | 33,480 | 1,090,938 | |||||||||||
TC Energy Corp. | Oil, Gas & Consumable Fuels | 22,800 | 1,287,080 | |||||||||||
Teck Resources Ltd., B | Metals & Mining | 10,800 | 436,479 | |||||||||||
TELUS Corp. | Diversified Telecommunication Services | 10,560 | 276,121 | |||||||||||
Thomson Reuters Corp. | Professional Services | 3,840 | 417,280 | |||||||||||
The Toronto-Dominion Bank | Banks | 42,384 | 3,365,813 | |||||||||||
Wheaton Precious Metals Corp. | Metals & Mining | 10,488 | 499,189 | |||||||||||
|
| |||||||||||||
| 42,228,960 | ||||||||||||||
|
| |||||||||||||
| 188 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Canada ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States 2.4% | ||||||||||||||
| a | Bausch Health Companies Inc. | Pharmaceuticals | 7,320 | $ | 167,375 | |||||||||
Waste Connections Inc. | Commercial Services & Supplies | 6,096 | 853,259 | |||||||||||
|
| |||||||||||||
| 1,020,634 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $35,766,724) 99.9% | 43,249,594 | |||||||||||||
Other Assets, less Liabilities 0.1% | 39,217 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 43,288,811 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $197,380, representing 0.5% of net assets.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 189 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE China ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 31.78 | $ | 22.19 | $ | 24.01 | $ | 25.99 | $ | 24.95 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment income (loss)c | 0.49 | 0.32 | 0.45 | 0.40 | (0.01 | ) | ||||||||||||||
Net realized and unrealized gains (losses) | (10.47 | ) | 9.56 | (1.78 | ) | (1.99 | ) | 1.05 | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (9.98 | ) | 9.88 | (1.33 | ) | (1.59 | ) | 1.04 | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.37 | ) | (0.29 | ) | (0.49 | ) | (0.39 | ) | — | d | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 21.43 | $ | 31.78 | $ | 22.19 | $ | 24.01 | $ | 25.99 | ||||||||||
|
| |||||||||||||||||||
Total returne | (31.63)% | 44.67% | (5.64)% | (5.94)% | 4.17% | |||||||||||||||
| Ratios to average net assetsf | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | —% | —% | |||||||||||||||
Net investment income (loss) | 1.80% | 1.06% | 1.94% | 1.70% | (0.12)% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $111,454 | $120,782 | $48,807 | $43,220 | $31,191 | |||||||||||||||
Portfolio turnover rateg | 12.78% | h | 15.97% | h | 32.47% | h | 7.21% | 2.71% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 12.00% | 15.31% | 32.47% |
| 190 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 100.0% | ||||||||||||||
| China 95.8% | ||||||||||||||
360 DigiTech Inc. | Consumer Finance | 6,786 | $ | 104,437 | ||||||||||
| a | 360 Security Technology Inc., A | Software | 26,000 | 40,875 | ||||||||||
| a,b | 3SBio Inc., 144A | Biotechnology | 52,000 | 42,496 | ||||||||||
| a | 51job Inc., ADR | Professional Services | 1,352 | 79,160 | ||||||||||
| b | A-Living Services Co. Ltd., 144A | Commercial Services & Supplies | 19,500 | 27,290 | ||||||||||
Addsino Co. Ltd., A | Communications Equipment | 5,200 | 8,912 | |||||||||||
| a | Advanced Micro-Fabrication Equipment Inc. China, A | Semiconductors & Semiconductor Equipment | 2,040 | 37,422 | ||||||||||
AECC Aero-Engine Control Co. Ltd. | Aerospace & Defense | 5,200 | 19,012 | |||||||||||
AECC Aviation Power Co. Ltd., A | Aerospace & Defense | 10,400 | 73,559 | |||||||||||
Agile Group Holdings Ltd. | Real Estate Management & Development | 72,000 | 36,499 | |||||||||||
Agricultural Bank of China Ltd., A | Banks | 327,600 | 158,946 | |||||||||||
Agricultural Bank of China Ltd., H | Banks | 1,534,000 | 589,593 | |||||||||||
Aier Eye Hospital Group Co. Ltd. | Health Care Providers & Services | 17,690 | 87,919 | |||||||||||
| a | Air China Ltd., A | Airlines | 20,800 | 29,850 | ||||||||||
| a | Air China Ltd., H | Airlines | 76,000 | 53,278 | ||||||||||
| a,b | Akeso Inc., 144A | Biotechnology | 26,000 | 55,377 | ||||||||||
| a | Alibaba Group Holding Ltd. | Internet & Direct Marketing Retail | 706,732 | 10,116,283 | ||||||||||
| a | Alpha Group, A | Leisure Products | 7,800 | 6,094 | ||||||||||
| a | Aluminum Corp. of China Ltd., A | Metals & Mining | 44,200 | 40,523 | ||||||||||
| a | Aluminum Corp. of China Ltd., H | Metals & Mining | 208,000 | 122,175 | ||||||||||
| a | Amlogic Shanghai Co. Ltd., A | Semiconductors & Semiconductor Equipment | 1,456 | 25,895 | ||||||||||
Angang Steel Co. Ltd. | Metals & Mining | 20,800 | 11,632 | |||||||||||
Angang Steel Co. Ltd., H | Metals & Mining | 70,000 | 32,268 | |||||||||||
Angel Yeast Co. Ltd., A | Food Products | 2,600 | 17,071 | |||||||||||
| a,b | Angelalign Technology Inc., 144A | Health Care Equipment & Supplies | 1,200 | 20,655 | ||||||||||
Anhui Anke Biotechnology Group Co. Ltd. | Biotechnology | 6,316 | 9,800 | |||||||||||
Anhui Conch Cement Co. Ltd., A | Construction Materials | 13,000 | 80,870 | |||||||||||
Anhui Conch Cement Co. Ltd., H | Construction Materials | 61,200 | 314,932 | |||||||||||
Anhui Expressway Co. Ltd., H | Transportation Infrastructure | 18,000 | 17,583 | |||||||||||
Anhui Gujing Distillery Co. Ltd., A | Beverages | 1,100 | 29,693 | |||||||||||
Anhui Gujing Distillery Co. Ltd., B | Beverages | 6,200 | 80,150 | |||||||||||
Anhui Zhongding Sealing Parts Co. Ltd., A | Auto Components | 5,200 | 12,295 | |||||||||||
Anta Sports Products Ltd. | Textiles, Apparel & Luxury Goods | 57,200 | 718,707 | |||||||||||
Apeloa Pharmaceutical Co. Ltd., A | Pharmaceuticals | 5,200 | 25,606 | |||||||||||
Asymchem Laboratories Tianjin Co. Ltd., A | Pharmaceuticals | 500 | 28,906 | |||||||||||
Autohome Inc., ADR | Interactive Media & Services | 2,938 | 89,345 | |||||||||||
Avary Holding Shenzhen Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,600 | 11,804 | |||||||||||
Avic Capital Co. Ltd., A | Diversified Financial Services | 33,800 | 22,043 | |||||||||||
AVIC Electromechanical Systems Co. Ltd. | Aerospace & Defense | 13,000 | 22,158 | |||||||||||
AviChina Industry & Technology Co. Ltd., H | Aerospace & Defense | 130,000 | 72,209 | |||||||||||
AVICOPTER PLC, A | Aerospace & Defense | 2,600 | 20,847 | |||||||||||
| b | BAIC Motor Corp. Ltd., 144A | Automobiles | 104,000 | 34,926 | ||||||||||
| a | Baidu Inc., A | Interactive Media & Services | 102,584 | 1,853,517 | ||||||||||
| a | Baidu Inc., ADR | Interactive Media & Services | 938 | 124,097 | ||||||||||
Bank of Beijing Co. Ltd., A | Banks | 72,800 | 52,523 | |||||||||||
Bank of Changsha Co. Ltd., A | Banks | 13,000 | 15,666 | |||||||||||
Bank of Chengdu Co. Ltd., A | Banks | 5,200 | 12,304 | |||||||||||
Bank of China Ltd., A | Banks | 156,000 | 80,358 | |||||||||||
Bank of China Ltd., H | Banks | 3,796,000 | 1,526,853 | |||||||||||
Bank of Communications Co. Ltd., A | Banks | 140,400 | 113,017 | |||||||||||
Bank of Communications Co. Ltd., H | Banks | 364,000 | 261,215 | |||||||||||
Bank of Guiyang Co. Ltd., A | Banks | 13,000 | 13,024 | |||||||||||
Bank of Hangzhou Co. Ltd., A | Banks | 20,800 | 46,167 | |||||||||||
Bank of Jiangsu Co. Ltd., A | Banks | 19,000 | 21,101 | |||||||||||
Bank of Nanjing Co. Ltd., A | Banks | 36,400 | 61,182 | |||||||||||
Bank of Ningbo Co. Ltd., A | Banks | 23,420 | 137,943 | |||||||||||
Bank of Qingdao Co. Ltd., A | Banks | 15,600 | 9,756 | |||||||||||
| franklintempleton.com | Annual Report | 191 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Bank of Shanghai Co. Ltd., A | Banks | 49,400 | $ | 51,672 | ||||||||||
Bank of Suzhou Co. Ltd., A | Banks | 5,200 | 6,062 | |||||||||||
| a | Bank of Zhengzhou Co. Ltd. | Banks | 19,880 | 9,207 | ||||||||||
Baoshan Iron & Steel Co. Ltd., A | Metals & Mining | 67,600 | 71,880 | |||||||||||
BBMG Corp., A | Construction Materials | 33,800 | 16,293 | |||||||||||
BBMG Corp., H | Construction Materials | 130,000 | 21,082 | |||||||||||
Beijing Capital Co. Ltd., A | Water Utilities | 26,000 | 12,902 | |||||||||||
Beijing Capital Development Co. Ltd., A | Real Estate Management & Development | 7,800 | 8,110 | |||||||||||
| a | Beijing Capital International Airport Co. Ltd. | Transportation Infrastructure | 104,000 | 60,955 | ||||||||||
Beijing Dabeinong Technology Group Co. Ltd. | Food Products | 13,000 | 17,816 | |||||||||||
Beijing E-Hualu Information Technology Co. Ltd., A | Software | 2,600 | 8,630 | |||||||||||
Beijing Easpring Material Technology Co. Ltd., A | Chemicals | 2,600 | 30,800 | |||||||||||
Beijing Enlight Media Co. Ltd. | Entertainment | 10,400 | 13,434 | |||||||||||
Beijing Enterprises Holdings Ltd. | Gas Utilities | 28,000 | 88,847 | |||||||||||
| a | Beijing Jetsen Technology Co. Ltd., A | Software | 7,800 | 7,225 | ||||||||||
Beijing Jingneng Clean Energy Co. Ltd., H | Independent Power and Renewable Electricity Producers | 104,000 | 23,638 | |||||||||||
Beijing Kingsoft Office Software Inc., A | Software | 1,560 | 46,116 | |||||||||||
Beijing New Building Materials PLC | Building Products | 5,200 | 24,828 | |||||||||||
| a | Beijing Orient National Communication Science &Technology Co. Ltd. | Software | 5,200 | 9,273 | ||||||||||
Beijing Originwater Technology Co. Ltd. | Commercial Services & Supplies | 10,400 | 9,830 | |||||||||||
Beijing Roborock Technology Co. Ltd., A | Household Durables | 200 | 17,459 | |||||||||||
| a | Beijing Sanju Environmental Protection and New Material Co. Ltd. | Chemicals | 9,000 | 9,300 | ||||||||||
Beijing Shiji Information Technology Co. Ltd. | Software | 4,200 | 13,166 | |||||||||||
Beijing Shougang Co. Ltd. | Metals & Mining | 10,400 | 8,519 | |||||||||||
Beijing Shunxin Agriculture Co. Ltd., A | Beverages | 2,600 | 9,568 | |||||||||||
Beijing Sinnet Technology Co. Ltd., A | IT Services | 5,400 | 11,280 | |||||||||||
Beijing Tiantan Biological Products Corp. Ltd., A | Biotechnology | 5,600 | 21,772 | |||||||||||
| a | Beijing Ultrapower Software Co. Ltd. | IT Services | 7,800 | 5,689 | ||||||||||
Beijing United Information Technology Co. Ltd., A | Trading Companies & Distributors | 1,200 | 21,145 | |||||||||||
Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., A | Biotechnology | 700 | 30,655 | |||||||||||
Beijing Yanjing Brewery Co. Ltd. | Beverages | 10,400 | 11,910 | |||||||||||
Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 16,189 | |||||||||||
Beijing Zhong Ke San Huan High-Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 5,560 | 10,904 | |||||||||||
Beijing-Shanghai High Speed Railway Co. Ltd. | Road & Rail | 98,800 | 74,395 | |||||||||||
| a | Bilibili Inc., ADR | Entertainment | 897 | 22,945 | ||||||||||
| a | Bilibili Inc., Z | Entertainment | 11,583 | 320,066 | ||||||||||
| b | Blue Moon Group Holdings Ltd., 144A | Household Products | 39,000 | 27,888 | ||||||||||
Blue Sail Medical Co. Ltd., A | Health Care Equipment & Supplies | 2,600 | 5,406 | |||||||||||
Bluefocus Intelligent Communications Group Co. Ltd. | Media | 10,400 | 13,712 | |||||||||||
Bluestar Adisseo Co., A | Chemicals | 2,600 | 4,042 | |||||||||||
BOC International China Co. Ltd., A | Capital Markets | 2,600 | 5,488 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 49,400 | 22,267 | |||||||||||
BOE Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 124,800 | 84,732 | |||||||||||
Boya Bio-pharmaceutical Group Co. Ltd., A | Biotechnology | 2,600 | 12,058 | |||||||||||
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SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Bright Dairy & Food Co. Ltd., A | Food Products | 5,200 | $ | 9,371 | ||||||||||
| a | BTG Hotels Group Co. Ltd., A | Hotels, Restaurants & Leisure | 5,200 | 18,775 | ||||||||||
By-health Co. Ltd., A | Personal Products | 5,200 | 17,440 | |||||||||||
BYD Co. Ltd. | Automobiles | 6,500 | 235,299 | |||||||||||
BYD Co. Ltd., H | Automobiles | 41,000 | 1,174,809 | |||||||||||
BYD Electronic International Co. Ltd. | Communications Equipment | 41,500 | 83,727 | |||||||||||
C&S Paper Co. Ltd., A | Household Products | 5,200 | 9,830 | |||||||||||
Caitong Securities Co. Ltd., A | Capital Markets | 5,200 | 6,946 | |||||||||||
Camel Group Co. Ltd., A | Electrical Equipment | 5,200 | 9,224 | |||||||||||
| a,b,c | CanSino Biologics Inc., 144A, Reg S | Pharmaceuticals | 3,200 | 51,444 | ||||||||||
| a | CanSino Biologics Inc., A | Pharmaceuticals | 240 | 8,775 | ||||||||||
CECEP Solar Energy Co. Ltd. | Independent Power and Renewable Electricity Producers | 10,400 | 14,351 | |||||||||||
CECEP Wind-Power Corp | Independent Power and Renewable Electricity Producers | 18,200 | 13,160 | |||||||||||
Central China Securities Co. Ltd., A | Capital Markets | 10,400 | 7,585 | |||||||||||
Central China Securities Co. Ltd., H | Capital Markets | 52,000 | 9,296 | |||||||||||
CGN Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 28,600 | 12,299 | |||||||||||
| b | CGN Power Co. Ltd., H, 144A | Independent Power and Renewable Electricity Producers | 546,000 | 142,925 | ||||||||||
Changchun High & New Technology Industry Group Inc. | Pharmaceuticals | 1,200 | 31,729 | |||||||||||
Changjiang Securities Co. Ltd. | Capital Markets | 20,800 | 20,413 | |||||||||||
Changzhou Xingyu Automotive LightingSystems Co. Ltd., A | Auto Components | 1,000 | 20,471 | |||||||||||
Chaozhou Three-Circle Group Co. Ltd., A | Electronic Equipment, Instruments & Components | 7,800 | 34,392 | |||||||||||
Chengdu Xingrong Environment Co. Ltd., A | Water Utilities | 10,400 | 8,142 | |||||||||||
| a | Chengxin Lithium Group Co. Ltd., A | Paper & Forest Products | 2,600 | 20,819 | ||||||||||
China Baoan Group Co. Ltd. | Industrial Conglomerates | 7,800 | 13,749 | |||||||||||
China Cinda Asset Management Co. Ltd., H | Capital Markets | 442,000 | 75,629 | |||||||||||
China CITIC Bank Corp. Ltd., A | Banks | 33,800 | 27,101 | |||||||||||
China CITIC Bank Corp. Ltd., H | Banks | 468,000 | 237,245 | |||||||||||
China Coal Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 18,200 | 23,194 | |||||||||||
China Coal Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 104,000 | 78,218 | |||||||||||
China Communications Services Corp. Ltd., H | Construction & Engineering | 122,000 | 55,303 | |||||||||||
| a | China Conch Environment Protection Holdings Ltd. | Commercial Services & Supplies | 81,620 | 102,137 | ||||||||||
China Conch Venture Holdings Ltd. | Construction & Engineering | 81,620 | 238,667 | |||||||||||
China Construction Bank Corp., A | Banks | 33,800 | 33,491 | |||||||||||
China Construction Bank Corp., H | Banks | 4,628,000 | 3,480,721 | |||||||||||
China CSSC Holdings Ltd., A | Machinery | 15,600 | 42,464 | |||||||||||
| b,c | China East Education Holdings Ltd., 144A, Reg S | Diversified Consumer Services | 26,000 | 15,172 | ||||||||||
| a | China Eastern Airlines Corp. Ltd., A | Airlines | 39,000 | 28,752 | ||||||||||
| a | China Eastern Airlines Corp. Ltd., H | Airlines | 52,000 | 17,529 | ||||||||||
| a | China Energy Engineering Corp. Ltd. | Construction & Engineering | 111,800 | 42,972 | ||||||||||
China Everbright Bank Co. Ltd., A | Banks | 148,200 | 77,040 | |||||||||||
China Everbright Bank Co. Ltd., H | Banks | 156,000 | 59,162 | |||||||||||
| d | China Evergrande Group | Real Estate Management & Development | 182,000 | 38,346 | ||||||||||
| b,c | China Feihe Ltd., 144A, Reg S | Food Products | 130,000 | 128,815 | ||||||||||
China Galaxy Securities Co. Ltd., A | Capital Markets | 7,800 | 12,226 | |||||||||||
China Galaxy Securities Co. Ltd., H | Capital Markets | 182,000 | 102,023 | |||||||||||
China Great Wall Securities Co. Ltd., A | Capital Markets | 7,800 | 11,697 | |||||||||||
China Greatwall Technology Group Co. Ltd. | Technology Hardware, Storage & Peripherals | 10,400 | 18,857 | |||||||||||
China Hongqiao Group Ltd. | Metals & Mining | 104,000 | 138,907 | |||||||||||
China International Capital Corp. Ltd., A | Capital Markets | 2,600 | 17,042 | |||||||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| b | China International Capital Corp. Ltd., H, 144A | Capital Markets | 72,800 | $ | 162,493 | |||||||||
China International Marine Containers (Group) Co. Ltd., H | Machinery | 20,800 | 34,050 | |||||||||||
China International Marine Containers Group Co. Ltd. | Machinery | 5,500 | 12,034 | |||||||||||
China Jinmao Holdings Group Ltd. | Real Estate Management & Development | 312,000 | 92,826 | |||||||||||
China Jushi Co. Ltd., A | Construction Materials | 14,287 | 34,299 | |||||||||||
China Lesso Group Holdings Ltd. | Building Products | 52,000 | 63,212 | |||||||||||
China Life Insurance Co. Ltd., H | Insurance | 364,000 | 559,614 | |||||||||||
| a,b | China Literature Ltd., 144A | Media | 20,800 | 86,718 | ||||||||||
China Lodging Group Ltd., ADR | Hotels, Restaurants & Leisure | 10,816 | 356,820 | |||||||||||
China Longyuan Power Group Corp. | Independent Power and Renewable Electricity Producers | 156,000 | 355,369 | |||||||||||
China Medical System Holdings Ltd. | Pharmaceuticals | 65,000 | 102,421 | |||||||||||
China Meheco Co. Ltd., A | Trading Companies & Distributors | 2,600 | 14,892 | |||||||||||
China Meidong Auto Holdings Ltd. | Specialty Retail | 22,000 | 84,276 | |||||||||||
China Merchants Bank Co. Ltd., A | Banks | 72,800 | 536,702 | |||||||||||
China Merchants Bank Co. Ltd., H | Banks | 188,500 | 1,481,494 | |||||||||||
China Merchants Expressway Network & Technology Holdings Co. Ltd. | Transportation Infrastructure | 10,400 | 12,795 | |||||||||||
China Merchants Port Holdings Co. Ltd. | Transportation Infrastructure | 69,320 | 125,692 | |||||||||||
China Merchants Property Operation & Service Co. Ltd., A | Real Estate Management & Development | 2,600 | 7,229 | |||||||||||
| b | China Merchants Securities Co. Ltd., 144A | Capital Markets | 20,800 | 24,541 | ||||||||||
China Merchants Securities Co. Ltd., A | Capital Markets | 26,400 | 60,177 | |||||||||||
China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | Real Estate Management & Development | 26,000 | 62,091 | |||||||||||
China Minmetals Rare Earth Co. Ltd., A | Metals & Mining | 2,600 | 11,931 | |||||||||||
China Minsheng Banking Corp. Ltd., A | Banks | 119,600 | 71,970 | |||||||||||
China Minsheng Banking Corp. Ltd., H | Banks | 312,000 | 117,527 | |||||||||||
China Molybdenum Co. Ltd., A | Metals & Mining | 33,800 | 27,740 | |||||||||||
China Molybdenum Co. Ltd., H | Metals & Mining | 195,000 | 101,840 | |||||||||||
China National Building Material Co. Ltd., H | Construction Materials | 208,000 | 258,692 | |||||||||||
China National Chemical Engineering Co. Ltd., A | Construction & Engineering | 23,400 | 35,534 | |||||||||||
China National Medicines Corp. Ltd., A | Health Care Providers & Services | 2,600 | 12,013 | |||||||||||
China National Nuclear Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 52,000 | 66,432 | |||||||||||
China Northern Rare Earth Group High-Tech Co. Ltd., A | Metals & Mining | 13,000 | 79,313 | |||||||||||
China Oilfield Services Ltd., A | Energy Equipment & Services | 5,200 | 11,173 | |||||||||||
China Oilfield Services Ltd., H | Energy Equipment & Services | 104,000 | 106,637 | |||||||||||
China Orient Securities Co. Ltd., A | Capital Markets | 20,800 | 35,977 | |||||||||||
China Overseas Land & Investment Ltd. | Real Estate Management & Development | 195,000 | 583,899 | |||||||||||
China Pacific Insurance Group Co. Ltd., A | Insurance | 23,400 | 84,486 | |||||||||||
China Pacific Insurance Group Co. Ltd., H | Insurance | 130,000 | 317,389 | |||||||||||
China Petroleum & Chemical Corp., A | Oil, Gas & Consumable Fuels | 122,200 | 83,159 | |||||||||||
China Petroleum & Chemical Corp., H | Oil, Gas & Consumable Fuels | 1,248,000 | 626,279 | |||||||||||
China Railway Group Ltd., A | Construction & Engineering | 70,200 | 66,682 | |||||||||||
China Railway Group Ltd., H | Construction & Engineering | 182,000 | 102,023 | |||||||||||
| b,c | China Railway Signal & Communication Corp. Ltd., 144A, Reg S | Electronic Equipment, Instruments & Components | 78,000 | 24,800 | ||||||||||
China Railway Signal & Communication Corp. Ltd., A | Electronic Equipment, Instruments & Components | 22,516 | 15,784 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
China Reinsurance Group Corp., H | Insurance | 364,000 | $ | 33,465 | ||||||||||
China Resources Cement Holdings Ltd. | Construction Materials | 114,000 | 95,056 | |||||||||||
China Resources Double Crane Pharmaceutical Co. Ltd., A | Pharmaceuticals | 2,600 | 6,963 | |||||||||||
China Resources Microelectronics Ltd., A | Semiconductors & Semiconductor Equipment | 3,432 | 29,611 | |||||||||||
| b | China Resources Mixc Lifestyle Services Ltd., 144A | Real Estate Management & Development | 31,200 | 154,379 | ||||||||||
| b | China Resources Pharmaceutical Group Ltd., 144A | Pharmaceuticals | 78,000 | 40,636 | ||||||||||
China Resources Power Holdings Co. Ltd. | Independent Power and Renewable Electricity Producers | 97,600 | 183,699 | |||||||||||
China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,600 | 18,578 | |||||||||||
China Shenhua Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 23,400 | 109,736 | |||||||||||
China Shenhua Energy Co. Ltd., H | Oil, Gas & Consumable Fuels | 172,848 | 553,986 | |||||||||||
China Shipping Container Lines Co. Ltd., A | Trading Companies & Distributors | 36,400 | 18,922 | |||||||||||
China Shipping Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 15,600 | 15,728 | |||||||||||
China South Publishing & Media Group Co. Ltd., A | Media | 7,800 | 11,648 | |||||||||||
| a | China Southern Airlines Co. Ltd., A | Airlines | 41,600 | 40,564 | ||||||||||
| a | China Southern Airlines Co. Ltd., H | Airlines | 72,000 | 41,924 | ||||||||||
China State Construction Engineering Corp. Ltd., A | Construction & Engineering | 143,000 | 122,544 | |||||||||||
China Suntien Green Energy Corp. Ltd., H | Oil, Gas & Consumable Fuels | 78,000 | 44,122 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. | Insurance | 72,800 | 89,148 | |||||||||||
China Three Gorges Renewables Group Co. Ltd., A | Independent Power and Renewable Electricity Producers | 85,800 | 82,987 | |||||||||||
China Tourism Group Duty Free Corp. Ltd., A | Specialty Retail | 6,900 | 178,660 | |||||||||||
| b,c | China Tower Corp. Ltd., H, 144A, Reg S | Diversified Telecommunication Services | 2,340,000 | 262,941 | ||||||||||
China TransInfo Technology Co. Ltd. | IT Services | 2,600 | 4,382 | |||||||||||
China United Network Communications Ltd., A | Wireless Telecommunication Services | 93,600 | 52,638 | |||||||||||
China Vanke Co. Ltd., A | Real Estate Management & Development | 33,800 | 101,963 | |||||||||||
China Vanke Co. Ltd., H | Real Estate Management & Development | 93,600 | 212,026 | |||||||||||
China World Trade Center Co. Ltd., A | Real Estate Management & Development | 2,600 | 6,635 | |||||||||||
China Yangtze Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 78,000 | 270,317 | |||||||||||
China Zhenhua Group Science & Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,600 | 46,445 | |||||||||||
China Zheshang Bank Co. Ltd., A | Banks | 26,000 | 13,598 | |||||||||||
Chinalin Securities Co. Ltd., A | Capital Markets | 2,600 | 5,943 | |||||||||||
Chinese Universe Publishing and Media Group Co. Ltd., A | Media | 5,200 | 9,265 | |||||||||||
| a | Chongqing Brewery Co. Ltd., A | Beverages | 2,600 | 43,918 | ||||||||||
Chongqing Changan Automobile Co. Ltd. | Automobiles | 20,880 | 37,266 | |||||||||||
Chongqing Changan Automobile Co. Ltd., B | Automobiles | 52,440 | 20,356 | |||||||||||
Chongqing Department Store Co. Ltd., A | Multiline Retail | 2,600 | 10,698 | |||||||||||
Chongqing Fuling Zhacai Group Co. Ltd., A | Food Products | 2,600 | 13,315 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A | Banks | 15,600 | $ | 9,781 | ||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H | Banks | 104,000 | 40,902 | |||||||||||
Chongqing Water Group Co. Ltd., A | Water Utilities | 7,800 | 7,790 | |||||||||||
Chongqing Zhifei Biological Products Co. Ltd. | Biotechnology | 5,200 | 113,042 | |||||||||||
CIFI Holdings Group Co. Ltd. | Real Estate Management & Development | 208,000 | 122,440 | |||||||||||
CITIC Ltd. | Industrial Conglomerates | 234,000 | 260,252 | |||||||||||
Citic Pacific Special Steel Group Co. Ltd., A | Metals & Mining | 16,480 | 51,791 | |||||||||||
CITIC Securities Co. Ltd., A | Capital Markets | 42,200 | 138,936 | |||||||||||
CITIC Securities Co. Ltd., H | Capital Markets | 130,200 | 300,587 | |||||||||||
CMST Development Co. Ltd., A | Air Freight & Logistics | 7,800 | 6,574 | |||||||||||
CNOOC Energy Technology & Services Ltd. | Energy Equipment & Services | 18,200 | 7,540 | |||||||||||
Contemporary Amperex Technology Co. Ltd. | Electrical Equipment | 8,300 | 669,821 | |||||||||||
COSCO SHIPPING Development Co. Ltd., H | Trading Companies & Distributors | 182,000 | 36,951 | |||||||||||
COSCO SHIPPING Energy Transportation Co. Ltd., H | Oil, Gas & Consumable Fuels | 64,000 | 29,665 | |||||||||||
| a | COSCO SHIPPING Holdings Co. Ltd., A | Marine | 43,580 | 106,408 | ||||||||||
| a | COSCO SHIPPING Holdings Co. Ltd., H | Marine | 156,000 | 272,105 | ||||||||||
Country Garden Holdings Co. Ltd. | Real Estate Management & Development | 390,000 | 300,291 | |||||||||||
Country Garden Services Holdings Co. Ltd. | Commercial Services & Supplies | 92,000 | 394,719 | |||||||||||
CRRC Corp. Ltd., A | Machinery | 85,800 | 72,986 | |||||||||||
CRRC Corp. Ltd., H | Machinery | 208,000 | 83,398 | |||||||||||
| b | CSC Financial Co. Ltd., 144A | Capital Markets | 39,000 | 36,951 | ||||||||||
CSC Financial Co. Ltd., A | Capital Markets | 18,200 | 66,744 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 54,600 | 20,358 | |||||||||||
CSG Holding Co. Ltd. | Construction Materials | 5,200 | 6,078 | |||||||||||
CSPC Pharmaceutical Group Ltd. | Pharmaceuticals | 416,000 | 480,731 | |||||||||||
Daan Gene Co. Ltd. | Biotechnology | 3,840 | 11,281 | |||||||||||
| a | Dada Nexus Ltd., ADR | Internet & Direct Marketing Retail | 3,380 | 30,859 | ||||||||||
| b | Dali Foods Group Co. Ltd., 144A | Food Products | 104,000 | 54,580 | ||||||||||
Daqin Railway Co. Ltd., A | Road & Rail | 52,000 | 56,275 | |||||||||||
DaShenLin Pharmaceutical Group Co. Ltd., A | Food & Staples Retailing | 960 | 4,528 | |||||||||||
Datang International Power Generation Co. Ltd., A | Independent Power and Renewable Electricity Producers | 23,400 | 8,773 | |||||||||||
Datang International Power Generation Co. Ltd., H | Independent Power and Renewable Electricity Producers | 156,000 | 22,509 | |||||||||||
DHC Software Co. Ltd. | IT Services | 10,400 | 11,632 | |||||||||||
Dian Diagnostics Group Co. Ltd. | Health Care Providers & Services | 2,600 | 11,886 | |||||||||||
| a | DiDi Global Inc., ADR | Road & Rail | 122,200 | 305,500 | ||||||||||
Do-Fluoride Chemicals Co. Ltd., A | Chemicals | 2,600 | 16,117 | |||||||||||
Dong-E-E-Jiao Co. Ltd., A | Pharmaceuticals | 2,600 | 13,884 | |||||||||||
Dongfang Electric Corp. Ltd., A | Electrical Equipment | 10,400 | 22,215 | |||||||||||
Dongfang Electric Corp. Ltd., H | Electrical Equipment | 15,600 | 17,470 | |||||||||||
Dongfeng Motor Group Co. Ltd., H | Automobiles | 156,000 | 117,328 | |||||||||||
Dongxing Securities Co. Ltd., A | Capital Markets | 10,400 | 15,990 | |||||||||||
East Group Co. Ltd., A | Electrical Equipment | 5,200 | 6,389 | |||||||||||
East Money Information Co. Ltd. | Capital Markets | 36,400 | 145,300 | |||||||||||
Ecovacs Robotics Co. Ltd., A | Household Durables | 1,700 | 29,099 | |||||||||||
ENN Ecological Holdings Co. Ltd., A | Gas Utilities | 10,400 | 29,014 | |||||||||||
ENN Energy Holdings Ltd. | Gas Utilities | 36,900 | 553,637 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Eternal Asia Supply Chain Management Ltd., A | Commercial Services & Supplies | 10,400 | $ | 8,011 | ||||||||||
Eve Energy Co. Ltd. | Electrical Equipment | 6,700 | 85,142 | |||||||||||
| b | Everbright Securities Co. Ltd., 144A | Capital Markets | 15,600 | 10,697 | ||||||||||
Everbright Securities Co. Ltd., A | Capital Markets | 13,000 | 25,516 | |||||||||||
| a,b,d | Evergrande Property Services Group Ltd., 144A | Real Estate Management & Development | 221,000 | 64,905 | ||||||||||
Fangda Carbon New Material Co. Ltd. | Electrical Equipment | 13,000 | 17,304 | |||||||||||
Faw Jiefang Group Co. Ltd. | Automobiles | 10,400 | 14,155 | |||||||||||
Fiberhome Telecommunication Technologies Co. Ltd., A | Communications Equipment | 5,200 | 12,394 | |||||||||||
Financial Street Holdings Co. Ltd., A | Real Estate Management & Development | 7,800 | 7,532 | |||||||||||
First Capital Securities Co. Ltd. | Capital Markets | 15,600 | 14,401 | |||||||||||
Flat Glass Group Co Ltd., H | Semiconductors & Semiconductor Equipment | 26,000 | 100,595 | |||||||||||
Flat Glass Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 2,600 | 18,431 | |||||||||||
Focus Media Information Technology Co. Ltd. | Media | 52,000 | 50,050 | |||||||||||
Foshan Haitian Flavouring & Food Co. Ltd. | Food Products | 13,056 | 179,795 | |||||||||||
Fosun International Ltd. | Industrial Conglomerates | 104,000 | 113,277 | |||||||||||
Founder Securities Co. Ltd., A | Capital Markets | 28,600 | 30,366 | |||||||||||
Foxconn Industrial Internet Co. Ltd., A | Electronic Equipment, Instruments & Components | 44,200 | 70,672 | |||||||||||
Fu Jian Anjoy Foods Co. Ltd., A | Food Products | 700 | 12,163 | |||||||||||
Fujian Funeng Co. Ltd., A | Independent Power and Renewable Electricity Producers | 5,200 | 9,084 | |||||||||||
Fujian Sunner Development Co. Ltd. | Food Products | 5,200 | 16,235 | |||||||||||
| a,e | Full Truck Alliance Co. Ltd., Sponsored ADR | Road & Rail | 28,210 | 188,161 | ||||||||||
Fuyao Glass Industry Group Co. Ltd., A | Auto Components | 7,800 | 43,718 | |||||||||||
| b | Fuyao Group Glass Industries Co. Ltd., 144A | Auto Components | 31,200 | 128,284 | ||||||||||
G-bits Network Technology Xiamen Co. Ltd., A | Entertainment | 200 | 11,358 | |||||||||||
Ganfeng Lithium Co. Ltd. | Metals & Mining | 5,200 | 102,925 | |||||||||||
| b | Ganfeng Lithium Co. Ltd., H, 144A | Metals & Mining | 7,400 | 105,830 | ||||||||||
| a | GCL System Integration Technology Co. Ltd. | Semiconductors & Semiconductor Equipment | 20,800 | 11,763 | ||||||||||
GD Power Development Co. Ltd., A | Independent Power and Renewable Electricity Producers | 62,400 | 24,771 | |||||||||||
| a | GDS Holdings Ltd., A | IT Services | 42,496 | 216,783 | ||||||||||
| a | GDS Holdings Ltd., ADR | IT Services | 265 | 10,401 | ||||||||||
GEM Co. Ltd. | Metals & Mining | 18,200 | 24,025 | |||||||||||
Gemdale Corp., A | Real Estate Management & Development | 15,600 | 35,092 | |||||||||||
| a | Genscript Biotech Corp. | Life Sciences Tools & Services | 52,000 | 166,662 | ||||||||||
GF Securities Co. Ltd. | Capital Markets | 20,800 | 57,602 | |||||||||||
GF Securities Co. Ltd., H | Capital Markets | 78,000 | 110,754 | |||||||||||
Gigadevice Semiconductor Beijing Inc., A | Semiconductors & Semiconductor Equipment | 2,648 | 58,828 | |||||||||||
Ginlong Technologies Co. Ltd., A | Electrical Equipment | 900 | 29,722 | |||||||||||
Glarun Technology Co. Ltd., A | Communications Equipment | 5,200 | 13,082 | |||||||||||
GoerTek Inc. | Electronic Equipment, Instruments & Components | 13,000 | 70,446 | |||||||||||
| a | GOME Retail Holdings Ltd. | Specialty Retail | 598,000 | 37,416 | ||||||||||
Gongniu Group Co. Ltd., A | Electrical Equipment | 600 | 12,138 | |||||||||||
| a | Grandjoy Holdings Group Co. Ltd., A | Real Estate Management & Development | 15,600 | 11,525 | ||||||||||
Great Wall Motor Co. Ltd., A | Automobiles | 10,400 | 44,889 | |||||||||||
Great Wall Motor Co. Ltd., H | Automobiles | 156,000 | 250,193 | |||||||||||
Greendland Holdings Corp. Ltd., A | Real Estate Management & Development | 24,390 | 20,709 | |||||||||||
Greentown China Holdings Ltd. | Real Estate Management & Development | 39,000 | 71,313 | |||||||||||
GRG Banking Equipment Co. Ltd. | Technology Hardware, Storage & Peripherals | 7,800 | 13,061 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Guangdong Baolihua New Energy Stock Co. Ltd. | Independent Power and Renewable Electricity Producers | 7,800 | $ | 5,947 | ||||||||||
Guangdong Electric Power Development Co. Ltd., A | Independent Power and Renewable Electricity Producers | 7,800 | 5,873 | |||||||||||
Guangdong Electric Power Development Co. Ltd., B | Independent Power and Renewable Electricity Producers | 41,600 | 11,208 | |||||||||||
| a | Guangdong Golden Dragon Development Inc. | Capital Markets | 2,600 | 6,127 | ||||||||||
Guangdong Haid Group Co. Ltd. | Food Products | 6,100 | 52,754 | |||||||||||
| a | Guangdong HEC Technology Holding Co. Ltd., A | Metals & Mining | 10,400 | 12,025 | ||||||||||
Guangdong Kinlong Hardware Products Co. Ltd. | Building Products | 700 | 11,829 | |||||||||||
| a | Guangdong LY Intelligent Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 26,000 | 20,806 | ||||||||||
Guangdong Xinbao Electrical Appliances Holdings Co. Ltd. | Household Durables | 2,600 | 6,832 | |||||||||||
| a | Guanghui Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 23,400 | 30,226 | ||||||||||
| a | Guangshen Railway Co. Ltd., A | Road & Rail | 13,000 | 4,382 | ||||||||||
| a | Guangshen Railway Co. Ltd., H | Road & Rail | 52,000 | 8,831 | ||||||||||
Guangxi Guiguan Electric Power Co. Ltd., A | Independent Power and Renewable Electricity Producers | 13,000 | 10,915 | |||||||||||
Guangxi Liugong Machinery Co. Ltd. | Machinery | 5,200 | 5,316 | |||||||||||
Guangzhou Automobile Group Co. Ltd., A | Automobiles | 10,400 | 18,398 | |||||||||||
Guangzhou Automobile Group Co. Ltd., H | Automobiles | 166,000 | 138,627 | |||||||||||
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., A | Pharmaceuticals | 5,200 | 25,688 | |||||||||||
Guangzhou Baiyunshan Pharmceutical Holdings Co. Ltd. | Pharmaceuticals | 15,600 | 41,334 | |||||||||||
Guangzhou Haige Communications Group Inc. Co. | Communications Equipment | 7,800 | 12,570 | |||||||||||
Guangzhou Kingmed Diagnostics Group Co. Ltd. | Health Care Providers & Services | 2,600 | 30,083 | |||||||||||
Guangzhou R&F Properties Co. Ltd., H | Real Estate Management & Development | 83,200 | 29,534 | |||||||||||
Guangzhou Shiyuan Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 700 | 7,070 | |||||||||||
Guangzhou TInc.i Materials Technology Co. Ltd. | Chemicals | 3,430 | 50,790 | |||||||||||
Guangzhou Wondfo Biotech Co. Ltd., A | Health Care Equipment & Supplies | 2,600 | 19,688 | |||||||||||
Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A | Capital Markets | 6,810 | 8,561 | |||||||||||
Guangzhou Zhujiang Brewery Co. Ltd. | Beverages | 5,200 | 6,299 | |||||||||||
| a | Guizhou Bailing Group Pharmaceutical Co. Ltd., A | Pharmaceuticals | 5,200 | 8,159 | ||||||||||
Guizhou Panjiang Refined Coal Co. Ltd., A | Oil, Gas & Consumable Fuels | 5,200 | 7,053 | |||||||||||
| a | Guizhou Xinbang Pharmaceutical Co. Ltd. | Pharmaceuticals | 7,800 | 7,974 | ||||||||||
Guolian Securities Co. Ltd., A | Capital Markets | 7,800 | 16,219 | |||||||||||
Guosen Securities Co. Ltd. | Capital Markets | 18,200 | 28,498 | |||||||||||
| a | Guosheng Financial Holding Inc. | Electrical Equipment | 7,800 | 11,169 | ||||||||||
| a,b | Guotai Junan Securities Co. Ltd., 144A | Capital Markets | 36,400 | 49,175 | ||||||||||
Guotai Junan Securities Co. Ltd., A | Capital Markets | 26,000 | 64,344 | |||||||||||
| a | Guoxuan High-Tech Co. Ltd. | Electrical Equipment | 5,200 | 28,187 | ||||||||||
Guoyuan Securities Co. Ltd. | Capital Markets | 15,600 | 17,571 | |||||||||||
| b,c | Haidilao International Holding Ltd., 144A, Reg S | Hotels, Restaurants & Leisure | 52,000 | 101,989 | ||||||||||
Haier Smart Home Co. Ltd., A | Household Durables | 20,800 | 75,689 | |||||||||||
Haier Smart Home Co. Ltd., H | Household Durables | 114,400 | 371,770 | |||||||||||
| 198 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Haitian International Holdings Ltd. | Machinery | 31,000 | $ | 80,554 | ||||||||||
Haitong Securities Co. Ltd., A | Capital Markets | 33,800 | 54,842 | |||||||||||
Haitong Securities Co. Ltd., H | Capital Markets | 166,400 | 127,062 | |||||||||||
Han’s Laser Technology Industry Group Co. Ltd., A | Machinery | 2,600 | 15,711 | |||||||||||
| a | Hang Zhou Great Star Industrial Co. Ltd. | Household Durables | 5,200 | 13,483 | ||||||||||
Hangzhou Binjiang Real Estate Group Co. Ltd. | Real Estate Management & Development | 7,800 | 8,429 | |||||||||||
Hangzhou Chang Chuan Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 2,600 | 14,994 | |||||||||||
Hangzhou First Applied Material Co. Ltd., A | Semiconductors & Semiconductor Equipment | 2,600 | 46,482 | |||||||||||
Hangzhou Oxygen Plant Group Co. Ltd. | Machinery | 2,600 | 11,747 | |||||||||||
Hangzhou Robam Appliances Co. Ltd., A | Household Durables | 2,600 | 11,955 | |||||||||||
Hangzhou Shunwang Technology Co. Ltd. | Entertainment | 2,600 | 5,333 | |||||||||||
Hangzhou Silan Microelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 5,200 | 39,728 | |||||||||||
Hangzhou Tigermed Consulting Co. Ltd. | Life Sciences Tools & Services | 2,600 | 44,070 | |||||||||||
| b,c | Hangzhou Tigermed Consulting Co. Ltd., H, 144A, Reg S | Life Sciences Tools & Services | 6,300 | 76,745 | ||||||||||
| b | Hansoh Pharmaceutical Group Co. Ltd., 144A | Pharmaceuticals | 52,000 | 87,116 | ||||||||||
Haohua Chemical Science & Technology Co. Ltd., A | Chemicals | 2,600 | 15,453 | |||||||||||
Harbin Boshi Automation Co. Ltd. | Machinery | 2,600 | 4,182 | |||||||||||
Hefei Meiya Optoelectronic Technology Inc. | Machinery | 2,600 | 10,964 | |||||||||||
Heilongjiang Agriculture Co. Ltd., A | Food Products | 5,200 | 12,402 | |||||||||||
Hello Group Inc., ADR | Interactive Media & Services | 7,254 | 41,928 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. | Food Products | 10,400 | 47,609 | |||||||||||
Hengan International Group Co. Ltd. | Personal Products | 39,000 | 180,274 | |||||||||||
Hengdian Group DMEGC Magnetics Co. Ltd. | Electronic Equipment, Instruments & Components | 5,200 | 11,083 | |||||||||||
Hengli Petrochemical Co. Ltd., A | Chemicals | 10,400 | 34,060 | |||||||||||
| a | HengTen Networks Group Ltd. | Internet & Direct Marketing Retail | 104,000 | 28,153 | ||||||||||
Hengtong Optic-electric Co. Ltd., A | Communications Equipment | 7,800 | 15,936 | |||||||||||
Hengyi Petrochemical Co. Ltd., A | Chemicals | 13,000 | 17,407 | |||||||||||
Hesteel Co. Ltd. | Metals & Mining | 28,600 | 10,723 | |||||||||||
Hithink RoyalFlush Information Network Co. Ltd., A | Capital Markets | 2,600 | 39,237 | |||||||||||
| a | Holitech Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 10,400 | 5,341 | ||||||||||
Hongfa Technology Co. Ltd., A | Electrical Equipment | 2,600 | 19,344 | |||||||||||
Hongta Securities Co. Ltd., A | Capital Markets | 6,520 | 10,661 | |||||||||||
Hopson Development Holdings Ltd. | Real Estate Management & Development | 34,940 | 66,477 | |||||||||||
Hoshine Silicon Industry Co. Ltd., A | Chemicals | 2,600 | 42,862 | |||||||||||
| a,b | Hua Hong Semiconductor Ltd., 144A | Semiconductors & Semiconductor Equipment | 26,000 | 110,555 | ||||||||||
Huadian Power International Corp. Ltd., A | Independent Power and Renewable Electricity Producers | 23,400 | 13,049 | |||||||||||
Huadian Power International Corp. Ltd., H | Independent Power and Renewable Electricity Producers | 104,000 | 32,004 | |||||||||||
Huadong Medicine Co. Ltd., A | Health Care Providers & Services | 5,200 | 27,376 | |||||||||||
Huafa Industrial Co. Ltd. Zhuhai, A | Real Estate Management & Development | 5,200 | 5,922 | |||||||||||
Huafon Chemical Co. Ltd. | Chemicals | 13,000 | 18,656 | |||||||||||
Huagong Tech Co. Ltd. | Electronic Equipment, Instruments & Components | 2,600 | 8,261 | |||||||||||
Huaibei Mining Holdings Co. Ltd., A | Metals & Mining | 7,800 | 19,389 | |||||||||||
Hualan Biological Engineering Inc. | Biotechnology | 5,860 | 18,748 | |||||||||||
Huaneng Power International Inc., A | Independent Power and Renewable Electricity Producers | 26,000 | 28,301 | |||||||||||
Huaneng Power International Inc., H | Independent Power and Renewable Electricity Producers | 208,000 | 88,975 | |||||||||||
| franklintempleton.com | Annual Report | 199 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Huapont Life Sciences Co. Ltd. | Chemicals | 5,200 | $ | 5,021 | ||||||||||
| b | Huatai Securities Co. Ltd., 144A | Capital Markets | 78,000 | 120,116 | ||||||||||
Huatai Securities Co. Ltd., A | Capital Markets | 26,000 | 60,944 | |||||||||||
Huaxi Securities Co. Ltd. | Capital Markets | 7,800 | 10,309 | |||||||||||
Huaxia Bank Co. Ltd., A | Banks | 54,600 | 47,822 | |||||||||||
Huaxin Cement Co. Ltd., A | Construction Materials | 5,200 | 16,186 | |||||||||||
| a | Huaxin Cement Co. Ltd., H | Construction Materials | 16,800 | 29,132 | ||||||||||
Huayu Automotive Systems Co. Ltd. | Auto Components | 10,400 | 32,684 | |||||||||||
Hubei Biocause Pharmaceutical Co. Ltd. | Insurance | 7,800 | 3,895 | |||||||||||
Hubei Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 23,400 | 15,814 | |||||||||||
Hubei Xingfa Chemicals Group Co. Ltd., A | Chemicals | 2,600 | 13,610 | |||||||||||
Hubei Xinyangfeng Fertilizer Co. Ltd. | Chemicals | 5,200 | 14,065 | |||||||||||
Huizhou Desay Sv Automotive Co. Ltd. | Household Durables | 2,600 | 51,860 | |||||||||||
Humanwell Healthcare Group Co. Ltd., A | Pharmaceuticals | 5,200 | 14,130 | |||||||||||
Hunan Valin Steel Co. Ltd., A | Metals & Mining | 23,400 | 20,274 | |||||||||||
Hundsun Technologies Inc., A | Software | 5,420 | 37,960 | |||||||||||
Huolinhe Opencut Coal Industry Corp. Ltd. of Inner Mongolia | Oil, Gas & Consumable Fuels | 5,200 | 14,204 | |||||||||||
| b | Hygeia Healthcare Holdings Co. Ltd., 144A | Health Care Providers & Services | 15,600 | 60,855 | ||||||||||
| a | I-Mab, ADR | Biotechnology | 1,352 | 21,956 | ||||||||||
Iflytek Co. Ltd. | Software | 7,800 | 57,221 | |||||||||||
Imeik Technology Development Co. Ltd., A | Biotechnology | 600 | 44,895 | |||||||||||
Industrial and Commercial Bank of China Ltd. | Banks | 267,800 | 201,227 | |||||||||||
Industrial and Commercial Bank of China Ltd., H | Banks | 3,926,000 | 2,411,326 | |||||||||||
Industrial Bank Co. Ltd., A | Banks | 72,800 | 237,044 | |||||||||||
Industrial Securities Co. Ltd., A | Capital Markets | 23,400 | 28,310 | |||||||||||
Ingenic Semiconductor Co. Ltd., A | Semiconductors & Semiconductor Equipment | 1,300 | 18,732 | |||||||||||
| a | Inner Mongolia BaoTou Steel Union Co. Ltd., A | Metals & Mining | 143,000 | 50,234 | ||||||||||
Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | Chemicals | 26,000 | 18,799 | |||||||||||
Inner Mongolia Yili Industrial Group Co. Ltd., A | Food Products | 23,400 | 135,982 | |||||||||||
Inner Mongolia Yitai Coal Co. Ltd., B | Oil, Gas & Consumable Fuels | 49,400 | 53,648 | |||||||||||
| a,b | Innovent Biologics Inc., 144A | Biotechnology | 68,500 | 235,727 | ||||||||||
Inspur Electronic Information Industry Co. Ltd. | Technology Hardware, Storage & Peripherals | 5,308 | 22,702 | |||||||||||
Intco Medical Technology Co. Ltd. | Health Care Equipment & Supplies | 1,575 | 11,472 | |||||||||||
| a,e | Iqiyi Inc., ADR | Entertainment | 14,144 | 64,214 | ||||||||||
JA Solar Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 5,200 | 64,450 | |||||||||||
Jafron Biomedical Co. Ltd., A | Health Care Equipment & Supplies | 2,600 | 18,590 | |||||||||||
Jason Furniture Hangzhou Co. Ltd., A | Household Durables | 2,600 | 25,111 | |||||||||||
| a,b | JD Health International Inc., 144A | Internet & Direct Marketing Retail | 36,400 | 223,567 | ||||||||||
| a,b | JD Logistics Inc., 144A | Air Freight & Logistics | 85,800 | 211,887 | ||||||||||
| a | JD.com Inc., A | Internet & Direct Marketing Retail | 76,910 | 2,298,049 | ||||||||||
Jiajiayue Group Co. Ltd., A | Food & Staples Retailing | 2,600 | 5,243 | |||||||||||
Jiangsu Changjiang Electronics Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 5,200 | 20,135 | |||||||||||
Jiangsu Eastern Shenghong Co. Ltd. | Chemicals | 13,000 | 29,080 | |||||||||||
Jiangsu Expressway Co. Ltd., A | Transportation Infrastructure | 7,800 | 10,333 | |||||||||||
Jiangsu Expressway Co. Ltd., H | Transportation Infrastructure | 62,000 | 64,918 | |||||||||||
| 200 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Jiangsu GoodWe Power Supply Technology Co. Ltd., A | Electrical Equipment | 260 | $ | 14,122 | ||||||||||
Jiangsu Hengli Hydraulic Co. Ltd., A | Machinery | 3,880 | 31,813 | |||||||||||
Jiangsu Hengrui Medicine Co. Ltd., A | Pharmaceuticals | 21,940 | 127,256 | |||||||||||
Jiangsu King’s Luck Brewery JSC Ltd | Beverages | 5,200 | 34,486 | |||||||||||
Jiangsu Linyang Energy Co. Ltd., A | Electrical Equipment | 7,800 | 10,604 | |||||||||||
Jiangsu Yanghe Brewery JST Co. Ltd., A | Beverages | 5,800 | 123,920 | |||||||||||
Jiangsu Yangnong Chemical Co. Ltd., A | Chemicals | 900 | 17,118 | |||||||||||
Jiangsu Yoke Technology Co. Ltd., A | Chemicals | 2,600 | 20,986 | |||||||||||
Jiangsu Yuyue Medical Equipment & Supply Co. Ltd., A | Health Care Equipment & Supplies | 2,600 | 11,398 | |||||||||||
Jiangsu Zhongnan Construction Group Co. Ltd. | Real Estate Management & Development | 15,600 | 10,764 | |||||||||||
Jiangsu Zhongtian Technology Co. Ltd., A | Electrical Equipment | 13,000 | 34,814 | |||||||||||
Jiangxi Copper Co. Ltd., A | Metals & Mining | 7,800 | 23,690 | |||||||||||
Jiangxi Copper Co. Ltd., H | Metals & Mining | 52,000 | 87,249 | |||||||||||
| a | Jiangxi Special Electric Motor Co. Ltd., A | Electrical Equipment | 5,200 | 16,547 | ||||||||||
Jiangxi Zhengbang Technology Co. Ltd., A | Food Products | 10,400 | 12,631 | |||||||||||
Jilin Aodong Pharmaceutical Group Co. Ltd. | Pharmaceuticals | 5,200 | 14,507 | |||||||||||
Jinke Properties Group Co. Ltd., A | Real Estate Management & Development | 20,800 | 16,088 | |||||||||||
Jinke Smart Services Group Co. Ltd., H | Real Estate Management & Development | 15,600 | 56,373 | |||||||||||
| a,b,c | Jinxin Fertility Group Ltd., 144A, Reg S | Health Care Providers & Services | 71,500 | 55,053 | ||||||||||
JiuGui Liquor Co. Ltd., A | Beverages | 900 | 20,968 | |||||||||||
| b | Jiumaojiu International Holdings Ltd., 144A | Hotels, Restaurants & Leisure | 26,000 | 55,775 | ||||||||||
Jizhong Energy Resources Co. Ltd., A | Oil, Gas & Consumable Fuels | 10,400 | 11,550 | |||||||||||
JoInc.are Pharmaceutical Group Industry Co. Ltd., A | Pharmaceuticals | 7,800 | 15,039 | |||||||||||
Joinn Laboratories China Co. Ltd., A | Life Sciences Tools & Services | 1,000 | 18,130 | |||||||||||
| b | Joinn Laboratories China Co. Ltd., H, 144A | Life Sciences Tools & Services | 2,600 | 24,053 | ||||||||||
Jointown Pharmaceutical Group Co. Ltd., A | Health Care Providers & Services | 7,800 | 16,317 | |||||||||||
Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., A | Food Products | 2,600 | 11,529 | |||||||||||
Joyoung Co. Ltd. | Household Durables | 2,600 | 6,688 | |||||||||||
| d | JOYY Inc., ADR | Interactive Media & Services | 2,548 | 93,588 | ||||||||||
Juneyao Airlines Co. Ltd., A | Airlines | 2,600 | 5,603 | |||||||||||
Kaishan Group Co. Ltd., A | Machinery | 2,600 | 5,787 | |||||||||||
| a | Kanzhun Ltd., ADR | Interactive Media & Services | 14,560 | 362,690 | ||||||||||
| a | KE Holdings Inc., ADR | Real Estate Management & Development | 11,466 | 141,834 | ||||||||||
Keda Industrial Group Co. Ltd. | Machinery | 7,800 | 22,129 | |||||||||||
Kingboard Holdings Ltd. | Electronic Equipment, Instruments & Components | 39,000 | 189,736 | |||||||||||
| a | Kingdee International Software Group Co. Ltd. | Software | 130,000 | 289,169 | ||||||||||
Kingfa Sci & Tech Co. Ltd., A | Chemicals | 10,400 | 15,957 | |||||||||||
| a | Kingsoft Cloud Holdings Ltd., ADR | IT Services | 4,732 | 28,723 | ||||||||||
Kingsoft Corp. Ltd. | Software | 43,400 | 140,762 | |||||||||||
| a,b | Kuaishou Technology, 144A, B | Interactive Media & Services | 78,000 | 739,025 | ||||||||||
| a | Kuang-Chi Technologies Co. Ltd. | Auto Components | 7,800 | 21,097 | ||||||||||
Kunlun Tech Co. Ltd. | Entertainment | 5,200 | 13,794 | |||||||||||
Kweichow Moutai Co. Ltd., A | Beverages | 4,400 | 1,191,475 | |||||||||||
KWG Group Holdings Ltd. | Real Estate Management & Development | 65,000 | 26,892 | |||||||||||
Lakala Payment Co. Ltd., A | IT Services | 2,600 | 9,695 | |||||||||||
Lao Feng Xiang Co. Ltd., B | Textiles, Apparel & Luxury Goods | 10,400 | 34,694 | |||||||||||
| b,d | Legend Holdings Corp., 144A | Technology Hardware, Storage & Peripherals | 26,000 | 32,735 | ||||||||||
Lens Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 18,200 | 33,458 | |||||||||||
Leo Group Co. Ltd. | Media | 28,600 | 9,416 | |||||||||||
Lepu Medical Technology Beijing Co. Ltd. | Health Care Equipment & Supplies | 5,200 | 16,522 | |||||||||||
Levima Advanced Materials Corp., A | Chemicals | 2,600 | 10,518 | |||||||||||
Leyard Optoelectronic Co. Ltd. | Electronic Equipment, Instruments & Components | 10,400 | 11,681 | |||||||||||
| a | Li Auto Inc., ADR | Automobiles | 20,436 | 527,453 | ||||||||||
Li Ning Co. Ltd. | Textiles, Apparel & Luxury Goods | 113,000 | 975,407 | |||||||||||
| franklintempleton.com | Annual Report | 201 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
LianChuang Electronic Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 3,260 | $ | 7,626 | ||||||||||
Lianhe Chemical Technology Co. Ltd. | Chemicals | 2,600 | 5,587 | |||||||||||
Liaoning Port Co. Ltd., A | Transportation Infrastructure | 59,800 | 16,203 | |||||||||||
Livzon Pharmaceutical Group Inc. | Pharmaceuticals | 2,600 | 15,769 | |||||||||||
Livzon Pharmaceutical Group Inc., H | Pharmaceuticals | 7,800 | 28,037 | |||||||||||
Logan Group Co. Ltd. | Real Estate Management & Development | 52,000 | 14,807 | |||||||||||
Lomon Billions Group Co. Ltd. | Chemicals | 7,800 | 28,420 | |||||||||||
| b,c | Longfor Group Holdings Ltd., 144A, Reg S | Real Estate Management & Development | 91,400 | 470,340 | ||||||||||
LONGi Green Energy Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 19,600 | 222,889 | |||||||||||
Longshine Technology Group Co. Ltd., A | Software | 2,600 | 11,390 | |||||||||||
Luenmei Quantum Co. Ltd., A | Water Utilities | 5,200 | 5,857 | |||||||||||
| a | Lufax Holding Ltd., ADR | Consumer Finance | 27,378 | 152,495 | ||||||||||
Luxi Chemical Group Co. Ltd., A | Chemicals | 7,800 | 22,019 | |||||||||||
Luxshare Precision Industry Co. Ltd., A | Electronic Equipment, Instruments & Components | 23,499 | 117,345 | |||||||||||
| a,b | Luye Pharma Group Ltd., 144A | Pharmaceuticals | 91,000 | 34,860 | ||||||||||
Luzhou Laojiao Co. Ltd., A | Beverages | 5,500 | 161,047 | |||||||||||
Maanshan Iron & Steel Co. Ltd., A | Metals & Mining | 13,000 | 8,110 | |||||||||||
Maanshan Iron & Steel Co. Ltd., H | Metals & Mining | 52,000 | 20,916 | |||||||||||
Maccura Biotechnology Co. Ltd. | Life Sciences Tools & Services | 2,600 | 10,071 | |||||||||||
Mango Excellent Media Co. Ltd. | Entertainment | 7,830 | 38,434 | |||||||||||
Maxscend Microelectronics Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,020 | 33,730 | |||||||||||
| a | Meinian Onehealth Healthcare Holdings Co. Ltd. | Health Care Providers & Services | 13,000 | 12,062 | ||||||||||
| a,b | Meituan Dianping, 144A | Internet & Direct Marketing Retail | 192,400 | 3,822,744 | ||||||||||
Metallurgical Corp. of China Ltd. | Construction & Engineering | 130,000 | 35,192 | |||||||||||
Metallurgical Corp. of China Ltd., A | Construction & Engineering | 57,200 | 33,790 | |||||||||||
Ming Yang Smart Energy Group Ltd., A | Electrical Equipment | 7,800 | 27,241 | |||||||||||
Ming Yuan Cloud Group Holdings Ltd. | Software | 26,000 | 35,789 | |||||||||||
MINISO Group Holding Ltd., ADR | Multiline Retail | 3,692 | 28,798 | |||||||||||
Montage Technology Co. Ltd. | Semiconductors & Semiconductor Equipment | 4,025 | 42,671 | |||||||||||
Muyuan Foods Co. Ltd. | Food Products | 18,760 | 168,034 | |||||||||||
NanJi E-Commerce Co. Ltd. | Media | 10,400 | 8,912 | |||||||||||
Nanjing Hanrui Cobalt Co. Ltd., A | Metals & Mining | 800 | 7,982 | |||||||||||
Nanjing Iron & Steel Co. Ltd., A | Metals & Mining | 20,800 | 11,828 | |||||||||||
Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd. | Pharmaceuticals | 3,650 | 18,043 | |||||||||||
Nanjing Securities Co. Ltd., A | Capital Markets | 13,000 | 16,833 | |||||||||||
Nanyang Topsec Technologies Group Inc., A | Electrical Equipment | 5,200 | 9,265 | |||||||||||
Nari Technology Development Co. Ltd., A | Electrical Equipment | 18,200 | 90,282 | |||||||||||
| a | National Silicon Industry Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 6,162 | 21,287 | ||||||||||
NAURA Technology Group Co. Ltd., A | Semiconductors & Semiconductor Equipment | 1,800 | 77,693 | |||||||||||
| a | NavInfo Co. Ltd. | Household Durables | 7,800 | 17,165 | ||||||||||
NetEase Inc. | Entertainment | 75,400 | 1,384,493 | |||||||||||
New China Life Insurance Co. Ltd., A | Insurance | 7,800 | 43,410 | |||||||||||
New China Life Insurance Co. Ltd., H | Insurance | 46,800 | 130,873 | |||||||||||
| a | New Hope Liuhe Co. Ltd. | Food Products | 15,600 | 41,727 | ||||||||||
| a | New Oriental Education & Technology Group Inc., ADR | Diversified Consumer Services | 66,144 | 76,066 | ||||||||||
Newland Digital Technology Co. Ltd. | Software | 2,600 | 6,897 | |||||||||||
Nine Dragons Paper Holdings Ltd. | Paper & Forest Products | 84,000 | 73,366 | |||||||||||
Ninestar Corp. | Technology Hardware, Storage & Peripherals | 5,200 | 35,010 | |||||||||||
Ningbo Joyson Electronic Corp. | Auto Components | 5,200 | 11,574 | |||||||||||
Ningbo Orient Wires & Cables Co. Ltd., A | Electrical Equipment | 2,600 | 21,113 | |||||||||||
Ningbo Ronbay New Energy Technology Co. Ltd., A | Electrical Equipment | 1,586 | 32,334 | |||||||||||
Ningbo Sanxing Medical Electric Co. Ltd., A | Electrical Equipment | 5,200 | 8,978 | |||||||||||
Ningbo Shanshan Co. Ltd., A | Chemicals | 7,800 | 34,306 | |||||||||||
Ningbo Tuopu Group Co. Ltd., A | Auto Components | 2,600 | 23,264 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Ningbo Zhoushan Port Co. Ltd., A | Transportation Infrastructure | 31,200 | $ | 19,315 | ||||||||||
Ningxia Baofeng Energy Group Co. Ltd., A | Chemicals | 10,400 | 24,345 | |||||||||||
| a | NIO Inc., ADR | Automobiles | 64,558 | 1,358,946 | ||||||||||
| b | Nongfu Spring Co. Ltd., H, 144A | Beverages | 83,200 | 443,548 | ||||||||||
| a | North Industries Group Red Arrow Co. Ltd., A | Machinery | 2,600 | 9,215 | ||||||||||
Northeast Securities Co. Ltd. | Capital Markets | 7,800 | 9,510 | |||||||||||
NSFOCUS Information Technology Co. Ltd. | Software | 2,600 | 5,038 | |||||||||||
| a | Offcn Education Technology Co. Ltd., A | Diversified Consumer Services | 7,800 | 6,893 | ||||||||||
Offshore Oil Engineering Co. Ltd., A | Energy Equipment & Services | 13,000 | 8,765 | |||||||||||
| a | OFILM Group Co. Ltd. | Electronic Equipment, Instruments & Components | 10,400 | 11,665 | ||||||||||
Oppein Home Group Inc., A | Household Durables | 900 | 16,588 | |||||||||||
ORG Technology Co. Ltd. | Containers & Packaging | 7,800 | 6,094 | |||||||||||
| b | Orient Securities Co. Ltd. of China, 144A | Capital Markets | 41,600 | 27,250 | ||||||||||
Oriental Energy Co. Ltd., A | Oil, Gas & Consumable Fuels | 5,200 | 7,520 | |||||||||||
| a | Ourpalm Co. Ltd. | Entertainment | 13,000 | 7,454 | ||||||||||
Ovctek China Inc., A | Health Care Equipment & Supplies | 3,320 | 19,105 | |||||||||||
| a | Pangang Group Vanadium Titanium & Resources Co. Ltd., A | Metals & Mining | 26,000 | 15,318 | ||||||||||
People.cn Co. Ltd. | Media | 5,200 | 9,011 | |||||||||||
Perfect World Co. Ltd. | Entertainment | 5,200 | 10,534 | |||||||||||
PetroChina Co. Ltd., H | Oil, Gas & Consumable Fuels | 1,040,000 | 539,163 | |||||||||||
Pharmaron Beijing Co. Ltd., A | Life Sciences Tools & Services | 1,000 | 18,588 | |||||||||||
| b,c | Pharmaron Beijing Co. Ltd., H, 144A, Reg S | Life Sciences Tools & Services | 7,800 | 95,067 | ||||||||||
PICC Property and Casualty Co. Ltd., H | Insurance | 312,000 | 319,514 | |||||||||||
| a | Pinduoduo Inc., ADR | Internet & Direct Marketing Retail | 18,434 | 739,388 | ||||||||||
Ping An Bank Co. Ltd., A | Banks | 67,600 | 163,779 | |||||||||||
| a,b,c | Ping An Healthcare and Technology Co. Ltd., 144A, Reg S | Health Care Technology | 18,200 | 47,874 | ||||||||||
Ping An Insurance Group Co. of China Ltd., A | Insurance | 39,000 | 297,656 | |||||||||||
Ping An Insurance Group Co. of China Ltd., H | Insurance | 299,000 | 2,124,697 | |||||||||||
Pingdingshan Tianan Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 7,800 | 21,036 | |||||||||||
Poly Developments and Holdings Group Co. Ltd., A | Real Estate Management & Development | 41,600 | 115,991 | |||||||||||
Poly Property Services Co. Ltd., H | Real Estate Management & Development | 6,200 | 44,889 | |||||||||||
| b | Pop Mart International Group Ltd., 144A | Specialty Retail | 36,400 | 159,890 | ||||||||||
| b | Postal Savings Bank of China Co. Ltd., 144A | Banks | 468,000 | 379,472 | ||||||||||
Postal Savings Bank of China Co. Ltd., A | Banks | 72,800 | 61,813 | |||||||||||
Power Construction Corp. of China Ltd. | Construction & Engineering | 39,000 | 44,787 | |||||||||||
Proya Cosmetics Co. Ltd. | Personal Products | 700 | 20,789 | |||||||||||
Qingdao TGOOD Electric Co. Ltd. | Electrical Equipment | 2,600 | 7,651 | |||||||||||
Raytron Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,348 | 9,568 | |||||||||||
| a,b | Red Star Macalline Group Corp. Ltd., 144A | Real Estate Management & Development | 32,400 | 14,563 | ||||||||||
| a | Red Star Macalline Group Corp. Ltd., A | Real Estate Management & Development | 5,400 | 6,899 | ||||||||||
| a,b | Remegen Co. Ltd., H, 144A | Biotechnology | 3,500 | 20,782 | ||||||||||
RiseSun Real Estate Development Co. Ltd. | Real Estate Management & Development | 13,000 | 9,133 | |||||||||||
| a | RLX Technology Inc., ADR | Tobacco | 35,100 | 62,829 | ||||||||||
Rongsheng Petro Chemical Co. Ltd. | Chemicals | 11,300 | 25,455 | |||||||||||
SAIC Motor Corp Ltd | Automobiles | 33,800 | 90,515 | |||||||||||
Sailun Group Co. Ltd., A | Auto Components | 10,400 | 16,153 | |||||||||||
Sangfor Technologies Inc. | Software | 300 | 5,272 | |||||||||||
Sansteel Minguang Co. Ltd. | Metals & Mining | 5,200 | 5,865 | |||||||||||
Sany Heavy Industry Co. Ltd., A | Machinery | 28,600 | 78,933 | |||||||||||
SDIC Capital Co. Ltd., A | Capital Markets | 16,560 | 18,391 | |||||||||||
SDIC Power Holdings Co. Ltd., A | | Independent Power and Renewable Electricity Producers | | 26,000 | 38,254 | |||||||||
Sealand Securities Co. Ltd. | Capital Markets | 21,840 | 12,867 | |||||||||||
Seazen Group Ltd. | Real Estate Management & Development | 104,000 | 56,041 | |||||||||||
Seazen Holdings Co. Ltd., A | Real Estate Management & Development | 7,800 | 39,528 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
SF Holding Co. Ltd. | Air Freight & Logistics | 18,200 | $ | 131,022 | ||||||||||
SG Micro Corp., A | | Semiconductors & Semiconductor Equipment | | 850 | 43,720 | |||||||||
Shaanxi Coal Industry Co. Ltd. | Oil, Gas & Consumable Fuels | 26,000 | 67,374 | |||||||||||
Shaanxi International Trust Co. Ltd. | Capital Markets | �� | 13,000 | 6,471 | ||||||||||
Shandong Chenming Paper Holdings Ltd., A | Paper & Forest Products | 5,200 | 5,243 | |||||||||||
Shandong Chenming Paper Holdings Ltd., B | Paper & Forest Products | 31,200 | 11,832 | |||||||||||
Shandong Chenming Paper Holdings Ltd., H | Paper & Forest Products | 26,000 | 10,325 | |||||||||||
Shandong Denghai Seeds Co. Ltd. | Food Products | 2,600 | 9,776 | |||||||||||
| b | Shandong Gold Mining Co. Ltd., 144A | Metals & Mining | 33,000 | 65,988 | ||||||||||
Shandong Gold Mining Co. Ltd., A | Metals & Mining | 13,684 | 46,346 | |||||||||||
Shandong Hi-speed Co. Ltd., A | Transportation Infrastructure | 10,400 | 8,847 | |||||||||||
Shandong Himile Mechanical Science & Technology Co. Ltd. | Machinery | 2,600 | 7,917 | |||||||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., A | Chemicals | 7,880 | 40,430 | |||||||||||
Shandong Linglong Tyre Co. Ltd., A | Auto Components | 2,600 | 9,039 | |||||||||||
Shandong Nanshan Aluminum Co. Ltd., A | Metals & Mining | 39,000 | 25,004 | |||||||||||
Shandong Pharmaceutical Glass Co. Ltd., A | Health Care Equipment & Supplies | 2,600 | 10,862 | |||||||||||
Shandong Sun Paper Industry JSC Ltd., A | Paper & Forest Products | 7,800 | 14,007 | |||||||||||
Shandong Weigao Group Medical Polymer Co. Ltd., H | Health Care Equipment & Supplies | 119,300 | 127,809 | |||||||||||
Shanghai AJ Group Co. Ltd., A | Diversified Financial Services | 5,200 | 5,398 | |||||||||||
Shanghai Bailian Group Co. Ltd., B | Food & Staples Retailing | 10,400 | 7,790 | |||||||||||
Shanghai Bairun Investment Holding Group Co. Ltd. | Beverages | 2,600 | 14,757 | |||||||||||
Shanghai Baosight Software Co. Ltd., A | Software | 3,170 | 24,344 | |||||||||||
Shanghai Baosight Software Co. Ltd., B | Software | 19,746 | 80,366 | |||||||||||
Shanghai Construction Group Co. Ltd., A | Construction & Engineering | 31,200 | 16,022 | |||||||||||
Shanghai Electric Group Co. Ltd., A | Electrical Equipment | 31,200 | 19,856 | |||||||||||
Shanghai Electric Group Co. Ltd., H | Electrical Equipment | 156,000 | 41,035 | |||||||||||
Shanghai Electric Power Co. Ltd., A | | Independent Power and Renewable Electricity Producers | | 10,400 | 15,891 | |||||||||
Shanghai Environment Group Co. Ltd., A | Commercial Services & Supplies | 5,200 | 8,699 | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., A | Pharmaceuticals | 7,800 | 65,527 | |||||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., H | Pharmaceuticals | 26,000 | 127,155 | |||||||||||
Shanghai Friendess Electronic Technology Corp. Ltd., A | | Electronic Equipment, Instruments & Components | | 300 | 14,192 | |||||||||
Shanghai Huayi Group Co. Ltd., B | Chemicals | 15,600 | 11,123 | |||||||||||
| a | Shanghai International Airport Co. Ltd., A | Transportation Infrastructure | 6,900 | 53,477 | ||||||||||
Shanghai International Port Group Co. Ltd., A | Transportation Infrastructure | 36,400 | 31,365 | |||||||||||
Shanghai Jahwa United Co. Ltd., A | Personal Products | 2,600 | 14,122 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd. | Hotels, Restaurants & Leisure | 7,800 | 15,569 | |||||||||||
Shanghai Jinjiang International Hotels Co. Ltd., A | Hotels, Restaurants & Leisure | 2,600 | 20,372 | |||||||||||
Shanghai Jinqiao Export Processing Zone Development Co. Ltd., A | Real Estate Management & Development | 2,600 | 6,103 | |||||||||||
Shanghai Jinqiao Export Processing Zone Development Co. Ltd., B | Real Estate Management & Development | 15,600 | 14,617 | |||||||||||
| a | Shanghai Junshi Biosciences Co. Ltd., A | Biotechnology | 569 | 7,815 | ||||||||||
| a,b | Shanghai Junshi Biosciences Co. Ltd., H, 144A | Biotechnology | 10,400 | 73,969 | ||||||||||
Shanghai Lingang Holdings Corp. Ltd. | Real Estate Management & Development | 6,000 | 13,327 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A | Real Estate Management & Development | 5,200 | 9,543 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | Real Estate Management & Development | 54,600 | 51,106 | |||||||||||
Shanghai M&G Stationery Inc., A | Commercial Services & Supplies | 2,600 | 20,020 | |||||||||||
Shanghai Mechanical and Electrical Industry Co. Ltd., A | Machinery | 2,600 | 5,329 | |||||||||||
Shanghai Mechanical and Electrical Industry Co. Ltd., B | Machinery | 10,400 | 12,844 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., A | Health Care Providers & Services | 7,800 | 30,116 | |||||||||||
Shanghai Pharmaceuticals Holding Co. Ltd., H | Health Care Providers & Services | 41,600 | 80,210 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A | Banks | 101,415 | 127,805 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Shanghai Putailai New Energy Technology Co. Ltd., A | Chemicals | 2,660 | $ | 58,889 | ||||||||||
Shanghai RAAS Blood Products Co. Ltd., A | Biotechnology | 20,800 | 19,627 | |||||||||||
Shanghai Shibei Hi-Tech Co. Ltd., B | Real Estate Management & Development | 28,600 | 8,237 | |||||||||||
Shanghai Shimao Co. Ltd., A | Real Estate Management & Development | 10,400 | 6,144 | |||||||||||
Shanghai Tunnel Engineering Co. Ltd., A | Construction & Engineering | 13,000 | 10,854 | |||||||||||
Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd. | Trading Companies & Distributors | 7,800 | 7,231 | |||||||||||
Shanghai Yuyuan Tourist Mart Group Co. Ltd., A | Specialty Retail | 15,600 | 24,992 | |||||||||||
Shanghai Zhangjiang High-Tech Park Development Co. Ltd., A | Real Estate Management & Development | 5,200 | 11,222 | |||||||||||
| a | Shanghai Zhenhua Port Machinery Co. Ltd., B | Machinery | 57,200 | 14,243 | ||||||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., A | Oil, Gas & Consumable Fuels | 10,400 | 27,196 | |||||||||||
| a | Shanxi Meijin Energy Co. Ltd., A | Metals & Mining | 15,600 | 31,480 | ||||||||||
Shanxi Securities Co. Ltd. | Capital Markets | 13,200 | 11,769 | |||||||||||
Shanxi Taigang Stainless Steel Co. Ltd., A | Metals & Mining | 20,800 | 21,953 | |||||||||||
Shanxi Xinghuacun Fen Wine Factory Co. Ltd., A | Beverages | 4,320 | 173,464 | |||||||||||
Shanxi Xishan Coal & Electricity Power Co. Ltd. | Oil, Gas & Consumable Fuels | 13,000 | 25,434 | |||||||||||
Shanying International Holding Co. Ltd., A | Paper & Forest Products | 15,600 | 7,421 | |||||||||||
Shenghe Resources Holding Co. Ltd., A | Metals & Mining | 5,200 | 13,901 | |||||||||||
Shengyi Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 7,800 | 19,807 | |||||||||||
Shennan Circuits Co. Ltd., A | Electronic Equipment, Instruments & Components | 1,100 | 15,725 | |||||||||||
Shenwan Hongyuan Group Co. Ltd. | Capital Markets | 80,600 | 55,612 | |||||||||||
| b,c | Shenwan Hongyuan Group Co. Ltd., 144A, Reg S | Capital Markets | 83,200 | 18,592 | ||||||||||
Shenzhen Accord Pharmaceutical Co. Ltd., B | Health Care Providers & Services | 2,600 | 5,900 | |||||||||||
Shenzhen Agricultural Products Group Co. Ltd. | Food & Staples Retailing | 5,200 | 5,070 | |||||||||||
| a | Shenzhen Airport Co. Ltd. | Transportation Infrastructure | 10,400 | 11,353 | ||||||||||
Shenzhen Capchem Technology Co. Ltd., A | Chemicals | 2,600 | 33,401 | |||||||||||
| a | Shenzhen Dynanonic Co. Ltd., A | Chemicals | 300 | 26,876 | ||||||||||
Shenzhen Energy Group Co. Ltd. | Independent Power and Renewable Electricity Producers | 15,600 | 15,801 | |||||||||||
Shenzhen Everwin Precision Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 5,280 | 8,168 | |||||||||||
Shenzhen Expressway Co. Ltd., H | Transportation Infrastructure | 24,000 | 25,283 | |||||||||||
Shenzhen Gas Corporation Ltd., A | Gas Utilities | 8,500 | 9,547 | |||||||||||
Shenzhen Goodix Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 200 | 2,234 | |||||||||||
| b | Shenzhen Hepalink Pharmaceutical Group Co. Ltd., 144A | Pharmaceuticals | 13,000 | 9,562 | ||||||||||
Shenzhen Hepalink Pharmaceutical Group Co. Ltd., A | Pharmaceuticals | 2,600 | 6,025 | |||||||||||
Shenzhen Huaqiang Industry Co. Ltd. | Real Estate Management & Development | 2,600 | 5,165 | |||||||||||
Shenzhen Infogem Technologies Co. Ltd., A | Software | 2,600 | 5,214 | |||||||||||
Shenzhen Inovance Technology Co. Ltd. | Machinery | 8,750 | 78,567 | |||||||||||
Shenzhen International Holdings Ltd. | Transportation Infrastructure | 52,000 | 54,979 | |||||||||||
Shenzhen Investment Ltd. | Real Estate Management & Development | 104,000 | 23,240 | |||||||||||
Shenzhen Jinjia Group Co. Ltd. | Containers & Packaging | 5,200 | 11,312 | |||||||||||
Shenzhen Kaifa Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 5,200 | 9,289 | |||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Shenzhen Kangtai Biological Products Co. Ltd. | Biotechnology | 2,600 | $ | 38,193 | ||||||||||
Shenzhen Kedali Industry Co. Ltd., A | Auto Components | 800 | 18,651 | |||||||||||
Shenzhen Kingdom Sci-Tech Co. Ltd., A | Software | 2,600 | 5,496 | |||||||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | Health Care Equipment & Supplies | 4,200 | 203,281 | |||||||||||
| a | Shenzhen MTC Co. Ltd. | Household Durables | 18,200 | 10,465 | ||||||||||
| a | Shenzhen Neptunus Bioengineering Co. Ltd. | Health Care Providers & Services | 10,400 | 6,307 | ||||||||||
Shenzhen Overseas Chinese Town Co. Ltd. | Hotels, Restaurants & Leisure | 26,000 | 30,144 | |||||||||||
| a | Shenzhen Salubris Pharmaceuticals Co. Ltd. | Pharmaceuticals | 2,600 | 8,998 | ||||||||||
Shenzhen SC New Energy Technology Corp., A | Semiconductors & Semiconductor Equipment | 500 | 5,781 | |||||||||||
Shenzhen Sunway Communication Co. Ltd. | Communications Equipment | 2,600 | 7,385 | |||||||||||
Shenzhen Transsion Holdings Co. Ltd., A | Technology Hardware, Storage & Peripherals | 2,912 | 43,858 | |||||||||||
Shenzhen Yan Tian Port Holding Co. Ltd., A | Transportation Infrastructure | 7,800 | 6,291 | |||||||||||
Shenzhen YUTO Packaging Technology Co. Ltd. | Containers & Packaging | 2,600 | 10,682 | |||||||||||
Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., A | Metals & Mining | 13,000 | 9,072 | |||||||||||
Shenzhou International Group Holdings Ltd. | Textiles, Apparel & Luxury Goods | 36,400 | 487,106 | |||||||||||
| a | Shijiazhuang Changshan BeiMing Technology Co. Ltd. | Textiles, Apparel & Luxury Goods | 5,200 | 5,431 | ||||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd., A | Pharmaceuticals | 5,880 | 31,030 | |||||||||||
Shimao Group Holdings Ltd. | Real Estate Management & Development | 78,000 | 44,023 | |||||||||||
| b | Shimao Services Holdings Ltd., 144A | Real Estate Management & Development | 26,000 | 13,944 | ||||||||||
| a | Siasun Robot & Automation Co. Ltd. | Machinery | 5,200 | 7,479 | ||||||||||
Sichuan Chuantou Energy Co Ltd., A | Independent Power and Renewable Electricity Producers | 15,600 | 26,393 | |||||||||||
| a | Sichuan Hebang Biotechnology Co. Ltd., A | Chemicals | 31,200 | 17,251 | ||||||||||
Sichuan Kelun Pharmaceutical Co. Ltd. | Pharmaceuticals | 5,200 | 14,196 | |||||||||||
| a | Sichuan New Energy Power Co. Ltd. | Trading Companies & Distributors | 5,200 | 15,957 | ||||||||||
Sichuan Road & Bridge Co. Ltd., A | Construction & Engineering | 18,200 | 29,960 | |||||||||||
Sichuan Swellfun Co. Ltd., A | Beverages | 2,600 | 33,736 | |||||||||||
Sichuan Yahua Industrial Group Co. Ltd., A | Chemicals | 2,600 | 11,820 | |||||||||||
Sieyuan Electric Co. Ltd. | Electrical Equipment | 2,600 | 13,434 | |||||||||||
Sino-Ocean Land Holdings Ltd. | Real Estate Management & Development | 156,000 | 33,266 | |||||||||||
Sinolink Securities Co. Ltd., A | Capital Markets | 10,400 | 15,728 | |||||||||||
Sinoma International Engineering Co. | Construction & Engineering | 7,800 | 11,771 | |||||||||||
Sinoma Science & Technology Co. Ltd. | Chemicals | 5,200 | 19,889 | |||||||||||
Sinopec Engineering Group Co. Ltd. | Construction & Engineering | 78,000 | 39,840 | |||||||||||
| a | Sinopec Oilfield Service Corp. | Energy Equipment & Services | 156,000 | 12,749 | ||||||||||
| a | Sinopec Oilfield Service Corp., A | Energy Equipment & Services | 23,400 | 7,299 | ||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., A | Chemicals | 13,000 | 7,208 | |||||||||||
Sinopec Shanghai Petrochemical Co. Ltd., H | Chemicals | 156,000 | 32,469 | |||||||||||
Sinopharm Group Co. Ltd., H | Health Care Providers & Services | 62,400 | 142,466 | |||||||||||
Sinotrans Ltd., A | Air Freight & Logistics | 13,000 | 8,191 | |||||||||||
Sinotrans Ltd., H | Air Freight & Logistics | 104,000 | 32,536 | |||||||||||
Sinotruk Hong Kong Ltd. | Machinery | 39,000 | 59,759 | |||||||||||
Skshu Paint Co. Ltd., A | Chemicals | 980 | 13,684 | |||||||||||
| b | Smoore International Holdings Ltd., 144A | Tobacco | 88,820 | 213,221 | ||||||||||
| 206 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Songcheng Performance Development Co. Ltd. | Hotels, Restaurants & Leisure | 8,460 | $ | 17,605 | ||||||||||
SooChow Securities Co. Ltd., A | Capital Markets | 18,404 | 21,715 | |||||||||||
Southwest Securities Co. Ltd., A | Capital Markets | 23,400 | 16,035 | |||||||||||
StarPower Semiconductor Ltd., A | Semiconductors & Semiconductor Equipment | 500 | 30,450 | |||||||||||
| a | STO Express Co. Ltd. | Air Freight & Logistics | 5,200 | 6,086 | ||||||||||
Sun Art Retail Group Ltd. | Food & Staples Retailing | 78,000 | 28,386 | |||||||||||
Sunac China Holdings Ltd. | Real Estate Management & Development | 160,000 | 93,572 | |||||||||||
| a,b | Sunac Services Holdings Ltd., 144A | Real Estate Management & Development | 27,898 | 17,277 | ||||||||||
Sungrow Power Supply Co. Ltd. | Electrical Equipment | 5,200 | 87,861 | |||||||||||
| a | Suning Universal Co. Ltd. | Real Estate Management & Development | 13,000 | 9,133 | ||||||||||
| a | Suning.com Co. Ltd. | Specialty Retail | 36,400 | 19,782 | ||||||||||
Sunny Optical Technology Group Co. Ltd. | Electronic Equipment, Instruments & Components | 31,200 | 502,378 | |||||||||||
Sunwoda Electronic Co. Ltd., A | Electrical Equipment | 5,200 | 22,526 | |||||||||||
Suofeiya Home Collection Co. Ltd. | Household Durables | 2,600 | 7,880 | |||||||||||
Suzhou Anjie Technology Co. Ltd., A | Electrical Equipment | 2,600 | 5,058 | |||||||||||
Suzhou Dongshan Precision Manufacturing Co. Ltd., A | Electronic Equipment, Instruments & Components | 5,200 | 15,302 | |||||||||||
Suzhou Gold Mantis Construction Decoration Co. Ltd. | Construction & Engineering | 7,800 | 6,721 | |||||||||||
Suzhou Maxwell Technologies Co. Ltd., A | Electrical Equipment | 400 | 33,155 | |||||||||||
Suzhou TA&A Ultra Clean Technology Co. Ltd., A | Chemicals | 2,600 | 29,325 | |||||||||||
Taiji Computer Corp. Ltd. | IT Services | 2,600 | 8,720 | |||||||||||
| a | TAL Education Group, ADR | Diversified Consumer Services | 21,294 | 64,095 | ||||||||||
Tangshan Jidong Cement Co. Ltd. | Construction Materials | 10,400 | 19,610 | |||||||||||
TangShan Port Group Co. Ltd., A | Transportation Infrastructure | 18,200 | 8,544 | |||||||||||
Tangshan Sanyou Chemical Industries Co. Ltd., A | Chemicals | 8,000 | 10,132 | |||||||||||
TBEA Co. Ltd., A | Electrical Equipment | 13,000 | 41,735 | |||||||||||
TCL Corp. | Household Durables | 49,400 | 38,209 | |||||||||||
Tencent Holdings Ltd. | Interactive Media & Services | 297,800 | 14,229,481 | |||||||||||
| a | Tencent Music Entertainment Group, ADR | Entertainment | 28,782 | 140,168 | ||||||||||
The People’s Insurance Co. Group of China Ltd., H | Insurance | 416,000 | 136,517 | |||||||||||
Thunder Software Technology Co. Ltd. | Software | 1,200 | 18,752 | |||||||||||
Tian Di Science & Technology Co. Ltd., A | Machinery | 13,000 | 10,055 | |||||||||||
Tianfeng Securities Co. Ltd., A | Capital Markets | 31,250 | 17,082 | |||||||||||
Tianjin Chase Sun Pharmaceutical Co. Ltd. | Pharmaceuticals | 10,400 | 13,008 | |||||||||||
Tianjin Guangyu Development Co. Ltd., A | Real Estate Management & Development | 5,200 | 13,934 | |||||||||||
Tianjin Zhonghuan Semiconductor Co. Ltd. | Semiconductors & Semiconductor Equipment | 10,400 | 69,955 | |||||||||||
Tianma Microelectronics Co. Ltd. | Electronic Equipment, Instruments & Components | 7,800 | 12,840 | |||||||||||
Tianshan Aluminum Group Co. Ltd., A | Machinery | 7,800 | 9,486 | |||||||||||
Tianshui Huatian Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 10,400 | 17,218 | |||||||||||
Tibet Summit Resources Co. Ltd., A | Metals & Mining | 2,600 | 10,833 | |||||||||||
Titan Wind Energy Suzhou Co. Ltd., A | Electrical Equipment | 5,200 | 10,878 | |||||||||||
| a,c | Tongcheng-Elong Holdings Ltd., Reg S | Internet & Direct Marketing Retail | 45,200 | 80,803 | ||||||||||
TongFu Microelectronics Co. Ltd., A | Semiconductors & Semiconductor Equipment | 5,200 | 13,581 | |||||||||||
Tongkun Group Co. Ltd., A | Chemicals | 7,800 | 21,478 | |||||||||||
Tongling Nonferrous Metals Group Co. Ltd. | Metals & Mining | 36,400 | 21,330 | |||||||||||
Tongwei Co. Ltd., A | Food Products | 15,600 | 104,908 | |||||||||||
| a | Topchoice Medical Investment Corp., A | Health Care Providers & Services | 1,200 | 27,047 | ||||||||||
| b | Topsports International Holdings Ltd., 144A | Specialty Retail | 78,000 | 65,237 | ||||||||||
TravelSky Technology Ltd., H | IT Services | 52,000 | 75,031 | |||||||||||
Trina Solar Co. Ltd., A | Semiconductors & Semiconductor Equipment | 7,202 | 66,823 | |||||||||||
| a | Trip.com Group Ltd., ADR | Internet & Direct Marketing Retail | 26,416 | 610,738 | ||||||||||
Tsingtao Brewery Co. Ltd., A | Beverages | 2,600 | 32,360 | |||||||||||
Tsingtao Brewery Co. Ltd., H | Beverages | 26,400 | 210,016 | |||||||||||
| a | Tuya Inc., ADR | Software | 10,400 | 30,784 | ||||||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Unigroup Guoxin Microelectronics Co. Ltd. | Semiconductors & Semiconductor Equipment | 2,600 | $ | 83,774 | ||||||||||
Unisplendour Corp. Ltd. | Electronic Equipment, Instruments & Components | 5,200 | 16,014 | |||||||||||
Universal Scientific Industrial Shanghai Co. Ltd., A | Electronic Equipment, Instruments & Components | 2,600 | 4,964 | |||||||||||
Valiant Co. Ltd., A | Chemicals | 2,600 | 7,409 | |||||||||||
| a | Vipshop Holdings Ltd., ADR | Internet & Direct Marketing Retail | 21,424 | 192,816 | ||||||||||
Visual China Group Co. Ltd., A | Internet & Direct Marketing Retail | 2,600 | 6,635 | |||||||||||
Walvax Biotechnology Co. Ltd. | Biotechnology | 5,200 | 44,946 | |||||||||||
Wangsu Science & Technology Co. Ltd. | IT Services | 7,800 | 7,335 | |||||||||||
Wanhua Chemical Group Co. Ltd., A | Chemicals | 11,300 | 143,989 | |||||||||||
Wanxiang Qianchao Co. Ltd. | Auto Components | 13,000 | 11,120 | |||||||||||
| a | Weibo Corp., ADR | Interactive Media & Services | 3,432 | 84,118 | ||||||||||
Weichai Power Co. Ltd., A | Machinery | 23,400 | 49,210 | |||||||||||
Weichai Power Co. Ltd., H | Machinery | 104,000 | 164,405 | |||||||||||
Weifu High-Technology Co. Ltd., B | Auto Components | 7,800 | 15,199 | |||||||||||
Weifu High-Technology Group Co. Ltd., A | Auto Components | 2,600 | 8,134 | |||||||||||
Weihai Guangwei Composites Co. Ltd., A | Chemicals | 2,600 | 24,148 | |||||||||||
| a | Wens Foodstuffs Group Co. Ltd. | Food Products | 5,200 | 18,062 | ||||||||||
Western Mining Co. Ltd., A | Metals & Mining | 7,800 | 16,907 | |||||||||||
Western Securities Co. Ltd. | Capital Markets | 15,600 | 17,767 | |||||||||||
Western Superconducting Technologies Co. Ltd., A | Metals & Mining | 1,488 | 20,304 | |||||||||||
Westone Information Industry Inc. | Electronic Equipment, Instruments & Components | 2,600 | 18,599 | |||||||||||
Will Semiconductor Ltd., A | Semiconductors & Semiconductor Equipment | 2,600 | 79,211 | |||||||||||
Wingtech Technology Co. Ltd., A | Electronic Equipment, Instruments & Components | 5,200 | 66,596 | |||||||||||
Winning Health Technology Group Co. Ltd. | Health Care Technology | 8,700 | 12,869 | |||||||||||
Wolong Electric Group Co. Ltd., A | Electrical Equipment | 5,200 | 10,747 | |||||||||||
Wuchan Zhongda Group Co. Ltd., A | Distributors | 20,800 | 17,497 | |||||||||||
Wuhan Guide Infrared Co. Ltd. | Electronic Equipment, Instruments & Components | 9,338 | 25,080 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | Entertainment | 5,200 | 19,209 | |||||||||||
Wuliangye Yibin Co. Ltd., A | Beverages | 13,500 | 329,754 | |||||||||||
WUS Printed Circuit Kunshan Co. Ltd. | Electronic Equipment, Instruments & Components | 7,840 | 16,352 | |||||||||||
| b | WuXi AppTec Co. Ltd., 144A | Life Sciences Tools & Services | 16,920 | 268,986 | ||||||||||
WuXi AppTec Co. Ltd., A | Life Sciences Tools & Services | 8,660 | 153,307 | |||||||||||
| a,b | WuXi Biologics (Cayman) Inc., 144A | Life Sciences Tools & Services | 162,700 | 1,351,436 | ||||||||||
Wuxi Lead Intelligent Equipment Co. Ltd. | Electronic Equipment, Instruments & Components | 1,080 | 9,942 | |||||||||||
Wuxi Shangji Automation Co. Ltd., A | Machinery | 900 | 19,437 | |||||||||||
XCMG Construction Machinery Co. Ltd. | Machinery | 26,000 | 21,093 | |||||||||||
Xiamen C & D Inc., A | Trading Companies & Distributors | 13,000 | 26,049 | |||||||||||
Xiamen Faratronic Co. Ltd., A | Electronic Equipment, Instruments & Components | 800 | 25,329 | |||||||||||
Xiamen ITG Group Corp. Ltd., A | Trading Companies & Distributors | 5,200 | 6,340 | |||||||||||
Xiamen Tungsten Co. Ltd., A | Metals & Mining | 5,200 | 15,162 | |||||||||||
Xiangcai Co. Ltd., A | Real Estate Management & Development | 5,200 | 6,783 | |||||||||||
| a,b | Xiaomi Corp., B, 144A | Technology Hardware, Storage & Peripherals | 655,200 | 1,166,265 | ||||||||||
Xinfengming Group Co. Ltd., A | Chemicals | 2,600 | 4,731 | |||||||||||
Xinhua Winshare Publishing and Media Co. Ltd., H | Distributors | 26,000 | 18,891 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd. | Electrical Equipment | 13,000 | 26,888 | |||||||||||
Xinjiang Goldwind Science & Technology Co. Ltd., H | Electrical Equipment | 31,200 | 47,090 | |||||||||||
Xinjiang Tianshan Cement Co. Ltd., A | Construction Materials | 7,800 | 16,194 | |||||||||||
Xinjiang Zhongtai Chemical Co. Ltd., A | Chemicals | 10,400 | 14,794 | |||||||||||
Xinxing Ductile Iron Pipes Co. Ltd. | Metals & Mining | 13,000 | 10,239 | |||||||||||
Xinyi Solar Holdings Ltd. | Semiconductors & Semiconductor Equipment | 208,000 | 367,056 | |||||||||||
| a | XPeng Inc., ADR | Automobiles | 24,492 | 675,734 | ||||||||||
Xuji Electric Co. Ltd., A | Electrical Equipment | 2,600 | 7,811 | |||||||||||
| 208 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| b,c | Yadea Group Holdings Ltd., 144A, Reg S | Automobiles | 52,000 | $ | 80,476 | |||||||||
Yang Quan Coal Industry Group Co. Ltd., A | Oil, Gas & Consumable Fuels | 7,800 | 14,831 | |||||||||||
Yango Group Co. Ltd. | Real Estate Management & Development | 18,200 | 12,185 | |||||||||||
| b,c | Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., 144A, Reg S | Communications Equipment | 13,000 | 17,928 | ||||||||||
Yangzhou Yangjie Electronic Technology Co. Ltd., A | Semiconductors & Semiconductor Equipment | 2,600 | 30,321 | |||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | Machinery | 104,000 | 117,575 | |||||||||||
Yantai Changyu Pioneer Wine Co. Ltd., A | Beverages | 2,600 | 11,325 | |||||||||||
Yantai Changyu Pioneer Wine Co. Ltd., B | Beverages | 10,400 | 14,794 | |||||||||||
Yantai Eddie Precision Machinery Co. Ltd., A | Machinery | 3,360 | 12,624 | |||||||||||
Yantai Jereh Oilfield Services Group Co. Ltd. | Energy Equipment & Services | 2,600 | 17,263 | |||||||||||
Yanzhou Coal Mining Co. Ltd., A | Oil, Gas & Consumable Fuels | 5,200 | 31,406 | |||||||||||
Yanzhou Coal Mining Co. Ltd., H | Oil, Gas & Consumable Fuels | 94,000 | 279,069 | |||||||||||
Yealink Network Technology Corp. Ltd. | Communications Equipment | 3,200 | 39,193 | |||||||||||
Yifan Pharmaceutical Co. Ltd. | Pharmaceuticals | 5,200 | 12,205 | |||||||||||
Yifeng Pharmacy Chain Co. Ltd. | Food & Staples Retailing | 1,690 | 10,649 | |||||||||||
| a | Yihai International Holding Ltd. | Food Products | 26,000 | 74,699 | ||||||||||
Yihai Kerry Arawana Holdings Co. Ltd., A | Food Products | 5,200 | 40,613 | |||||||||||
Yintai Gold Co. Ltd., A | Metals & Mining | 10,600 | 15,546 | |||||||||||
Yonghui Superstores Co. Ltd., A | Food & Staples Retailing | 28,600 | 19,012 | |||||||||||
Yonyou Network Technology Co. Ltd., A | Software | 11,390 | 41,088 | |||||||||||
Youngor Group Co. Ltd., A | Real Estate Management & Development | 18,200 | 19,438 | |||||||||||
YTO Express Group Co. Ltd., A | Air Freight & Logistics | 10,400 | 28,260 | |||||||||||
| a | Yuan Longping High-tech Agriculture Co. Ltd. | Food Products | 5,200 | 15,875 | ||||||||||
Yuexiu Property Co. Ltd. | Real Estate Management & Development | 60,800 | 60,479 | |||||||||||
Yunda Holding Co. Ltd., A | Air Freight & Logistics | 5,500 | 15,214 | |||||||||||
| a | Yunnan Aluminium Co. Ltd. | Metals & Mining | 11,990 | 25,838 | ||||||||||
Yunnan Baiyao Group Co. Ltd. | Pharmaceuticals | 5,200 | 67,022 | |||||||||||
Yunnan Copper Co. Ltd. | Metals & Mining | 5,200 | 9,207 | |||||||||||
Yunnan Energy New Material Co. Ltd. | Containers & Packaging | 2,600 | 90,106 | |||||||||||
Yunnan Hongxiang Yixintang Pharmaceutical Co. Ltd. | Food & Staples Retailing | 2,600 | 9,740 | |||||||||||
| a | Yunnan Tin Co. Ltd. | Metals & Mining | 5,200 | 17,153 | ||||||||||
| a | Zai Lab Ltd., ADR | Biotechnology | 2,860 | 125,783 | ||||||||||
Zhangzhou Pientzehuang Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,600 | 129,928 | |||||||||||
Zhaojin Mining Industry Co. Ltd., H | Metals & Mining | 52,000 | 45,882 | |||||||||||
Zhefu Holding Group Co. Ltd. | Electrical Equipment | 20,800 | 17,399 | |||||||||||
| a | Zhejiang Century Huatong Group Co. Ltd., A | Entertainment | 23,400 | 23,112 | ||||||||||
Zhejiang China Commodities City Group Co. Ltd., A | Real Estate Management & Development | 18,200 | 14,421 | |||||||||||
Zhejiang Chint Electrics Co. Ltd., A | Electrical Equipment | 5,200 | 32,422 | |||||||||||
Zhejiang Crystal-Optech Co. Ltd. | Electronic Equipment, Instruments & Components | 5,200 | 9,142 | |||||||||||
Zhejiang Dahua Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 10,400 | 27,114 | |||||||||||
Zhejiang Dingli Machinery Co. Ltd. | Machinery | 2,600 | 18,386 | |||||||||||
Zhejiang Expressway Co. Ltd., H | Transportation Infrastructure | 70,000 | 58,815 | |||||||||||
Zhejiang Hailiang Co. Ltd., A | Metals & Mining | 5,200 | 8,617 | |||||||||||
Zhejiang HangKe Technology Inc. Co., A | Electrical Equipment | 1,196 | 10,754 | |||||||||||
Zhejiang Hisoar Pharmaceutical Co. Ltd., A | Pharmaceuticals | 5,200 | 5,914 | |||||||||||
Zhejiang Huace Film & TV Co. Ltd., A | Entertainment | 7,800 | 6,242 | |||||||||||
Zhejiang Huahai Pharmaceutical Co. Ltd., A | Pharmaceuticals | 5,400 | 17,872 | |||||||||||
Zhejiang Huayou Cobalt Co. Ltd., A | Metals & Mining | 5,200 | 80,112 | |||||||||||
Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., A | Semiconductors & Semiconductor Equipment | 3,500 | 33,081 | |||||||||||
Zhejiang Jiuzhou Pharmaceutical Co. Ltd., A | Pharmaceuticals | 2,600 | 19,856 | |||||||||||
Zhejiang Juhua Co. Ltd., A | Chemicals | 10,400 | 21,396 | |||||||||||
Zhejiang Longsheng Group Co. Ltd., A | Chemicals | 10,400 | 17,857 | |||||||||||
| franklintempleton.com | Annual Report | 209 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
Zhejiang Medicine Co. Ltd., A | Pharmaceuticals | 2,600 | $ | 6,398 | ||||||||||
Zhejiang NHU Co. Ltd. | Pharmaceuticals | 8,880 | 44,315 | |||||||||||
Zhejiang Sanhua Intelligent Controls Co. Ltd. | Machinery | 7,800 | 20,421 | |||||||||||
Zhejiang Satellite Petrochemical Co. Ltd. | Chemicals | 6,640 | 41,212 | |||||||||||
Zhejiang Supor Co. Ltd. | Household Durables | 1,400 | 11,034 | |||||||||||
Zhejiang Wanfeng Auto Wheel Co. Ltd. | Auto Components | 10,400 | 6,995 | |||||||||||
Zhejiang Wanliyang Co. Ltd. | Machinery | 5,200 | 6,217 | |||||||||||
Zhejiang Weiming Environment Protection Co. Ltd., A | Commercial Services & Supplies | 2,600 | 11,943 | |||||||||||
Zhejiang Weixing New Building Materials Co. Ltd., A | Building Products | 5,200 | 16,760 | |||||||||||
Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., A | Pharmaceuticals | 2,600 | 15,891 | |||||||||||
Zhejiang Yasha Decoration Co. Ltd. | Diversified Consumer Services | 5,200 | 4,726 | |||||||||||
| a | Zhejiang Yongtai Technology Co. Ltd., A | Chemicals | 2,600 | 15,662 | ||||||||||
Zhengzhou Coal Mining Machinery Group Co. Ltd., A | Machinery | 5,200 | 11,255 | |||||||||||
Zheshang Securities Co. Ltd., A | Capital Markets | 5,200 | 8,609 | |||||||||||
| a | Zhihu Inc., ADR | Interactive Media & Services | 2,912 | 7,047 | ||||||||||
| a,b,c | ZhongAn Online P & C Insurance Co. Ltd., 144A, Reg S | Insurance | 36,400 | 124,100 | ||||||||||
Zhongji Innolight Co. Ltd. | Communications Equipment | 2,600 | 12,947 | |||||||||||
Zhongshan Public Utilities Group Co. Ltd., A | Water Utilities | 5,200 | 6,602 | |||||||||||
Zhongsheng Group Holdings Ltd. | Specialty Retail | 32,500 | 229,908 | |||||||||||
Zhongtai Securities Co. Ltd., A | Capital Markets | 7,800 | 10,014 | |||||||||||
Zhuzhau CRRC Times Electric Co. Ltd., A | Electrical Equipment | 2,002 | 17,267 | |||||||||||
Zhuzhou CRRC Times Electric Co. Ltd., H | Electrical Equipment | 26,000 | 102,089 | |||||||||||
Zhuzhou Hongda Electronics Corp. Ltd., A | Electronic Equipment, Instruments & Components | 2,600 | 27,482 | |||||||||||
Zhuzhou Kibing Group Co. Ltd., A | Building Products | 7,800 | 16,305 | |||||||||||
Zijin Mining Group Co. Ltd., A | Metals & Mining | 72,800 | 130,047 | |||||||||||
Zijin Mining Group Co. Ltd., H | Metals & Mining | 284,000 | 437,347 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., A | Machinery | 26,000 | 27,196 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., H | Machinery | 72,800 | 46,387 | |||||||||||
ZTE Corp. | Communications Equipment | 13,000 | 48,944 | |||||||||||
ZTE Corp., H | Communications Equipment | 36,400 | 74,460 | |||||||||||
ZTO Express Cayman Inc. | Air Freight & Logistics | 5,158 | 131,463 | |||||||||||
ZTO Express Cayman Inc., ADR | Air Freight & Logistics | 1,290 | 32,250 | |||||||||||
|
| |||||||||||||
| 106,785,327 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 4.2% | ||||||||||||||
| a | Alibaba Health Information Technology Ltd. | Health Care Technology | 232,000 | 150,492 | ||||||||||
| a | Alibaba Pictures Group Ltd. | Entertainment | 780,000 | 64,739 | ||||||||||
Beijing Enterprises Water Group Ltd. | Water Utilities | 260,000 | 80,011 | |||||||||||
Bosideng International Holdings Ltd. | Textiles, Apparel & Luxury Goods | 104,000 | 48,604 | |||||||||||
China Everbright Environment Group Ltd. | Commercial Services & Supplies | 182,000 | 110,157 | |||||||||||
China Everbright Ltd. | Capital Markets | 52,000 | 51,526 | |||||||||||
China Gas Holdings Ltd. | Gas Utilities | 145,600 | 186,662 | |||||||||||
| a | China Mengniu Dairy Co. Ltd. | Food Products | 153,000 | 824,450 | ||||||||||
China Power International Development Ltd. | Independent Power and Renewable Electricity Producers | 260,000 | 138,443 | |||||||||||
| 210 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Hong Kong (continued) | ||||||||||||||
China Resources Beer Holdings Co. Ltd. | Beverages | 79,000 | $ | 484,709 | ||||||||||
China Resources Gas Group Ltd. | Gas Utilities | 42,000 | 178,321 | |||||||||||
China Resources Land Ltd. | Real Estate Management & Development | 137,400 | 640,384 | |||||||||||
China State Construction International Holdings Ltd. | Construction & Engineering | 76,000 | 101,703 | |||||||||||
China Traditional Chinese Medicine Co. Ltd. | Pharmaceuticals | 104,000 | 54,447 | |||||||||||
COSCO SHIPPING Ports Ltd. | Transportation Infrastructure | 104,000 | 81,007 | |||||||||||
Far East Horizon Ltd. | Diversified Financial Services | 104,000 | 92,959 | |||||||||||
Geely Automobile Holdings Ltd. | Automobiles | 272,000 | 429,287 | |||||||||||
Guangdong Investment Ltd. | Water Utilities | 150,500 | 206,012 | |||||||||||
Jiayuan International Group Ltd. | Real Estate Management & Development | 52,000 | 10,425 | |||||||||||
Kingboard Laminates Holdings Ltd. | Electronic Equipment, Instruments & Components | 55,600 | 91,585 | |||||||||||
Kunlun Energy Co. Ltd. | Gas Utilities | 208,000 | 181,403 | |||||||||||
Shanghai Industrial Holdings Ltd. | Industrial Conglomerates | 26,000 | 39,043 | |||||||||||
Shougang Fushan Resources Group Ltd. | Metals & Mining | 156,000 | 61,353 | |||||||||||
Sino Biopharmaceutical Ltd. | Pharmaceuticals | 494,000 | 308,458 | |||||||||||
|
| |||||||||||||
| 4,616,180 | ||||||||||||||
|
| |||||||||||||
| Singapore 0.0%† | ||||||||||||||
Yanlord Land Group Ltd. | Real Estate Management & Development | 33,800 | 30,969 | |||||||||||
|
| |||||||||||||
Total Common Stocks | 111,432,476 | |||||||||||||
|
| |||||||||||||
| Short Term Investments 0.1% | ||||||||||||||
Investments from Cash Collateral | ||||||||||||||
| United States 0.1% | ||||||||||||||
| f,g | Institutional Fiduciary Trust Portfolio, 0.01% | Money Market Funds | 78,125 | 78,125 | ||||||||||
|
| |||||||||||||
Total Investments | 111,510,601 | |||||||||||||
Other Assets, less Liabilities (0.1)% | (56,843 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 111,453,758 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $12,892,487, representing 11.6% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $1,652,141, representing 1.5% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eA portion or all of the security is on loan at March 31, 2022 Note 1(d).
fThe rate shown is the annualized seven-day effective yield at period end.
gSee Note 3(c) regarding investments in affiliated management investment companies.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 211 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 27.28 | $ | 19.03 | $ | 23.24 | $ | 24.98 | $ | 25.05 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.85 | 0.60 | 0.76 | 0.86 | 0.24 | |||||||||||||||
Net realized and unrealized gains (losses) | 0.11 | 8.14 | (4.21 | ) | (1.79 | ) | (0.30 | ) | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.96 | 8.74 | (3.45 | ) | (0.93 | ) | (0.06 | ) | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.06 | ) | (0.49 | ) | (0.76 | ) | (0.81 | ) | (0.01 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 27.18 | $ | 27.28 | $ | 19.03 | $ | 23.24 | $ | 24.98 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 3.30% | 46.23% | (15.44)% | (3.69)% | (0.26)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | —% | —% | |||||||||||||||
Net investment income | 2.96% | 2.53% | 3.23% | 3.61% | 2.35% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $184,857 | $229,126 | $91,356 | $74,359 | $104,911 | |||||||||||||||
Portfolio turnover ratef | 5.47% | g | 5.00% | g | 4.47% | g | 5.81% | 0.96% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 5.47% | 4.92% | 4.47% |
| 212 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests 98.5% | ||||||||||||||
| Australia 0.8% | ||||||||||||||
Rio Tinto PLC | Metals & Mining | 18,496 | $ | 1,480,892 | ||||||||||
|
| |||||||||||||
| Austria 0.4% | ||||||||||||||
| a | ams AG | Semiconductors & Semiconductor Equipment | 4,318 | 66,934 | ||||||||||
Andritz AG | Machinery | 1,190 | 55,584 | |||||||||||
Erste Group Bank AG | Banks | 5,168 | 190,273 | |||||||||||
OMV AG | Oil, Gas & Consumable Fuels | 2,414 | 116,543 | |||||||||||
Raiffeisen Bank International AG | Banks | 2,210 | 31,843 | |||||||||||
| a | Telekom Austria AG | Diversified Telecommunication Services | 2,448 | 19,066 | ||||||||||
Verbund AG | Electric Utilities | 1,122 | 119,222 | |||||||||||
Voestalpine AG | Metals & Mining | 1,938 | 58,264 | |||||||||||
|
| |||||||||||||
| 657,729 | ||||||||||||||
|
| |||||||||||||
| Belgium 1.4% | ||||||||||||||
Ackermans & van Haaren NV | Diversified Financial Services | 374 | 70,409 | |||||||||||
Ageas SA/NV | Insurance | 3,026 | 154,338 | |||||||||||
Anheuser-Busch InBev SA/NV | Beverages | 14,722 | 888,803 | |||||||||||
Colruyt SA | Food & Staples Retailing | 884 | 36,884 | |||||||||||
D’ieteren Group | Distributors | 408 | 69,502 | |||||||||||
Elia Group SA/NV | Electric Utilities | 612 | 94,106 | |||||||||||
Groupe Bruxelles Lambert SA | Diversified Financial Services | 1,768 | 185,150 | |||||||||||
KBC Groep NV | Banks | 4,726 | 343,793 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 2,414 | 45,258 | |||||||||||
Sofina SA | Diversified Financial Services | 272 | 99,932 | |||||||||||
Solvay SA | Chemicals | 1,190 | 118,450 | |||||||||||
Telenet Group Holding NV | Media | 816 | 26,530 | |||||||||||
UCB SA | Pharmaceuticals | 2,074 | 250,263 | |||||||||||
Umicore SA | Chemicals | 3,536 | 154,855 | |||||||||||
Warehouses De Pauw CVA | Equity Real Estate Investment Trusts (REITs | ) | 2,380 | 103,541 | ||||||||||
|
| |||||||||||||
| 2,641,814 | ||||||||||||||
|
| |||||||||||||
Bermuda 0.0%† | ||||||||||||||
Hiscox Ltd. | Insurance | 5,712 | 73,974 | |||||||||||
|
| |||||||||||||
| Chile 0.1% | ||||||||||||||
Antofagasta PLC | Metals & Mining | 5,882 | 129,566 | |||||||||||
|
| |||||||||||||
Czech Republic 0.0%† | ||||||||||||||
| b | Avast PLC, 144A | Software | 9,316 | 69,425 | ||||||||||
|
| |||||||||||||
| Denmark 3.9% | ||||||||||||||
Ambu AS, B | Health Care Equipment & Supplies | 2,958 | 44,246 | |||||||||||
AP Moller-Maersk A/S, A | Marine | 68 | 202,921 | |||||||||||
AP Moller-Maersk A/S, B | Marine | 88 | 268,133 | |||||||||||
Carlsberg AS, B | Beverages | 1,632 | 202,616 | |||||||||||
Chr. Hansen Holding AS | Chemicals | 1,768 | 131,357 | |||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 2,278 | 349,093 | |||||||||||
Danske Bank AS | Banks | 11,254 | 189,549 | |||||||||||
DSV A/S | Air Freight & Logistics | 3,298 | 641,559 | |||||||||||
| a | Genmab A/S | Biotechnology | 1,020 | 376,091 | ||||||||||
GN Store Nord AS | Health Care Equipment & Supplies | 2,210 | 109,982 | |||||||||||
H. Lundbeck AS | Pharmaceuticals | 1,054 | 24,539 | |||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 27,132 | 3,039,355 | |||||||||||
Novozymes AS | Chemicals | 3,332 | 230,761 | |||||||||||
| b | Orsted AS, 144A | Electric Utilities | 3,230 | 410,288 | ||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 1,564 | 151,502 | |||||||||||
Rockwool International AS, B | Building Products | 102 | 34,054 | |||||||||||
Royal Unibrew A/S | Beverages | 884 | 83,622 | |||||||||||
SimCorp A/S | Software | 680 | 50,552 | |||||||||||
| franklintempleton.com | Annual Report | 213 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Denmark (continued) | ||||||||||||||
Tryg AS | Insurance | 5,270 | $ | 129,477 | ||||||||||
Vestas Wind Systems A/S | Electrical Equipment | 17,306 | 517,082 | |||||||||||
| a | William Demant Holding AS | Health Care Equipment & Supplies | 1,802 | 82,481 | ||||||||||
|
| |||||||||||||
| 7,269,260 | ||||||||||||||
|
| |||||||||||||
| Finland 2.0% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 2,448 | 148,772 | |||||||||||
| c | Fortum OYJ, Reg S | Electric Utilities | 7,480 | 137,573 | ||||||||||
Huhtamaki OYJ | Containers & Packaging | 1,598 | 56,150 | |||||||||||
Kesko OYJ | Food & Staples Retailing | 4,624 | 128,674 | |||||||||||
Kojamo Oyj | Real Estate Management & Development | 3,366 | 81,570 | |||||||||||
Kone OYJ, B | Machinery | 6,732 | 356,466 | |||||||||||
Metso Outotec Oyj | Machinery | 10,438 | 89,241 | |||||||||||
Neste Oil OYJ | Oil, Gas & Consumable Fuels | 6,970 | 321,685 | |||||||||||
| a | Nokia OYJ | Communications Equipment | 96,594 | 535,818 | ||||||||||
Nokian Renkaat OYJ | Auto Components | 2,312 | 38,008 | |||||||||||
Nordea Bank Abp | Banks | 60,758 | 634,111 | |||||||||||
Orion OYJ | Pharmaceuticals | 1,734 | 79,392 | |||||||||||
Sampo Oyj, A | Insurance | 8,704 | 429,798 | |||||||||||
Stora Enso OYJ, R | Paper & Forest Products | 9,860 | 195,444 | |||||||||||
UPM-Kymmene OYJ | Paper & Forest Products | 9,112 | 300,707 | |||||||||||
Valmet Oyj | Machinery | 2,890 | 90,711 | |||||||||||
Wartsila OYJ ABP | Machinery | 8,500 | 78,554 | |||||||||||
|
| |||||||||||||
| 3,702,674 | ||||||||||||||
|
| |||||||||||||
| France 16.0% | ||||||||||||||
| a | Accor SA | Hotels, Restaurants & Leisure | 3,162 | 102,837 | ||||||||||
| a | Aeroports de Paris SA | Transportation Infrastructure | 476 | 72,028 | ||||||||||
Air Liquide SA | Chemicals | 7,922 | 1,400,787 | |||||||||||
| a | Airbus SE | Aerospace & Defense | 9,486 | 1,164,806 | ||||||||||
| b | ALD SA, 144A | Road & Rail | 1,360 | 18,219 | ||||||||||
Alstom SA | Machinery | 5,066 | 119,892 | |||||||||||
| b | Amundi SA, 144A | Capital Markets | 986 | 68,238 | ||||||||||
Arkema SA | Chemicals | 1,122 | 135,763 | |||||||||||
Atos SE | IT Services | 1,598 | 44,041 | |||||||||||
AXA SA | Insurance | 33,082 | 977,823 | |||||||||||
Biomerieux | Health Care Equipment & Supplies | 680 | 73,194 | |||||||||||
BNP Paribas SA | Banks | 18,428 | 1,064,768 | |||||||||||
Bollore | Entertainment | 17,170 | 90,821 | |||||||||||
Bouygues SA | Construction & Engineering | 3,638 | 128,033 | |||||||||||
Bureau Veritas SA | Professional Services | 4,862 | 140,328 | |||||||||||
Capgemini SE | IT Services | 2,720 | 612,848 | |||||||||||
Carrefour SA | Food & Staples Retailing | 10,540 | 230,383 | |||||||||||
Cie Generale des Etablissements Michelin SCA | Auto Components | 2,958 | 404,655 | |||||||||||
CNP Assurances | Insurance | 2,618 | 63,502 | |||||||||||
Compagnie de Saint-Gobain | Building Products | 7,888 | 476,305 | |||||||||||
Covivio | Equity Real Estate Investment Trusts (REITs | ) | 850 | 68,227 | ||||||||||
Credit Agricole SA | Banks | 20,332 | 246,267 | |||||||||||
Danone SA | Food Products | 10,302 | 573,470 | |||||||||||
Dassault Aviation SA | Aerospace & Defense | 420 | 67,153 | |||||||||||
Dassault Systemes SE | Software | 11,424 | 568,369 | |||||||||||
Edenred | IT Services | 4,216 | 210,717 | |||||||||||
EDF SA | Electric Utilities | 8,885 | 84,366 | |||||||||||
Eiffage SA | Construction & Engineering | 1,292 | 134,037 | |||||||||||
Engie SA | Multi-Utilities | 28,560 | 379,230 | |||||||||||
EssilorLuxottica SA | Textiles, Apparel & Luxury Goods | 5,032 | 931,090 | |||||||||||
| 214 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| France (continued) | ||||||||||||||
Eurazeo SE | Diversified Financial Services | 754 | $ | 64,095 | ||||||||||
Faurecia SE | Auto Components | 2,045 | 53,812 | |||||||||||
Gecina SA | Equity Real Estate Investment Trusts (REITs | ) | 884 | 112,423 | ||||||||||
Getlink SE | Transportation Infrastructure | 7,820 | 142,217 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 528 | 758,730 | |||||||||||
ICADE | Equity Real Estate Investment Trusts (REITs | ) | 544 | 35,318 | ||||||||||
Ipsen SA | Pharmaceuticals | 578 | 72,865 | |||||||||||
| a | JCDecaux SA | Media | 1,292 | 30,792 | ||||||||||
Kering SA | Textiles, Apparel & Luxury Goods | 1,258 | 805,815 | |||||||||||
| a | Klepierre SA | Equity Real Estate Investment Trusts (REITs | ) | 3,196 | 85,985 | |||||||||
L’Oreal SA | Personal Products | 4,216 | 1,706,796 | |||||||||||
| b | La Francaise des Jeux SAEM, 144A | Hotels, Restaurants & Leisure | 1,496 | 59,856 | ||||||||||
Legrand SA | Electrical Equipment | 4,590 | 441,148 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | 4,284 | 3,095,426 | |||||||||||
| a,b | Neoen SA, 144A | Independent Power and Renewable Electricity Producers | 442 | 18,993 | ||||||||||
Orange SA | Diversified Telecommunication Services | 32,742 | 389,951 | |||||||||||
Orpea | Health Care Providers & Services | 850 | 37,244 | |||||||||||
Pernod Ricard SA | Beverages | 3,570 | 791,652 | |||||||||||
Plastic Omnium SA | Auto Components | 952 | 17,477 | |||||||||||
Publicis Groupe | Media | 3,978 | 244,588 | |||||||||||
Remy Cointreau SA | Beverages | 408 | 84,891 | |||||||||||
| a | Renault SA | Automobiles | 3,162 | 83,997 | ||||||||||
Rexel SA | Trading Companies & Distributors | 5,202 | 112,461 | |||||||||||
Safran SA | Aerospace & Defense | 5,984 | 714,148 | |||||||||||
Sanofi | Pharmaceuticals | 18,632 | 1,917,816 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 408 | 169,101 | |||||||||||
Schneider Electric SE | Electrical Equipment | 9,010 | 1,525,401 | |||||||||||
SCOR SE | Insurance | 2,720 | 88,341 | |||||||||||
SEB SA | Household Durables | 510 | 71,839 | |||||||||||
Societe Generale SA | Banks | 12,954 | 352,549 | |||||||||||
Sodexo SA | Hotels, Restaurants & Leisure | 1,496 | 122,842 | |||||||||||
| a | SOITEC | Semiconductors & Semiconductor Equipment | 374 | 71,200 | ||||||||||
Somfy SA | Electrical Equipment | 136 | 22,123 | |||||||||||
Teleperformance | Professional Services | 986 | 379,916 | |||||||||||
Thales SA | Aerospace & Defense | 1,734 | 219,848 | |||||||||||
TotalEnergies SE | Oil, Gas & Consumable Fuels | 40,562 | 2,077,395 | |||||||||||
| a | Ubisoft Entertainment SA | Entertainment | 1,598 | 71,032 | ||||||||||
| a | Unibail-Rodamco-Westfield | Equity Real Estate Investment Trusts (REITs | ) | 1,768 | 134,121 | |||||||||
Valeo | Auto Components | 4,148 | 77,329 | |||||||||||
Veolia Environnement SA | Multi-Utilities | 10,608 | 343,349 | |||||||||||
Vinci SA | Construction & Engineering | 8,568 | 886,491 | |||||||||||
Vivendi SA | Media | 12,546 | 165,278 | |||||||||||
Wendel SE | Diversified Financial Services | 476 | 49,043 | |||||||||||
| a,b,c | Worldline SA, 144A, Reg S | IT Services | 4,182 | 183,728 | ||||||||||
|
| |||||||||||||
| 29,541,619 | ||||||||||||||
|
| |||||||||||||
| Germany 11.9% | ||||||||||||||
1&1 Drillisch AG | Wireless Telecommunication Services | 748 | 16,895 | |||||||||||
Adidas AG | Textiles, Apparel & Luxury Goods | 3,128 | 737,490 | |||||||||||
Allianz SE | Insurance | 7,004 | 1,687,575 | |||||||||||
| a,b | Auto1 Group SE, 144A | Specialty Retail | 1,496 | 17,203 | ||||||||||
BASF SE | Chemicals | 15,606 | 898,762 | |||||||||||
Bayer AG | Pharmaceuticals | 16,864 | 1,165,228 | |||||||||||
Bayerische Motoren Werke AG | Automobiles | 5,542 | 484,672 | |||||||||||
Bechtle AG | IT Services | 1,462 | 83,287 | |||||||||||
Beiersdorf AG | Personal Products | 1,700 | 180,071 | |||||||||||
| franklintempleton.com | Annual Report | 215 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Germany (continued) | ||||||||||||||
Brenntag SE | Trading Companies & Distributors | 2,652 | $ | 216,408 | ||||||||||
Carl Zeiss Meditec AG | Health Care Equipment & Supplies | 646 | 105,624 | |||||||||||
| a | Commerzbank AG | Banks | 17,884 | 137,838 | ||||||||||
| a | Continental AG | Auto Components | 1,904 | 138,549 | ||||||||||
Covestro AG | Chemicals | 3,094 | 157,806 | |||||||||||
| a | CTS Eventim AG & Co. KGaA | Entertainment | 986 | 68,040 | ||||||||||
Daimler AG | Automobiles | 14,314 | 1,016,268 | |||||||||||
| a | Daimler Truck Holding AG | Machinery | 7,208 | 202,344 | ||||||||||
| a,b | Delivery Hero SE, 144A | Internet & Direct Marketing Retail | 3,128 | 138,727 | ||||||||||
| a | Deutsche Bank AG | Capital Markets | 35,156 | 450,229 | ||||||||||
Deutsche Boerse AG | Capital Markets | 3,162 | 573,467 | |||||||||||
| a | Deutsche Lufthansa AG | Airlines | 10,200 | 83,506 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 16,660 | 807,276 | |||||||||||
Deutsche Telekom AG | Diversified Telecommunication Services | 57,834 | 1,089,557 | |||||||||||
Deutsche Wohnen SE | Real Estate Management & Development | 748 | 25,301 | |||||||||||
| b | DWS Group GmbH & Co. KGaA, 144A | Capital Markets | 612 | 22,648 | ||||||||||
E.ON SE | Multi-Utilities | 37,264 | 437,090 | |||||||||||
Evonik Industries AG | Chemicals | 3,026 | 84,778 | |||||||||||
| a | Evotec SE | Life Sciences Tools & Services | 2,686 | 81,887 | ||||||||||
Fielmann AG | Specialty Retail | 408 | 22,426 | |||||||||||
| a | Fraport AG Frankfurt Airport Services Worldwide | Transportation Infrastructure | 612 | 34,388 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | Health Care Providers & Services | 3,502 | 236,751 | |||||||||||
Fresenius SE & Co. KGaA | Health Care Providers & Services | 6,936 | 257,335 | |||||||||||
Fuchs Petrolub SE | Chemicals | 578 | 16,567 | |||||||||||
GEA Group AG | Machinery | 2,822 | 117,150 | |||||||||||
Hannover Rueck SE | Insurance | 1,020 | 175,172 | |||||||||||
HeidelbergCement AG | Construction Materials | 2,550 | 146,573 | |||||||||||
Hella GmbH & Co. KGaA | Auto Components | 374 | 24,235 | |||||||||||
| a | HelloFresh SE | Internet & Direct Marketing Retail | 2,788 | 127,061 | ||||||||||
Henkel AG & Co. KGaA | Household Products | 1,734 | 115,664 | |||||||||||
Hochtief AG | Construction & Engineering | 340 | 23,152 | |||||||||||
Infineon Technologies AG | Semiconductors & Semiconductor Equipment | 22,168 | 764,252 | |||||||||||
KION Group AG | Machinery | 1,394 | 93,062 | |||||||||||
Knorr-Bremse AG | Machinery | 1,122 | 86,938 | |||||||||||
LANXESS AG | Chemicals | 1,428 | 63,380 | |||||||||||
LEG Immobilien SE | Real Estate Management & Development | 1,224 | 140,614 | |||||||||||
Merck KGaA | Pharmaceuticals | 2,210 | 466,833 | |||||||||||
| a | METRO AG | Food & Staples Retailing | 2,278 | 20,444 | ||||||||||
MTU Aero Engines AG | Aerospace & Defense | 918 | 215,212 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | Insurance | 2,380 | 643,490 | |||||||||||
Nemetschek AG | Software | 918 | 89,680 | |||||||||||
Puma SE | Textiles, Apparel & Luxury Goods | 1,700 | 146,478 | |||||||||||
Rational AG | Machinery | 68 | 47,439 | |||||||||||
Rheinmetall AG | Industrial Conglomerates | 748 | 159,878 | |||||||||||
RWE AG | Multi-Utilities | 10,608 | 466,572 | |||||||||||
SAP SE | Software | 19,006 | 2,138,388 | |||||||||||
Sartorius AG | Health Care Equipment & Supplies | 34 | 13,051 | |||||||||||
| b,c | Scout24 AG, 144A | Interactive Media & Services | 1,292 | 74,752 | ||||||||||
Siemens AG | Industrial Conglomerates | 12,818 | 1,792,157 | |||||||||||
| a | Siemens Energy AG | Electrical Equipment | 7,310 | 168,526 | ||||||||||
| b | Siemens Healthineers AG, 144A | Health Care Equipment & Supplies | 4,794 | 299,987 | ||||||||||
| a | Sixt SE | Road & Rail | 238 | 32,413 | ||||||||||
Symrise AG | Chemicals | 2,210 | 267,657 | |||||||||||
| a | Talanx AG | Insurance | 884 | 39,363 | ||||||||||
Telefonica Deutschland Holding AG | Diversified Telecommunication Services | 11,050 | 30,356 | |||||||||||
| 216 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Germany (continued) | ||||||||||||||
| a | thyssenkrupp AG | Metals & Mining | 8,058 | $ | 69,843 | |||||||||
Traton SE | Machinery | 850 | 15,955 | |||||||||||
| a | TUI AG | Hotels, Restaurants & Leisure | 18,707 | 59,606 | ||||||||||
Uniper SE | Independent Power and Renewable Electricity Producers | 1,496 | 38,950 | |||||||||||
United Internet AG | Diversified Telecommunication Services | 1,870 | 64,875 | |||||||||||
Vantage Towers AG | Diversified Telecommunication Services | 1,496 | 53,415 | |||||||||||
Varta AG | Electrical Equipment | 238 | 23,806 | |||||||||||
Volkswagen AG | Automobiles | 544 | 136,915 | |||||||||||
Vonovia SE | Real Estate Management & Development | 13,328 | 627,432 | |||||||||||
Wacker Chemie AG | Chemicals | 272 | 46,834 | |||||||||||
| a,b | Zalando SE, 144A | Internet & Direct Marketing Retail | 3,740 | 191,420 | ||||||||||
|
| |||||||||||||
| 21,994,973 | ||||||||||||||
|
| |||||||||||||
| Ireland 1.3% | ||||||||||||||
AIB Group PLC | Banks | 13,396 | 29,855 | |||||||||||
CRH PLC | Construction Materials | 13,226 | 534,959 | |||||||||||
DCC PLC | Industrial Conglomerates | 1,700 | 132,642 | |||||||||||
Experian PLC | Professional Services | 15,572 | 605,040 | |||||||||||
| a | Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 2,992 | 349,820 | ||||||||||
Glanbia PLC | Food Products | 3,298 | 38,493 | |||||||||||
Kerry Group | Food Products | 2,652 | 298,321 | |||||||||||
Kingspan Group PLC | Building Products | 2,584 | 255,998 | |||||||||||
Smurfit Kappa Group PLC | Containers & Packaging | 4,454 | 200,150 | |||||||||||
|
| |||||||||||||
| 2,445,278 | ||||||||||||||
|
| |||||||||||||
| Isle Of Man 0.1% | ||||||||||||||
| a | GVC Holdings PLC | Hotels, Restaurants & Leisure | 9,962 | 215,569 | ||||||||||
|
| |||||||||||||
| Italy 3.4% | ||||||||||||||
A2A SpA | Multi-Utilities | 26,554 | 45,928 | |||||||||||
Amplifon SpA | Health Care Providers & Services | 2,278 | 102,754 | |||||||||||
Assicurazioni Generali SpA | Insurance | 22,168 | 512,297 | |||||||||||
| a | Atlantia SpA | Transportation Infrastructure | 8,432 | 177,317 | ||||||||||
Banca Mediolanum SpA | Diversified Financial Services | 3,502 | 30,221 | |||||||||||
Buzzi Unicem SpA | Construction Materials | 1,836 | 34,432 | |||||||||||
Davide Campari-Milano NV | Beverages | 8,500 | 99,824 | |||||||||||
De’ Longhi SpA | Household Durables | 1,088 | 29,949 | |||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 374 | 59,049 | |||||||||||
Enel SpA | Electric Utilities | 132,430 | 894,109 | |||||||||||
Eni SpA | Oil, Gas & Consumable Fuels | 42,330 | 626,127 | |||||||||||
Ferrari NV | Automobiles | 2,142 | 473,561 | |||||||||||
FinecoBank Banca Fineco SpA | Banks | 10,438 | 160,562 | |||||||||||
Hera SpA | Multi-Utilities | 14,178 | 52,784 | |||||||||||
| b,c | Infrastrutture Wireless Italiane SpA, 144A, Reg S | Diversified Telecommunication Services | 6,324 | 71,525 | ||||||||||
Interpump Group SpA | Machinery | 1,360 | 69,154 | |||||||||||
Intesa Sanpaolo SpA | Banks | 283,526 | 657,272 | |||||||||||
Italgas Reti SpA | Gas Utilities | 8,602 | 55,742 | |||||||||||
| a | Iveco Group NV | Machinery | 3,278 | 21,701 | ||||||||||
| a | Leonardo SpA | Aerospace & Defense | 6,902 | 69,269 | ||||||||||
Mediobanca Banca di Credito Finanziario SpA | Banks | 11,832 | 121,380 | |||||||||||
Moncler SpA | Textiles, Apparel & Luxury Goods | 3,672 | 207,306 | |||||||||||
| a,b | Nexi SpA, 144A | IT Services | 12,682 | 148,162 | ||||||||||
| b | Pirelli & C SpA, 144A | Auto Components | 7,990 | 43,837 | ||||||||||
| b,c | Poste Italiane SpA, 144A, Reg S | Insurance | 7,854 | 90,184 | ||||||||||
Prysmian SpA | Electrical Equipment | 4,318 | 148,745 | |||||||||||
| franklintempleton.com | Annual Report | 217 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Italy (continued) | ||||||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 1,632 | $ | 82,875 | ||||||||||
Reply SpA | IT Services | 374 | 62,420 | |||||||||||
Snam SpA | Gas Utilities | 37,502 | 218,314 | |||||||||||
Telecom Italia SpA | Diversified Telecommunication Services | 182,614 | 67,762 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 104,550 | 35,829 | |||||||||||
Tenaris SA | Energy Equipment & Services | 8,024 | 122,803 | |||||||||||
Terna—Rete Elettrica Nazionale | Electric Utilities | 23,902 | 207,065 | |||||||||||
UniCredit SpA | Banks | 36,652 | 401,895 | |||||||||||
UnipolSai Assicurazioni SpA | Insurance | 8,160 | 24,387 | |||||||||||
|
| |||||||||||||
| 6,226,541 | ||||||||||||||
|
| |||||||||||||
| Luxembourg 0.4% | ||||||||||||||
ArcelorMittal SA | Metals & Mining | 9,996 | 325,876 | |||||||||||
Aroundtown SA | Real Estate Management & Development | 19,040 | 110,034 | |||||||||||
Eurofins Scientific SE | Life Sciences Tools & Services | 2,074 | 207,480 | |||||||||||
| a | RTL Group SA | Media | 646 | 36,226 | ||||||||||
| a | SUSE SA | Software | 612 | 19,897 | ||||||||||
|
| |||||||||||||
| 699,513 | ||||||||||||||
|
| |||||||||||||
| Mexico 0.0%† | ||||||||||||||
Fresnillo PLC | Metals & Mining | 3,230 | 31,216 | |||||||||||
|
| |||||||||||||
| Netherlands 8.8% | ||||||||||||||
Aalberts NV | Machinery | 1,632 | 85,672 | |||||||||||
| b | ABN AMRO Bank NV, 144A | Banks | 7,106 | 92,047 | ||||||||||
| a,b | Adyen NV, 144A | IT Services | 510 | 1,026,520 | ||||||||||
Aegon NV | Insurance | 30,158 | 161,133 | |||||||||||
Akzo Nobel NV | Chemicals | 2,924 | 254,480 | |||||||||||
| a | Argenx SE | Biotechnology | 850 | 267,175 | ||||||||||
ASM International NV | Semiconductors & Semiconductor Equipment | 816 | 301,521 | |||||||||||
ASML Holding NV | Semiconductors & Semiconductor Equipment | 6,562 | 4,453,739 | |||||||||||
ASR Nederland NV | Insurance | 2,346 | 110,232 | |||||||||||
BE Semiconductor Industries NV | Semiconductors & Semiconductor Equipment | 1,190 | 103,091 | |||||||||||
| b | CTP NV, 144A | Real Estate Management & Development | 782 | 13,225 | ||||||||||
| b,c | Euronext NV, 144A, Reg S | Capital Markets | 1,360 | 125,142 | ||||||||||
EXOR NV | Diversified Financial Services | 1,802 | 139,347 | |||||||||||
Heineken Holding NV | Beverages | 1,802 | 142,555 | |||||||||||
Heineken NV | Beverages | 4,080 | 393,040 | |||||||||||
IMCD Group NV | Trading Companies & Distributors | 986 | 170,321 | |||||||||||
ING Groep NV | Banks | 64,294 | 680,386 | |||||||||||
JDE Peet’s BV | Food Products | 1,394 | 40,218 | |||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 16,660 | 539,698 | |||||||||||
Koninklijke DSM NV | Chemicals | 2,856 | 516,381 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 54,026 | 188,932 | |||||||||||
Koninklijke Philips NV | Health Care Equipment & Supplies | 14,892 | 459,475 | |||||||||||
Koninklijke Vopak NV | Oil, Gas & Consumable Fuels | 1,122 | 36,665 | |||||||||||
NN Group NV | Insurance | 5,338 | 272,378 | |||||||||||
| a | Prosus NV | Internet & Direct Marketing Retail | 15,028 | 812,218 | ||||||||||
| a | QIAGEN NV | Life Sciences Tools & Services | 3,774 | 186,988 | ||||||||||
Randstad NV | Professional Services | 1,904 | 115,754 | |||||||||||
Shell PLC | Oil, Gas & Consumable Fuels | 130,628 | 3,626,439 | |||||||||||
| b | Signify NV, 144A | Electrical Equipment | 2,142 | 101,123 | ||||||||||
Universal Music Group NV | Entertainment | 12,818 | 345,068 | |||||||||||
Wolters Kluwer NV | Professional Services | 4,386 | 471,318 | |||||||||||
|
| |||||||||||||
| 16,232,281 | ||||||||||||||
|
| |||||||||||||
| 218 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Nigeria 0.0%† | ||||||||||||||
| b | Airtel Africa PLC, 144A | Wireless Telecommunication Services | 17,068 | $ | 31,349 | |||||||||
|
| |||||||||||||
| Norway 1.3% | ||||||||||||||
| a | Adevinta ASA, B | Interactive Media & Services | 4,522 | 41,817 | ||||||||||
Aker ASA | Diversified Financial Services | 408 | 37,795 | |||||||||||
Aker BP ASA | Oil, Gas & Consumable Fuels | 2,142 | 80,987 | |||||||||||
DNB Bank ASA | Banks | 17,578 | 402,260 | |||||||||||
Equinor ASA | Oil, Gas & Consumable Fuels | 16,490 | 624,598 | |||||||||||
Gjensidige Forsikring ASA | Insurance | 2,822 | 70,582 | |||||||||||
Leroy Seafood Group ASA | Food Products | 4,488 | 41,636 | |||||||||||
Mowi ASA | Food Products | 7,310 | 198,969 | |||||||||||
| a | Nordic Semiconductor ASA | Semiconductors & Semiconductor Equipment | 2,652 | 68,908 | ||||||||||
Norsk Hydro ASA | Metals & Mining | 22,882 | 225,313 | |||||||||||
Orkla ASA | Food Products | 13,056 | 117,002 | |||||||||||
Salmar ASA | Food Products | 884 | 70,607 | |||||||||||
Schibsted ASA, A | Media | 1,326 | 33,074 | |||||||||||
Schibsted ASA, B | Media | 1,700 | 36,629 | |||||||||||
Telenor ASA | Diversified Telecommunication Services | 10,880 | 157,713 | |||||||||||
Tomra Systems ASA | Commercial Services & Supplies | 1,972 | 101,780 | |||||||||||
Yara International ASA | Chemicals | 2,822 | 142,649 | |||||||||||
|
| |||||||||||||
| 2,452,319 | ||||||||||||||
|
| |||||||||||||
| Poland 0.5% | ||||||||||||||
| a,b | Allegro.eu, 144A | Internet & Direct Marketing Retail | 6,698 | 57,171 | ||||||||||
Bank Pekao SA | Banks | 2,686 | 72,770 | |||||||||||
CD Projekt SA | Entertainment | 1,054 | 43,943 | |||||||||||
Cyfrowy Polsat SA | Media | 4,556 | 30,350 | |||||||||||
| a,b | Dino Polska SA, 144A | Food & Staples Retailing | 816 | 66,674 | ||||||||||
| a | InPost SA | Air Freight & Logistics | 3,434 | 22,008 | ||||||||||
KGHM Polska Miedz SA | Metals & Mining | 2,346 | 97,336 | |||||||||||
LPP SA | Textiles, Apparel & Luxury Goods | 19 | 52,296 | |||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 5,304 | 96,757 | |||||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | Oil, Gas & Consumable Fuels | 30,090 | 44,811 | |||||||||||
| a | Powszechna Kasa Oszczednosci Bank Polski SA | Banks | 14,654 | 140,096 | ||||||||||
Powszechny Zaklad Ubezpieczen SA | Insurance | 9,520 | 77,329 | |||||||||||
Santander Bank Polska SA | Banks | 510 | 37,327 | |||||||||||
|
| |||||||||||||
| 838,868 | ||||||||||||||
|
| |||||||||||||
| Portugal 0.2% | ||||||||||||||
EDP—Energias de Portugal SA | Electric Utilities | 48,348 | 240,192 | |||||||||||
Galp Energia SGPS SA, B | Oil, Gas & Consumable Fuels | 8,840 | 113,260 | |||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 4,590 | 110,976 | |||||||||||
|
| |||||||||||||
| 464,428 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| d | Evraz PLC | Metals & Mining | 10,404 | — | ||||||||||
| d | Raspadskaya OJSC | Metals & Mining | 4,427 | — | ||||||||||
|
| |||||||||||||
| — | ||||||||||||||
|
| |||||||||||||
| Spain 3.7% | ||||||||||||||
Acciona SA | Electric Utilities | 408 | 78,762 | |||||||||||
ACS Actividades de Construccion y Servicios SA | Construction & Engineering | 3,745 | 102,088 | |||||||||||
| a,b | Aena SME SA, 144A | Transportation Infrastructure | 1,224 | 205,713 | ||||||||||
| a | Amadeus IT Group SA | IT Services | 7,310 | 481,339 | ||||||||||
Banco Bilbao Vizcaya Argentaria SA | Banks | 113,254 | 656,523 | |||||||||||
Banco Santander SA | Banks | 288,218 | 994,126 | |||||||||||
Bankinter SA | Banks | 11,764 | 69,687 | |||||||||||
| franklintempleton.com | Annual Report | 219 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Spain (continued) | ||||||||||||||
CaixaBank SA | Banks | 75,820 | $ | 259,579 | ||||||||||
| b | Cellnex Telecom SA, 144A | Diversified Telecommunication Services | 10,268 | 499,373 | ||||||||||
| a | Corp. ACCIONA Energias Renovables SA | Independent Power and Renewable Electricity Producers | 850 | 31,683 | ||||||||||
Corporacion Mapfre SA | Insurance | 16,490 | 34,860 | |||||||||||
EDP Renovaveis SA | Independent Power and Renewable Electricity Producers | 4,080 | 105,955 | |||||||||||
Enagas SA | Gas Utilities | 4,250 | 95,285 | |||||||||||
Endesa SA | Electric Utilities | 5,440 | 119,694 | |||||||||||
Ferrovial SA | Construction & Engineering | 7,990 | 214,518 | |||||||||||
Fluidra SA | Machinery | 1,734 | 50,742 | |||||||||||
Grifols SA | Biotechnology | 5,678 | 104,115 | |||||||||||
Iberdrola SA | Electric Utilities | 102,170 | 1,127,700 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 17,748 | 390,602 | |||||||||||
Inmobiliaria Colonial SA | Equity Real Estate Investment Trusts (REITs | ) | 5,678 | 52,057 | ||||||||||
Merlin Properties Socimi SA | Equity Real Estate Investment Trusts (REITs | ) | 5,712 | 67,273 | ||||||||||
Naturgy Energy Group SA | Gas Utilities | 2,516 | 76,032 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 7,412 | 153,476 | |||||||||||
Repsol SA | Oil, Gas & Consumable Fuels | 21,896 | 290,500 | |||||||||||
| a | Siemens Gamesa Renewable Energy SA | Electrical Equipment | 3,876 | 68,894 | ||||||||||
Telefonica SA | Diversified Telecommunication Services | 87,489 | 427,197 | |||||||||||
|
| |||||||||||||
| 6,757,773 | ||||||||||||||
|
| |||||||||||||
| Sweden 5.4% | ||||||||||||||
Alfa Laval AB | Machinery | 5,440 | 189,887 | |||||||||||
Assa Abloy AB, B | Building Products | 15,572 | 425,918 | |||||||||||
Atlas Copco AB | Machinery | 6,494 | 299,287 | |||||||||||
Atlas Copco AB, A | Machinery | 10,812 | 570,451 | |||||||||||
Beijer Ref AB | Trading Companies & Distributors | 4,182 | 76,914 | |||||||||||
Boliden AB | Metals & Mining | 4,692 | 240,707 | |||||||||||
Castellum AB | Real Estate Management & Development | 4,726 | 118,310 | |||||||||||
Electrolux AB | Household Durables | 3,910 | 60,038 | |||||||||||
Elekta AB, B | Health Care Equipment & Supplies | 6,222 | 49,552 | |||||||||||
Epiroc AB, A | Machinery | 10,676 | 231,634 | |||||||||||
Epiroc AB, B | Machinery | 6,494 | 118,844 | |||||||||||
EQT AB | Capital Markets | 4,692 | 187,340 | |||||||||||
Ericsson, B | Communications Equipment | 51,442 | 476,366 | |||||||||||
Essity AB, B | Household Products | 10,472 | 249,681 | |||||||||||
| b,c | Evolution Gaming Group AB, 144A, Reg S | Hotels, Restaurants & Leisure | 2,754 | 286,086 | ||||||||||
| a | Fastighets AB Balder, B | Real Estate Management & Development | 1,700 | 113,353 | ||||||||||
Getinge AB, B | Health Care Equipment & Supplies | 3,842 | 155,421 | |||||||||||
Hennes & Mauritz AB, B | Specialty Retail | 15,062 | 203,932 | |||||||||||
Hexagon AB, B | Electronic Equipment, Instruments & Components | 31,858 | 453,801 | |||||||||||
Holmen AB, B | Paper & Forest Products | 1,632 | 92,358 | |||||||||||
Husqvarna AB, A | Household Durables | 442 | 4,695 | |||||||||||
Husqvarna AB, B | Household Durables | 7,276 | 77,027 | |||||||||||
Industrivarden AB, A | Diversified Financial Services | 3,957 | 114,132 | |||||||||||
Industrivarden AB, C | Diversified Financial Services | 2,856 | 80,874 | |||||||||||
Indutrade AB | Machinery | 4,794 | 122,584 | |||||||||||
Investment AB Latour, B | Industrial Conglomerates | 2,414 | 77,968 | |||||||||||
Investor AB, A | Diversified Financial Services | 9,112 | 215,495 | |||||||||||
Investor AB, B | Diversified Financial Services | 31,178 | 689,674 | |||||||||||
| a | Kinnevik AB, A | Diversified Financial Services | 272 | 7,413 | ||||||||||
| a | Kinnevik AB, B | Diversified Financial Services | 4,114 | 109,258 | ||||||||||
L E Lundbergforetagen AB, B | Diversified Financial Services | 1,292 | 66,628 | |||||||||||
| 220 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Sweden (continued) | ||||||||||||||
Lifco AB, B | Industrial Conglomerates | 3,910 | $ | 101,071 | ||||||||||
Lundin Energy AB | Oil, Gas & Consumable Fuels | 3,230 | 138,393 | |||||||||||
Nibe Industrier AB, B | Building Products | 19,924 | 224,587 | |||||||||||
Sagax AB, B | Real Estate Management & Development | 2,924 | 90,047 | |||||||||||
Sagax AB, D | Real Estate Management & Development | 2,040 | 7,070 | |||||||||||
Samhallsbyggnadsbolaget i Norden AB | Real Estate Management & Development | 18,836 | 85,394 | |||||||||||
Sandvik AB | Machinery | 18,496 | 398,920 | |||||||||||
Securitas AB, B | Commercial Services & Supplies | 5,270 | 60,196 | |||||||||||
| a,b | Sinch AB, 144A | Software | 8,840 | 61,144 | ||||||||||
Skandinaviska Enskilda Banken AB, A | Banks | 23,970 | 263,507 | |||||||||||
Skandinaviska Enskilda Banken AB, C | Banks | 374 | 4,414 | |||||||||||
Skanska AB, B | Construction & Engineering | 6,154 | 139,596 | |||||||||||
SKF AB, B | Machinery | 6,562 | 108,400 | |||||||||||
Svenska Cellulosa AB, A | Paper & Forest Products | 408 | 7,985 | |||||||||||
Svenska Cellulosa AB, B | Paper & Forest Products | 10,166 | 200,115 | |||||||||||
Svenska Handelsbanken AB, A | Banks | 25,500 | 237,778 | |||||||||||
Svenska Handelsbanken AB, B | Banks | 646 | 6,887 | |||||||||||
Sweco AB, B | Construction & Engineering | 3,400 | 49,982 | |||||||||||
Swedbank AB, A | Banks | 17,272 | 261,321 | |||||||||||
Swedish Match AB | Tobacco | 26,078 | 198,340 | |||||||||||
| a | Swedish Orphan Biovitrum AB | Biotechnology | 3,060 | 73,221 | ||||||||||
Tele2 AB, B | Wireless Telecommunication Services | 8,568 | 130,827 | |||||||||||
Telefonaktiebolaget LM Ericsson, A | Communications Equipment | 646 | 6,280 | |||||||||||
Telia Co. AB | Diversified Telecommunication Services | 44,132 | 178,718 | |||||||||||
| b | Thule Group AB, 144A | Leisure Products | 1,802 | 72,510 | ||||||||||
Trelleborg AB, B | Machinery | 4,148 | 97,475 | |||||||||||
Vitrolife AB | Biotechnology | 1,122 | 37,515 | |||||||||||
Volvo AB, A | Machinery | 3,536 | 68,676 | |||||||||||
Volvo AB, B | Machinery | 25,976 | 492,238 | |||||||||||
|
| |||||||||||||
| 9,968,235 | ||||||||||||||
|
| |||||||||||||
| Switzerland 16.7% | ||||||||||||||
ABB Ltd. | Electrical Equipment | 27,982 | 917,378 | |||||||||||
Adecco Group AG | Professional Services | 2,618 | 119,513 | |||||||||||
Alcon Inc. | Health Care Equipment & Supplies | 7,888 | 631,726 | |||||||||||
Baloise Holding AG | Insurance | 782 | 140,297 | |||||||||||
Banque Cantonale Vaudoise | Banks | 476 | 41,484 | |||||||||||
Barry Callebaut AG | Food Products | 68 | 160,348 | |||||||||||
Belimo Holding AG | Building Products | 170 | 90,981 | |||||||||||
BKW AG | Electric Utilities | 306 | 38,572 | |||||||||||
Chocoladefabriken Lindt & Spruengli AG | Food Products | 37 | 443,075 | |||||||||||
Cie Financiere Richemont SA | Textiles, Apparel & Luxury Goods | 8,704 | 1,116,079 | |||||||||||
| a | Clariant AG | Chemicals | 3,910 | 68,364 | ||||||||||
Coca-Cola HBC AG | Beverages | 3,366 | 70,887 | |||||||||||
Credit Suisse Group AG | Capital Markets | 43,894 | 350,103 | |||||||||||
DKSH Holding AG | Professional Services | 612 | 51,707 | |||||||||||
Emmi AG | Food Products | 34 | 37,353 | |||||||||||
EMS-Chemie Holding AG | Chemicals | 136 | 133,229 | |||||||||||
| a | Flughafen Zurich AG | Transportation Infrastructure | 340 | 61,553 | ||||||||||
Geberit AG | Building Products | 612 | 380,534 | |||||||||||
Georg Fischer AG | Machinery | 68 | 81,873 | |||||||||||
Givaudan AG | Chemicals | 159 | 661,226 | |||||||||||
| a | Glencore PLC | Metals & Mining | 223,720 | 1,472,805 | ||||||||||
Helvetia Holding AG | Insurance | 612 | 80,270 | |||||||||||
| a | Holcim Ltd. | Construction Materials | 9,350 | 460,159 | ||||||||||
Julius Baer Group Ltd. | Capital Markets | 3,536 | 207,030 | |||||||||||
| franklintempleton.com | Annual Report | 221 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Switzerland (continued) | ||||||||||||||
Kuehne + Nagel International AG | Marine | 850 | $ | 243,015 | ||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 2,516 | 189,196 | |||||||||||
Lonza Group AG | Life Sciences Tools & Services | 1,258 | 918,911 | |||||||||||
Nestle SA | Food Products | 46,988 | 6,137,417 | |||||||||||
Novartis AG | Pharmaceuticals | 35,802 | 3,161,002 | |||||||||||
Partners Group Holding AG | Capital Markets | 374 | 468,795 | |||||||||||
PSP Swiss Property AG | Real Estate Management & Development | 748 | 98,839 | |||||||||||
Roche Holding AG, Bearer | Pharmaceuticals | 442 | 194,523 | |||||||||||
Roche Holding AG, Non-Voting | Pharmaceuticals | 12,002 | 4,779,281 | |||||||||||
Schindler Holding AG | Machinery | 306 | 65,805 | |||||||||||
Schindler Holding AG, PC | Machinery | 680 | 147,047 | |||||||||||
SGS SA | Professional Services | 102 | 285,522 | |||||||||||
SIG Combibloc Group AG | Containers & Packaging | 5,474 | 139,192 | |||||||||||
Sika AG | Chemicals | 2,618 | 874,516 | |||||||||||
Sonova Holding AG | Health Care Equipment & Supplies | 918 | 386,652 | |||||||||||
STMicroelectronics NV | Semiconductors & Semiconductor Equipment | 10,676 | 470,276 | |||||||||||
Straumann Holding AG | Health Care Equipment & Supplies | 170 | 274,605 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 476 | 136,399 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 782 | 42,828 | |||||||||||
Swiss Life Holding AG | Insurance | 544 | 351,258 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 1,292 | 128,112 | |||||||||||
Swiss Re AG | Insurance | 4,862 | 465,569 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 442 | 266,569 | |||||||||||
Tecan Group AG | Life Sciences Tools & Services | 204 | 81,578 | |||||||||||
Temenos AG | Software | 1,054 | 101,935 | |||||||||||
UBS Group AG | Capital Markets | 54,094 | 1,066,597 | |||||||||||
| b,c | VAT Group AG, 144A, Reg S | Machinery | 442 | 170,220 | ||||||||||
| a | Vifor Pharma AG | Pharmaceuticals | 884 | 158,260 | ||||||||||
Zurich Insurance Group AG | Insurance | 2,550 | 1,265,786 | |||||||||||
|
| |||||||||||||
| 30,886,251 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 19.9% | ||||||||||||||
3i Group PLC | Capital Markets | 16,354 | 298,979 | |||||||||||
Abrdn PLC | Capital Markets | 36,652 | 103,706 | |||||||||||
Admiral Group PLC | Insurance | 3,808 | 128,504 | |||||||||||
Anglo American PLC | Metals & Mining | 20,842 | 1,090,119 | |||||||||||
Ashtead Group PLC | Trading Companies & Distributors | 7,684 | 488,961 | |||||||||||
Associated British Foods PLC | Food Products | 5,984 | 130,946 | |||||||||||
AstraZeneca PLC | Pharmaceuticals | 26,452 | 3,528,777 | |||||||||||
| b | Auto Trader Group PLC, 144A | Interactive Media & Services | 15,470 | 128,892 | ||||||||||
AVEVA Group PLC | Software | 1,904 | 61,419 | |||||||||||
Aviva PLC | Insurance | 63,512 | 378,060 | |||||||||||
B&M European Value Retail SA | Multiline Retail | 15,198 | 106,896 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 53,720 | 507,420 | |||||||||||
Barclays PLC | Banks | 285,362 | 557,196 | |||||||||||
Barratt Developments PLC | Household Durables | 16,422 | 112,954 | |||||||||||
Bellway PLC | Household Durables | 2,108 | 67,500 | |||||||||||
Berkeley Group Holdings PLC | Household Durables | 1,726 | 84,993 | |||||||||||
BP PLC | Oil, Gas & Consumable Fuels | 328,508 | 1,623,502 | |||||||||||
British American Tobacco PLC | Tobacco | 38,896 | 1,635,981 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 15,776 | 110,172 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 118,456 | 284,168 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 5,780 | 225,872 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 6,868 | 151,376 | |||||||||||
| a | Centrica PLC | Multi-Utilities | 101,558 | 107,080 | ||||||||||
CNH Industrial NV | Machinery | 17,000 | 272,282 | |||||||||||
| 222 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 30,498 | $ | 662,561 | ||||||||||
| b | ConvaTec Group PLC, 144A | Health Care Equipment & Supplies | 27,574 | 78,274 | ||||||||||
Croda International PLC | Chemicals | 2,312 | 239,875 | |||||||||||
Dechra Pharmaceuticals PLC | Pharmaceuticals | 1,802 | 96,233 | |||||||||||
| a,b | Deliveroo PLC, 144A | Internet & Direct Marketing Retail | 22,032 | 32,693 | ||||||||||
Derwent London PLC | Equity Real Estate Investment Trusts (REITs | ) | 1,700 | 71,827 | ||||||||||
Diageo PLC | Beverages | 39,338 | 2,001,077 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 23,460 | 84,975 | |||||||||||
Dr. Martens PLC | Textiles, Apparel & Luxury Goods | 9,554 | 30,039 | |||||||||||
DS Smith PLC | Containers & Packaging | 21,930 | 93,004 | |||||||||||
| a | easyJet PLC | Airlines | 6,376 | 46,726 | ||||||||||
Electrocomponents PLC | Trading Companies & Distributors | 8,024 | 114,522 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 3,808 | 520,433 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 84,626 | 1,835,357 | |||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 6,562 | 216,860 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 6,494 | 86,187 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 2,890 | 78,424 | |||||||||||
HomeServe PLC | Commercial Services & Supplies | 4,658 | 51,701 | |||||||||||
Howden Joinery Group PLC | Trading Companies & Distributors | 9,792 | 98,990 | |||||||||||
HSBC Holdings PLC | Banks | 349,214 | 2,415,751 | |||||||||||
IMI PLC | Machinery | 4,216 | 75,660 | |||||||||||
Imperial Brands PLC | Tobacco | 16,116 | 341,734 | |||||||||||
| a | Informa PLC | Media | 25,568 | 202,591 | ||||||||||
InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 3,128 | 213,749 | |||||||||||
Intermediate Capital Group PLC | Capital Markets | 4,760 | 111,902 | |||||||||||
| a | International Consolidated Airlines Group SA | Airlines | 19,451 | 36,428 | ||||||||||
Intertek Group PLC | Professional Services | 2,788 | 191,764 | |||||||||||
| a | ITV PLC | Media | 64,498 | 69,568 | ||||||||||
J Sainsbury PLC | Food & Staples Retailing | 27,982 | 93,101 | |||||||||||
JD Sports Fashion PLC | Specialty Retail | 43,758 | 85,413 | |||||||||||
Johnson Matthey PLC | Chemicals | 2,924 | 72,320 | |||||||||||
| a,b,c | Just Eat Takeaway.com NV, 144A, Reg S | Internet & Direct Marketing Retail | 3,094 | 105,875 | ||||||||||
Kingfisher PLC | Specialty Retail | 33,762 | 113,532 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 12,240 | 126,606 | ||||||||||
Legal & General Group PLC | Insurance | 102,000 | 365,292 | |||||||||||
Lloyds Banking Group PLC | Banks | 1,208,972 | 749,018 | |||||||||||
London Stock Exchange Group PLC | Capital Markets | 6,188 | 649,025 | |||||||||||
M&G PLC | Diversified Financial Services | 44,676 | 130,116 | |||||||||||
| a | Meggitt PLC | Aerospace & Defense | 13,396 | 134,083 | ||||||||||
Melrose Industries PLC | Industrial Conglomerates | 74,419 | 122,333 | |||||||||||
Mondi PLC | Paper & Forest Products | 8,330 | 163,583 | |||||||||||
National Grid PLC | Multi-Utilities | 61,846 | 954,680 | |||||||||||
Natwest Group PLC | Banks | 87,346 | 248,294 | |||||||||||
Next PLC | Multiline Retail | 2,176 | 172,819 | |||||||||||
| a | NMC Health PLC | Health Care Providers & Services | 1,159 | — | ||||||||||
| a | Ocado Group PLC | Food & Staples Retailing | 8,330 | 128,432 | ||||||||||
Pearson PLC | Media | 12,886 | 127,349 | |||||||||||
Pennon Group PLC | Water Utilities | 4,782 | 67,684 | |||||||||||
| a,b | Pepco Group NV, 144A | Multiline Retail | 1,836 | 19,725 | ||||||||||
Persimmon PLC | Household Durables | 5,440 | 154,067 | |||||||||||
Phoenix Group Holdings PLC | Insurance | 12,954 | 104,723 | |||||||||||
Prudential PLC | Insurance | 46,852 | 699,539 | |||||||||||
Reckitt Benckiser Group PLC | Household Products | 10,846 | 832,832 | |||||||||||
RELX PLC | Professional Services | 31,722 | 995,303 | |||||||||||
Renishaw PLC | Electronic Equipment, Instruments & Components | 578 | 29,452 | |||||||||||
Rentokil Initial PLC | Commercial Services & Supplies | 31,892 | 220,871 | |||||||||||
| franklintempleton.com | Annual Report | 223 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
Rightmove PLC | Interactive Media & Services | 15,062 | $ | 125,493 | ||||||||||
| a | Rolls-Royce Holdings PLC | Aerospace & Defense | 143,072 | 190,448 | ||||||||||
Royal Mail PLC | Air Freight & Logistics | 15,640 | 67,749 | |||||||||||
Schroders PLC | Capital Markets | 1,938 | 82,444 | |||||||||||
Segro PLC | Equity Real Estate Investment Trusts (REITs | ) | 20,434 | 361,999 | ||||||||||
Severn Trent PLC | Water Utilities | 4,318 | 174,993 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 15,028 | 241,397 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 6,800 | 130,046 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 1,258 | 207,623 | |||||||||||
SSE PLC | Electric Utilities | 18,326 | 421,894 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 9,078 | 173,133 | |||||||||||
Standard Chartered PLC | Banks | 43,180 | 290,064 | |||||||||||
Tate & Lyle PLC | Food Products | 8,024 | 77,355 | |||||||||||
Taylor Wimpey PLC | Household Durables | 62,186 | 107,014 | |||||||||||
Tesco PLC | Food & Staples Retailing | 128,826 | 468,148 | |||||||||||
The Sage Group PLC | Software | 17,952 | 165,739 | |||||||||||
| a | THG PLC | Internet & Direct Marketing Retail | 17,476 | 21,169 | ||||||||||
Travis Perkins PLC | Trading Companies & Distributors | 3,842 | 62,575 | |||||||||||
Unilever PLC | Personal Products | 43,520 | 1,979,737 | |||||||||||
United Utilities Group PLC | Water Utilities | 11,730 | 173,671 | |||||||||||
Vodafone Group PLC | Wireless Telecommunication Services | 462,808 | 760,720 | |||||||||||
Weir Group PLC | Machinery | 4,488 | 96,969 | |||||||||||
| a | Whitbread PLC | Hotels, Restaurants & Leisure | 3,468 | 130,455 | ||||||||||
| a | Wise PLC, A | IT Services | 7,650 | 49,858 | ||||||||||
WPP PLC | Media | 19,108 | 252,340 | |||||||||||
|
| |||||||||||||
| 36,763,760 | ||||||||||||||
|
| |||||||||||||
| United States 0.3% | ||||||||||||||
Stellantis NV | Automobiles | 34,680 | 571,083 | |||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests | 182,146,390 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 0.8% | ||||||||||||||
| Germany 0.7% | ||||||||||||||
| e | Bayerische Motoren Werke AG, 2.731%, pfd. | Automobiles | 986 | 77,124 | ||||||||||
| e | Fuchs Petrolub SE, 3.020%, pfd. | Chemicals | 1,190 | 43,402 | ||||||||||
| e | Henkel AG & Co. KGaA, 3.049%, pfd. | Household Products | 2,992 | 202,007 | ||||||||||
| e | Porsche Automobil Holding SE, 2.514%, pfd. | Automobiles | 2,618 | 256,046 | ||||||||||
| e | Sartorius AG, 0.314%, pfd. | Health Care Equipment & Supplies | 442 | 197,553 | ||||||||||
| e | Sixt SE, 0.074%, pfd. | Road & Rail | 272 | 20,580 | ||||||||||
| e | Volkswagen AG, 3.096%, pfd. | Automobiles | 3,128 | 546,418 | ||||||||||
|
| |||||||||||||
| 1,343,130 | ||||||||||||||
|
| |||||||||||||
| Spain 0.1% | ||||||||||||||
| e | Grifols SA, 3.440%, pfd., B | Biotechnology | 4,420 | 53,605 | ||||||||||
| �� |
|
| ||||||||||||
Total Preferred Stocks | 1,396,735 | |||||||||||||
|
| |||||||||||||
| Rights 0.0%† | ||||||||||||||
| France 0.0%† | ||||||||||||||
| a | Electricite de France SA, rts., 4/4/22 | Electric Utilities | 7,579 | 2,833 | ||||||||||
|
| |||||||||||||
Total Investments | 183,545,958 | |||||||||||||
Other Assets, less Liabilities 0.7% | 1,311,124 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 184,857,082 | ||||||||||||
|
| |||||||||||||
| 224 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $5,100,950, representing 2.8% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $1,245,085, representing 0.7% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eVariable rate security. The rate shown represents the yield at period end.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
EURO STOXX 50 Index | Long | 21 | $ | 893,269 | 6/17/22 | $ | 57,220 | |||||||||||||
FTSE 100 Index | Long | 3 | 295,694 | 6/17/22 | 14,513 | |||||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | 71,733 | |||||||||||||||||
|
| |||||||||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 225 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe Hedged ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 25.72 | $ | 19.15 | $ | 22.81 | $ | 23.88 | $ | 25.05 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.76 | 0.59 | 0.73 | 0.79 | 0.25 | |||||||||||||||
Net realized and unrealized gains (losses) | 1.51 | 6.45 | (2.92 | ) | 0.62 | (1.40 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.27 | 7.04 | (2.19 | ) | 1.41 | (1.15 | ) | |||||||||||||
|
| |||||||||||||||||||
| Less distributions from: |
| |||||||||||||||||||
Net investment income | (0.87 | ) | (0.47 | ) | (1.47 | ) | (0.38 | ) | (0.02 | ) | ||||||||||
Net realized gains | — | — | — | (2.10 | ) | — | d | |||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.87 | ) | (0.47 | ) | (1.47 | ) | (2.48 | ) | (0.02 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 27.12 | $ | 25.72 | $ | 19.15 | $ | 22.81 | $ | 23.88 | ||||||||||
|
| |||||||||||||||||||
Total returne | 8.75% | 36.92% | (10.67)% | 6.98% | (4.61)% | |||||||||||||||
| Ratios to average net assetsf |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | —% | |||||||||||||||
Net investment income | 2.77% | 2.58% | 3.10% | 3.28% | 2.47% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $21,695 | $15,429 | $3,831 | $4,563 | $33,428 | |||||||||||||||
Portfolio turnover rateg | 11.67% | h | 12.87% | h | 14.81% | h | 26.81% | 5.33% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 11.67% | 12.87% | 14.81% |
| 226 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE Europe Hedged ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests 98.9% | ||||||||||||||
| Australia 0.8% | ||||||||||||||
Rio Tinto PLC | Metals & Mining | 2,188 | $ | 175,183 | ||||||||||
|
| |||||||||||||
| Austria 0.4% | ||||||||||||||
| a | ams AG | Semiconductors & Semiconductor Equipment | 480 | 7,440 | ||||||||||
Andritz AG | Machinery | 136 | 6,352 | |||||||||||
Erste Group Bank AG | Banks | 616 | 22,680 | |||||||||||
OMV AG | Oil, Gas & Consumable Fuels | 280 | 13,518 | |||||||||||
Raiffeisen Bank International AG | Banks | 256 | 3,689 | |||||||||||
| a | Telekom Austria AG | Diversified Telecommunication Services | 256 | 1,994 | ||||||||||
Verbund AG | Electric Utilities | 132 | 14,026 | |||||||||||
Voestalpine AG | Metals & Mining | 236 | 7,095 | |||||||||||
|
| |||||||||||||
| 76,794 | ||||||||||||||
|
| |||||||||||||
| Belgium 1.4% | ||||||||||||||
Ackermans & van Haaren NV | Diversified Financial Services | 44 | 8,284 | |||||||||||
Ageas SA/NV | Insurance | 356 | 18,158 | |||||||||||
Anheuser-Busch InBev SA/NV | Beverages | 1,740 | 105,048 | |||||||||||
Colruyt SA | Food & Staples Retailing | 97 | 4,047 | |||||||||||
D’ieteren Group | Distributors | 48 | 8,177 | |||||||||||
Elia Group SA/NV | Electric Utilities | 72 | 11,071 | |||||||||||
Groupe Bruxelles Lambert SA | Diversified Financial Services | 208 | 21,782 | |||||||||||
KBC Groep NV | Banks | 556 | 40,446 | |||||||||||
Proximus SADP | Diversified Telecommunication Services | 268 | 5,025 | |||||||||||
Sofina SA | Diversified Financial Services | 30 | 11,022 | |||||||||||
Solvay SA | Chemicals | 136 | 13,537 | |||||||||||
Telenet Group Holding NV | Media | 88 | 2,861 | |||||||||||
UCB SA | Pharmaceuticals | 240 | 28,960 | |||||||||||
Umicore SA | Chemicals | 408 | 17,868 | |||||||||||
Warehouses De Pauw CVA | Equity Real Estate Investment Trusts (REITs | ) | 288 | 12,529 | ||||||||||
|
| |||||||||||||
| 308,815 | ||||||||||||||
|
| |||||||||||||
Bermuda 0.0%† | ||||||||||||||
Hiscox Ltd. | Insurance | 668 | 8,651 | |||||||||||
|
| |||||||||||||
| Chile 0.1% | ||||||||||||||
Antofagasta PLC | Metals & Mining | 692 | 15,243 | |||||||||||
|
| |||||||||||||
Czech Republic 0.0%† | ||||||||||||||
| b | Avast PLC, 144A | Software | 1,096 | 8,168 | ||||||||||
|
| |||||||||||||
| Denmark 4.0% | ||||||||||||||
Ambu AS, B | Health Care Equipment & Supplies | 340 | 5,086 | |||||||||||
AP Moller-Maersk A/S, A | Marine | 9 | 26,857 | |||||||||||
AP Moller-Maersk A/S, B | Marine | 11 | 33,517 | |||||||||||
Carlsberg AS, B | Beverages | 192 | 23,837 | |||||||||||
Chr. Hansen Holding AS | Chemicals | 204 | 15,157 | |||||||||||
Coloplast AS, B | Health Care Equipment & Supplies | 268 | 41,070 | |||||||||||
Danske Bank AS | Banks | 1,316 | 22,165 | |||||||||||
DSV AS | Air Freight & Logistics | 392 | 76,256 | |||||||||||
| a | Genmab A/S | Biotechnology | 120 | 44,246 | ||||||||||
GN Store Nord AS | Health Care Equipment & Supplies | 260 | 12,939 | |||||||||||
H. Lundbeck AS | Pharmaceuticals | 116 | 2,701 | |||||||||||
Novo Nordisk AS, B | Pharmaceuticals | 3,196 | 358,019 | |||||||||||
Novozymes AS | Chemicals | 396 | 27,425 | |||||||||||
| b | Orsted AS, 144A | Electric Utilities | 376 | 47,761 | ||||||||||
Pandora AS | Textiles, Apparel & Luxury Goods | 184 | 17,824 | |||||||||||
Rockwool International AS, B | Building Products | 12 | 4,006 | |||||||||||
Royal Unibrew A/S | Beverages | 100 | 9,459 | |||||||||||
SimCorp A/S | Software | 76 | 5,650 | |||||||||||
| franklintempleton.com | Annual Report | 227 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Denmark (continued) | ||||||||||||||
Tryg AS | Insurance | 612 | $ | 15,036 | ||||||||||
Vestas Wind Systems A/S | Electrical Equipment | 2,032 | 60,714 | |||||||||||
| a | William Demant Holding AS | Health Care Equipment & Supplies | 208 | 9,520 | ||||||||||
|
| |||||||||||||
| 859,245 | ||||||||||||||
|
| |||||||||||||
| Finland 2.0% | ||||||||||||||
Elisa OYJ | Diversified Telecommunication Services | 288 | 17,503 | |||||||||||
| c | Fortum OYJ, Reg S | Electric Utilities | 860 | 15,817 | ||||||||||
Huhtamaki OYJ | Containers & Packaging | 184 | 6,465 | |||||||||||
Kesko OYJ | Food & Staples Retailing | 540 | 15,027 | |||||||||||
Kojamo Oyj | Real Estate Management & Development | 388 | 9,403 | |||||||||||
Kone OYJ, B | Machinery | 796 | 42,149 | |||||||||||
Metso Outotec Oyj | Machinery | 1,228 | 10,499 | |||||||||||
Neste Oil OYJ | Oil, Gas & Consumable Fuels | 840 | 38,768 | |||||||||||
| a | Nokia OYJ | Communications Equipment | 11,340 | 62,904 | ||||||||||
Nokian Renkaat OYJ | Auto Components | 268 | 4,406 | |||||||||||
Nordea Bank Abp | Banks | 7,192 | 75,061 | |||||||||||
Orion OYJ | Pharmaceuticals | 204 | 9,340 | |||||||||||
Sampo OYJ, A | Insurance | 1,020 | 50,367 | |||||||||||
Stora Enso OYJ, R | Paper & Forest Products | 1,144 | 22,676 | |||||||||||
UPM-Kymmene OYJ | Paper & Forest Products | 1,080 | 35,641 | |||||||||||
Valmet Oyj | Machinery | 336 | 10,546 | |||||||||||
Wartsila OYJ ABP | Machinery | 956 | 8,835 | |||||||||||
|
| |||||||||||||
| 435,407 | ||||||||||||||
|
| |||||||||||||
| France 16.0% | ||||||||||||||
| a | Accor SA | Hotels, Restaurants & Leisure | 372 | 12,098 | ||||||||||
| a | Aeroports de Paris SA | Transportation Infrastructure | 56 | 8,474 | ||||||||||
Air Liquide SA | Chemicals | 936 | 165,506 | |||||||||||
| a | Airbus SE | Aerospace & Defense | 1,120 | 137,527 | ||||||||||
| b | ALD SA, 144A | Road & Rail | 156 | 2,090 | ||||||||||
Alstom SA | Machinery | 596 | 14,105 | |||||||||||
| b | Amundi SA, 144A | Capital Markets | 112 | 7,751 | ||||||||||
Arkema SA | Chemicals | 132 | 15,972 | |||||||||||
Atos SE | IT Services | 188 | 5,181 | |||||||||||
AXA SA | Insurance | 3,872 | 114,447 | |||||||||||
Biomerieux | Health Care Equipment & Supplies | 84 | 9,042 | |||||||||||
BNP Paribas SA | Banks | 2,152 | 124,342 | |||||||||||
Bollore | Entertainment | 1,948 | 10,304 | |||||||||||
Bouygues SA | Construction & Engineering | 432 | 15,203 | |||||||||||
Bureau Veritas SA | Professional Services | 564 | 16,278 | |||||||||||
Capgemini SE | IT Services | 324 | 73,001 | |||||||||||
Carrefour SA | Food & Staples Retailing | 1,240 | 27,104 | |||||||||||
Cie Generale des Etablissements Michelin SCA | Auto Components | 352 | 48,154 | |||||||||||
CNP Assurances | Insurance | 296 | 7,180 | |||||||||||
Compagnie de Saint-Gobain | Building Products | 940 | 56,761 | |||||||||||
Covivio | Equity Real Estate Investment Trusts (REITs | ) | 104 | 8,348 | ||||||||||
Credit Agricole SA | Banks | 2,420 | 29,312 | |||||||||||
Danone SA | Food Products | 1,208 | 67,244 | |||||||||||
Dassault Aviation SA | Aerospace & Defense | 45 | 7,195 | |||||||||||
Dassault Systemes SE | Software | 1,340 | 66,668 | |||||||||||
Edenred | IT Services | 504 | 25,190 | |||||||||||
EDF SA | Electric Utilities | 1,101 | 10,454 | |||||||||||
Eiffage SA | Construction & Engineering | 148 | 15,354 | |||||||||||
Engie SA | Multi-Utilities | 3,348 | 44,456 | |||||||||||
EssilorLuxottica SA | Textiles, Apparel & Luxury Goods | 592 | 109,540 | |||||||||||
| 228 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| France (continued) | ||||||||||||||
Eurazeo SE | Diversified Financial Services | 96 | $ | 8,161 | ||||||||||
Faurecia SE | Auto Components | 232 | 6,105 | |||||||||||
Gecina SA | Equity Real Estate Investment Trusts (REITs | ) | 104 | 13,226 | ||||||||||
Getlink SE | Transportation Infrastructure | 920 | 16,731 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 62 | 89,093 | |||||||||||
ICADE | Equity Real Estate Investment Trusts (REITs | ) | 68 | 4,415 | ||||||||||
Ipsen SA | Pharmaceuticals | 72 | 9,077 | |||||||||||
| a | JCDecaux SA | Media | 140 | 3,337 | ||||||||||
Kering SA | Textiles, Apparel & Luxury Goods | 148 | 94,802 | |||||||||||
| a | Klepierre SA | Equity Real Estate Investment Trusts (REITs | ) | 372 | 10,008 | |||||||||
L’Oreal SA | Personal Products | 496 | 200,800 | |||||||||||
| b | La Francaise des Jeux SAEM, 144A | Hotels, Restaurants & Leisure | 180 | 7,202 | ||||||||||
Legrand SA | Electrical Equipment | 540 | 51,900 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | 502 | 362,723 | |||||||||||
| a,b | Neoen SA, 144A | Independent Power and Renewable Electricity Producers | 48 | 2,063 | ||||||||||
Orange SA | Diversified Telecommunication Services | 3,868 | 46,067 | |||||||||||
Orpea | Health Care Providers & Services | 96 | 4,206 | |||||||||||
Pernod Ricard SA | Beverages | 420 | 93,135 | |||||||||||
Plastic Omnium SA | Auto Components | 100 | 1,836 | |||||||||||
Publicis Groupe | Media | 464 | 28,529 | |||||||||||
Remy Cointreau SA | Beverages | 48 | 9,987 | |||||||||||
| a | Renault SA | Automobiles | 364 | 9,669 | ||||||||||
Rexel SA | Trading Companies & Distributors | 616 | 13,317 | |||||||||||
Safran SA | Aerospace & Defense | 704 | 84,017 | |||||||||||
Sanofi | Pharmaceuticals | 2,188 | 225,214 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 48 | 19,894 | |||||||||||
Schneider Electric SE | Electrical Equipment | 1,064 | 180,136 | |||||||||||
SCOR SE | Insurance | 312 | 10,133 | |||||||||||
SEB SA | Household Durables | 60 | 8,452 | |||||||||||
Societe Generale SA | Banks | 1,544 | 42,021 | |||||||||||
Sodexo SA | Hotels, Restaurants & Leisure | 172 | 14,124 | |||||||||||
| a | SOITEC | Semiconductors & Semiconductor Equipment | 44 | 8,376 | ||||||||||
Somfy SA | Electrical Equipment | 16 | 2,603 | |||||||||||
Teleperformance | Professional Services | 116 | 44,696 | |||||||||||
Thales SA | Aerospace & Defense | 200 | 25,357 | |||||||||||
TotalEnergies SE | Oil, Gas & Consumable Fuels | 4,784 | 245,014 | |||||||||||
| a | Ubisoft Entertainment SA | Entertainment | 188 | 8,357 | ||||||||||
| a | Unibail-Rodamco-Westfield | Equity Real Estate Investment Trusts (REITs | ) | 208 | 15,779 | |||||||||
Valeo | Auto Components | 472 | 8,799 | |||||||||||
Veolia Environnement SA | Multi-Utilities | 1,260 | 40,782 | |||||||||||
Vinci SA | Construction & Engineering | 1,008 | 104,293 | |||||||||||
Vivendi SA | Media | 1,432 | 18,865 | |||||||||||
Wendel SE | Diversified Financial Services | 52 | 5,358 | |||||||||||
| a,b,c | Worldline SA, 144A, Reg S | IT Services | 492 | 21,615 | ||||||||||
|
| |||||||||||||
| 3,474,555 | ||||||||||||||
|
| |||||||||||||
| Germany 11.9% | ||||||||||||||
1&1 Drillisch AG | Wireless Telecommunication Services | 88 | 1,988 | |||||||||||
Adidas AG | Textiles, Apparel & Luxury Goods | 368 | 86,764 | |||||||||||
Allianz SE | Insurance | 828 | 199,502 | |||||||||||
| a,b | Auto1 Group SE, 144A | Specialty Retail | 176 | 2,024 | ||||||||||
BASF SE | Chemicals | 1,844 | 106,197 | |||||||||||
Bayer AG | Pharmaceuticals | 1,980 | 136,809 | |||||||||||
Bayerische Motoren Werke AG | Automobiles | 648 | 56,670 | |||||||||||
Bechtle AG | IT Services | 168 | 9,571 | |||||||||||
Beiersdorf AG | Personal Products | 204 | 21,609 | |||||||||||
| franklintempleton.com | Annual Report | 229 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Germany (continued) | ||||||||||||||
Brenntag AG | Trading Companies & Distributors | 312 | $ | 25,460 | ||||||||||
Carl Zeiss Meditec AG | Health Care Equipment & Supplies | 72 | 11,772 | |||||||||||
| a | Commerzbank AG | Banks | 2,100 | 16,185 | ||||||||||
| a | Continental AG | Auto Components | 220 | 16,009 | ||||||||||
| b | Covestro AG, 144A | Chemicals | 360 | 18,361 | ||||||||||
| a | CTS Eventim AG & Co. KGaA | Entertainment | 120 | 8,281 | ||||||||||
Daimler AG | Automobiles | 1,692 | 120,129 | |||||||||||
| a | Daimler Truck Holding AG | Machinery | 840 | 23,581 | ||||||||||
| a,b | Delivery Hero SE, 144A | Internet & Direct Marketing Retail | 376 | 16,676 | ||||||||||
| a | Deutsche Bank AG | Capital Markets | 4,116 | 52,712 | ||||||||||
Deutsche Boerse AG | Capital Markets | 368 | 66,741 | |||||||||||
| a | Deutsche Lufthansa AG | Airlines | 1,184 | 9,693 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 1,968 | 95,361 | |||||||||||
Deutsche Telekom AG | Diversified Telecommunication Services | 6,808 | 128,259 | |||||||||||
Deutsche Wohnen AG | Real Estate Management & Development | 104 | 3,518 | |||||||||||
| b | DWS Group GmbH & Co. KGaA, 144A | Capital Markets | 68 | 2,516 | ||||||||||
E.ON SE | Multi-Utilities | 4,364 | 51,188 | |||||||||||
Evonik Industries AG | Chemicals | 388 | 10,870 | |||||||||||
| a | Evotec SE | Life Sciences Tools & Services | 308 | 9,390 | ||||||||||
Fielmann AG | Specialty Retail | 52 | 2,858 | |||||||||||
| a | Fraport AG Frankfurt Airport Services Worldwide | Transportation Infrastructure | 68 | 3,821 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | Health Care Providers & Services | 412 | 27,853 | |||||||||||
Fresenius SE & Co. KGaA | Health Care Providers & Services | 820 | 30,423 | |||||||||||
Fuchs Petrolub SE | Chemicals | 68 | 1,949 | |||||||||||
GEA Group AG | Machinery | 332 | 13,782 | |||||||||||
Hannover Rueck SE | Insurance | 120 | 20,609 | |||||||||||
HeidelbergCement AG | Construction Materials | 288 | 16,554 | |||||||||||
Hella GmbH & Co. KGaA | Auto Components | 48 | 3,110 | |||||||||||
| a | HelloFresh SE | Internet & Direct Marketing Retail | 328 | 14,948 | ||||||||||
Henkel AG & Co. KGaA | Household Products | 204 | 13,608 | |||||||||||
Hochtief AG | Construction & Engineering | 36 | 2,451 | |||||||||||
Infineon Technologies AG | Semiconductors & Semiconductor Equipment | 2,624 | 90,464 | |||||||||||
KION Group AG | Machinery | 156 | 10,414 | |||||||||||
Knorr-Bremse AG | Machinery | 132 | 10,228 | |||||||||||
Lanxess AG | Chemicals | 168 | 7,456 | |||||||||||
LEG Immobilien AG | Real Estate Management & Development | 144 | 16,543 | |||||||||||
Merck KGaA | Pharmaceuticals | 260 | 54,922 | |||||||||||
METRO AG | Food & Staples Retailing | 244 | 2,190 | |||||||||||
MTU Aero Engines AG | Aerospace & Defense | 106 | 24,850 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | Insurance | 284 | 76,786 | |||||||||||
Nemetschek AG | Software | 112 | 10,941 | |||||||||||
Puma SE | Textiles, Apparel & Luxury Goods | 204 | 17,577 | |||||||||||
Rational AG | Machinery | 7 | 4,883 | |||||||||||
Rheinmetall AG | Industrial Conglomerates | 88 | 18,809 | |||||||||||
RWE AG | Multi-Utilities | 1,268 | 55,771 | |||||||||||
SAP SE | Software | 2,232 | 251,125 | |||||||||||
Sartorius AG | Health Care Equipment & Supplies | 4 | 1,535 | |||||||||||
| b,c | Scout24 AG, 144A, Reg S | Interactive Media & Services | 148 | 8,563 | ||||||||||
Siemens AG | Industrial Conglomerates | 1,512 | 211,401 | |||||||||||
| a | Siemens Energy AG | Electrical Equipment | 860 | 19,827 | ||||||||||
| b | Siemens Healthineers AG, 144A | Health Care Equipment & Supplies | 564 | 35,293 | ||||||||||
Sixt SE | Road & Rail | 28 | 3,813 | |||||||||||
Symrise AG | Chemicals | 260 | 31,489 | |||||||||||
| a | Talanx AG | Insurance | 112 | 4,987 | ||||||||||
Telefonica Deutschland Holding AG | Diversified Telecommunication Services | 1,276 | 3,505 | |||||||||||
| 230 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Germany (continued) | ||||||||||||||
| a | thyssenkrupp AG | Metals & Mining | 964 | $ | 8,356 | |||||||||
Traton SE | Machinery | 96 | 1,802 | |||||||||||
| a | TUI AG | Hotels, Restaurants & Leisure | 2,142 | 6,825 | ||||||||||
Uniper SE | Independent Power and Renewable Electricity Producers | 180 | 4,687 | |||||||||||
United Internet AG | Diversified Telecommunication Services | 224 | 7,771 | |||||||||||
Vantage Towers AG | Diversified Telecommunication Services | 184 | 6,570 | |||||||||||
Varta AG | Electrical Equipment | 28 | 2,801 | |||||||||||
Volkswagen AG | Automobiles | 64 | 16,108 | |||||||||||
Vonovia SE | Real Estate Management & Development | 1,564 | 73,627 | |||||||||||
Wacker Chemie AG | Chemicals | 32 | 5,510 | |||||||||||
| a,b | Zalando SE, 144A | Internet & Direct Marketing Retail | 436 | 22,315 | ||||||||||
|
| |||||||||||||
| 2,589,546 | ||||||||||||||
|
| |||||||||||||
| Ireland 1.3% | ||||||||||||||
AIB Group PLC | Banks | 1,568 | 3,494 | |||||||||||
CRH PLC | Construction Materials | 1,556 | 62,936 | |||||||||||
DCC PLC | Industrial Conglomerates | 200 | 15,605 | |||||||||||
Experian PLC | Professional Services | 1,840 | 71,492 | |||||||||||
| a | Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 356 | 41,623 | ||||||||||
Glanbia PLC | Food Products | 380 | 4,435 | |||||||||||
Kerry Group | Food Products | 308 | 34,647 | |||||||||||
Kingspan Group PLC | Building Products | 308 | 30,514 | |||||||||||
Smurfit Kappa Group PLC | Containers & Packaging | 524 | 23,547 | |||||||||||
|
| |||||||||||||
| 288,293 | ||||||||||||||
|
| |||||||||||||
| Isle Of Man 0.1% | ||||||||||||||
| a | GVC Holdings PLC | Hotels, Restaurants & Leisure | 1,164 | 25,188 | ||||||||||
|
| |||||||||||||
| Italy 3.4% | ||||||||||||||
A2A SpA | Multi-Utilities | 3,020 | 5,223 | |||||||||||
Amplifon SpA | Health Care Providers & Services | 264 | 11,908 | |||||||||||
Assicurazioni Generali SpA | Insurance | 2,612 | 60,363 | |||||||||||
| a | Atlantia SpA | Transportation Infrastructure | 996 | 20,945 | ||||||||||
Banca Mediolanum SpA | Diversified Financial Services | 512 | 4,418 | |||||||||||
Buzzi Unicem SpA | Construction Materials | 184 | 3,451 | |||||||||||
Davide Campari-Milano NV | Beverages | 980 | 11,509 | |||||||||||
De’ Longhi SpA | Household Durables | 136 | 3,744 | |||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 44 | 6,947 | |||||||||||
Enel SpA | Electric Utilities | 15,648 | 105,648 | |||||||||||
Eni SpA | Oil, Gas & Consumable Fuels | 4,988 | 73,780 | |||||||||||
Ferrari NV | Automobiles | 252 | 55,713 | |||||||||||
FinecoBank Banca Fineco SpA | Banks | 1,216 | 18,705 | |||||||||||
Hera SpA | Multi-Utilities | 1,536 | 5,718 | |||||||||||
| b,c | Infrastrutture Wireless Italiane SpA, 144A, Reg S | Diversified Telecommunication Services | 692 | 7,827 | ||||||||||
Interpump Group SpA | Machinery | 156 | 7,932 | |||||||||||
Intesa Sanpaolo SpA | Banks | 33,428 | 77,493 | |||||||||||
Italgas Reti SpA | Gas Utilities | 948 | 6,143 | |||||||||||
| a | Iveco Group NV | Machinery | 381 | 2,522 | ||||||||||
| a | Leonardo SpA | Aerospace & Defense | 800 | 8,029 | ||||||||||
Mediobanca Banca di Credito Finanziario SpA | Banks | 1,416 | 14,526 | |||||||||||
Moncler SpA | Textiles, Apparel & Luxury Goods | 432 | 24,389 | |||||||||||
| a,b | Nexi SpA, 144A | IT Services | 1,480 | 17,291 | ||||||||||
| b | Pirelli & C SpA, 144A | Auto Components | 996 | 5,465 | ||||||||||
| b,c | Poste Italiane SpA, 144A, Reg S | Insurance | 900 | 10,334 | ||||||||||
Prysmian SpA | Electrical Equipment | 532 | 18,326 | |||||||||||
| franklintempleton.com | Annual Report | 231 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Italy (continued) | ||||||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 192 | $ | 9,750 | ||||||||||
Reply SpA | IT Services | 44 | 7,344 | |||||||||||
Snam SpA | Gas Utilities | 4,464 | 25,987 | |||||||||||
Telecom Italia SpA | Diversified Telecommunication Services | 22,224 | 8,247 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 12,428 | 4,259 | |||||||||||
Tenaris SA | Energy Equipment & Services | 952 | 14,570 | |||||||||||
Terna—Rete Elettrica Nazionale | Electric Utilities | 2,840 | 24,603 | |||||||||||
UniCredit SpA | Banks | 4,316 | 47,326 | |||||||||||
UnipolSai Assicurazioni SpA | Insurance | 812 | 2,427 | |||||||||||
|
| |||||||||||||
| 732,862 | ||||||||||||||
|
| |||||||||||||
| Luxembourg 0.4% | ||||||||||||||
ArcelorMittal SA | Metals & Mining | 1,184 | 38,599 | |||||||||||
Aroundtown SA | Real Estate Management & Development | 2,272 | 13,130 | |||||||||||
Eurofins Scientific SE | Life Sciences Tools & Services | 248 | 24,810 | |||||||||||
| a | RTL Group SA | Media | 80 | 4,486 | ||||||||||
| a | SUSE SA | Software | 72 | 2,341 | ||||||||||
|
| |||||||||||||
| 83,366 | ||||||||||||||
|
| |||||||||||||
| Mexico 0.0%† | ||||||||||||||
Fresnillo PLC | Metals & Mining | 352 | 3,402 | |||||||||||
|
| |||||||||||||
| Netherlands 8.8% | ||||||||||||||
Aalberts NV | Machinery | 188 | 9,869 | |||||||||||
| b | ABN AMRO Bank NV, 144A | Banks | 840 | 10,881 | ||||||||||
| a,b | Adyen NV, 144A | IT Services | 59 | 118,754 | ||||||||||
Aegon NV | Insurance | 3,556 | 19,000 | |||||||||||
Akzo Nobel NV | Chemicals | 344 | 29,939 | |||||||||||
| a | Argenx SE | Biotechnology | 104 | 32,690 | ||||||||||
ASM International NV | Semiconductors & Semiconductor Equipment | 96 | 35,473 | |||||||||||
ASML Holding NV | Semiconductors & Semiconductor Equipment | 770 | 522,612 | |||||||||||
ASR Nederland NV | Insurance | 260 | 12,217 | |||||||||||
BE Semiconductor Industries NV | Semiconductors & Semiconductor Equipment | 144 | 12,475 | |||||||||||
| b | CTP NV, 144A | Real Estate Management & Development | 120 | 2,029 | ||||||||||
| b,c | Euronext NV, 144A, Reg S | Capital Markets | 168 | 15,459 | ||||||||||
EXOR NV | Diversified Financial Services | 208 | 16,084 | |||||||||||
Heineken Holding NV | Beverages | 212 | 16,771 | |||||||||||
Heineken NV | Beverages | 476 | 45,855 | |||||||||||
IMCD Group NV | Trading Companies & Distributors | 116 | 20,038 | |||||||||||
ING Groep NV | Banks | 7,608 | 80,511 | |||||||||||
JDE Peet’s BV | Food Products | 160 | 4,616 | |||||||||||
Koninklijke Ahold Delhaize NV | Food & Staples Retailing | 1,964 | 63,623 | |||||||||||
Koninklijke DSM NV | Chemicals | 336 | 60,751 | |||||||||||
Koninklijke KPN NV | Diversified Telecommunication Services | 6,476 | 22,647 | |||||||||||
Koninklijke Philips NV | Health Care Equipment & Supplies | 1,764 | 54,426 | |||||||||||
Koninklijke Vopak NV | Oil, Gas & Consumable Fuels | 132 | 4,314 | |||||||||||
NN Group NV | Insurance | 636 | 32,453 | |||||||||||
| a | Prosus NV | Internet & Direct Marketing Retail | 1,776 | 95,987 | ||||||||||
| a | QIAGEN NV | Life Sciences Tools & Services | 440 | 21,800 | ||||||||||
Randstad NV | Professional Services | 220 | 13,375 | |||||||||||
Shell PLC | Oil, Gas & Consumable Fuels | 15,384 | 427,084 | |||||||||||
| b | Signify NV, 144A | Electrical Equipment | 252 | 11,897 | ||||||||||
Universal Music Group NV | Entertainment | 1,508 | 40,596 | |||||||||||
Wolters Kluwer NV | Professional Services | 520 | 55,879 | |||||||||||
|
| |||||||||||||
| 1,910,105 | ||||||||||||||
|
| |||||||||||||
| 232 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Nigeria 0.0%† | ||||||||||||||
| b | Airtel Africa PLC, 144A | Wireless Telecommunication Services | 1,996 | $ | 3,666 | |||||||||
|
| |||||||||||||
| Norway 1.3% | ||||||||||||||
| a | Adevinta ASA | Interactive Media & Services | 540 | 4,994 | ||||||||||
Aker ASA | Diversified Financial Services | 52 | 4,817 | |||||||||||
Aker BP ASA | Oil, Gas & Consumable Fuels | 256 | 9,679 | |||||||||||
DNB Bank ASA | Banks | 2,068 | 47,325 | |||||||||||
Equinor ASA | Oil, Gas & Consumable Fuels | 1,932 | 73,179 | |||||||||||
Gjensidige Forsikring ASA | Insurance | 332 | 8,304 | |||||||||||
Leroy Seafood Group ASA | Food Products | 512 | 4,750 | |||||||||||
Mowi ASA | Food Products | 892 | 24,279 | |||||||||||
| a | Nordic Semiconductor ASA | Semiconductors & Semiconductor Equipment | 312 | 8,107 | ||||||||||
Norsk Hydro ASA | Metals & Mining | 2,668 | 26,271 | |||||||||||
Orkla ASA | Food Products | 1,504 | 13,478 | |||||||||||
Salmar ASA | Food Products | 108 | 8,626 | |||||||||||
Schibsted ASA, A | Media | 148 | 3,691 | |||||||||||
Schibsted ASA, B | Media | 188 | 4,051 | |||||||||||
Telenor ASA | Diversified Telecommunication Services | 1,264 | 18,322 | |||||||||||
Tomra Systems ASA | Commercial Services & Supplies | 240 | 12,387 | |||||||||||
Yara International ASA | Chemicals | 328 | 16,580 | |||||||||||
|
| |||||||||||||
| 288,840 | ||||||||||||||
|
| |||||||||||||
| Poland 0.5% | ||||||||||||||
| a,b | Allegro.eu, 144A | Internet & Direct Marketing Retail | 756 | 6,453 | ||||||||||
Bank Pekao SA | Banks | 308 | 8,344 | |||||||||||
CD Projekt SA | Entertainment | 132 | 5,503 | |||||||||||
Cyfrowy Polsat SA | Media | 540 | 3,597 | |||||||||||
| a,b | Dino Polska SA, 144A | Food & Staples Retailing | 100 | 8,171 | ||||||||||
| a | InPost SA | Air Freight & Logistics | 404 | 2,589 | ||||||||||
KGHM Polska Miedz SA | Metals & Mining | 280 | 11,617 | |||||||||||
LPP SA | Textiles, Apparel & Luxury Goods | 2 | 5,505 | |||||||||||
Polski Koncern Naftowy Orlen SA | Oil, Gas & Consumable Fuels | 632 | 11,529 | |||||||||||
Polskie Gornictwo Naftowe i Gazownictwo SA | Oil, Gas & Consumable Fuels | 3,388 | 5,046 | |||||||||||
| a | Powszechna Kasa Oszczednosci Bank Polski SA | Banks | 1,700 | 16,253 | ||||||||||
Powszechny Zaklad Ubezpieczen SA | Insurance | 1,140 | 9,260 | |||||||||||
Santander Bank Polska SA | Banks | 60 | 4,391 | |||||||||||
|
| |||||||||||||
| 98,258 | ||||||||||||||
|
| |||||||||||||
| Portugal 0.3% | ||||||||||||||
EDP—Energias de Portugal SA | Electric Utilities | 5,640 | 28,019 | |||||||||||
Galp Energia SGPS SA, B | Oil, Gas & Consumable Fuels | 1,028 | 13,171 | |||||||||||
Jeronimo Martins SGPS SA | Food & Staples Retailing | 548 | 13,250 | |||||||||||
|
| |||||||||||||
| 54,440 | ||||||||||||||
|
| |||||||||||||
| Russia 0.0%† | ||||||||||||||
| d | Evraz PLC | Metals & Mining | 1,168 | — | ||||||||||
| d | Raspadskaya OJSC | Metals & Mining | 497 | — | ||||||||||
|
| |||||||||||||
| — | ||||||||||||||
|
| |||||||||||||
| Spain 3.7% | ||||||||||||||
Acciona SA | Electric Utilities | 44 | 8,494 | |||||||||||
ACS Actividades de Construccion y Servicios SA | Construction & Engineering | 432 | 11,776 | |||||||||||
| a,b | Aena SME SA, 144A | Transportation Infrastructure | 140 | 23,529 | ||||||||||
| a | Amadeus IT Group SA | IT Services | 856 | 56,365 | ||||||||||
Banco Bilbao Vizcaya Argentaria SA | Banks | 13,400 | 77,679 | |||||||||||
Banco Santander SA | Banks | 33,968 | 117,163 | |||||||||||
Bankinter SA | Banks | 1,364 | 8,080 | |||||||||||
CaixaBank SA | Banks | 8,936 | 30,594 | |||||||||||
| b | Cellnex Telecom SA, 144A | Diversified Telecommunication Services | 1,224 | 59,528 | ||||||||||
| franklintempleton.com | Annual Report | 233 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Spain (continued) | ||||||||||||||
| a | Corp. ACCIONA Energias Renovables SA | Independent Power and Renewable Electricity Producers | 96 | $ | 3,578 | |||||||||
Corporacion Mapfre SA | Insurance | 2,020 | 4,270 | |||||||||||
EDP Renovaveis SA | Independent Power and Renewable Electricity Producers | 480 | 12,465 | |||||||||||
Enagas SA | Gas Utilities | 504 | 11,300 | |||||||||||
Endesa SA | Electric Utilities | 636 | 13,994 | |||||||||||
Ferrovial SA | Construction & Engineering | 964 | 25,882 | |||||||||||
Fluidra SA | Machinery | 220 | 6,438 | |||||||||||
Grifols SA | Biotechnology | 672 | 12,322 | |||||||||||
Iberdrola SA | Electric Utilities | 12,076 | 133,289 | |||||||||||
Industria de Diseno Textil SA | Specialty Retail | 2,120 | 46,657 | |||||||||||
Inmobiliaria Colonial SA | Equity Real Estate Investment Trusts (REITs | ) | 716 | 6,564 | ||||||||||
Merlin Properties Socimi SA | Equity Real Estate Investment Trusts (REITs | ) | 684 | 8,056 | ||||||||||
Naturgy Energy Group SA | Gas Utilities | 288 | 8,703 | |||||||||||
Red Electrica Corp. SA | Electric Utilities | 880 | 18,222 | |||||||||||
Repsol SA | Oil, Gas & Consumable Fuels | 2,632 | 34,919 | |||||||||||
| a | Siemens Gamesa Renewable Energy SA | Electrical Equipment | 436 | 7,750 | ||||||||||
Telefonica SA | Diversified Telecommunication Services | 10,260 | 50,098 | |||||||||||
|
| |||||||||||||
| 797,715 | ||||||||||||||
|
| |||||||||||||
| Sweden 5.4% | ||||||||||||||
Alfa Laval AB | Machinery | 628 | 21,921 | |||||||||||
Assa Abloy AB, B | Building Products | 1,848 | 50,546 | |||||||||||
Atlas Copco AB | Machinery | 756 | 34,842 | |||||||||||
Atlas Copco AB, A | Machinery | 1,272 | 67,112 | |||||||||||
Beijer Ref AB | Trading Companies & Distributors | 500 | 9,196 | |||||||||||
Boliden AB | Metals & Mining | 552 | 28,318 | |||||||||||
Castellum AB | Real Estate Management & Development | 548 | 13,719 | |||||||||||
Electrolux AB | Household Durables | 448 | 6,879 | |||||||||||
Elekta AB, B | Health Care Equipment & Supplies | 708 | 5,639 | |||||||||||
Epiroc AB, A | Machinery | 1,252 | 27,164 | |||||||||||
Epiroc AB, B | Machinery | 764 | 13,982 | |||||||||||
EQT AB | Capital Markets | 564 | 22,519 | |||||||||||
Ericsson, B | Communications Equipment | 6,056 | 56,080 | |||||||||||
Essity AB, B | Household Products | 1,216 | 28,993 | |||||||||||
| b,c | Evolution Gaming Group AB, 144A, Reg S | Hotels, Restaurants & Leisure | 324 | 33,657 | ||||||||||
| a | Fastighets AB Balder, B | Real Estate Management & Development | 200 | 13,336 | ||||||||||
Getinge AB, B | Health Care Equipment & Supplies | 444 | 17,961 | |||||||||||
Hennes & Mauritz AB, B | Specialty Retail | 1,780 | 24,100 | |||||||||||
Hexagon AB, B | Electronic Equipment, Instruments & Components | 3,776 | 53,787 | |||||||||||
Holmen AB, B | Paper & Forest Products | 196 | 11,092 | |||||||||||
Husqvarna AB, A | Household Durables | 48 | 510 | |||||||||||
Husqvarna AB, B | Household Durables | 804 | 8,512 | |||||||||||
Industrivarden AB, A | Diversified Financial Services | 452 | 13,037 | |||||||||||
Industrivarden AB, C | Diversified Financial Services | 352 | 9,968 | |||||||||||
Indutrade AB | Machinery | 568 | 14,524 | |||||||||||
Investment AB Latour, B | Industrial Conglomerates | 292 | 9,431 | |||||||||||
Investor AB, A | Diversified Financial Services | 1,068 | 25,258 | |||||||||||
Investor AB, B | Diversified Financial Services | 3,660 | 80,961 | |||||||||||
| a | Kinnevik AB, A | Diversified Financial Services | 28 | 763 | ||||||||||
| a | Kinnevik AB, B | Diversified Financial Services | 488 | 12,960 | ||||||||||
L E Lundbergforetagen AB, B | Diversified Financial Services | 152 | 7,839 | |||||||||||
Lifco AB, B | Industrial Conglomerates | 464 | 11,994 | |||||||||||
Lundin Energy AB | Oil, Gas & Consumable Fuels | 388 | 16,624 | |||||||||||
Nibe Industrier AB, B | Building Products | 2,388 | 26,918 | |||||||||||
Sagax AB, B | Real Estate Management & Development | 336 | 10,347 | |||||||||||
Sagax AB, D | Real Estate Management & Development | 220 | 762 | |||||||||||
| 234 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Sweden (continued) | ||||||||||||||
Samhallsbyggnadsbolaget i Norden AB | Real Estate Management & Development | 2,212 | $ | 10,028 | ||||||||||
Samhallsbyggnadsbolaget i Norden AB, D | Real Estate Management & Development | 136 | 402 | |||||||||||
Sandvik AB | Machinery | 2,172 | 46,845 | |||||||||||
Securitas AB, B | Commercial Services & Supplies | 608 | 6,945 | |||||||||||
| a,b | Sinch AB, 144A | Software | 1,096 | 7,581 | ||||||||||
Skandinaviska Enskilda Banken AB, A | Banks | 2,908 | 31,968 | |||||||||||
Skandinaviska Enskilda Banken AB, C | Banks | 40 | 472 | |||||||||||
Skanska AB, B | Construction & Engineering | 728 | 16,514 | |||||||||||
SKF AB, B | Machinery | 768 | 12,687 | |||||||||||
Svenska Cellulosa AB, A | Paper & Forest Products | 48 | 939 | |||||||||||
Svenska Cellulosa AB, B | Paper & Forest Products | 1,184 | 23,307 | |||||||||||
Svenska Handelsbanken AB, A | Banks | 2,964 | 27,638 | |||||||||||
Svenska Handelsbanken AB, B | Banks | 80 | 853 | |||||||||||
Sweco AB, B | Construction & Engineering | 400 | 5,880 | |||||||||||
Swedbank AB, A | Banks | 2,036 | 30,804 | |||||||||||
Swedish Match AB | Tobacco | 3,080 | 23,425 | |||||||||||
| a | Swedish Orphan Biovitrum AB | Biotechnology | 364 | 8,710 | ||||||||||
Tele2 AB, B | Wireless Telecommunication Services | 1,020 | 15,575 | |||||||||||
Telefonaktiebolaget LM Ericsson, A | Communications Equipment | 60 | 583 | |||||||||||
Telia Co. AB | Diversified Telecommunication Services | 5,132 | 20,783 | |||||||||||
| b | Thule Group AB, 144A | Leisure Products | 208 | 8,370 | ||||||||||
Trelleborg AB, B | Machinery | 500 | 11,750 | |||||||||||
Vitrolife AB | Biotechnology | 132 | 4,413 | |||||||||||
Volvo AB, A | Machinery | 416 | 8,079 | |||||||||||
Volvo AB, B | Machinery | 3,040 | 57,607 | |||||||||||
|
| |||||||||||||
| 1,173,409 | ||||||||||||||
|
| |||||||||||||
| Switzerland 16.8% | ||||||||||||||
ABB Ltd. | Electrical Equipment | 3,300 | 108,189 | |||||||||||
Adecco Group AG | Professional Services | 324 | 14,791 | |||||||||||
Alcon Inc. | Health Care Equipment & Supplies | 924 | 74,000 | |||||||||||
Baloise Holding AG | Insurance | 92 | 16,506 | |||||||||||
Banque Cantonale Vaudoise | Banks | 56 | 4,880 | |||||||||||
Barry Callebaut AG | Food Products | 7 | 16,506 | |||||||||||
Belimo Holding AG | Building Products | 20 | 10,704 | |||||||||||
BKW AG | Electric Utilities | 34 | 4,286 | |||||||||||
Chocoladefabriken Lindt & Spruengli AG | Food Products | 4 | 47,900 | |||||||||||
Cie Financiere Richemont SA | Textiles, Apparel & Luxury Goods | 1,028 | 131,816 | |||||||||||
| a | Clariant AG | Chemicals | 448 | 7,833 | ||||||||||
Coca-Cola HBC AG | Beverages | 384 | 8,087 | |||||||||||
Credit Suisse Group AG | Capital Markets | 5,200 | 41,476 | |||||||||||
DKSH Holding AG | Professional Services | 68 | 5,745 | |||||||||||
Emmi AG | Food Products | 4 | 4,394 | |||||||||||
EMS-Chemie Holding AG | Chemicals | 14 | 13,715 | |||||||||||
| a | Flughafen Zurich AG | Transportation Infrastructure | 40 | 7,242 | ||||||||||
Geberit AG | Building Products | 70 | 43,525 | |||||||||||
Georg Fischer AG | Machinery | 8 | 9,632 | |||||||||||
Givaudan AG | Chemicals | 19 | 79,014 | |||||||||||
| a | Glencore PLC | Metals & Mining | 26,408 | 173,851 | ||||||||||
Helvetia Holding AG | Insurance | 68 | 8,919 | |||||||||||
| a | Holcim Ltd. | Construction Materials | 1,108 | 54,530 | ||||||||||
Julius Baer Group Ltd. | Capital Markets | 424 | 24,825 | |||||||||||
Kuehne + Nagel International AG | Marine | 100 | 28,590 | |||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 296 | 22,258 | |||||||||||
Lonza Group AG | Life Sciences Tools & Services | 149 | 108,838 | |||||||||||
Nestle SA | Food Products | 5,540 | 723,616 | |||||||||||
| franklintempleton.com | Annual Report | 235 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| Switzerland (continued) | ||||||||||||||
Novartis AG | Pharmaceuticals | 4,224 | $ | 372,942 | ||||||||||
Partners Group Holding AG | Capital Markets | 45 | 56,406 | |||||||||||
PSP Swiss Property AG | Real Estate Management & Development | 88 | 11,628 | |||||||||||
Roche Holding AG, Bearer | Pharmaceuticals | 52 | 22,885 | |||||||||||
Roche Holding AG, Non-Voting | Pharmaceuticals | 1,416 | 563,861 | |||||||||||
Schindler Holding AG | Machinery | 40 | 8,602 | |||||||||||
Schindler Holding AG, PC | Machinery | 84 | 18,165 | |||||||||||
SGS SA | Professional Services | 12 | 33,591 | |||||||||||
SIG Combibloc Group AG | Containers & Packaging | 680 | 17,291 | |||||||||||
Sika AG | Chemicals | 308 | 102,884 | |||||||||||
Sonova Holding AG | Health Care Equipment & Supplies | 108 | 45,488 | |||||||||||
STMicroelectronics NV | Semiconductors & Semiconductor Equipment | 1,276 | 56,208 | |||||||||||
Straumann Holding AG | Health Care Equipment & Supplies | 20 | 32,306 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 60 | 17,193 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 84 | 4,600 | |||||||||||
Swiss Life Holding AG | Insurance | 63 | 40,679 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 152 | 15,072 | |||||||||||
Swiss Re AG | Insurance | 584 | 55,922 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 51 | 30,758 | |||||||||||
Tecan Group AG | Life Sciences Tools & Services | 26 | 10,397 | |||||||||||
Temenos AG | Software | 120 | 11,606 | |||||||||||
UBS Group AG | Capital Markets | 6,396 | �� | 126,113 | ||||||||||
| b,c | VAT Group AG, 144A, Reg S | Machinery | 52 | 20,026 | ||||||||||
| a | Vifor Pharma AG | Pharmaceuticals | 104 | 18,619 | ||||||||||
Zurich Insurance Group AG | Insurance | 300 | 148,916 | |||||||||||
|
| |||||||||||||
| 3,637,826 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 20.0% | ||||||||||||||
3i Group PLC | Capital Markets | 1,928 | 35,247 | |||||||||||
Abrdn PLC | Capital Markets | 4,328 | 12,246 | |||||||||||
Admiral Group PLC | Insurance | 444 | 14,983 | |||||||||||
Anglo American PLC | Metals & Mining | 2,452 | 128,249 | |||||||||||
Ashtead Group PLC | Trading Companies & Distributors | 900 | 57,270 | |||||||||||
Associated British Foods PLC | Food Products | 692 | 15,143 | |||||||||||
AstraZeneca PLC | Pharmaceuticals | 3,116 | 415,684 | |||||||||||
| b | Auto Trader Group PLC, 144A | Interactive Media & Services | 1,864 | 15,530 | ||||||||||
AVEVA Group PLC | Software | 240 | 7,742 | |||||||||||
Aviva PLC | Insurance | 7,524 | 44,787 | |||||||||||
B&M European Value Retail SA | Multiline Retail | 1,860 | 13,082 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 6,396 | 60,414 | |||||||||||
Barclays PLC | Banks | 33,700 | 65,802 | |||||||||||
Barratt Developments PLC | Household Durables | 2,024 | 13,922 | |||||||||||
Bellway PLC | Household Durables | 244 | 7,813 | |||||||||||
Berkeley Group Holdings PLC | Household Durables | 212 | 10,440 | |||||||||||
BP PLC | Oil, Gas & Consumable Fuels | 38,624 | 190,882 | |||||||||||
British American Tobacco PLC | Tobacco | 4,596 | 193,310 | |||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 1,888 | 13,185 | ||||||||||
BT Group PLC | Diversified Telecommunication Services | 14,048 | 33,700 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 672 | 26,261 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 788 | 17,368 | |||||||||||
| a | Centrica PLC | Multi-Utilities | 11,976 | 12,627 | ||||||||||
CNH Industrial NV | Machinery | 1,996 | 31,969 | |||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 3,588 | 77,948 | |||||||||||
| b | ConvaTec Group PLC, 144A | Health Care Equipment & Supplies | 3,132 | 8,891 | ||||||||||
Croda International PLC | Chemicals | 272 | 28,221 | |||||||||||
Dechra Pharmaceuticals PLC | Pharmaceuticals | 212 | 11,322 | |||||||||||
| 236 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
| a,b | Deliveroo PLC, 144A | Internet & Direct Marketing Retail | 2,576 | $ | 3,823 | |||||||||
Derwent London PLC | Equity Real Estate Investment Trusts (REITs | ) | 208 | 8,788 | ||||||||||
Diageo PLC | Beverages | 4,624 | 235,217 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 2,656 | 9,620 | |||||||||||
Dr. Martens PLC | Textiles, Apparel & Luxury Goods | 1,096 | 3,446 | |||||||||||
DS Smith PLC | Containers & Packaging | 2,608 | 11,060 | |||||||||||
| a | easyJet PLC | Airlines | 716 | 5,247 | ||||||||||
Electrocomponents PLC | Trading Companies & Distributors | 960 | 13,702 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 444 | 60,681 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 9,952 | 215,838 | |||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 756 | 24,984 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 768 | 10,193 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | �� | 336 | 9,118 | ||||||||||
HomeServe PLC | Commercial Services & Supplies | 548 | 6,083 | |||||||||||
Howden Joinery Group PLC | Trading Companies & Distributors | 1,152 | 11,646 | |||||||||||
HSBC Holdings PLC | Banks | 41,148 | 284,649 | |||||||||||
IMI PLC | Machinery | 532 | 9,547 | |||||||||||
Imperial Brands PLC | Tobacco | 1,904 | 40,374 | |||||||||||
| a | Informa PLC | Media | 3,004 | 23,803 | ||||||||||
InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 372 | 25,420 | |||||||||||
Intermediate Capital Group PLC | Capital Markets | 564 | 13,259 | |||||||||||
| a | International Consolidated Airlines Group SA | Airlines | 2,380 | 4,457 | ||||||||||
Intertek Group PLC | Professional Services | 324 | 22,285 | |||||||||||
| a | ITV PLC | Media | 7,556 | 8,150 | ||||||||||
J Sainsbury PLC | Food & Staples Retailing | 3,476 | 11,565 | |||||||||||
JD Sports Fashion PLC | Specialty Retail | 4,960 | 9,682 | |||||||||||
Johnson Matthey PLC | Chemicals | 380 | 9,399 | |||||||||||
| a,b,c | Just Eat Takeaway.com NV, 144A, Reg S | Internet & Direct Marketing Retail | 368 | 12,593 | ||||||||||
Kingfisher PLC | Specialty Retail | 4,156 | 13,976 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 1,436 | 14,853 | ||||||||||
Legal & General Group PLC | Insurance | 11,960 | 42,832 | |||||||||||
Lloyds Banking Group PLC | Banks | 142,612 | 88,355 | |||||||||||
London Stock Exchange Group PLC | Capital Markets | 732 | 76,775 | |||||||||||
M&G PLC | Diversified Financial Services | 5,272 | 15,354 | |||||||||||
| a | Meggitt PLC | Aerospace & Defense | 1,564 | 15,654 | ||||||||||
Melrose Industries PLC | Industrial Conglomerates | 8,812 | 14,486 | |||||||||||
Mondi PLC | Paper & Forest Products | 984 | 19,324 | |||||||||||
National Grid PLC | Multi-Utilities | 7,276 | 112,315 | |||||||||||
Natwest Group PLC | Banks | 10,412 | 29,598 | |||||||||||
Next PLC | Multiline Retail | 260 | 20,649 | |||||||||||
| a | NMC Health PLC | Health Care Providers & Services | 60 | — | ||||||||||
| a | Ocado Group PLC | Food & Staples Retailing | 972 | 14,986 | ||||||||||
Pearson PLC | Media | 1,524 | 15,061 | |||||||||||
Pennon Group PLC | Water Utilities | 524 | 7,417 | |||||||||||
| a,b | Pepco Group NV, 144A | Multiline Retail | 216 | 2,321 | ||||||||||
Persimmon PLC | Household Durables | 632 | 17,899 | |||||||||||
Phoenix Group Holdings PLC | Insurance | 1,468 | 11,868 | |||||||||||
Prudential PLC | Insurance | 5,528 | 82,538 | |||||||||||
Reckitt Benckiser Group PLC | Household Products | 1,276 | 97,980 | |||||||||||
RELX PLC | Professional Services | 3,744 | 117,471 | |||||||||||
Renishaw PLC | Electronic Equipment, Instruments & Components | 64 | 3,261 | |||||||||||
Rentokil Initial PLC | Commercial Services & Supplies | 3,744 | 25,929 | |||||||||||
Rightmove PLC | Interactive Media & Services | 1,704 | 14,197 | |||||||||||
| a | Rolls-Royce Holdings PLC | Aerospace & Defense | 16,764 | 22,315 | ||||||||||
Royal Mail PLC | Air Freight & Logistics | 1,824 | 7,901 | |||||||||||
Schroders PLC | Capital Markets | 224 | 9,529 | |||||||||||
| franklintempleton.com | Annual Report | 237 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks and Other Equity Interests (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
Segro PLC | Equity Real Estate Investment Trusts (REITs | ) | 2,416 | $ | 42,801 | |||||||||
Severn Trent PLC | Water Utilities | 504 | 20,425 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 1,784 | 28,657 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 780 | 14,917 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 148 | 24,426 | |||||||||||
SSE PLC | Electric Utilities | 2,152 | 49,543 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 1,080 | 20,598 | |||||||||||
Standard Chartered PLC | Banks | 5,104 | 34,286 | |||||||||||
Tate & Lyle PLC | Food Products | 968 | 9,332 | |||||||||||
Taylor Wimpey PLC | Household Durables | 7,160 | 12,321 | |||||||||||
Tesco PLC | Food & Staples Retailing | 15,200 | 55,236 | |||||||||||
The Sage Group PLC | Software | 2,084 | 19,240 | |||||||||||
| a | THG PLC | Internet & Direct Marketing Retail | 1,836 | 2,224 | ||||||||||
Travis Perkins PLC | Trading Companies & Distributors | 444 | 7,231 | |||||||||||
Unilever PLC | Personal Products | 5,144 | 234,002 | |||||||||||
United Utilities Group PLC | Water Utilities | 1,380 | 20,432 | |||||||||||
Vodafone Group PLC | Wireless Telecommunication Services | 54,412 | 89,437 | |||||||||||
Weir Group PLC | Machinery | 512 | 11,062 | |||||||||||
| a | Whitbread PLC | Hotels, Restaurants & Leisure | 400 | 15,047 | ||||||||||
| a | Wise PLC, A | IT Services | 952 | 6,205 | ||||||||||
WPP PLC | Media | 2,244 | 29,634 | |||||||||||
|
| |||||||||||||
| 4,330,567 | ||||||||||||||
|
| |||||||||||||
| United States 0.3% | ||||||||||||||
Stellantis NV | Automobiles | 4,072 | 67,055 | |||||||||||
|
| |||||||||||||
Total Common Stocks and Other Equity Interests (Cost $21,006,811) | 21,446,599 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 0.7% | ||||||||||||||
| Germany 0.7% | ||||||||||||||
| e | Bayerische Motoren Werke AG, 2.731%, pfd. | Automobiles | 116 | 9,073 | ||||||||||
| e | Fuchs Petrolub SE, 3.020%, pfd. | Chemicals | 136 | 4,960 | ||||||||||
| e | Henkel AG & Co. KGaA, 3.049%, pfd. | Household Products | 352 | 23,766 | ||||||||||
| e | Porsche Automobil Holding SE, 2.514%, pfd. | Automobiles | 312 | 30,514 | ||||||||||
| e | Sartorius AG, 0.314%, pfd. | Health Care Equipment & Supplies | 50 | 22,348 | ||||||||||
| e | Sixt SE, 0.074%, pfd. | Road & Rail | 32 | 2,421 | ||||||||||
| e | Volkswagen AG, 3.096%, pfd. | Automobiles | 368 | 64,284 | ||||||||||
|
| |||||||||||||
| 157,366 | ||||||||||||||
|
| |||||||||||||
| Spain 0.0%† | ||||||||||||||
| e | Grifols SA, 3.440%, pfd., B | Biotechnology | 516 | 6,258 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $187,521) | 163,624 | |||||||||||||
|
| |||||||||||||
| Rights 0.0%† | ||||||||||||||
| France 0.0%† | ||||||||||||||
| a | Electricite de France SA, rts., 4/4/22 | Electric Utilities | 1,040 | 389 | ||||||||||
|
| |||||||||||||
Total Investments | 21,610,612 | |||||||||||||
Other Assets, less Liabilities 0.4% | 84,061 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 21,694,673 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
| 238 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $616,474, representing 2.8% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $145,891, representing 0.7% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eVariable rate security. The rate shown represents the yield at period end.
At March 31, 2022 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
| OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Danish Krone | BOFA | Buy | 5,370,100 | $ | 803,252 | 4/04/22 | $ | 12 | $ | — | ||||||||||||||||||
Danish Krone | BOFA | Sell | 5,370,100 | 811,656 | 4/04/22 | 8,392 | — | |||||||||||||||||||||
Euro | BOFA | Buy | 3,153,767 | 3,508,988 | 4/04/22 | 51 | — | |||||||||||||||||||||
Euro | HSBK | Buy | 3,153,767 | 3,508,985 | 4/04/22 | 55 | — | |||||||||||||||||||||
Euro | UBSW | Buy | 3,153,767 | 3,509,004 | 4/04/22 | 36 | — | |||||||||||||||||||||
Euro | BOFA | Sell | 3,153,767 | 3,546,721 | 4/04/22 | 37,681 | — | |||||||||||||||||||||
Euro | HSBK | Sell | 3,153,767 | 3,546,739 | 4/04/22 | 37,699 | — | |||||||||||||||||||||
Euro | UBSW | Sell | 3,153,767 | 3,546,893 | 4/04/22 | 37,854 | — | |||||||||||||||||||||
Great British Pound | DBAB | Buy | 4,025,600 | 5,296,482 | 4/04/22 | 3,826 | — | |||||||||||||||||||||
Great British Pound | DBAB | Sell | 4,025,600 | 5,402,931 | 4/04/22 | 102,623 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Buy | 2,310,800 | 264,269 | 4/04/22 | 4 | — | |||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 2,310,800 | 262,581 | 4/04/22 | — | (1,692 | ) | ||||||||||||||||||||
Polish Zloty | BOFA | Buy | 386,200 | 92,673 | 4/04/22 | 2 | — | |||||||||||||||||||||
Polish Zloty | BOFA | Sell | 386,200 | 92,075 | 4/04/22 | — | (600 | ) | ||||||||||||||||||||
Swedish Krona | BOFA | Buy | 10,576,200 | 1,134,842 | 4/04/22 | 17 | — | |||||||||||||||||||||
Swedish Krona | BOFA | Sell | 10,576,200 | 1,121,453 | 4/04/22 | — | (13,406 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Buy | 2,999,900 | 3,259,794 | 4/04/22 | 82 | — | |||||||||||||||||||||
Swiss Franc | MSCO | Sell | 2,999,900 | 3,274,376 | 4/04/22 | 14,501 | — | |||||||||||||||||||||
Danish Krone | BOFA | Sell | 5,816,600 | 870,700 | 5/03/22 | — | (89 | ) | ||||||||||||||||||||
Euro | BOFA | Sell | 3,192,367 | 3,554,905 | 5/03/22 | — | (130 | ) | ||||||||||||||||||||
Euro | HSBK | Sell | 3,192,367 | 3,554,953 | 5/03/22 | — | (82 | ) | ||||||||||||||||||||
Euro | UBSW | Sell | 3,192,367 | 3,554,969 | 5/03/22 | — | (66 | ) | ||||||||||||||||||||
Norwegian Krone | BOFA | Sell | 2,617,100 | 299,155 | 5/03/22 | — | (33 | ) | ||||||||||||||||||||
Swedish Krona | BOFA | Sell | 11,202,900 | 1,202,656 | 5/03/22 | — | (80 | ) | ||||||||||||||||||||
Swiss Franc | MSCO | Sell | 3,164,200 | 3,441,646 | 5/03/22 | — | (149 | ) | ||||||||||||||||||||
Great British Pound | DBAB | Sell | 4,119,800 | 5,419,366 | 5/04/22 | — | (3,957 | ) | ||||||||||||||||||||
Polish Zloty | BOFA | Sell | 424,600 | 101,577 | 5/04/22 | — | (20 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 242,835 | $ | (20,304 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 222,531 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 239 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE France ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 28.44 | $ | 19.34 | $ | 23.86 | $ | 25.33 | $ | 25.32 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.85 | 0.40 | 0.52 | 0.70 | 0.08 | |||||||||||||||
Net realized and unrealized gains (losses) | 0.41 | 9.10 | (4.47 | ) | (1.48 | ) | (0.01 | ) | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 1.26 | 9.50 | (3.95 | ) | (0.78 | ) | 0.07 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.88 | ) | (0.40 | ) | (0.57 | ) | (0.69 | ) | (0.06 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 28.82 | $ | 28.44 | $ | 19.34 | $ | 23.86 | $ | 25.33 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 4.23% | 49.47% | (17.08)% | (3.07)% | 0.26% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 2.77% | 1.68% | 2.14% | 2.90% | 0.78% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $10,088 | $7,111 | $8,702 | $2,386 | $2,533 | |||||||||||||||
Portfolio turnover ratef | 5.94% | g | 4.56% | g | 2.60% | g | 5.80% | 1.90% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 5.94% | 4.56% | 2.60% |
| 240 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.9% | ||||||||||||||
| France 97.2% | ||||||||||||||
| a | Accor SA | Hotels, Restaurants & Leisure | 1,057 | $ | 34,377 | |||||||||
| a | Aeroports de Paris SA | Transportation Infrastructure | 161 | 24,363 | ||||||||||
Air Liquide SA | Chemicals | 2,646 | 467,872 | |||||||||||
| a | Airbus SE | Aerospace & Defense | 3,171 | 389,374 | ||||||||||
| b | ALD SA, 144A | Road & Rail | 462 | 6,189 | ||||||||||
Alstom SA | Machinery | 1,680 | 39,759 | |||||||||||
| b | Amundi SA, 144A | Capital Markets | 322 | 22,285 | ||||||||||
Arkema SA | Chemicals | 371 | 44,891 | |||||||||||
Atos SE | IT Services | 546 | 15,048 | |||||||||||
AXA SA | Insurance | 10,976 | 324,424 | |||||||||||
Biomerieux | Health Care Equipment & Supplies | 245 | 26,371 | |||||||||||
BNP Paribas SA | Banks | 6,104 | 352,689 | |||||||||||
Bollore | Entertainment | 5,740 | 30,362 | |||||||||||
Bouygues SA | Construction & Engineering | 1,225 | 43,112 | |||||||||||
Bureau Veritas SA | Professional Services | 1,631 | 47,074 | |||||||||||
Capgemini SE | IT Services | 910 | 205,034 | |||||||||||
Carrefour SA | Food & Staples Retailing | 3,521 | 76,962 | |||||||||||
Cie de L’Odet SE | Air Freight & Logistics | 2 | 2,470 | |||||||||||
Cie Generale des Etablissements Michelin SCA | Auto Components | 1,001 | 136,937 | |||||||||||
CNP Assurances | Insurance | 854 | 20,714 | |||||||||||
Compagnie de Saint-Gobain | Building Products | 2,660 | 160,620 | |||||||||||
Covivio | Equity Real Estate Investment Trusts (REITs | ) | 287 | 23,037 | ||||||||||
Credit Agricole SA | Banks | 6,895 | 83,514 | |||||||||||
Danone SA | Food Products | 3,430 | 190,934 | |||||||||||
Dassault Aviation SA | Aerospace & Defense | 133 | 21,265 | |||||||||||
Dassault Systemes SE | Software | 3,794 | 188,760 | |||||||||||
Edenred | IT Services | 1,414 | 70,672 | |||||||||||
EDF SA | Electric Utilities | 3,052 | 28,980 | |||||||||||
Eiffage SA | Construction & Engineering | 420 | 43,572 | |||||||||||
Engie SA | Multi-Utilities | 9,471 | 125,759 | |||||||||||
EssilorLuxottica SA | Textiles, Apparel & Luxury Goods | 1,680 | 310,857 | |||||||||||
Eurazeo SE | Diversified Financial Services | 273 | 23,207 | |||||||||||
Faurecia SE | Auto Components | 665 | 17,499 | |||||||||||
Gecina SA | Equity Real Estate Investment Trusts (REITs | ) | 294 | 37,390 | ||||||||||
Getlink SE | Transportation Infrastructure | 2,590 | 47,102 | |||||||||||
Hermes International | Textiles, Apparel & Luxury Goods | 176 | 252,910 | |||||||||||
ICADE | Equity Real Estate Investment Trusts (REITs | ) | 182 | 11,816 | ||||||||||
Ipsen SA | Pharmaceuticals | 196 | 24,708 | |||||||||||
| a | JCDecaux SA | Media | 413 | 9,843 | ||||||||||
Kering SA | Textiles, Apparel & Luxury Goods | 418 | 267,751 | |||||||||||
| a | Klepierre SA | Equity Real Estate Investment Trusts (REITs | ) | 1,057 | 28,437 | |||||||||
L’Oreal SA | Personal Products | 1,404 | 568,392 | |||||||||||
| b | La Francaise des Jeux SAEM, 144A | Hotels, Restaurants & Leisure | 490 | 19,605 | ||||||||||
Legrand SA | Electrical Equipment | 1,519 | 145,992 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | Textiles, Apparel & Luxury Goods | 1,422 | 1,027,473 | |||||||||||
| a,b | Neoen SA, 144A | Independent Power and Renewable Electricity Producers | 154 | 6,617 | ||||||||||
Orange SA | Diversified Telecommunication Services | 10,948 | 130,389 | |||||||||||
Orpea | Health Care Providers & Services | 280 | 12,269 | |||||||||||
Pernod Ricard SA | Beverages | 1,190 | 263,884 | |||||||||||
Plastic Omnium SA | Auto Components | 308 | 5,654 | |||||||||||
Publicis Groupe | Media | 1,309 | 80,484 | |||||||||||
Remy Cointreau SA | Beverages | 140 | 29,129 | |||||||||||
| a | Renault SA | Automobiles | 1,043 | 27,707 | ||||||||||
Rexel SA | Trading Companies & Distributors | 1,750 | 37,833 | |||||||||||
Safran SA | Aerospace & Defense | 1,988 | 237,254 | |||||||||||
Sanofi | Pharmaceuticals | 6,202 | 638,380 | |||||||||||
Sartorius Stedim Biotech | Life Sciences Tools & Services | 136 | 56,367 | |||||||||||
| franklintempleton.com | Annual Report | 241 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE France ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| France (continued) | ||||||||||||||
Schneider Electric SE | Electrical Equipment | 3,017 | $ | 510,781 | ||||||||||
SCOR SE | Insurance | 882 | 28,646 | |||||||||||
SEB SA | Household Durables | 175 | 24,651 | |||||||||||
Societe Generale SA | Banks | 4,340 | 118,115 | |||||||||||
Sodexo SA | Hotels, Restaurants & Leisure | 497 | 40,810 | |||||||||||
| a | SOITEC | Semiconductors & Semiconductor Equipment | 126 | 23,987 | ||||||||||
Somfy SA | Electrical Equipment | 42 | 6,832 | |||||||||||
Teleperformance | Professional Services | 332 | 127,923 | |||||||||||
Thales SA | Aerospace & Defense | 574 | 72,775 | |||||||||||
TotalEnergies SE | Oil, Gas & Consumable Fuels | 13,545 | 693,711 | |||||||||||
| a | Ubisoft Entertainment SA | Entertainment | 539 | 23,959 | ||||||||||
Valeo | Auto Components | 1,358 | 25,316 | |||||||||||
Veolia Environnement SA | Multi-Utilities | 3,542 | 114,644 | |||||||||||
Vinci SA | Construction & Engineering | 2,856 | 295,497 | |||||||||||
Vivendi SA | Media | 4,074 | 53,670 | |||||||||||
Wendel SE | Diversified Financial Services | 154 | 15,867 | |||||||||||
| a,b,c | Worldline SA, 144A, Reg S | IT Services | 1,379 | 60,584 | ||||||||||
|
| |||||||||||||
| 9,804,137 | ||||||||||||||
|
| |||||||||||||
| Luxembourg 0.7% | ||||||||||||||
Eurofins Scientific SE | Life Sciences Tools & Services | 693 | 69,327 | |||||||||||
|
| |||||||||||||
| Netherlands 0.4% | ||||||||||||||
| b,c | Euronext NV, 144A, Reg S | Capital Markets | 469 | 43,155 | ||||||||||
|
| |||||||||||||
| Switzerland 1.6% | ||||||||||||||
STMicroelectronics NV | Semiconductors & Semiconductor Equipment | 3,612 | 159,108 | |||||||||||
|
| |||||||||||||
| Rights 0.0%† | ||||||||||||||
| France 0.0%† | ||||||||||||||
| a | Electricite de France SA, rts., 04/04/22 | Electric Utilities | 3,042 | 1,137 | ||||||||||
|
| |||||||||||||
Total Investments | 10,076,864 | |||||||||||||
Other Assets, less Liabilities 0.1% | 11,017 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 10,087,881 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $158,436, representing 1.6% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $103,739, representing 1.0% of net assets.
See Abbreviations on page 365
| 242 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Germany ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 25.98 | $ | 16.73 | $ | 20.70 | $ | 24.60 | $ | 25.55 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.70 | 0.61 | 0.52 | 0.53 | 0.05 | |||||||||||||||
Net realized and unrealized gains (losses) | (3.63 | ) | 9.29 | (3.92 | ) | (3.83 | ) | (1.00 | ) | |||||||||||
|
| |||||||||||||||||||
Total from investment operations | (2.93 | ) | 9.90 | (3.40 | ) | (3.30 | ) | (0.95 | ) | |||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.68 | ) | (0.65 | ) | (0.57 | ) | (0.60 | ) | — | |||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 22.37 | $ | 25.98 | $ | 16.73 | $ | 20.70 | $ | 24.60 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (11.68)% | 59.79% | (17.00)% | (13.72)% | (3.72)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 2.73% | 2.66% | 2.46% | 2.44% | 0.52% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $16,775 | $9,093 | $4,182 | $4,140 | $2,460 | |||||||||||||||
Portfolio turnover ratef | 6.70% | g | 5.79% | g | 5.74% | g | 10.75% | 1.75% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 6.70% | 5.79% | 5.74% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 243 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 94.3% | ||||||||||||||
| Germany 92.8% | ||||||||||||||
1&1 Drillisch AG | Wireless Telecommunication Services | 555 | $ | 12,536 | ||||||||||
adidas AG | Textiles, Apparel & Luxury Goods | 2,220 | 523,411 | |||||||||||
Allianz SE | Insurance | 4,980 | 1,199,903 | |||||||||||
| a,b | Auto1 Group SE, 144A | Specialty Retail | 1,125 | 12,937 | ||||||||||
BASF SE | Chemicals | 11,115 | 640,121 | |||||||||||
Bayer AG | Pharmaceuticals | 11,925 | 823,965 | |||||||||||
Bayerische Motoren Werke AG | Automobiles | 3,900 | 341,072 | |||||||||||
Bechtle AG | IT Services | 990 | 56,398 | |||||||||||
Beiersdorf AG | Personal Products | 1,215 | 128,698 | |||||||||||
Brenntag AG | Trading Companies & Distributors | 1,875 | 153,003 | |||||||||||
Carl Zeiss Meditec AG | Health Care Equipment & Supplies | 450 | 73,577 | |||||||||||
| a | Commerzbank AG | Banks | 12,630 | 97,344 | ||||||||||
| a | Continental AG | Auto Components | 1,305 | 94,961 | ||||||||||
| b | Covestro AG, 144A | Chemicals | 2,175 | 110,933 | ||||||||||
| a | CTS Eventim AG & Co. KGaA | Entertainment | 705 | 48,650 | ||||||||||
Daimler AG | Automobiles | 10,200 | 724,182 | |||||||||||
Daimler Truck Holding AG | Machinery | 5,070 | 142,326 | |||||||||||
| a,b | Delivery Hero SE, 144A | Internet & Direct Marketing Retail | 2,280 | 101,119 | ||||||||||
| a | Deutsche Bank AG | Capital Markets | 24,840 | 318,116 | ||||||||||
Deutsche Boerse AG | Capital Markets | 2,235 | 405,344 | |||||||||||
| a | Deutsche Lufthansa AG | Airlines | 7,320 | 59,928 | ||||||||||
Deutsche Post AG | Air Freight & Logistics | 11,865 | 574,929 | |||||||||||
Deutsche Telekom AG | Diversified Telecommunication Services | 41,040 | 773,169 | |||||||||||
Deutsche Wohnen AG | Real Estate Management & Development | 585 | 19,787 | |||||||||||
| b | DWS Group GmbH & Co. KGaA, 144A | Capital Markets | 420 | 15,543 | ||||||||||
E.ON SE | Multi-Utilities | 26,280 | 308,253 | |||||||||||
Evonik Industries AG | Chemicals | 2,310 | 64,718 | |||||||||||
| a | Evotec SE | Life Sciences Tools & Services | 1,890 | 57,620 | ||||||||||
Fielmann AG | Specialty Retail | 300 | 16,489 | |||||||||||
| a | Fraport AG Frankfurt Airport Services Worldwide | Transportation Infrastructure | 435 | 24,442 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | Health Care Providers & Services | 2,475 | 167,321 | |||||||||||
Fresenius SE & Co. KGaA | Health Care Providers & Services | 4,920 | 182,539 | |||||||||||
Fuchs Petrolub SE | Chemicals | 405 | 11,608 | |||||||||||
GEA Group AG | Machinery | 2,025 | 84,064 | |||||||||||
Hannover Rueck SE | Insurance | 720 | 123,651 | |||||||||||
HeidelbergCement AG | Construction Materials | 1,755 | 100,877 | |||||||||||
| a | Hella GmbH & Co. KGaA | Auto Components | 270 | 17,496 | ||||||||||
| a | HelloFresh SE | Internet & Direct Marketing Retail | 1,965 | 89,553 | ||||||||||
Henkel AG & Co. KGaA | Household Products | 1,230 | 82,045 | |||||||||||
Hochtief AG | Construction & Engineering | 240 | 16,343 | |||||||||||
Infineon Technologies AG | Semiconductors & Semiconductor Equipment | 15,795 | 544,540 | |||||||||||
KION Group AG | Machinery | 945 | 63,087 | |||||||||||
Knorr-Bremse AG | Machinery | 795 | 61,601 | |||||||||||
Lanxess AG | Chemicals | 1,035 | 45,937 | |||||||||||
LEG Immobilien AG | Real Estate Management & Development | 885 | 101,670 | |||||||||||
Merck KGaA | Pharmaceuticals | 1,560 | 329,529 | |||||||||||
METRO AG | Food & Staples Retailing | 1,620 | 14,539 | |||||||||||
MTU Aero Engines AG | Aerospace & Defense | 645 | 151,211 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | Insurance | 1,695 | 458,284 | |||||||||||
Nemetschek AG | Software | 660 | 64,476 | |||||||||||
Puma SE | Textiles, Apparel & Luxury Goods | 1,200 | 103,396 | |||||||||||
Rational AG | Machinery | 41 | 28,603 | |||||||||||
Rheinmetall AG | Industrial Conglomerates | 525 | 112,214 | |||||||||||
RWE AG | Multi-Utilities | 7,650 | 336,470 | |||||||||||
SAP SE | Software | 13,440 | 1,512,150 | |||||||||||
Sartorius AG | Health Care Equipment & Supplies | 30 | 11,516 | |||||||||||
| b | Scout24 AG, 144A | Interactive Media & Services | 915 | 52,940 | ||||||||||
| 244 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Germany ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Germany (continued) | ||||||||||||||
Siemens AG | Industrial Conglomerates | 9,120 | $ | 1,275,119 | ||||||||||
| a | Siemens Energy AG | Electrical Equipment | 5,220 | 120,342 | ||||||||||
| b | Siemens Healthineers AG, 144A | Health Care Equipment & Supplies | 3,345 | 209,315 | ||||||||||
Sixt SE | Road & Rail | 165 | 22,471 | |||||||||||
Symrise AG | Chemicals | 1,575 | 190,751 | |||||||||||
| a | Talanx AG | Insurance | 645 | 28,721 | ||||||||||
Telefonica Deutschland Holding AG | Diversified Telecommunication Services | 8,040 | 22,087 | |||||||||||
| a | thyssenkrupp AG | Metals & Mining | 5,940 | 51,485 | ||||||||||
Traton SE | Machinery | 615 | 11,544 | |||||||||||
Uniper SE | Independent Power and Renewable Electricity Producers | 1,065 | 27,728 | |||||||||||
United Internet AG | Diversified Telecommunication Services | 1,305 | 45,274 | |||||||||||
Vantage Towers AG | Diversified Telecommunication Services | 1,110 | 39,632 | |||||||||||
Varta AG | Electrical Equipment | 165 | 16,505 | |||||||||||
Volkswagen AG | Automobiles | 390 | 98,156 | |||||||||||
Vonovia SE | Real Estate Management & Development | 9,435 | 444,164 | |||||||||||
Wacker Chemie AG | Chemicals | 180 | 30,993 | |||||||||||
| a,b | Zalando SE, 144A | Internet & Direct Marketing Retail | 2,640 | 135,120 | ||||||||||
|
| |||||||||||||
| 15,560,541 | ||||||||||||||
|
| |||||||||||||
| Luxembourg 0.7% | ||||||||||||||
Aroundtown SA | Real Estate Management & Development | 13,890 | 80,272 | |||||||||||
| a | RTL Group SA | Media | 465 | 26,076 | ||||||||||
| a | SUSE SA | Software | 435 | 14,142 | ||||||||||
|
| |||||||||||||
| 120,490 | ||||||||||||||
|
| |||||||||||||
| Netherlands 0.8% | ||||||||||||||
| a | QIAGEN NV | Life Sciences Tools & Services | 2,685 | 133,032 | ||||||||||
|
| |||||||||||||
Total Common Stocks | 15,814,063 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 5.6% | ||||||||||||||
| Germany 5.6% | ||||||||||||||
| c | Bayerische Motoren Werke AG, 2.731%, pfd. | Automobiles | 690 | 53,971 | ||||||||||
| c | Fuchs Petrolub SE, 3.020%, pfd. | Chemicals | 855 | 31,184 | ||||||||||
| c | Henkel AG & Co. KGaA, 3.049%, pfd. | Household Products | 2,130 | 143,808 | ||||||||||
| c | Porsche Automobil Holding SE, 2.514%, pfd. | Automobiles | 1,860 | 181,912 | ||||||||||
| c | Sartorius AG, 0.314%, pfd. | Health Care Equipment & Supplies | 300 | 134,086 | ||||||||||
| c | Sixt SE, 0.074%, pfd. | Road & Rail | 195 | 14,754 | ||||||||||
| c | Volkswagen AG, 3.096%, pfd. | Automobiles | 2,220 | 387,803 | ||||||||||
|
| |||||||||||||
Total Preferred Stocks | 947,518 | |||||||||||||
|
| |||||||||||||
Total Investments | 16,761,581 | |||||||||||||
Other Assets, less Liabilities 0.1% | 13,128 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 16,774,709 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $637,907, representing 3.8% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 245 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Hong Kong ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 28.10 | $ | 20.58 | $ | 26.82 | $ | 26.17 | $ | 25.30 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.74 | 0.72 | 0.77 | 0.66 | 0.16 | |||||||||||||||
Net realized and unrealized gains (losses) | (4.72 | ) | 7.61 | (6.25 | ) | 0.59 | 0.78 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (3.98 | ) | 8.33 | (5.48 | ) | 1.25 | 0.94 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.69 | ) | (0.81 | ) | (0.76 | ) | (0.60 | ) | (0.07 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 23.43 | $ | 28.10 | $ | 20.58 | $ | 26.82 | $ | 26.17 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (14.41)% | 41.14% | (20.90)% | 4.97% | 3.70% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total Expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 2.79% | 2.99% | 3.10% | 2.67% | 1.49% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $17,573 | $16,862 | $15,433 | $20,118 | $7,852 | |||||||||||||||
Portfolio turnover ratef | 9.91% | g | 14.84% | g | 5.99% | g | 5.33% | 0.93% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 9.74% | 14.84% | 5.99% |
| 246 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.6% | ||||||||||||||
| Cambodia 0.3% | ||||||||||||||
NagaCorp Ltd. | Hotels, Restaurants & Leisure | 50,000 | $ | 44,628 | ||||||||||
|
| |||||||||||||
| China 13.5% | ||||||||||||||
AAC Technologies Holdings Inc. | Electronic Equipment, Instruments & Components | 22,500 | 54,530 | |||||||||||
| a | BeiGene Ltd. | Biotechnology | 22,500 | 348,214 | ||||||||||
BOC Hong Kong (Holdings) Ltd. | Banks | 120,000 | 455,091 | |||||||||||
| a,b | Budweiser Brewing Co. APAC Ltd., 144A | Beverages | 56,500 | 150,423 | ||||||||||
| a | China Travel International Investment Hong Kong Ltd. | Hotels, Restaurants & Leisure | 90,000 | 17,123 | ||||||||||
Chow Tai Fook Jewellery Co. Ltd. | Specialty Retail | 59,000 | 107,432 | |||||||||||
| a,b | ESR Cayman Ltd., 144A | Real Estate Management & Development | 56,000 | 174,120 | ||||||||||
| a | FIH Mobile Ltd. | Electronic Equipment, Instruments & Components | 95,000 | 13,101 | ||||||||||
| a | HUTCHMED China Ltd. | Biotechnology | 16,500 | 63,418 | ||||||||||
Kerry Logistics Network Ltd. | Air Freight & Logistics | 10,000 | 22,933 | |||||||||||
Lee & Man Paper Manufacturing Ltd. | Paper & Forest Products | 50,000 | 26,113 | |||||||||||
Lenovo Group Ltd. | Technology Hardware, Storage & Peripherals | 250,000 | 271,982 | |||||||||||
Microport Scientific Corp. | Health Care Equipment & Supplies | 16,000 | 36,326 | |||||||||||
Minth Group Ltd. | Auto Components | 24,000 | 59,208 | |||||||||||
| a | MMG Ltd. | Metals & Mining | 80,000 | 32,280 | ||||||||||
Nexteer Automotive Group Ltd. | Auto Components | 30,000 | 19,154 | |||||||||||
| a | Shangri-La Asia Ltd. | Hotels, Restaurants & Leisure | 40,000 | 31,463 | ||||||||||
Shui On Land Ltd. | Real Estate Management & Development | 120,000 | 18,388 | |||||||||||
SITC International Holdings Co. Ltd. | Marine | 40,000 | 141,737 | |||||||||||
Tingyi Cayman Islands Holding Corp. | Food Products | 64,000 | 107,873 | |||||||||||
Towngas China Co. Ltd. | Gas Utilities | 40,000 | 21,043 | |||||||||||
Uni-President China Holdings Ltd. | Food Products | 40,000 | 34,885 | |||||||||||
Want Want China Holdings Ltd. | Food Products | 175,000 | 161,785 | |||||||||||
|
| |||||||||||||
| 2,368,622 | ||||||||||||||
|
| |||||||||||||
| Hong Kong 75.9% | ||||||||||||||
AIA Group Ltd. | Insurance | 342,000 | 3,600,621 | |||||||||||
ASM Pacific Technology Ltd. | Semiconductors & Semiconductor Equipment | 10,500 | 106,590 | |||||||||||
Cafe de Coral Holdings Ltd. | Hotels, Restaurants & Leisure | 10,000 | 16,728 | |||||||||||
| a | Cathay Pacific Airways Ltd. | Airlines | 35,000 | 34,457 | ||||||||||
Champion REIT | Equity Real Estate Investment Trusts (REITs | ) | 65,000 | 29,548 | ||||||||||
CK Asset Holdings Ltd. | Real Estate Management & Development | 66,000 | 452,563 | |||||||||||
CK Infrastructure Holdings Ltd. | Electric Utilities | 20,000 | 133,948 | |||||||||||
CLP Holdings Ltd. | Electric Utilities | 55,000 | 536,207 | |||||||||||
Dah Sing Banking Group Ltd. | Banks | 12,000 | 10,665 | |||||||||||
Dah Sing Financial Group | Banks | 4,800 | 15,629 | |||||||||||
Dairy Farm International Holdings Ltd. | Food & Staples Retailing | 10,000 | 28,200 | |||||||||||
Guotai Junan International Holdings Ltd. | Capital Markets | 75,000 | 8,428 | |||||||||||
Haitong International Securities Group Ltd. | Capital Markets | 80,000 | 14,404 | |||||||||||
Hang Lung Group Ltd. | Real Estate Management & Development | 30,000 | 63,743 | |||||||||||
Hang Lung Properties Ltd. | Real Estate Management & Development | 70,000 | 141,226 | |||||||||||
Hang Seng Bank Ltd. | Banks | 24,500 | 473,019 | |||||||||||
Henderson Land Development Co. Ltd. | Real Estate Management & Development | 44,000 | 183,160 | |||||||||||
Hong Kong and China Gas Co. Ltd. | Gas Utilities | 365,000 | 442,303 | |||||||||||
Hong Kong Exchanges and Clearing Ltd. | Capital Markets | 42,650 | 2,022,654 | |||||||||||
Hongkong Land Holdings Ltd. | Real Estate Management & Development | 39,000 | 191,100 | |||||||||||
Huabao International Holdings Ltd. | Chemicals | 30,000 | 16,740 | |||||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | Wireless Telecommunication Services | 40,000 | 6,436 | |||||||||||
Hysan Development Co. Ltd. | Real Estate Management & Development | 20,000 | 58,483 | |||||||||||
Jardine Matheson Holdings Ltd. | Industrial Conglomerates | 6,900 | 379,500 | |||||||||||
Johnson Electric Holdings Ltd. | Auto Components | 12,500 | 17,302 | |||||||||||
Kerry Properties Ltd. | Real Estate Management & Development | 20,000 | 56,567 | |||||||||||
| a | Lifestyle International Holdings Ltd. | Multiline Retail | 15,000 | 7,259 | ||||||||||
| franklintempleton.com | Annual Report | 247 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Hong Kong ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Hong Kong (continued) | ||||||||||||||
Link REIT | Equity Real Estate Investment Trusts (REITs | ) | 71,000 | $ | 607,426 | |||||||||
Man Wah Holdings Ltd. | Household Durables | 52,000 | 57,037 | |||||||||||
| a | Melco International Development Ltd. | Hotels, Restaurants & Leisure | 25,000 | 23,112 | ||||||||||
MTR Corp. Ltd. | Road & Rail | 47,500 | 256,867 | |||||||||||
New World Development Co. Ltd. | Real Estate Management & Development | 48,000 | 195,214 | |||||||||||
NWS Holdings Ltd. | Industrial Conglomerates | 45,000 | 41,372 | |||||||||||
Orient Overseas International Ltd. | Marine | 4,500 | 120,323 | |||||||||||
PCCW Ltd. | Diversified Telecommunication Services | 140,000 | 79,015 | |||||||||||
Power Assets Holdings Ltd. | Electric Utilities | 46,000 | 299,857 | |||||||||||
| a | Shun Tak Holdings Ltd. | Industrial Conglomerates | 40,000 | 8,785 | ||||||||||
Sino Land Co. Ltd. | Real Estate Management & Development | 120,000 | 155,681 | |||||||||||
Sun Hung Kai Properties Ltd. | Real Estate Management & Development | 47,500 | 567,715 | |||||||||||
Swire Pacific Ltd., A | Real Estate Management & Development | 17,000 | 103,979 | |||||||||||
Swire Pacific Ltd., B | Real Estate Management & Development | 32,500 | 32,785 | |||||||||||
Swire Properties Ltd. | Real Estate Management & Development | 36,000 | 89,455 | |||||||||||
Techtronic Industries Co. Ltd. | Machinery | 41,800 | 677,327 | |||||||||||
The Bank of East Asia Ltd. | Banks | 42,000 | 65,965 | |||||||||||
The Wharf Holdings Ltd. | Real Estate Management & Development | 45,000 | 137,332 | |||||||||||
United Energy Group Ltd. | Oil, Gas & Consumable Fuels | 240,000 | 27,581 | |||||||||||
Vinda International Holdings Ltd. | Household Products | 10,000 | 22,627 | |||||||||||
Vitasoy International Holdings Ltd. | Food Products | 25,700 | 48,765 | |||||||||||
VTech Holdings Ltd. | Communications Equipment | 5,500 | 40,031 | |||||||||||
| b | WH Group Ltd., 144A | Food Products | 260,248 | 164,495 | ||||||||||
Wharf Real Estate Investment Co. Ltd. | Real Estate Management & Development | 55,075 | 273,216 | |||||||||||
Xinyi Glass Holdings Ltd. | Building Products | 68,000 | 164,977 | |||||||||||
| a | Yue Yuen Industrial Holdings Ltd. | Textiles, Apparel & Luxury Goods | 22,500 | 36,315 | ||||||||||
|
| |||||||||||||
| 13,344,734 | ||||||||||||||
|
| |||||||||||||
| Indonesia 0.2% | ||||||||||||||
First Pacific Co. Ltd. | Food Products | 80,000 | 32,382 | |||||||||||
|
| |||||||||||||
| Italy 0.6% | ||||||||||||||
Prada SpA | Textiles, Apparel & Luxury Goods | 17,000 | 107,995 | |||||||||||
|
| |||||||||||||
| Luxembourg 0.3% | ||||||||||||||
L’Occitane International SA | Personal Products | 15,000 | 48,746 | |||||||||||
|
| |||||||||||||
| Macau 4.0% | ||||||||||||||
Galaxy Entertainment Group Ltd. | Hotels, Restaurants & Leisure | 72,150 | 433,007 | |||||||||||
| a | MGM China Holdings Ltd. | Hotels, Restaurants & Leisure | 26,000 | 16,567 | ||||||||||
Sands China Ltd. | Hotels, Restaurants & Leisure | 80,000 | 193,886 | |||||||||||
| a | SJM Holdings Ltd. | Hotels, Restaurants & Leisure | 65,000 | 32,287 | ||||||||||
| a | Wynn Macau Ltd. | Hotels, Restaurants & Leisure | 50,000 | 36,647 | ||||||||||
|
| |||||||||||||
| 712,394 | ||||||||||||||
|
| |||||||||||||
| Singapore 0.3% | ||||||||||||||
| b | BOC Aviation Ltd., 144A | Trading Companies & Distributors | 7,000 | 55,373 | ||||||||||
|
| |||||||||||||
| Taiwan 0.0%† | ||||||||||||||
| a,b | FIT Hon Teng Ltd., 144A | Electronic Equipment, Instruments & Components | 40,000 | 5,976 | ||||||||||
|
| |||||||||||||
| United Kingdom 3.8% | ||||||||||||||
CK Hutchison Holdings Ltd. | Industrial Conglomerates | 90,000 | 661,376 | |||||||||||
|
| |||||||||||||
| 248 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Hong Kong ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States 0.7% | ||||||||||||||
| b | JS Global Lifestyle Co. Ltd., 144A | Household Durables | 22,500 | $ | 26,461 | |||||||||
| a,b | Samsonite International SA, 144A | Textiles, Apparel & Luxury Goods | 43,500 | 98,427 | ||||||||||
|
| |||||||||||||
| 124,888 | ||||||||||||||
|
| |||||||||||||
Total Investments | 17,507,114 | |||||||||||||
Other Assets, less Liabilities 0.4% | 66,276 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 17,573,390 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $675,275, representing 3.84% of net assets.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
MINI HSI IDX | Long | 2 | $ | 439,800 | 4/28/22 | $ | 587 | |||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 249 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE India ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 27.70 | $ | 15.98 | $ | 23.36 | $ | 22.74 | $ | 23.72 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.27 | 0.20 | 0.26 | 0.29 | 0.09 | |||||||||||||||
Net realized and unrealized gains (losses) | 4.09 | 11.70 | (7.43 | ) | 0.53 | (1.07 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.36 | 11.90 | (7.17 | ) | 0.82 | (0.98 | ) | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.72 | ) | (0.18 | ) | (0.21 | ) | (0.20 | ) | — | |||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 31.34 | $ | 27.70 | $ | 15.98 | $ | 23.36 | $ | 22.74 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 15.75% | 74.87% | (30.98)% | 3.66% | (4.13)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
Net investment income | 0.86% | 0.89% | 1.20% | 1.33% | 2.78% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $50,140 | $23,544 | $8,790 | $7,007 | $2,274 | |||||||||||||||
Portfolio turnover ratef | 10.73% | g | 23.48% | g | 36.55% | g | 8.03% | 1.59% | ||||||||||||
aFor the period February 6, 2018 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 8.16% | 16.91% | 6.83% |
| 250 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 101.8% | ||||||||||||||
| India 101.8% | ||||||||||||||
| a | 3M India Ltd. | Industrial Conglomerates | 133 | $ | 34,573 | |||||||||
Aarti Industries Ltd. | Chemicals | 8,832 | 111,503 | |||||||||||
ABB India Ltd. | Electrical Equipment | 2,368 | 67,437 | |||||||||||
ACC Ltd. | Construction Materials | 4,032 | 114,474 | |||||||||||
Adani Enterprises Ltd. | Trading Companies & Distributors | 12,416 | 330,124 | |||||||||||
| a | Adani Green Energy Ltd. | Independent Power and Renewable Electricity Producers | 18,528 | 468,170 | ||||||||||
Adani Ports And Special Economic Zone Ltd. | Transportation Infrastructure | 36,096 | 368,796 | |||||||||||
| a | Adani Power Ltd. | Independent Power and Renewable Electricity Producers | 43,264 | 105,684 | ||||||||||
Adani Total Gas Ltd | Gas Utilities | 13,088 | 371,317 | |||||||||||
| a | Adani Transmission Ltd. | Electric Utilities | 11,776 | 368,028 | ||||||||||
| a | Aditya Birla Capital Ltd. | Diversified Financial Services | 22,432 | 31,868 | ||||||||||
Alkem Laboratories Ltd. | Pharmaceuticals | 1,184 | 56,574 | |||||||||||
Ambuja Cements Ltd. | Construction Materials | 32,384 | 127,891 | |||||||||||
Apollo Hospitals Enterprise Ltd. | Health Care Providers & Services | 4,672 | 278,446 | |||||||||||
Ashok Leyland Ltd. | Machinery | 67,552 | 104,526 | |||||||||||
Asian Paints Ltd. | Chemicals | 21,280 | 864,947 | |||||||||||
Astral Poly Technik Ltd. | Building Products | 4,192 | 111,913 | |||||||||||
| a,b | AU Small Finance Bank Ltd., 144A | Banks | 7,232 | 118,943 | ||||||||||
Aurobindo Pharma Ltd. | Pharmaceuticals | 12,512 | 110,391 | |||||||||||
| a,b | Avenue Supermarts Ltd., 144A | Food & Staples Retailing | 7,008 | 370,247 | ||||||||||
| a | Axis Bank Ltd. | Banks | 107,008 | 1,074,881 | ||||||||||
Bajaj Auto Ltd. | Automobiles | 3,264 | 157,353 | |||||||||||
Bajaj Finance Ltd. | Consumer Finance | 11,072 | 1,060,801 | |||||||||||
Bajaj Finserv Ltd. | Diversified Financial Services | 1,792 | 403,462 | |||||||||||
Bajaj Holdings & Investment Ltd. | Diversified Financial Services | 1,248 | 82,531 | |||||||||||
Balkrishna Industries Ltd. | Auto Components | 3,776 | 106,451 | |||||||||||
| b | Bandhan Bank Ltd, 144A | Banks | 37,216 | 150,976 | ||||||||||
| a | Bank of Baroda | Banks | 48,864 | 71,966 | ||||||||||
| a | Bank of India | Banks | 22,784 | 13,786 | ||||||||||
Bata India Ltd. | Textiles, Apparel & Luxury Goods | 2,816 | 72,891 | |||||||||||
Bayer Cropscience Ltd. | Chemicals | 608 | 39,873 | |||||||||||
Berger Paints India Ltd. | Chemicals | 11,104 | 102,533 | |||||||||||
Bharat Electronics Ltd. | Aerospace & Defense | 51,424 | 143,057 | |||||||||||
Bharat Forge Ltd. | Auto Components | 11,872 | 109,766 | |||||||||||
| a | Bharat Heavy Electricals Ltd. | Electrical Equipment | 62,144 | 40,473 | ||||||||||
Bharat Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 47,136 | 223,534 | |||||||||||
| a | Bharti Airtel Ltd. | Wireless Telecommunication Services | 107,712 | 1,073,140 | ||||||||||
| a | Bharti Infratel Ltd. | Diversified Telecommunication Services | 59,072 | 173,104 | ||||||||||
| a | Biocon Ltd. | Biotechnology | 21,280 | 94,247 | ||||||||||
Bosch Ltd. | Auto Components | 416 | 79,266 | |||||||||||
Britannia Industries Ltd. | Food Products | 5,600 | 236,963 | |||||||||||
Cadila Healthcare Ltd. | Pharmaceuticals | 11,840 | 54,454 | |||||||||||
| a | Canara Bank Ltd. | Banks | 17,504 | 52,610 | ||||||||||
Castrol India Ltd. | Chemicals | 23,488 | 31,292 | |||||||||||
Cholamandalam Investment and Finance Co. Ltd. | Consumer Finance | 18,944 | 179,615 | |||||||||||
Cipla Ltd. | Pharmaceuticals | 24,128 | 324,164 | |||||||||||
Coal India Ltd. | Oil, Gas & Consumable Fuels | 89,216 | 215,519 | |||||||||||
Coforge Ltd. | IT Services | 1,120 | 65,885 | |||||||||||
Colgate-Palmolive (India) Ltd. | Personal Products | 6,272 | 127,654 | |||||||||||
Container Corp. of India Ltd. | Road & Rail | 12,960 | 114,960 | |||||||||||
Coromandel International Ltd. | Chemicals | 5,248 | 55,378 | |||||||||||
Cummins India Ltd. | Machinery | 6,368 | 94,232 | |||||||||||
Dabur India Ltd. | Personal Products | 25,024 | 177,075 | |||||||||||
Dalmia Bharat Ltd. | Construction Materials | 3,840 | 75,792 | |||||||||||
Deepak Nitrite Ltd. | Chemicals | 3,488 | 103,282 | |||||||||||
| franklintempleton.com | Annual Report | 251 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE India ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Divi’s Laboratories Ltd. | Life Sciences Tools & Services | 6,016 | $ | 349,492 | ||||||||||
Dixon Technologies India Ltd. | Household Durables | 1,664 | 94,620 | |||||||||||
DLF Ltd. | Real Estate Management & Development | 28,064 | 140,903 | |||||||||||
| b | Dr Lal PathLabs Ltd., 144A | Health Care Providers & Services | 1,632 | 56,228 | ||||||||||
Dr Reddy’s Laboratories Ltd. | Pharmaceuticals | 5,696 | 322,889 | |||||||||||
Eicher Motors Ltd. | Automobiles | 6,336 | 205,457 | |||||||||||
Emami Ltd. | Personal Products | 9,760 | 57,594 | |||||||||||
Embassy Office Parks REIT | Equity Real Estate Investment Trusts (REITs | ) | 25,120 | 123,238 | ||||||||||
Exide Industries Ltd. | Auto Components | 21,056 | 41,987 | |||||||||||
Federal Bank Ltd. | Banks | 73,088 | 93,946 | |||||||||||
GAIL India Ltd. | Gas Utilities | 84,000 | 172,545 | |||||||||||
| a,b | General Insurance Corp. of India, 144A | Insurance | 4,864 | 7,308 | ||||||||||
Gillette India Ltd. | Personal Products | 384 | 24,576 | |||||||||||
GlaxoSmithKline Pharmaceuticals Ltd. | Pharmaceuticals | 2,048 | 45,052 | |||||||||||
Glenmark Pharmaceuticals Ltd. | Pharmaceuticals | 6,912 | 40,318 | |||||||||||
| a | GMR Infrastructure Ltd. | Transportation Infrastructure | 114,400 | 55,785 | ||||||||||
| a | GMR Power & Urban Infra Ltd.—Spun Off | Construction & Engineering | 10,014 | 4,440 | ||||||||||
| a | Godrej Consumer Products Ltd. | Personal Products | 17,184 | 169,470 | ||||||||||
| a | Godrej Industries Ltd. | Industrial Conglomerates | 4,096 | 25,081 | ||||||||||
| a | Godrej Properties Ltd. | Real Estate Management & Development | 4,128 | 91,097 | ||||||||||
Grasim Industries Ltd. | Construction Materials | 18,080 | 397,032 | |||||||||||
Gujarat Gas Ltd. | Gas Utilities | 9,536 | 63,332 | |||||||||||
Havell’s India Ltd. | Electrical Equipment | 11,328 | 172,301 | |||||||||||
HCL Technologies Ltd. | IT Services | 51,200 | 786,328 | |||||||||||
| b | HDFC Asset Management Co. Ltd., 144A | Capital Markets | 2,560 | 72,503 | ||||||||||
| b | HDFC Life Insurance Co. Ltd., 144A | Insurance | 45,696 | 324,561 | ||||||||||
Hero Motocorp Ltd. | Automobiles | 6,176 | 186,983 | |||||||||||
Hindalco Industries Ltd. | Metals & Mining | 66,592 | 500,484 | |||||||||||
Hindustan Aeronautics Ltd. | Aerospace & Defense | 1,696 | 33,235 | |||||||||||
Hindustan Petroleum Corp. Ltd. | Oil, Gas & Consumable Fuels | 32,416 | 115,226 | |||||||||||
Hindustan Unilever Ltd. | Household Products | 41,824 | 1,130,752 | |||||||||||
Hindustan Zinc Ltd. | Metals & Mining | 10,688 | 43,746 | |||||||||||
Honeywell Automation India Ltd. | Electronic Equipment, Instruments & Components | 106 | 55,503 | |||||||||||
Housing Development Finance Corp. Ltd. | Thrifts & Mortgage Finance | 82,304 | 2,596,364 | |||||||||||
ICICI Bank Ltd. | Banks | 73,472 | 708,104 | |||||||||||
| b,c | ICICI Lombard General Insurance Co. Ltd., 144A, Reg S | Insurance | 11,360 | 199,135 | ||||||||||
| b,c | ICICI Prudential Life Insurance Co. Ltd., 144A, Reg S | Insurance | 16,928 | 111,900 | ||||||||||
| a | IDFC First Bank Ltd. | Banks | 142,144 | 74,472 | ||||||||||
Indiabulls Housing Finance Ltd. | Thrifts & Mortgage Finance | 16,448 | 34,253 | |||||||||||
Indian Oil Corp. Ltd. | Oil, Gas & Consumable Fuels | 129,056 | 202,589 | |||||||||||
Indian Railway Catering and Tourism Corp. Ltd. | Commercial Services & Supplies | 12,320 | 125,956 | |||||||||||
| b | Indian Railway Finance Corp. Ltd., 144A | Diversified Financial Services | 80,160 | 22,691 | ||||||||||
Indraprastha Gas Ltd. | Gas Utilities | 16,512 | 81,312 | |||||||||||
Info Edge India Ltd. | Interactive Media & Services | 3,584 | 213,288 | |||||||||||
Infosys Ltd. | IT Services | 167,520 | 4,215,579 | |||||||||||
| a,b,c | InterGlobe Aviation Ltd., 144A, Reg S | Airlines | 4,544 | 120,783 | ||||||||||
Ipca Laboratories Ltd. | Pharmaceuticals | 6,400 | 90,014 | |||||||||||
ITC Ltd. | Tobacco | 139,392 | 461,084 | |||||||||||
Jindal Steel & Power Ltd. | Metals & Mining | 18,688 | 131,414 | |||||||||||
JSW Energy Ltd. | Independent Power and Renewable Electricity Producers | 17,856 | 71,212 | |||||||||||
JSW Steel Ltd. | Metals & Mining | 47,200 | 456,365 | |||||||||||
Jubilant Foodworks Ltd. | Hotels, Restaurants & Leisure | 3,424 | 119,134 | |||||||||||
Kansai Nerolac Paints Ltd. | Chemicals | 5,888 | 36,346 | |||||||||||
| a | L&T Finance Holdings Ltd. | Diversified Financial Services | 43,072 | 45,815 | ||||||||||
| b | L&T Technology Services Ltd., 144A | Professional Services | 1,184 | 79,771 | ||||||||||
| 252 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE India ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
| b,c | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | IT Services | 2,112 | $ | 171,563 | |||||||||
Larsen & Toubro Ltd. | Construction & Engineering | 32,480 | 757,681 | |||||||||||
| b | Laurus Labs Ltd., 144A | Pharmaceuticals | 17,088 | 133,073 | ||||||||||
LIC Housing Finance Ltd. | Thrifts & Mortgage Finance | 15,328 | 72,610 | |||||||||||
Lupin Ltd. | Pharmaceuticals | 11,168 | 110,103 | |||||||||||
| a | Macrotech Developers Ltd. | Real Estate Management & Development | 2,624 | 38,999 | ||||||||||
Mahindra & Mahindra Financial Services Ltd. | Consumer Finance | 28,512 | 59,884 | |||||||||||
Mahindra & Mahindra Ltd. | Automobiles | 43,360 | 461,524 | |||||||||||
| a | Mangalore Refinery and Petrochemicals Ltd. | Oil, Gas & Consumable Fuels | 9,984 | 5,481 | ||||||||||
Marico Ltd. | Personal Products | 24,352 | 161,875 | |||||||||||
Maruti Suzuki India Ltd. | Automobiles | 6,240 | 622,666 | |||||||||||
| a | Max Financial Services Ltd. | Insurance | 11,424 | 113,660 | ||||||||||
| a | Max Healthcare Institute Ltd. | Health Care Providers & Services | 17,568 | 80,601 | ||||||||||
Minda Industries Ltd. | Auto Components | 3,936 | 48,427 | |||||||||||
Mindtree Ltd. | IT Services | 2,048 | 116,296 | |||||||||||
Motherson Sumi Systems Ltd. | Auto Components | 67,968 | 125,083 | |||||||||||
| a | Motherson Sumi Wiring India Ltd. | Auto Components | 54,690 | 46,516 | ||||||||||
Mphasis Ltd. | IT Services | 4,224 | 188,239 | |||||||||||
MRF Ltd. | Auto Components | 128 | 109,836 | |||||||||||
Muthoot Finance Ltd. | Consumer Finance | 4,512 | 79,251 | |||||||||||
Nestle India Ltd. | Food Products | 1,696 | 389,012 | |||||||||||
NHPC Ltd. | Independent Power and Renewable Electricity Producers | 111,072 | 40,750 | |||||||||||
| b | Nippon Life India Asset Management Ltd., 144A | Capital Markets | 7,136 | 32,739 | ||||||||||
NMDC Ltd. | Metals & Mining | 35,648 | 76,471 | |||||||||||
NTPC Ltd. | Independent Power and Renewable Electricity Producers | 209,120 | 372,566 | |||||||||||
| a | Oberoi Realty Ltd. | Real Estate Management & Development | 5,600 | 69,458 | ||||||||||
Oil & Natural Gas Corp. Ltd. | Oil, Gas & Consumable Fuels | 174,048 | 376,463 | |||||||||||
Oil India Ltd. | Oil, Gas & Consumable Fuels | 15,264 | 48,023 | |||||||||||
Oracle Financial Services Software Ltd. | Software | 1,088 | 51,514 | |||||||||||
Page Industries Ltd. | Textiles, Apparel & Luxury Goods | 273 | 155,601 | |||||||||||
Persistent Systems Ltd. | IT Services | 2,336 | 146,905 | |||||||||||
| �� | Petronet LNG Ltd. | Oil, Gas & Consumable Fuels | 35,712 | 91,312 | ||||||||||
PI Industries Ltd. | Chemicals | 3,424 | 127,410 | |||||||||||
Pidilite Industries Ltd. | Chemicals | 7,168 | 232,167 | |||||||||||
Piramal Enterprises Ltd. | Diversified Financial Services | 5,952 | 171,777 | |||||||||||
Polycab India Ltd. | Electrical Equipment | 1,216 | 37,943 | |||||||||||
Power Finance Corp. Ltd. | Diversified Financial Services | 54,400 | 80,837 | |||||||||||
Power Grid Corp. of India Ltd. | Electric Utilities | 148,288 | 424,267 | |||||||||||
| a | Punjab National Bank Ltd. | Banks | 50,496 | 23,357 | ||||||||||
Rajesh Exports Ltd. | Textiles, Apparel & Luxury Goods | 6,496 | 59,246 | |||||||||||
| a,b,c | RBL Bank Ltd., 144A, Reg S | Banks | 21,024 | 36,124 | ||||||||||
REC Ltd. | Diversified Financial Services | 43,520 | 70,672 | |||||||||||
Relaxo Footwears Ltd. | Textiles, Apparel & Luxury Goods | 3,392 | 47,734 | |||||||||||
Reliance Industries Ltd. | Oil, Gas & Consumable Fuels | 154,528 | 5,373,047 | |||||||||||
SBI Cards & Payment Services Ltd. | Consumer Finance | 13,600 | 152,862 | |||||||||||
| b | SBI Life Insurance Co. Ltd., 144A | Insurance | 19,808 | 293,153 | ||||||||||
Shree Cement Ltd. | Construction Materials | 640 | 202,981 | |||||||||||
Shriram Transport Finance Co. Ltd. | Consumer Finance | 9,344 | 139,941 | |||||||||||
Siemens Ltd. | Industrial Conglomerates | 4,032 | 126,012 | |||||||||||
| b | Sona Blw Precision Forgings Ltd., 144A | Auto Components | 8,352 | 74,890 | ||||||||||
SRF Ltd. | Chemicals | 6,656 | 235,351 | |||||||||||
State Bank of India | Banks | 84,256 | 548,790 | |||||||||||
Steel Authority of India Ltd. | Metals & Mining | 45,952 | 59,763 | |||||||||||
Sun Pharmaceutical Industries Ltd. | Pharmaceuticals | 51,296 | 619,241 | |||||||||||
| franklintempleton.com | Annual Report | 253 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE India ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| India (continued) | ||||||||||||||
Sun TV Network Ltd. | Media | 4,448 | $ | 28,754 | ||||||||||
Tata Communications Ltd. | Diversified Telecommunication Services | 5,344 | 86,647 | |||||||||||
Tata Consultancy Services Ltd. | IT Services | 48,672 | 2,402,255 | |||||||||||
Tata Consumer Products Ltd. | Food Products | 28,512 | 292,514 | |||||||||||
Tata Elxsi Ltd. | Software | 1,632 | 190,394 | |||||||||||
| a | Tata Motors Ltd. | Automobiles | 86,784 | 496,768 | ||||||||||
| a | Tata Motors Ltd., A | Automobiles | 18,240 | 49,707 | ||||||||||
Tata Power Co. Ltd. | Electric Utilities | 95,520 | 300,836 | |||||||||||
Tata Steel Ltd. | Metals & Mining | 38,144 | 658,025 | |||||||||||
| a | Tata Teleservices Maharashtra Ltd. | Diversified Telecommunication Services | 23,680 | 52,094 | ||||||||||
Tech Mahindra Ltd. | IT Services | 28,448 | 562,934 | |||||||||||
Titan Co. Ltd. | Textiles, Apparel & Luxury Goods | 19,648 | 657,608 | |||||||||||
Torrent Pharmaceuticals Ltd. | Pharmaceuticals | 2,304 | 84,891 | |||||||||||
Torrent Power Ltd. | Electric Utilities | 10,144 | 65,844 | |||||||||||
Trent Ltd. | Multiline Retail | 8,576 | 144,357 | |||||||||||
Tube Investments of India Ltd. | Auto Components | 4,608 | 98,801 | |||||||||||
TVS Motor Co. Ltd. | Automobiles | 9,280 | 76,622 | |||||||||||
UltraTech Cement Ltd. | Construction Materials | 5,408 | 471,201 | |||||||||||
| a | Union Bank of India Ltd. | Banks | 25,696 | 13,124 | ||||||||||
United Breweries Ltd. | Beverages | 3,232 | 63,533 | |||||||||||
| a | United Spirits Ltd. | Beverages | 13,600 | 159,440 | ||||||||||
UPL Ltd. | Chemicals | 25,312 | 257,078 | |||||||||||
Varun Beverages Ltd. | Beverages | 6,368 | 79,105 | |||||||||||
Vedanta Ltd. | Metals & Mining | 57,984 | 308,649 | |||||||||||
| a | Vodafone Idea Ltd. | Wireless Telecommunication Services | 381,088 | 48,532 | ||||||||||
Voltas Ltd. | Construction & Engineering | 10,816 | 177,766 | |||||||||||
Whirlpool of India Ltd. | Household Durables | 1,440 | 29,890 | |||||||||||
Wipro Ltd. | IT Services | 59,520 | 464,928 | |||||||||||
| a | Yes Bank Ltd. | Banks | 587,733 | 95,402 | ||||||||||
Zee Entertainment Enterprises Ltd. | Media | 39,136 | 148,926 | |||||||||||
| a | Zomato Ltd. | Internet & Direct Marketing Retail | 62,688 | 68,086 | ||||||||||
|
| |||||||||||||
Total Investments | 51,026,869 | |||||||||||||
Other Assets, less Liabilities (1.8)% | (886,953 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 50,139,916 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $2,376,589, representing 4.7% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $639,506, representing 1.3% of net assets.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
SGX Nifty 50 | Long | 3 | $ | 105,219 | 4/28/22 | $ | 1,364 | |||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| 254 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Italy ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 26.50 | $ | 17.61 | $ | 23.13 | $ | 26.27 | $ | 25.51 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.85 | 0.67 | 0.90 | 0.46 | 0.11 | |||||||||||||||
Net realized and unrealized gains (losses) | (1.59 | ) | 8.80 | (5.52 | ) | (2.99 | ) | 0.70 | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (0.74 | ) | 9.47 | (4.62 | ) | (2.53 | ) | 0.81 | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.11 | ) | (0.58 | ) | (0.90 | ) | (0.61 | ) | (0.05 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 24.65 | $ | 26.50 | $ | 17.61 | $ | 23.13 | $ | 26.27 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (3.15)% | 54.64% | (20.84)% | (9.67)% | 3.19% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 3.15% | 3.04% | 3.85% | 2.05% | 1.01% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $3,698 | $3,974 | $2,641 | $10,410 | $2,627 | |||||||||||||||
Portfolio turnover ratef | 12.75% | g | 17.45% | g | 9.89% | g | 16.67% | 3.09% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 12.75% | 17.45% | 9.89% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 255 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 100.0% | ||||||||||||||
| Italy 86.9% | ||||||||||||||
A2A SpA | Multi-Utilities | 15,093 | $ | 26,105 | ||||||||||
Amplifon SpA | Health Care Providers & Services | 1,284 | 57,917 | |||||||||||
Assicurazioni Generali SpA | Insurance | 10,917 | 252,289 | |||||||||||
| a | Atlantia SpA | Transportation Infrastructure | 4,908 | 103,211 | ||||||||||
Banca Mediolanum SpA | Diversified Financial Services | 2,397 | 20,685 | |||||||||||
Buzzi Unicem SpA | Construction Materials | 930 | 17,441 | |||||||||||
Davide Campari-Milano NV | Beverages | 4,929 | 57,886 | |||||||||||
De’ Longhi SpA | Household Durables | 699 | 19,241 | |||||||||||
DiaSorin SpA | Health Care Equipment & Supplies | 225 | 35,524 | |||||||||||
Enel SpA | Electric Utilities | 61,980 | 418,462 | |||||||||||
Eni SpA | Oil, Gas & Consumable Fuels | 20,157 | 298,154 | |||||||||||
Ferrari NV | Automobiles | 1,047 | 231,475 | |||||||||||
FinecoBank Banca Fineco SpA | Banks | 6,087 | 93,633 | |||||||||||
Hera SpA | Multi-Utilities | 7,839 | 29,184 | |||||||||||
| b,c | Infrastrutture Wireless Italiane SpA, 144A, Reg S | Diversified Telecommunication Services | 3,510 | 39,698 | ||||||||||
Interpump Group SpA | Machinery | 801 | 40,729 | |||||||||||
Intesa Sanpaolo SpA | Banks | 135,252 | 313,542 | |||||||||||
Italgas Reti SpA | Gas Utilities | 4,884 | 31,649 | |||||||||||
| a | Iveco Group NV | Machinery | 1,962 | 12,989 | ||||||||||
| a | Leonardo SpA | Aerospace & Defense | 3,990 | 40,044 | ||||||||||
Mediobanca Banca di Credito Finanziario SpA | Banks | 6,933 | 71,123 | |||||||||||
Moncler SpA | Textiles, Apparel & Luxury Goods | 2,037 | 115,001 | |||||||||||
| a,b | Nexi SpA, 144A | IT Services | 7,404 | 86,500 | ||||||||||
| b | Pirelli & C SpA, 144A | Auto Components | 4,872 | 26,730 | ||||||||||
| b,c | Poste Italiane SpA, 144A, Reg S | Insurance | 4,551 | 52,257 | ||||||||||
Prysmian SpA | Electrical Equipment | 2,628 | 90,528 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA | Pharmaceuticals | 966 | 49,055 | |||||||||||
Reply SpA | IT Services | 225 | 37,552 | |||||||||||
Snam SpA | Gas Utilities | 20,331 | 118,355 | |||||||||||
Telecom Italia SpA/Milano | Diversified Telecommunication Services | 107,046 | 39,721 | |||||||||||
Telecom Italia SpA/Milano, di Risp | Diversified Telecommunication Services | 60,174 | 20,621 | |||||||||||
Tenaris SA | Energy Equipment & Services | 4,662 | 71,350 | |||||||||||
Terna—Rete Elettrica Nazionale | Electric Utilities | 13,632 | 118,095 | |||||||||||
UniCredit SpA | Banks | 14,943 | 163,853 | |||||||||||
UnipolSai Assicurazioni SpA | Insurance | 4,245 | 12,687 | |||||||||||
|
| |||||||||||||
| 3,213,286 | ||||||||||||||
|
| |||||||||||||
| Netherlands 2.2% | ||||||||||||||
EXOR NV | Diversified Financial Services | 1,032 | 79,804 | |||||||||||
|
| |||||||||||||
| United Kingdom 3.5% | ||||||||||||||
CNH Industrial NV | Machinery | 8,127 | 130,167 | |||||||||||
|
| |||||||||||||
| United States 7.4% | ||||||||||||||
Stellantis NV | Automobiles | 16,683 | 274,722 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $3,335,664) 100.0% | 3,697,979 | |||||||||||||
| † | Other Assets, less Liabilities 0.0%† | 133 | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 3,698,112 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $205,185, representing 5.5% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $91,955, representing 2.5% of net assets.
| 256 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 30.25 | $ | 21.93 | $ | 24.18 | $ | 26.69 | $ | 25.91 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.63 | 0.53 | 0.56 | 0.59 | 0.44 | |||||||||||||||
Net realized and unrealized gains (losses) | (2.76 | ) | 8.24 | (2.22 | ) | (2.76 | ) | 0.37 | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (2.13 | ) | 8.77 | (1.66 | ) | (2.17 | ) | 0.81 | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.70 | ) | (0.45 | ) | (0.59 | ) | (0.34 | ) | (0.03 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 27.42 | $ | 30.25 | $ | 21.93 | $ | 24.18 | $ | 26.69 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (7.21)% | 40.23% | (7.15)% | (8.10)% | 3.11% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | —% | |||||||||||||||
Net investment income | 2.14% | 1.98% | 2.30% | 2.39% | 4.07% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $789,637 | $598,934 | $315,851 | $290,205 | $96,082 | |||||||||||||||
Portfolio turnover ratef | 2.95% | g | 5.76% | g | 4.59% | g | 4.35% | 0.93% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 2.80% | 5.76% | 4.51% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 257 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 98.9% | ||||||||||||||
| Japan 98.9% | ||||||||||||||
ABC-Mart Inc. | Specialty Retail | 4,800 | $ | 182,509 | ||||||||||
Acom Co. Ltd. | Consumer Finance | 72,000 | 189,232 | |||||||||||
Activia Properties Inc. | Equity Real Estate Investment Trusts (REITs | ) | 144 | 503,036 | ||||||||||
Advance Residence Investment | Equity Real Estate Investment Trusts (REITs | ) | 240 | 681,195 | ||||||||||
Advantest Corp. | Semiconductors & Semiconductor Equipment | 38,400 | 3,059,345 | |||||||||||
AEON Co. Ltd. | Food & Staples Retailing | 134,400 | 2,889,531 | |||||||||||
AEON Financial Service Co. Ltd. | Consumer Finance | 19,200 | 192,514 | |||||||||||
AEON Mall Co. Ltd. | Real Estate Management & Development | 24,000 | 321,714 | |||||||||||
AEON REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 336 | 418,010 | ||||||||||
AGC Inc. | Building Products | 33,600 | 1,357,841 | |||||||||||
Aica Kogyo Co. Ltd. | Building Products | 9,600 | 236,411 | |||||||||||
AIN Holdings Inc. | Food & Staples Retailing | 4,800 | 251,518 | |||||||||||
Air Water Inc. | Chemicals | 33,600 | 476,144 | |||||||||||
Aisin Seiki Co. Ltd. | Auto Components | 33,600 | 1,161,294 | |||||||||||
Ajinomoto Co. Inc. | Food Products | 91,200 | 2,611,081 | |||||||||||
Alfresa Holdings Corp. | Health Care Providers & Services | 33,600 | 470,331 | |||||||||||
Alps Alpine Co. Ltd. | Electronic Equipment, Instruments & Components | 38,400 | 383,130 | |||||||||||
Amada Co. Ltd. | Machinery | 57,600 | 514,426 | |||||||||||
Amano Corp. | Electronic Equipment, Instruments & Components | 14,400 | 260,653 | |||||||||||
| a | ANA Holdings Inc. | Airlines | 28,800 | 608,863 | ||||||||||
Anritsu Corp. | Electronic Equipment, Instruments & Components | 24,000 | 307,081 | |||||||||||
Aozora Bank Ltd. | Banks | 24,000 | 511,934 | |||||||||||
Ariake Japan Co. Ltd. | Food Products | 4,800 | 205,248 | |||||||||||
As One Corp. | Health Care Providers & Services | 4,800 | 286,319 | |||||||||||
Asahi Group Holdings Ltd. | Beverages | 81,600 | 2,999,115 | |||||||||||
Asahi Intecc Co. Ltd. | Health Care Equipment & Supplies | 38,400 | 761,198 | |||||||||||
Asahi Kasei Corp. | Chemicals | 235,200 | 2,058,908 | |||||||||||
Asics Corp. | Textiles, Apparel & Luxury Goods | 33,600 | 657,190 | |||||||||||
ASKUL Corp. | Internet & Direct Marketing Retail | 9,600 | 126,866 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 350,400 | 5,516,905 | |||||||||||
Azbil Corp. | Electronic Equipment, Instruments & Components | 24,000 | 808,733 | |||||||||||
Bandai Namco Holdings Inc. | Leisure Products | 37,000 | 2,832,577 | |||||||||||
BayCurrent Consulting Inc. | Professional Services | 2,300 | 848,939 | |||||||||||
Benefit One Inc. | Professional Services | 9,600 | 204,853 | |||||||||||
Benesse Holdings Inc. | Diversified Consumer Services | 14,400 | 266,585 | |||||||||||
BIC CAMERA Inc. | Specialty Retail | 28,800 | 256,738 | |||||||||||
Bridgestone Corp. | Auto Components | 110,400 | 4,327,771 | |||||||||||
Brother Industries Ltd. | Technology Hardware, Storage & Peripherals | 43,200 | 796,197 | |||||||||||
Calbee Inc. | Food Products | 14,400 | 279,399 | |||||||||||
CANON Inc. | Technology Hardware, Storage & Peripherals | 187,200 | 4,616,186 | |||||||||||
Canon Marketing Japan Inc. | Electronic Equipment, Instruments & Components | 9,600 | 199,553 | |||||||||||
Capcom Co. Ltd. | Entertainment | 33,600 | 821,626 | |||||||||||
Casio Computer Co. Ltd. | Household Durables | 38,400 | 445,456 | |||||||||||
Central Japan Railway Co. | Road & Rail | 34,620 | 4,553,724 | |||||||||||
Chubu Electric Power Co. Inc. | Electric Utilities | 134,400 | 1,398,535 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 123,940 | 4,183,581 | |||||||||||
Chuo Mitsui Trust Holdings Inc. | Banks | 67,200 | 2,215,178 | |||||||||||
Coca-Cola Bottlers Japan Holdings Inc. | Beverages | 24,000 | 285,133 | |||||||||||
COMSYS Holdings Corp. | Construction & Engineering | 19,200 | 422,044 | |||||||||||
Concordia Financial Group Ltd. | Banks | 211,200 | 796,948 | |||||||||||
Cosmo Energy Holdings Co. Ltd. | Oil, Gas & Consumable Fuels | 14,400 | 312,025 | |||||||||||
Cosmos Pharmaceutical Corp. | Food & Staples Retailing | 3,360 | 410,536 | |||||||||||
Credit Saison Co. Ltd. | Consumer Finance | 28,800 | 309,177 | |||||||||||
CyberAgent Inc. | Media | 72,000 | 905,228 | |||||||||||
Dai Nippon Printing Co. Ltd. | Commercial Services & Supplies | 48,000 | 1,138,159 | |||||||||||
Dai-ichi Life Holdings Inc. | Insurance | 187,200 | 3,854,276 | |||||||||||
Daicel Corp. | Chemicals | 48,000 | 323,098 | |||||||||||
| 258 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Daido Steel Co. Ltd. | Metals & Mining | 7,000 | $ | 212,812 | ||||||||||
Daifuku Co. Ltd. | Machinery | 19,200 | 1,390,468 | |||||||||||
Daiichi Sankyo Co. Ltd. | Pharmaceuticals | 355,200 | 7,842,933 | |||||||||||
Daiichikosho Co. Ltd. | Entertainment | 4,800 | 137,623 | |||||||||||
Daikin Industries Ltd. | Building Products | 50,784 | 9,376,473 | |||||||||||
Daio Paper Corp. | Paper & Forest Products | 14,400 | 187,808 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 12,346 | 1,321,314 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 120,000 | 3,164,737 | |||||||||||
Daiwa House Residential Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 384 | 1,037,710 | ||||||||||
Daiwa Office Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 48 | 299,370 | ||||||||||
Daiwa Securities Group Inc. | Capital Markets | 278,400 | 1,588,858 | |||||||||||
| a | DeNA Co. Ltd. | Entertainment | 14,400 | 220,671 | ||||||||||
Denka Co. Ltd. | Chemicals | 14,400 | 403,378 | |||||||||||
Denso Corp. | Auto Components | 86,400 | 5,595,090 | |||||||||||
Dentsu Group Inc. | Media | 38,400 | 1,588,202 | |||||||||||
Descente Ltd. | Textiles, Apparel & Luxury Goods | 9,600 | 244,795 | |||||||||||
DIC Corp. | Chemicals | 14,400 | 297,432 | |||||||||||
Disco Corp. | Semiconductors & Semiconductor Equipment | 5,376 | 1,523,661 | |||||||||||
DMG Mori Co. Ltd. | Machinery | 19,200 | 264,806 | |||||||||||
Dowa Holdings Co. Ltd. | Metals & Mining | 9,600 | 443,716 | |||||||||||
East Japan Railway Co. | Road & Rail | 69,700 | 4,082,941 | |||||||||||
EBARA Corp. | Machinery | 19,200 | 1,082,002 | |||||||||||
Eisai Co. Ltd. | Pharmaceuticals | 50,260 | 2,347,882 | |||||||||||
Electric Power Development Co. Ltd. | Independent Power and Renewable Electricity Producers | 28,800 | 414,767 | |||||||||||
ENEOS Holdings Inc. | Oil, Gas & Consumable Fuels | 566,400 | 2,137,270 | |||||||||||
Ezaki Glico Co. Ltd. | Food Products | 9,600 | 294,229 | |||||||||||
Fancl Corp. | Personal Products | 14,400 | 324,363 | |||||||||||
FANUC Corp. | Machinery | 36,680 | 6,541,204 | |||||||||||
Fast Retailing Co. Ltd. | Specialty Retail | 9,764 | 5,067,224 | |||||||||||
FP Corp. | Containers & Packaging | 9,600 | 230,637 | |||||||||||
Fuji Electric Co. Ltd. | Electrical Equipment | 24,000 | 1,218,043 | |||||||||||
Fuji Kyuko Co. Ltd. | Hotels, Restaurants & Leisure | 4,800 | 154,628 | |||||||||||
Fuji Media Holdings Inc. | Media | 9,600 | 92,777 | |||||||||||
Fuji Oil Holdings Inc. | Food Products | 9,600 | 156,606 | |||||||||||
FUJIFILM Holdings Corp. | Technology Hardware, Storage & Peripherals | 67,200 | 4,153,528 | |||||||||||
Fujitsu General Ltd. | Household Durables | 9,600 | 189,034 | |||||||||||
Fujitsu Ltd. | IT Services | 35,290 | 5,354,194 | |||||||||||
Fukuoka Financial Group Inc. | Banks | 28,800 | 563,305 | |||||||||||
Fukuyama Transporting Co. Ltd. | Road & Rail | 4,800 | 144,346 | |||||||||||
Furukawa Electric Co. Ltd. | Electrical Equipment | 9,600 | 172,108 | |||||||||||
Fuyo General Lease Co. Ltd. | Diversified Financial Services | 4,800 | 276,433 | |||||||||||
GLP J-REIT | Equity Real Estate Investment Trusts (REITs | ) | 816 | 1,246,438 | ||||||||||
GMO Internet Inc. | IT Services | 9,600 | 221,621 | |||||||||||
GMO Payment Gateway Inc. | IT Services | 7,780 | 806,364 | |||||||||||
Goldwin Inc. | Textiles, Apparel & Luxury Goods | 6,720 | 343,820 | |||||||||||
GS Yuasa Corp. | Electrical Equipment | 14,400 | �� | 277,738 | ||||||||||
GungHo Online Entertainment Inc. | Entertainment | 4,800 | 102,980 | |||||||||||
Hachijuni Bank Ltd. | Banks | 86,400 | 289,720 | |||||||||||
Hakuhodo DY Holdings Inc. | Media | 43,200 | 549,899 | |||||||||||
Hamamatsu Photonics K.K. | Electronic Equipment, Instruments & Components | 24,000 | 1,295,160 | |||||||||||
Hankyu Hanshin Holdings Inc. | Road & Rail | 43,200 | 1,261,743 | |||||||||||
Haseko Corp. | Household Durables | 48,000 | 556,424 | |||||||||||
Heiwa Corp. | Leisure Products | 9,600 | 144,109 | |||||||||||
Hikari Tsushin Inc. | Specialty Retail | 4,320 | 497,223 | |||||||||||
Hino Motors Ltd. | Machinery | 52,800 | 313,211 | |||||||||||
Hirogin Holdings Inc. | Banks | 57,600 | 307,516 | |||||||||||
| franklintempleton.com | Annual Report | 259 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Hirose Electric Co. Ltd. | Electronic Equipment, Instruments & Components | 6,240 | $ | 918,199 | ||||||||||
Hisamitsu Pharmaceutical Co. Inc. | Pharmaceuticals | 14,400 | 434,225 | |||||||||||
Hitachi Construction Machinery Co. Ltd. | Machinery | 19,200 | 505,409 | |||||||||||
Hitachi Ltd. | Industrial Conglomerates | 177,600 | 9,020,836 | |||||||||||
| a | Hitachi Metals Ltd. | Metals & Mining | 38,400 | 645,721 | ||||||||||
Hitachi Transport System Ltd. | Road & Rail | 4,800 | 265,755 | |||||||||||
Honda Motor Co. Ltd. | Automobiles | 326,400 | 9,377,193 | |||||||||||
HORIBA Ltd. | Electronic Equipment, Instruments & Components | 7,300 | 402,966 | |||||||||||
Hoshizaki Corp. | Machinery | 9,600 | 665,178 | |||||||||||
House Foods Group Inc. | Food Products | 14,400 | 343,346 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 67,860 | 7,844,085 | |||||||||||
Ibiden Co. Ltd. | Electronic Equipment, Instruments & Components | 19,200 | 957,034 | |||||||||||
Idemitsu Kosan Co. Ltd. | Oil, Gas & Consumable Fuels | 43,200 | 1,201,236 | |||||||||||
IHI Corp. | Machinery | 24,000 | 583,316 | |||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 28,800 | 501,850 | |||||||||||
Industrial & Infrastructure Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 384 | 584,977 | ||||||||||
Information Services International-Dentsu Ltd. | IT Services | 4,800 | 154,628 | |||||||||||
INFRONEER Holdings Inc. | Construction & Engineering | 48,000 | 412,078 | |||||||||||
INPEX Corp. | Oil, Gas & Consumable Fuels | 163,200 | 1,936,214 | |||||||||||
Internet Initiative Japan Inc. | Diversified Telecommunication Services | 9,600 | 324,680 | |||||||||||
Isetan Mitsukoshi Holdings Ltd. | Multiline Retail | 67,200 | 535,385 | |||||||||||
Isuzu Motors Ltd. | Automobiles | 96,000 | 1,256,008 | |||||||||||
Ito En Ltd. | Beverages | 9,600 | 475,353 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 259,200 | 8,849,638 | |||||||||||
ITOCHU Techno-Solutions Corp. | IT Services | 19,200 | 496,709 | |||||||||||
Itoham Yonekyu Holdings Inc. | Food Products | 24,000 | 128,330 | |||||||||||
Iwatani Corp. | Oil, Gas & Consumable Fuels | 9,600 | 408,915 | |||||||||||
Izumi Co. Ltd. | Multiline Retail | 9,600 | 254,682 | |||||||||||
J Front Retailing Co. Ltd. | Multiline Retail | 48,000 | 394,282 | |||||||||||
| a | Japan Airlines Co. Ltd. | Airlines | 27,360 | 516,205 | ||||||||||
| a | Japan Airport Terminal Co. Ltd. | Transportation Infrastructure | 9,600 | 442,134 | ||||||||||
Japan Aviatn Elect | Electronic Equipment, Instruments & Components | 9,600 | 157,476 | |||||||||||
Japan Exchange Group Inc. | Capital Markets | 100,800 | 1,898,487 | |||||||||||
Japan Hotel REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 864 | 443,478 | ||||||||||
Japan Logistics Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 144 | 376,684 | ||||||||||
Japan Post Bank Co. Ltd. | Banks | 76,800 | 623,259 | |||||||||||
Japan Post Holdings Co. Ltd. | Insurance | 422,400 | 3,126,543 | |||||||||||
Japan Post Insurance Co. Ltd. | Insurance | 38,400 | 675,777 | |||||||||||
Japan Prime Realty Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 173 | 569,421 | ||||||||||
Japan Real Estate Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 240 | 1,263,522 | ||||||||||
Japan Retail Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 1,296 | 1,099,798 | ||||||||||
Japan Tobacco Inc. | Tobacco | 225,600 | 3,880,041 | |||||||||||
JCR Pharmaceuticals Co. Ltd. | Pharmaceuticals | 9,600 | 178,515 | |||||||||||
Jeol Ltd. | Health Care Equipment & Supplies | 9,600 | 543,374 | |||||||||||
JFE Holdings Inc. | Metals & Mining | 96,000 | 1,362,785 | |||||||||||
JGC Holdings Corp. | Construction & Engineering | 43,200 | 521,069 | |||||||||||
JSR Corp. | Chemicals | 33,600 | 1,004,886 | |||||||||||
JTEKT Corp. | Auto Components | 43,200 | 343,109 | |||||||||||
Justsystems Corp. | Software | 4,800 | 228,976 | |||||||||||
K’s Holdings Corp. | Specialty Retail | 28,800 | 299,686 | |||||||||||
Kadokawa Corp. | Media | 19,200 | 509,364 | |||||||||||
Kagome Co. Ltd. | Food Products | 14,400 | 370,159 | |||||||||||
Kajima Corp. | Construction & Engineering | 81,600 | 1,002,394 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 24,000 | 545,153 | |||||||||||
Kaken Pharmaceutical Co. Ltd. | Pharmaceuticals | 4,800 | 153,837 | |||||||||||
Kamigumi Co. Ltd. | Transportation Infrastructure | 19,200 | 348,012 | |||||||||||
Kandenko Co. Ltd. | Construction & Engineering | 19,200 | 131,928 | |||||||||||
| 260 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Kaneka Corp. | Chemicals | 9,600 | $ | 280,387 | ||||||||||
Kansai Electric Power Co. Inc. | Electric Utilities | 139,200 | 1,317,741 | |||||||||||
Kansai Paint Co. Ltd. | Chemicals | 38,400 | 624,208 | |||||||||||
KAO Corp. | Personal Products | 86,400 | 3,577,013 | |||||||||||
Katitas Co. Ltd. | Real Estate Management & Development | 9,600 | 267,337 | |||||||||||
Kawasaki Heavy Industries Ltd. | Machinery | 28,800 | 528,188 | |||||||||||
Kawasaki Kisen Kaisha Ltd. | Marine | 14,400 | 951,497 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 316,862 | 10,455,467 | |||||||||||
Keihan Holdings Co. Ltd. | Industrial Conglomerates | 19,200 | 476,144 | |||||||||||
Keikyu Corp. | Road & Rail | 48,000 | 495,918 | |||||||||||
Keio Corp. | Road & Rail | 22,080 | 870,466 | |||||||||||
Keisei Electric Railway Co. Ltd. | Road & Rail | 24,000 | 675,263 | |||||||||||
Kenedix Office Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 73 | 439,654 | ||||||||||
Kewpie Corp. | Food Products | 19,200 | 370,475 | |||||||||||
Keyence Corp. | Electronic Equipment, Instruments & Components | 34,340 | 16,197,446 | |||||||||||
Kikkoman Corp. | Food Products | 33,600 | 2,250,612 | |||||||||||
Kinden Corp. | Construction & Engineering | 24,000 | 312,025 | |||||||||||
Kintetsu Group Holdings Co. Ltd. | Road & Rail | 33,600 | 970,282 | |||||||||||
Kirin Holdings Co. Ltd. | Beverages | 144,000 | 2,169,936 | |||||||||||
Kobayashi Pharmaceutical Co. Ltd. | Personal Products | 11,520 | 932,040 | |||||||||||
Kobe Bussan Co. Ltd. | Food & Staples Retailing | 24,000 | 746,447 | |||||||||||
Kobe Steel Ltd. | Metals & Mining | 62,400 | 303,839 | |||||||||||
Koei Tecmo Holdings Co. Ltd. | Entertainment | 14,400 | 476,342 | |||||||||||
Koito Manufacturing Co. Ltd. | Auto Components | 22,080 | 905,030 | |||||||||||
Kokuyo Co. Ltd. | Commercial Services & Supplies | 14,400 | 191,605 | |||||||||||
Komatsu Ltd. | Machinery | 172,800 | 4,189,911 | |||||||||||
Konami Holdings Corp. | Entertainment | 19,200 | 1,225,953 | |||||||||||
Konica Minolta Inc. | Technology Hardware, Storage & Peripherals | 86,400 | 367,311 | |||||||||||
Kose Corp. | Personal Products | 5,540 | 588,347 | |||||||||||
Kotobuki Spirits Co. Ltd. | Food Products | 4,800 | 257,846 | |||||||||||
Kubota Corp. | Machinery | 206,400 | 3,916,286 | |||||||||||
Kuraray Co. Ltd. | Chemicals | 67,200 | 585,214 | |||||||||||
Kurita Water Industries Ltd. | Machinery | 19,200 | 718,962 | |||||||||||
Kusuri No Aoki Holdings Co. Ltd. | Food & Staples Retailing | 3,180 | 178,159 | |||||||||||
Kyocera Corp. | Electronic Equipment, Instruments & Components | 58,300 | 3,305,628 | |||||||||||
Kyowa Exeo Corp. | Construction & Engineering | 19,200 | 357,662 | |||||||||||
Kyowa Kirin Co. Ltd. | Pharmaceuticals | 48,000 | 1,126,295 | |||||||||||
Kyudenko Corp. | Construction & Engineering | 9,600 | 226,683 | |||||||||||
Kyushu Electric Power Co. Inc. | Electric Utilities | 86,400 | 581,576 | |||||||||||
Kyushu Financial Group Inc. | Banks | 72,000 | 237,874 | |||||||||||
Kyushu Railway Co. | Road & Rail | 28,800 | 594,864 | |||||||||||
LaSalle Logiport REIT | Equity Real Estate Investment Trusts (REITs | ) | 336 | 485,003 | ||||||||||
Lasertec Corp. | Semiconductors & Semiconductor Equipment | 14,400 | 2,465,944 | |||||||||||
Lawson Inc. | Food & Staples Retailing | 9,600 | 369,763 | |||||||||||
LINTEC Corp. | Chemicals | 9,600 | 192,277 | |||||||||||
Lion Corp. | Household Products | 48,000 | 538,628 | |||||||||||
LIXIL Group Corp. | Building Products | 48,000 | 905,623 | |||||||||||
M3 Inc. | Health Care Technology | 80,468 | 2,962,814 | |||||||||||
Mabuchi Motor Co. Ltd. | Electrical Equipment | 9,600 | 302,533 | |||||||||||
Makita Corp. | Machinery | 48,000 | 1,556,169 | |||||||||||
Mani Inc. | Health Care Equipment & Supplies | 9,600 | 116,110 | |||||||||||
Marubeni Corp. | Trading Companies & Distributors | 297,600 | 3,496,417 | |||||||||||
Marui Group Co. Ltd. | Multiline Retail | 38,400 | 711,843 | |||||||||||
Maruichi Steel Tube Ltd. | Metals & Mining | 9,600 | 218,299 | |||||||||||
Maruwa Unyu Kikan Co. Ltd. | Air Freight & Logistics | 9,600 | 88,822 | |||||||||||
Matsui Securities Co. Ltd. | Capital Markets | 19,200 | 127,657 | |||||||||||
Matsumotokiyoshi Holdings Co. Ltd. | Food & Staples Retailing | 24,000 | 857,178 | |||||||||||
| franklintempleton.com | Annual Report | 261 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Mazda Motor Corp. | Automobiles | 110,400 | $ | 826,806 | ||||||||||
Mebuki Financial Group Inc. | Banks | 172,800 | 364,464 | |||||||||||
Medipal Holdings Corp. | Health Care Providers & Services | 28,800 | 478,122 | |||||||||||
Meiji Holdings Co. Ltd. | Food Products | 24,000 | 1,307,024 | |||||||||||
Menicon Co. Ltd. | Health Care Equipment & Supplies | 9,600 | 232,298 | |||||||||||
Minebea Mitsumi Inc. | Machinery | 76,800 | 1,704,628 | |||||||||||
Miraca Holdings Inc. | Health Care Providers & Services | 9,600 | 229,767 | |||||||||||
MISUMI Group Inc. | Machinery | 52,800 | 1,594,332 | |||||||||||
Mitsubishi Chemical Holdings Corp. | Chemicals | 244,800 | 1,648,001 | |||||||||||
Mitsubishi Corp. | Trading Companies & Distributors | 225,600 | 8,551,890 | |||||||||||
Mitsubishi Electric Corp. | Electrical Equipment | 369,600 | 4,293,602 | |||||||||||
Mitsubishi Estate Co. Ltd. | Real Estate Management & Development | 216,000 | 3,237,108 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 33,600 | 576,079 | |||||||||||
Mitsubishi Heavy Industries Ltd. | Machinery | 52,800 | 1,748,762 | |||||||||||
Mitsubishi Logistics Corp. | Transportation Infrastructure | 14,400 | 360,667 | |||||||||||
Mitsubishi Materials Corp. | Metals & Mining | 24,000 | 423,745 | |||||||||||
| a | Mitsubishi Motors Corp. | Automobiles | 120,000 | 327,250 | ||||||||||
Mitsubishi UFJ Financial Group Inc. | Banks | 2,323,200 | 14,552,659 | |||||||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | Diversified Financial Services | 120,660 | 566,642 | |||||||||||
Mitsui & Co. Ltd. | Trading Companies & Distributors | 297,600 | 8,159,941 | |||||||||||
Mitsui Chemicals Inc. | Chemicals | 33,600 | 855,399 | |||||||||||
Mitsui Fudosan Co. Ltd. | Real Estate Management & Development | 172,800 | 3,730,060 | |||||||||||
Mitsui Fudosan Logistics Park Inc. | Equity Real Estate Investment Trusts (REITs | ) | 96 | 454,789 | ||||||||||
Mitsui High-Tec Inc. | Semiconductors & Semiconductor Equipment | 4,800 | 492,358 | |||||||||||
Mitsui Mining and Smelting Co. Ltd. | Metals & Mining | 9,600 | 265,359 | |||||||||||
Mitsui O.S.K. Lines Ltd. | Marine | 57,600 | 1,623,003 | |||||||||||
Miura Co. Ltd. | Machinery | 19,200 | 480,099 | |||||||||||
Mizuho Financial Group Inc. | Banks | 480,000 | 6,196,993 | |||||||||||
| a | Money Forward Inc. | Software | 9,600 | 434,225 | ||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 45,120 | 979,164 | |||||||||||
Mori Hills REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 288 | 358,532 | ||||||||||
Morinaga & Co. Ltd. | Food Products | 9,600 | 301,347 | |||||||||||
Morinaga Milk Industry Co. Ltd. | Food Products | 9,600 | 413,660 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 88,320 | 2,894,640 | |||||||||||
Murata Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 108,960 | 7,286,742 | |||||||||||
Nabtesco Corp. | Machinery | 19,200 | 515,691 | |||||||||||
Nagase & Co. Ltd. | Trading Companies & Distributors | 19,200 | 288,059 | |||||||||||
Nagoya Railroad Co. Ltd. | Road & Rail | 38,400 | 686,533 | |||||||||||
Nankai Electric Railway Co. Ltd. | Road & Rail | 19,200 | 373,797 | |||||||||||
NEC Corp. | IT Services | 48,000 | 2,036,663 | |||||||||||
NEC System Integration & Construction Ltd. | IT Services | 14,400 | 211,892 | �� | ||||||||||
Net One Systems Co. Ltd. | IT Services | 14,400 | 339,431 | |||||||||||
Nexon Co. Ltd. | Entertainment | 79,200 | 1,913,198 | |||||||||||
NGK Insulators Ltd. | Machinery | 48,000 | 693,256 | |||||||||||
NGK Spark Plug Co. Ltd. | Auto Components | 38,400 | 625,473 | |||||||||||
NH Foods Ltd. | Food Products | 19,200 | 656,478 | |||||||||||
NHK Spring Co. Ltd. | Auto Components | 28,800 | 209,994 | |||||||||||
Nichirei Corp. | Food Products | 19,200 | 374,746 | |||||||||||
Nidec Corp. | Electrical Equipment | 88,520 | 7,109,314 | |||||||||||
Nifco Inc. | Auto Components | 14,400 | 331,007 | |||||||||||
Nihon Kohden Corp. | Health Care Equipment & Supplies | 14,400 | 350,108 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 50,880 | 723,953 | |||||||||||
Nihon Unisys Ltd. | IT Services | 9,600 | 246,377 | |||||||||||
Nikon Corp. | Household Durables | 62,400 | 675,539 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 20,034 | 10,179,170 | |||||||||||
Nippon Accommodations Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 96 | 506,200 | ||||||||||
Nippon Building Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 288 | 1,641,986 | ||||||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Nippon Electric Glass Co. Ltd. | Electronic Equipment, Instruments & Components | 14,400 | $ | 322,228 | ||||||||||
Nippon Express Co. Ltd. | Road & Rail | 14,400 | 998,954 | |||||||||||
Nippon Kayaku Co. Ltd. | Chemicals | 33,600 | 321,397 | |||||||||||
Nippon Paint Holdings Co. Ltd. | Chemicals | 192,000 | 1,711,588 | |||||||||||
Nippon Prologis REIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 432 | 1,268,861 | ||||||||||
Nippon Sanso Holdings Corp. | Chemicals | 28,800 | 553,102 | |||||||||||
Nippon Shinyaku Co. Ltd. | Pharmaceuticals | 9,600 | 658,851 | |||||||||||
Nippon Shobukai Co. Ltd. | Chemicals | 4,800 | 210,785 | |||||||||||
Nippon Steel Corp. | Metals & Mining | 153,600 | 2,747,399 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 225,600 | 6,589,100 | |||||||||||
Nippon Television Holdings Inc. | Media | 4,800 | 50,383 | |||||||||||
Nippon Yusen KK | Marine | 28,800 | 2,553,145 | |||||||||||
Nipro Corp. | Health Care Equipment & Supplies | 19,200 | 161,984 | |||||||||||
Nishi-Nippon Railroad Co. Ltd. | Road & Rail | 14,400 | 318,313 | |||||||||||
Nissan Chemical Corp. | Chemicals | 25,640 | 1,527,310 | |||||||||||
| a | Nissan Motor Co. Ltd. | Automobiles | 364,800 | 1,646,446 | ||||||||||
Nisshin Seifun Group Inc. | Food Products | 48,000 | 674,669 | |||||||||||
Nissin Foods Holdings Co. Ltd. | Food Products | 14,400 | 1,016,750 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 14,400 | 1,822,319 | |||||||||||
Nitto Denko Corp. | Chemicals | 28,800 | 2,092,820 | |||||||||||
Noevir Holdings Co. Ltd. | Personal Products | 4,800 | 195,559 | |||||||||||
NOF Corp. | Chemicals | 14,400 | 595,576 | |||||||||||
NOK Corp. | Auto Components | 19,200 | 181,441 | |||||||||||
Nomura Holdings Inc. | Capital Markets | 566,400 | 2,404,196 | |||||||||||
Nomura Real Estate Holdings Inc. | Real Estate Management & Development | 19,200 | 463,964 | |||||||||||
Nomura Real Estate Master Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 864 | 1,147,492 | ||||||||||
Nomura Research Institute Ltd. | IT Services | 48,860 | 1,618,267 | |||||||||||
NS Solutions Corp. | IT Services | 4,800 | 145,532 | |||||||||||
NSK Ltd. | Machinery | 81,600 | 494,810 | |||||||||||
NTT Data Corp. | IT Services | 120,000 | 2,390,608 | |||||||||||
Obayashi Corp. | Construction & Engineering | 129,600 | 960,989 | |||||||||||
OBIC Business Consultants Co. Ltd. | Software | 4,800 | 168,865 | |||||||||||
OBIC Co. Ltd. | IT Services | 12,960 | 1,966,823 | |||||||||||
Odakyu Electric Railway Co. Ltd. | Road & Rail | 57,600 | 966,683 | |||||||||||
Oji Holdings Corp. | Paper & Forest Products | 168,000 | 840,173 | |||||||||||
Okuma Corp. | Machinery | 4,800 | 201,689 | |||||||||||
Olympus Corp. | Health Care Equipment & Supplies | 201,600 | 3,885,004 | |||||||||||
Omron Corp. | Electronic Equipment, Instruments & Components | 35,280 | 2,387,559 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 81,600 | 2,061,261 | |||||||||||
Open House Co. Ltd. | Household Durables | 14,400 | 643,032 | |||||||||||
Oracle Corp. Japan | Software | 6,480 | 453,800 | |||||||||||
Orient Corp. | Consumer Finance | 105,600 | 107,884 | |||||||||||
Oriental Land Co. Ltd. | Hotels, Restaurants & Leisure | 35,660 | 6,907,243 | |||||||||||
ORIX Corp. | Diversified Financial Services | 230,400 | 4,645,965 | |||||||||||
ORIX JREIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 528 | 719,081 | ||||||||||
Osaka Gas Co. Ltd. | Gas Utilities | 76,800 | 1,323,712 | |||||||||||
OSG Corp. | Machinery | 14,400 | 222,926 | |||||||||||
Otsuka Corp. | IT Services | 19,200 | 687,324 | |||||||||||
Otsuka Holdings Co. Ltd. | Pharmaceuticals | 81,600 | 2,845,159 | |||||||||||
Paltac Corp. | Distributors | 4,800 | 179,938 | |||||||||||
Pan Pacific International Holdings Corp. | Multiline Retail | 76,800 | 1,242,721 | |||||||||||
Panasonic Corp. | Household Durables | 403,200 | 3,948,121 | |||||||||||
| a | Park24 Co. Ltd. | Commercial Services & Supplies | 19,200 | 318,431 | ||||||||||
Penta-Ocean Construction Co. Ltd. | Construction & Engineering | 52,800 | 266,664 | |||||||||||
| a | PeptiDream Inc. | Biotechnology | 16,100 | 289,966 | ||||||||||
Persol Holdings Co. Ltd. | Professional Services | 33,600 | 765,153 | |||||||||||
Pigeon Corp. | Household Products | 19,200 | 340,578 | |||||||||||
| franklintempleton.com | Annual Report | 263 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Pola Orbis Holdings Inc. | Personal Products | 14,400 | $ | 189,706 | ||||||||||
Rakus Co. Ltd. | Software | 19,200 | 264,015 | |||||||||||
Rakuten Inc. | Internet & Direct Marketing Retail | 153,600 | 1,223,738 | |||||||||||
Recruit Holdings Co. Ltd. | Professional Services | 273,600 | 12,204,082 | |||||||||||
Relo Group Inc. | Real Estate Management & Development | 19,200 | 289,958 | |||||||||||
| a | Renesas Electronics Corp. | Semiconductors & Semiconductor Equipment | 187,200 | 2,208,613 | ||||||||||
Rengo Co. Ltd. | Containers & Packaging | 38,400 | 247,405 | |||||||||||
| a | RENOVA Inc. | Independent Power and Renewable Electricity Producers | 9,600 | 135,646 | ||||||||||
Resona Holdings Inc. | Banks | 412,800 | 1,782,480 | |||||||||||
Resorttrust Inc. | Hotels, Restaurants & Leisure | 14,400 | 248,315 | |||||||||||
Ricoh Co. Ltd. | Technology Hardware, Storage & Peripherals | 115,200 | 1,007,970 | |||||||||||
Rinnai Corp. | Household Durables | 6,680 | 504,681 | |||||||||||
Rohm Co. Ltd. | Semiconductors & Semiconductor Equipment | 15,840 | 1,251,539 | |||||||||||
Rohto Pharmaceutical Co. Ltd. | Personal Products | 19,200 | 584,503 | |||||||||||
Ryohin Keikaku Co. Ltd. | Multiline Retail | 43,200 | 509,324 | |||||||||||
Sankyo Co. Ltd. | Leisure Products | 9,600 | 268,523 | |||||||||||
Sankyu Inc. | Road & Rail | 9,600 | 315,584 | |||||||||||
| a | Sansan Inc. | Software | 14,400 | 165,029 | ||||||||||
Santen Pharmaceutical Co. Ltd. | Pharmaceuticals | 67,200 | 679,336 | |||||||||||
Sanwa Holdings Corp. | Building Products | 38,400 | 393,570 | |||||||||||
Sapporo Holdings Ltd. | Beverages | 9,600 | 182,469 | |||||||||||
Sawai Group Holdings Co. Ltd. | Pharmaceuticals | 4,800 | 176,379 | |||||||||||
SBI Holdings Inc. | Capital Markets | 43,200 | 1,103,357 | |||||||||||
SCREEN Holdings Co. Ltd. | Semiconductors & Semiconductor Equipment | 7,400 | 753,565 | |||||||||||
SCSK Corp. | IT Services | 24,000 | 415,440 | |||||||||||
Secom Co. Ltd. | Commercial Services & Supplies | 38,400 | 2,805,612 | |||||||||||
Sega Sammy Holdings Inc. | Leisure Products | 38,400 | 668,500 | |||||||||||
Seibu Holdings Inc. | Road & Rail | 38,400 | 402,429 | |||||||||||
Seiko Epson Corp. | Technology Hardware, Storage & Peripherals | 52,800 | 800,863 | |||||||||||
Seino Holdings Co. Ltd. | Road & Rail | 24,000 | 220,276 | |||||||||||
Sekisui Chemical Co. Ltd. | Household Durables | 62,400 | 904,318 | |||||||||||
Sekisui House Ltd. | Household Durables | 110,400 | 2,156,609 | |||||||||||
Sekisui House Reit Inc. | Equity Real Estate Investment Trusts (REITs | ) | 768 | 510,629 | ||||||||||
Seven & i Holdings Co. Ltd. | Food & Staples Retailing | 144,000 | 6,896,577 | |||||||||||
Seven Bank Ltd. | Banks | 124,800 | 245,744 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 81,600 | 1,554,350 | |||||||||||
Sharp Corp. | Household Durables | 38,400 | 363,515 | |||||||||||
| a | SHIFT Inc. | IT Services | 1,600 | 285,528 | ||||||||||
Shikoku Electric Power Co. Inc. | Electric Utilities | 28,800 | 186,978 | |||||||||||
Shimadzu Corp. | Electronic Equipment, Instruments & Components | 52,800 | 1,842,290 | |||||||||||
Shimamura Co. Ltd. | Specialty Retail | 4,800 | 429,874 | |||||||||||
SHIMANO Inc. | Leisure Products | 14,968 | 3,472,083 | |||||||||||
Shimizu Corp. | Construction & Engineering | 100,800 | 610,406 | |||||||||||
Shin-Etsu Chemical Co. Ltd. | Chemicals | 75,920 | 11,753,135 | |||||||||||
Shinko Electric Industries Co. Ltd. | Semiconductors & Semiconductor Equipment | 14,400 | 694,047 | |||||||||||
| a | Shinsei Bank Ltd. | Banks | 9,600 | 176,933 | ||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 52,800 | 3,275,666 | |||||||||||
Ship Healthcare Holdings Inc. | Health Care Providers & Services | 14,400 | 235,857 | |||||||||||
Shiseido Co. Ltd. | Personal Products | 73,900 | 3,785,872 | |||||||||||
SHO-BOND Holdings Co. Ltd. | Construction & Engineering | 9,600 | 421,570 | |||||||||||
| a | Shochiku Co. Ltd. | Entertainment | 1,680 | 169,972 | ||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 76,800 | 696,657 | |||||||||||
Showa Denko K.K. | Chemicals | 33,600 | 672,692 | |||||||||||
Skylark Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 43,200 | 562,000 | |||||||||||
SMC Corp. | Machinery | 10,964 | 6,218,429 | |||||||||||
SMS Co. Ltd. | Professional Services | 9,600 | 268,523 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 518,400 | 6,099,075 | |||||||||||
| 264 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
SoftBank Group Corp. | Wireless Telecommunication Services | 249,600 | $ | 11,431,731 | ||||||||||
Sohgo Security Services Co. Ltd. | Commercial Services & Supplies | 14,400 | 474,562 | |||||||||||
Sojitz Corp. | Trading Companies & Distributors | 45,420 | 754,786 | |||||||||||
Sompo Holdings Inc. | Insurance | 62,400 | 2,766,421 | |||||||||||
Sony Corp. | Household Durables | 235,200 | 24,668,144 | |||||||||||
Sotetsu Holdings Inc. | Road & Rail | 14,400 | 271,806 | |||||||||||
Square Enix Holdings Co. Ltd. | Entertainment | 14,400 | 644,218 | |||||||||||
Stanley Electric Co. Ltd. | Auto Components | 28,800 | 551,441 | |||||||||||
Subaru Corp. | Automobiles | 115,200 | 1,848,895 | |||||||||||
Sugi Pharmacy Co. Ltd. | Food & Staples Retailing | 6,760 | 336,956 | |||||||||||
Sumco Corp. | Semiconductors & Semiconductor Equipment | 52,800 | 881,776 | |||||||||||
Sumitomo Bakelite Co. Ltd. | Chemicals | 4,800 | 197,339 | |||||||||||
Sumitomo Chemical Co. Ltd. | Chemicals | 288,000 | 1,333,520 | |||||||||||
Sumitomo Corp. | Trading Companies & Distributors | 211,200 | 3,687,191 | |||||||||||
Sumitomo Dainippon Pharma Co. Ltd. | Pharmaceuticals | 28,800 | 286,636 | |||||||||||
Sumitomo Electric Industries Ltd. | Auto Components | 144,000 | 1,734,525 | |||||||||||
Sumitomo Forestry Co. Ltd. | Household Durables | 24,000 | 428,688 | |||||||||||
Sumitomo Heavy Industries Ltd. | Machinery | 19,200 | 445,772 | |||||||||||
Sumitomo Metal Mining Co. Ltd. | Metals & Mining | 43,200 | 2,193,546 | |||||||||||
Sumitomo Mitsui Financial Group Inc. | Banks | 244,800 | 7,879,988 | |||||||||||
Sumitomo Realty & Development Co. Ltd. | Real Estate Management & Development | 76,800 | 2,144,389 | |||||||||||
Sumitomo Rubber Industries Ltd. | Auto Components | 33,600 | 311,155 | |||||||||||
Sundrug Co. Ltd. | Food & Staples Retailing | 12,960 | 317,660 | |||||||||||
Suntory Beverage & Food Ltd. | Beverages | 24,000 | 921,442 | |||||||||||
Sushiro Global Holdings Ltd. | Hotels, Restaurants & Leisure | 19,200 | 543,374 | |||||||||||
Suzuken Co. Ltd. | Health Care Providers & Services | 14,400 | 430,665 | |||||||||||
Suzuki Motor Corp. | Automobiles | 86,400 | 2,998,997 | |||||||||||
Sysmex Corp. | Health Care Equipment & Supplies | 36,132 | 2,656,279 | |||||||||||
T&D Holdings Inc. | Insurance | 100,800 | 1,387,739 | |||||||||||
Taiheiyo Cement Corp. | Construction Materials | 24,000 | 399,226 | |||||||||||
Taisei Corp. | Construction & Engineering | 28,800 | 838,789 | |||||||||||
Taisho Pharmaceutical Holdings Co. Ltd. | Pharmaceuticals | 8,160 | 381,864 | |||||||||||
Taiyo Yuden Co. Ltd. | Electronic Equipment, Instruments & Components | 24,000 | 1,097,425 | |||||||||||
Takara Bio Inc. | Biotechnology | 9,600 | 177,249 | |||||||||||
Takara Holdings Inc. | Beverages | 33,600 | 304,788 | |||||||||||
Takashimaya Co. Ltd. | Multiline Retail | 24,000 | 229,767 | |||||||||||
Takeda Pharmaceutical Co. Ltd. | Pharmaceuticals | 292,800 | 8,438,430 | |||||||||||
TBS Holdings Inc. | Media | 4,800 | 70,670 | |||||||||||
TDK Corp. | Electronic Equipment, Instruments & Components | 69,240 | 2,544,267 | |||||||||||
TechnoPro Holdings Inc. | Professional Services | 20,280 | 556,395 | |||||||||||
Teijin Ltd. | Chemicals | 33,600 | 377,317 | |||||||||||
Terumo Corp. | Health Care Equipment & Supplies | 124,800 | 3,829,085 | |||||||||||
The Bank of Kyoto Ltd. | Banks | 14,400 | 634,727 | |||||||||||
The Chiba Bank Ltd. | Banks | 115,200 | 688,115 | |||||||||||
The Chugoku Bank Ltd. | Banks | 33,600 | 242,225 | |||||||||||
The Chugoku Electric Power Co. Inc. | Electric Utilities | 57,600 | 401,954 | |||||||||||
The Iyo Bank Ltd. | Banks | 52,800 | 261,009 | |||||||||||
The Japan Steel Works Ltd. | Machinery | 9,600 | 302,138 | |||||||||||
The Shizuoka Bank Ltd. | Banks | 91,200 | 648,450 | |||||||||||
THK Co. Ltd. | Machinery | 19,200 | 430,428 | |||||||||||
TIS Inc. | IT Services | 43,200 | 1,023,987 | |||||||||||
Tobu Railway Co. Ltd. | Road & Rail | 38,400 | 942,481 | |||||||||||
Toda Corp. | Construction & Engineering | 43,200 | 263,738 | |||||||||||
Toho Co. Ltd. | Entertainment | 19,200 | 733,199 | |||||||||||
Toho Gas Co. Ltd. | Gas Utilities | 16,000 | 359,217 | |||||||||||
Tohoku Electric Power Co. Inc. | Electric Utilities | 91,200 | 534,990 | |||||||||||
Tokai Carbon Co. Ltd. | Chemicals | 38,400 | 364,147 | |||||||||||
| franklintempleton.com | Annual Report | 265 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Tokio Marine Holdings Inc. | Insurance | 123,360 | $ | 7,244,573 | ||||||||||
Tokyo Century Corp. | Diversified Financial Services | 12,000 | 446,385 | |||||||||||
| a | Tokyo Electric Power Co. Holdings Inc. | Electric Utilities | 297,600 | 988,118 | ||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 28,100 | 14,643,254 | |||||||||||
Tokyo Gas Co. Ltd. | Gas Utilities | 81,600 | 1,500,566 | |||||||||||
Tokyo Ohka Kogyo Co. Ltd. | Chemicals | 7,200 | 436,597 | |||||||||||
Tokyo Tatemono Co. Ltd. | Real Estate Management & Development | 38,400 | 580,232 | |||||||||||
TOKYU Corp. | Road & Rail | 91,200 | 1,196,213 | |||||||||||
Tokyu Fudosan Holdings Corp. | Real Estate Management & Development | 115,200 | 639,710 | |||||||||||
TOPPAN Inc. | Commercial Services & Supplies | 52,800 | 942,243 | |||||||||||
Toray Industries Inc. | Chemicals | 288,000 | 1,515,752 | |||||||||||
Toshiba Corp. | Industrial Conglomerates | 81,600 | 3,126,179 | |||||||||||
Toshiba Tec Corp. | Technology Hardware, Storage & Peripherals | 4,800 | 194,373 | |||||||||||
Tosoh Corp. | Chemicals | 52,800 | 789,118 | |||||||||||
TOTO Ltd. | Building Products | 28,800 | 1,172,169 | |||||||||||
Toyo Seikan Group Holdings Ltd. | Containers & Packaging | 28,800 | 333,617 | |||||||||||
Toyo Suisan Kaisha Ltd. | Food Products | 19,200 | 691,279 | |||||||||||
Toyo Tire Corp. | Auto Components | 19,200 | 247,247 | |||||||||||
Toyoda Gosei Co. Ltd. | Auto Components | 14,400 | 240,366 | |||||||||||
Toyota Boshoku Corp. | Auto Components | 9,600 | 158,346 | |||||||||||
Toyota Industries Corp. | Auto Components | 28,800 | 2,009,771 | |||||||||||
Toyota Motor Corp. | Automobiles | 2,308,800 | 42,276,482 | |||||||||||
Toyota Tsusho Corp. | Trading Companies & Distributors | 43,200 | 1,800,964 | |||||||||||
Trend Micro Inc. | Software | 24,000 | 1,415,778 | |||||||||||
TS TECH Co. Ltd. | Auto Components | 19,200 | 217,508 | |||||||||||
Tsumura & Co. | Pharmaceuticals | 14,400 | 379,650 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 6,890 | 440,506 | |||||||||||
Ube Industries Ltd. | Chemicals | 19,200 | 315,900 | |||||||||||
Ulvac Inc. | Semiconductors & Semiconductor Equipment | 9,600 | 498,290 | |||||||||||
Unicharm Corp. | Household Products | 72,000 | 2,585,771 | |||||||||||
United Urban Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 576 | 667,709 | ||||||||||
Ushio Inc. | Electrical Equipment | 19,200 | 288,850 | |||||||||||
USS Co. Ltd. | Specialty Retail | 38,400 | 651,416 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 19,200 | 475,353 | |||||||||||
West Japan Railway Co. | Road & Rail | 43,200 | 1,811,998 | |||||||||||
Yakult Honsha Co. Ltd. | Food Products | 24,000 | 1,289,228 | |||||||||||
| a | Yamada Holdings Co. Ltd. | Specialty Retail | 139,200 | 435,806 | ||||||||||
Yamaguchi Financial Group Inc. | Banks | 43,200 | 242,027 | |||||||||||
Yamaha Corp. | Leisure Products | 28,800 | 1,269,454 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 57,600 | 1,307,894 | |||||||||||
Yamato Holdings Co. Ltd. | Air Freight & Logistics | 62,400 | 1,178,852 | |||||||||||
Yamato Kogyo Co. Ltd. | Metals & Mining | 4,800 | 146,917 | |||||||||||
Yamazaki Baking Co. Ltd. | Food Products | 24,000 | 296,404 | |||||||||||
Yaoko Co. Ltd. | Food & Staples Retailing | 4,800 | 262,591 | |||||||||||
YASKAWA Electric Corp. | Machinery | 48,000 | 1,904,181 | |||||||||||
Yokogawa Electric Corp. | Electronic Equipment, Instruments & Components | 48,000 | 830,089 | |||||||||||
| �� | Yokohama Rubber Co. Ltd. | Auto Components | 19,200 | 267,653 | ||||||||||
Z Holdings Corp. | Interactive Media & Services | 494,400 | 2,184,932 | |||||||||||
Zenkoku Hosho Co. Ltd. | Diversified Financial Services | 9,600 | 372,531 | |||||||||||
Zensho Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 19,200 | 452,574 | |||||||||||
Zeon Corp. | Chemicals | 28,800 | 323,651 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 19,200 | 519,646 | |||||||||||
|
| |||||||||||||
Total Investments before Short Term Investments | 780,672,736 | |||||||||||||
|
| |||||||||||||
| 266 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Short Term Investment 0.0%† | ||||||||||||||
Money Market Funds 0.0%† | ||||||||||||||
| United States 0.0%† | ||||||||||||||
| b,c | Institutional Fiduciary Trust Portfolio, 0.01% | Money Market Funds | 251,746 | $ | 251,746 | |||||||||
|
| |||||||||||||
Total Investments (Cost $825,604,834) 98.9% | 780,924,482 | |||||||||||||
Other Assets, less Liabilities 1.1% | 8,712,805 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 789,637,287 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee 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 | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
Nikkei 225 Mini | Long | 35 | $ | 8,025,129 | 6/09/22 | $ | 147,742 | |||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 267 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan Hedged ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ | 30.70 | $ | 21.35 | $ | 23.12 | $ | 25.11 | $ | 25.91 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment incomec | 0.68 | 0.88 | 0.38 | 0.38 | 0.32 | |||||||||||||||
Net realized and unrealized gains (losses) | (0.08 | ) | 8.47 | (2.15 | ) | (1.11 | ) | (1.11 | ) | |||||||||||
|
| |||||||||||||||||||
Total from investment operations | 0.60 | 9.35 | (1.77 | ) | (0.73 | ) | (0.79 | ) | ||||||||||||
|
| |||||||||||||||||||
| Less distributions from: | ||||||||||||||||||||
Net investment income | (0.40 | ) | — | — | (0.01 | ) | (0.01 | ) | ||||||||||||
Net realized gains | — | — | — | (1.25 | ) | — | d | |||||||||||||
|
| |||||||||||||||||||
Total Distributions | (0.40 | ) | — | — | (1.26 | ) | (0.01 | ) | ||||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 30.90 | $ | 30.70 | $ | 21.35 | $ | 23.12 | $ | 25.11 | ||||||||||
|
| |||||||||||||||||||
Total returne | 1.93% | 43.84% | (7.66)% | (2.59)% | (3.04)% | |||||||||||||||
| Ratios to average net assetsf | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | —% | |||||||||||||||
Net investment income | 2.22% | 3.29% | 1.59% | 1.51% | 3.10% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $24,720 | $24,563 | $4,269 | $13,870 | $45,197 | |||||||||||||||
Portfolio turnover rateg | 5.46% | h | 6.31% | h | 10.06% | h | 19.78% | 1.92% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal 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.
fRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 5.03% | 6.31% | 10.06% |
| 268 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE Japan Hedged ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.2% | ||||||||||||||
| Japan 99.2% | ||||||||||||||
ABC-Mart Inc. | Specialty Retail | 136 | $ | 5,171 | ||||||||||
Acom Co. Ltd. | Consumer Finance | 2,200 | 5,782 | |||||||||||
Activia Properties Inc. | Equity Real Estate Investment Trusts (REITs | ) | 4 | 13,973 | ||||||||||
Advance Residence Investment | Equity Real Estate Investment Trusts (REITs | ) | 8 | 22,706 | ||||||||||
Advantest Corp. | Semiconductors & Semiconductor Equipment | 1,100 | 87,637 | |||||||||||
AEON Co. Ltd. | Food & Staples Retailing | 4,200 | 90,298 | |||||||||||
AEON Financial Service Co. Ltd. | Consumer Finance | 700 | 7,019 | |||||||||||
AEON Mall Co. Ltd. | Real Estate Management & Development | 600 | 8,043 | |||||||||||
AEON REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 12 | 14,929 | ||||||||||
AGC Inc. | Building Products | 1,136 | 45,908 | |||||||||||
Aica Kogyo Co. Ltd. | Building Products | 272 | 6,698 | |||||||||||
AIN Holdings Inc. | Food & Staples Retailing | 136 | 7,126 | |||||||||||
Air Water Inc. | Chemicals | 1,000 | 14,171 | |||||||||||
Aisin Seiki Co. Ltd. | Auto Components | 1,056 | 36,498 | |||||||||||
Ajinomoto Co. Inc. | Food Products | 2,848 | 81,539 | |||||||||||
Alfresa Holdings Corp. | Health Care Providers & Services | 1,100 | 15,398 | |||||||||||
Alps Alpine Co. Ltd. | Electronic Equipment, Instruments & Components | 1,272 | 12,691 | |||||||||||
Amada Co. Ltd. | Machinery | 1,900 | 16,969 | |||||||||||
Amano Corp. | Electronic Equipment, Instruments & Components | 400 | 7,240 | |||||||||||
| a | ANA Holdings Inc. | Airlines | 900 | 19,027 | ||||||||||
Anritsu Corp. | Electronic Equipment, Instruments & Components | 813 | 10,402 | |||||||||||
Aozora Bank Ltd. | Banks | 700 | 14,931 | |||||||||||
Ariake Japan Co. Ltd. | Food Products | 96 | 4,105 | |||||||||||
As One Corp. | Health Care Providers & Services | 128 | 7,635 | |||||||||||
Asahi Group Holdings Ltd. | Beverages | 2,472 | 90,856 | |||||||||||
Asahi Intecc Co. Ltd. | Health Care Equipment & Supplies | 1,160 | 22,994 | |||||||||||
Asahi Kasei Corp. | Chemicals | 7,400 | 64,779 | |||||||||||
Asics Corp. | Textiles, Apparel & Luxury Goods | 1,000 | 19,559 | |||||||||||
ASKUL Corp. | Internet & Direct Marketing Retail | 272 | 3,595 | |||||||||||
Astellas Pharma Inc. | Pharmaceuticals | 11,100 | 174,765 | |||||||||||
Azbil Corp. | Electronic Equipment, Instruments & Components | 772 | 26,014 | |||||||||||
Bandai Namco Holdings Inc. | Leisure Products | 1,212 | 92,786 | |||||||||||
BayCurrent Consulting Inc. | Professional Services | 72 | 26,575 | |||||||||||
Benefit One Inc. | Professional Services | 372 | 7,938 | |||||||||||
Benesse Holdings Inc. | Diversified Consumer Services | 400 | 7,405 | |||||||||||
BIC CAMERA Inc. | Specialty Retail | 800 | 7,132 | |||||||||||
Bridgestone Corp. | Auto Components | 3,484 | 136,576 | |||||||||||
Brother Industries Ltd. | Technology Hardware, Storage & Peripherals | 1,300 | 23,960 | |||||||||||
Calbee Inc. | Food Products | 400 | 7,761 | |||||||||||
CANON Inc. | Technology Hardware, Storage & Peripherals | 5,900 | 145,489 | |||||||||||
Canon Marketing Japan Inc. | Electronic Equipment, Instruments & Components | 272 | 5,654 | |||||||||||
Capcom Co. Ltd. | Entertainment | 1,148 | 28,072 | |||||||||||
Casio Computer Co. Ltd. | Household Durables | 1,300 | 15,081 | |||||||||||
Central Japan Railway Co. | Road & Rail | 1,040 | 136,796 | |||||||||||
Chubu Electric Power Co. Inc. | Electric Utilities | 4,132 | 42,997 | |||||||||||
Chugai Pharmaceutical Co. Ltd. | Pharmaceuticals | 3,892 | 131,374 | |||||||||||
Chuo Mitsui Trust Holdings Inc. | Banks | 2,172 | 71,598 | |||||||||||
Coca-Cola Bottlers Japan Holdings Inc. | Beverages | 800 | 9,504 | |||||||||||
COMSYS Holdings Corp. | Construction & Engineering | 636 | 13,980 | |||||||||||
Concordia Financial Group Ltd. | Banks | 6,600 | 24,905 | |||||||||||
Cosmo Energy Holdings Co. Ltd. | Oil, Gas & Consumable Fuels | 420 | 9,101 | |||||||||||
Cosmos Pharmaceutical Corp. | Food & Staples Retailing | 97 | 11,852 | |||||||||||
Credit Saison Co. Ltd. | Consumer Finance | 1,000 | 10,735 | |||||||||||
CyberAgent Inc. | Media | 2,284 | 28,716 | |||||||||||
Dai Nippon Printing Co. Ltd. | Commercial Services & Supplies | 1,572 | 37,275 | |||||||||||
Dai-ichi Life Holdings Inc. | Insurance | 5,900 | 121,476 | |||||||||||
Daicel Corp. | Chemicals | 1,800 | 12,116 | |||||||||||
Daido Steel Co. Ltd. | Metals & Mining | 168 | 5,107 | |||||||||||
| franklintempleton.com | Annual Report | 269 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Daifuku Co. Ltd. | Machinery | 601 | $ | 43,525 | ||||||||||
Daiichi Sankyo Co. Ltd. | Pharmaceuticals | 11,200 | 247,300 | |||||||||||
Daiichikosho Co. Ltd. | Entertainment | 240 | 6,881 | |||||||||||
Daikin Industries Ltd. | Building Products | 1,612 | 297,631 | |||||||||||
Daio Paper Corp. | Paper & Forest Products | 500 | 6,521 | |||||||||||
Daito Trust Construction Co. Ltd. | Real Estate Management & Development | 344 | 36,816 | |||||||||||
Daiwa House Industry Co. Ltd. | Real Estate Management & Development | 3,772 | 99,478 | |||||||||||
Daiwa House Residential Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 13 | 35,131 | ||||||||||
Daiwa Office Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 2 | 12,474 | ||||||||||
Daiwa Securities Group Inc. | Capital Markets | 8,700 | 49,652 | |||||||||||
| a | DeNA Co. Ltd. | Entertainment | 536 | 8,214 | ||||||||||
Denka Co. Ltd. | Chemicals | 564 | 15,799 | |||||||||||
Denso Corp. | Auto Components | 2,700 | 174,847 | |||||||||||
Dentsu Group Inc. | Media | 1,300 | 53,767 | |||||||||||
Descente Ltd. | Textiles, Apparel & Luxury Goods | 200 | 5,100 | |||||||||||
DIC Corp. | Chemicals | 500 | 10,327 | |||||||||||
Disco Corp. | Semiconductors & Semiconductor Equipment | 152 | 43,080 | |||||||||||
DMG Mori Co. Ltd. | Machinery | 736 | 10,151 | |||||||||||
Dowa Holdings Co. Ltd. | Metals & Mining | 272 | 12,572 | |||||||||||
East Japan Railway Co. | Road & Rail | 2,180 | 127,702 | |||||||||||
EBARA Corp. | Machinery | 580 | 32,685 | |||||||||||
Eisai Co. Ltd. | Pharmaceuticals | 1,560 | 72,875 | |||||||||||
Electric Power Development Co. Ltd. | Independent Power and Renewable Electricity Producers | 1,000 | 14,402 | |||||||||||
ENEOS Holdings Inc. | Oil, Gas & Consumable Fuels | 17,800 | 67,167 | |||||||||||
Ezaki Glico Co. Ltd. | Food Products | 272 | 8,336 | |||||||||||
Fancl Corp. | Personal Products | 432 | 9,731 | |||||||||||
FANUC Corp. | Machinery | 1,180 | 210,431 | |||||||||||
Fast Retailing Co. Ltd. | Specialty Retail | 307 | 159,324 | |||||||||||
FP Corp. | Containers & Packaging | 272 | 6,535 | |||||||||||
Fuji Electric Co. Ltd. | Electrical Equipment | 772 | 39,180 | |||||||||||
Fuji Kyuko Co. Ltd. | Hotels, Restaurants & Leisure | 100 | 3,221 | |||||||||||
Fuji Media Holdings Inc. | Media | 272 | 2,629 | |||||||||||
Fuji Oil Holdings Inc. | Food Products | 272 | 4,437 | |||||||||||
FUJIFILM Holdings Corp. | Technology Hardware, Storage & Peripherals | 2,156 | 133,259 | |||||||||||
Fujitsu General Ltd. | Household Durables | 372 | 7,325 | |||||||||||
Fujitsu Ltd. | IT Services | 1,152 | 174,781 | |||||||||||
Fukuoka Financial Group Inc. | Banks | 1,000 | 19,559 | |||||||||||
Fukuyama Transporting Co. Ltd. | Road & Rail | 136 | 4,090 | |||||||||||
Furukawa Electric Co. Ltd. | Electrical Equipment | 312 | 5,593 | |||||||||||
Fuyo General Lease Co. Ltd. | Diversified Financial Services | 100 | 5,759 | |||||||||||
GLP J-REIT | Equity Real Estate Investment Trusts (REITs | ) | 25 | 38,187 | ||||||||||
GMO Internet Inc. | IT Services | 300 | 6,926 | |||||||||||
GMO Payment Gateway Inc. | IT Services | 220 | 22,802 | |||||||||||
Goldwin Inc. | Textiles, Apparel & Luxury Goods | 176 | 9,005 | |||||||||||
GS Yuasa Corp. | Electrical Equipment | 400 | 7,715 | |||||||||||
GungHo Online Entertainment Inc. | Entertainment | 200 | 4,291 | |||||||||||
Hachijuni Bank Ltd. | Banks | 2,700 | 9,054 | |||||||||||
Hakuhodo DY Holdings Inc. | Media | 1,400 | 17,821 | |||||||||||
Hamamatsu Photonics K.K. | Electronic Equipment, Instruments & Components | 772 | 41,661 | |||||||||||
Hankyu Hanshin Holdings Inc. | Road & Rail | 1,300 | 37,969 | |||||||||||
Haseko Corp. | Household Durables | 1,600 | 18,547 | |||||||||||
Heiwa Corp. | Leisure Products | 272 | 4,083 | |||||||||||
Hikari Tsushin Inc. | Specialty Retail | 116 | 13,351 | |||||||||||
Hino Motors Ltd. | Machinery | 1,500 | 8,898 | |||||||||||
Hirogin Holdings Inc. | Banks | 1,800 | 9,610 | |||||||||||
Hirose Electric Co. Ltd. | Electronic Equipment, Instruments & Components | 180 | 26,486 | |||||||||||
Hisamitsu Pharmaceutical Co. Inc. | Pharmaceuticals | 400 | 12,062 | |||||||||||
| 270 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Hitachi Construction Machinery Co. Ltd. | Machinery | 636 | $ | 16,742 | ||||||||||
Hitachi Ltd. | Industrial Conglomerates | 5,500 | 279,361 | |||||||||||
| a | Hitachi Metals Ltd. | Metals & Mining | 1,172 | 19,708 | ||||||||||
Hitachi Transport System Ltd. | Road & Rail | 208 | 11,516 | |||||||||||
Honda Motor Co. Ltd. | Automobiles | 10,200 | 293,037 | |||||||||||
HORIBA Ltd. | Electronic Equipment, Instruments & Components | 200 | 11,040 | |||||||||||
Hoshizaki Corp. | Machinery | 272 | 18,847 | |||||||||||
House Foods Group Inc. | Food Products | 400 | 9,537 | |||||||||||
Hoya Corp. | Health Care Equipment & Supplies | 2,100 | 242,744 | |||||||||||
Ibiden Co. Ltd. | Electronic Equipment, Instruments & Components | 636 | 31,702 | |||||||||||
Idemitsu Kosan Co. Ltd. | Oil, Gas & Consumable Fuels | 1,388 | 38,595 | |||||||||||
IHI Corp. | Machinery | 772 | 18,763 | |||||||||||
Iida Group Holdings Co. Ltd. | Household Durables | 800 | 13,940 | |||||||||||
Industrial & Infrastructure Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 12 | 18,281 | ||||||||||
Information Services International-Dentsu Ltd. | IT Services | 200 | 6,443 | |||||||||||
INFRONEER Holdings Inc. | Construction & Engineering | 1,692 | 14,526 | |||||||||||
INPEX Corp. | Oil, Gas & Consumable Fuels | 5,200 | 61,693 | |||||||||||
Internet Initiative Japan Inc. | Diversified Telecommunication Services | 400 | 13,528 | |||||||||||
Isetan Mitsukoshi Holdings Ltd. | Multiline Retail | 2,100 | 16,731 | |||||||||||
Isuzu Motors Ltd. | Automobiles | 3,000 | 39,250 | |||||||||||
Ito En Ltd. | Beverages | 372 | 18,420 | |||||||||||
ITOCHU Corp. | Trading Companies & Distributors | 8,112 | 276,961 | |||||||||||
ITOCHU Techno-Solutions Corp. | IT Services | 500 | 12,935 | |||||||||||
Itoham Yonekyu Holdings Inc. | Food Products | 1,100 | 5,882 | |||||||||||
Iwatani Corp. | Oil, Gas & Consumable Fuels | 300 | 12,779 | |||||||||||
Izumi Co. Ltd. | Multiline Retail | 208 | 5,518 | |||||||||||
J Front Retailing Co. Ltd. | Multiline Retail | 1,700 | 13,964 | |||||||||||
| a | Japan Airlines Co. Ltd. | Airlines | 900 | 16,980 | ||||||||||
| a | Japan Airport Terminal Co. Ltd. | Transportation Infrastructure | 280 | 12,896 | ||||||||||
Japan Aviatn Elect | Electronic Equipment, Instruments & Components | 272 | 4,462 | |||||||||||
Japan Exchange Group Inc. | Capital Markets | 3,172 | 59,742 | |||||||||||
Japan Hotel REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 28 | 14,372 | ||||||||||
Japan Logistics Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 5 | 13,079 | ||||||||||
Japan Post Bank Co. Ltd. | Banks | 2,400 | 19,477 | |||||||||||
Japan Post Holdings Co. Ltd. | Insurance | 13,300 | 98,445 | |||||||||||
Japan Post Insurance Co. Ltd. | Insurance | 1,196 | 21,048 | |||||||||||
Japan Prime Realty Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 5 | 16,457 | ||||||||||
Japan Real Estate Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 8 | 42,117 | ||||||||||
Japan Retail Fund Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 41 | 34,793 | ||||||||||
Japan Tobacco Inc. | Tobacco | 7,100 | 122,111 | |||||||||||
JCR Pharmaceuticals Co. Ltd. | Pharmaceuticals | 300 | 5,579 | |||||||||||
Jeol Ltd. | Health Care Equipment & Supplies | 200 | 11,320 | |||||||||||
JFE Holdings Inc. | Metals & Mining | 3,000 | 42,587 | |||||||||||
JGC Holdings Corp. | Construction & Engineering | 1,200 | 14,474 | |||||||||||
JSR Corp. | Chemicals | 1,036 | 30,984 | |||||||||||
JTEKT Corp. | Auto Components | 1,600 | 12,708 | |||||||||||
Justsystems Corp. | Software | 200 | 9,541 | |||||||||||
K’s Holdings Corp. | Specialty Retail | 900 | 9,365 | |||||||||||
Kadokawa Corp. | Media | 600 | 15,918 | |||||||||||
Kagome Co. Ltd. | Food Products | 500 | 12,853 | |||||||||||
Kajima Corp. | Construction & Engineering | 2,600 | 31,939 | |||||||||||
Kakaku.com Inc. | Interactive Media & Services | 872 | 19,807 | |||||||||||
Kaken Pharmaceutical Co. Ltd. | Pharmaceuticals | 160 | 5,128 | |||||||||||
Kamigumi Co. Ltd. | Transportation Infrastructure | 536 | 9,715 | |||||||||||
Kandenko Co. Ltd. | Construction & Engineering | 600 | 4,123 | |||||||||||
Kaneka Corp. | Chemicals | 372 | 10,865 | |||||||||||
Kansai Electric Power Co. Inc. | Electric Utilities | 4,300 | 40,706 | |||||||||||
Kansai Paint Co. Ltd. | Chemicals | 1,088 | 17,686 | |||||||||||
| franklintempleton.com | Annual Report | 271 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
KAO Corp. | Personal Products | 2,724 | $ | 112,775 | ||||||||||
Katitas Co. Ltd. | Real Estate Management & Development | 300 | 8,354 | |||||||||||
Kawasaki Heavy Industries Ltd. | Machinery | 800 | 14,672 | |||||||||||
Kawasaki Kisen Kaisha Ltd. | Marine | 500 | 33,038 | |||||||||||
KDDI Corp. | Wireless Telecommunication Services | 9,868 | 325,613 | |||||||||||
Keihan Holdings Co. Ltd. | Industrial Conglomerates | 692 | 17,161 | |||||||||||
Keikyu Corp. | Road & Rail | 1,700 | 17,564 | |||||||||||
Keio Corp. | Road & Rail | 700 | 27,596 | |||||||||||
Keisei Electric Railway Co. Ltd. | Road & Rail | 804 | 22,621 | |||||||||||
Kenedix Office Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 3 | 18,068 | ||||||||||
Kewpie Corp. | Food Products | 636 | 12,272 | |||||||||||
Keyence Corp. | Electronic Equipment, Instruments & Components | 1,076 | 507,526 | |||||||||||
Kikkoman Corp. | Food Products | 1,136 | 76,092 | |||||||||||
Kinden Corp. | Construction & Engineering | 672 | 8,737 | |||||||||||
Kintetsu Group Holdings Co. Ltd. | Road & Rail | 1,096 | 31,650 | |||||||||||
Kirin Holdings Co. Ltd. | Beverages | 4,600 | 69,317 | |||||||||||
Kobayashi Pharmaceutical Co. Ltd. | Personal Products | 324 | 26,214 | |||||||||||
Kobe Bussan Co. Ltd. | Food & Staples Retailing | 800 | 24,882 | |||||||||||
Kobe Steel Ltd. | Metals & Mining | 2,400 | 11,686 | |||||||||||
Koei Tecmo Holdings Co. Ltd. | Entertainment | 397 | 13,132 | |||||||||||
Koito Manufacturing Co. Ltd. | Auto Components | 697 | 28,569 | |||||||||||
Kokuyo Co. Ltd. | Commercial Services & Supplies | 500 | 6,653 | |||||||||||
Komatsu Ltd. | Machinery | 5,516 | 133,747 | |||||||||||
Konami Holdings Corp. | Entertainment | 576 | 36,779 | |||||||||||
Konica Minolta Inc. | Technology Hardware, Storage & Peripherals | 2,800 | 11,904 | |||||||||||
Kose Corp. | Personal Products | 156 | 16,567 | |||||||||||
Kotobuki Spirits Co. Ltd. | Food Products | 100 | 5,372 | |||||||||||
Kubota Corp. | Machinery | 6,500 | 123,333 | |||||||||||
Kuraray Co. Ltd. | Chemicals | 2,100 | 18,288 | |||||||||||
Kurita Water Industries Ltd. | Machinery | 636 | 23,816 | |||||||||||
Kusuri No Aoki Holdings Co. Ltd. | Food & Staples Retailing | 80 | 4,482 | |||||||||||
Kyocera Corp. | Electronic Equipment, Instruments & Components | 1,792 | 101,607 | |||||||||||
Kyowa Exeo Corp. | Construction & Engineering | 636 | 11,848 | |||||||||||
Kyowa Kirin Co. Ltd. | Pharmaceuticals | 1,500 | 35,197 | |||||||||||
Kyudenko Corp. | Construction & Engineering | 280 | 6,612 | |||||||||||
Kyushu Electric Power Co. Inc. | Electric Utilities | 2,900 | 19,520 | |||||||||||
Kyushu Financial Group Inc. | Banks | 2,100 | 6,938 | |||||||||||
Kyushu Railway Co. | Road & Rail | 900 | 18,589 | |||||||||||
LaSalle Logiport REIT | Equity Real Estate Investment Trusts (REITs | ) | 11 | 15,878 | ||||||||||
Lasertec Corp. | Semiconductors & Semiconductor Equipment | 432 | 73,978 | |||||||||||
Lawson Inc. | Food & Staples Retailing | 252 | 9,706 | |||||||||||
LINTEC Corp. | Chemicals | 272 | 5,448 | |||||||||||
Lion Corp. | Household Products | 1,500 | 16,832 | |||||||||||
LIXIL Group Corp. | Building Products | 1,536 | 28,980 | |||||||||||
M3 Inc. | Health Care Technology | 2,520 | 92,786 | |||||||||||
Mabuchi Motor Co. Ltd. | Electrical Equipment | 272 | 8,572 | |||||||||||
Makita Corp. | Machinery | 1,428 | 46,296 | |||||||||||
Mani Inc. | Health Care Equipment & Supplies | 400 | 4,838 | |||||||||||
Marubeni Corp. | Trading Companies & Distributors | 9,300 | 109,263 | |||||||||||
Marui Group Co. Ltd. | Multiline Retail | 1,172 | 21,726 | |||||||||||
Maruichi Steel Tube Ltd. | Metals & Mining | 312 | 7,095 | |||||||||||
Maruwa Unyu Kikan Co. Ltd. | Air Freight & Logistics | 200 | 1,850 | |||||||||||
Matsui Securities Co. Ltd. | Capital Markets | 600 | 3,989 | |||||||||||
Matsumotokiyoshi Holdings Co. Ltd. | Food & Staples Retailing | 800 | 28,573 | |||||||||||
Mazda Motor Corp. | Automobiles | 3,500 | 26,212 | |||||||||||
Mebuki Financial Group Inc. | Banks | 5,400 | 11,389 | |||||||||||
Medipal Holdings Corp. | Health Care Providers & Services | 900 | 14,941 | |||||||||||
Meiji Holdings Co. Ltd. | Food Products | 793 | 43,186 | |||||||||||
| 272 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Menicon Co. Ltd. | Health Care Equipment & Supplies | 340 | $ | 8,227 | ||||||||||
Minebea Mitsumi Inc. | Machinery | 2,436 | 54,069 | |||||||||||
Miraca Holdings Inc. | Health Care Providers & Services | 272 | 6,510 | |||||||||||
MISUMI Group Inc. | Machinery | 1,680 | 50,729 | |||||||||||
Mitsubishi Chemical Holdings Corp. | Chemicals | 7,600 | 51,163 | |||||||||||
Mitsubishi Corp. | Trading Companies & Distributors | 7,073 | 268,118 | |||||||||||
Mitsubishi Electric Corp. | Electrical Equipment | 11,400 | 132,433 | |||||||||||
Mitsubishi Estate Co. Ltd. | Real Estate Management & Development | 6,801 | 101,924 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. | Chemicals | 1,136 | 19,477 | |||||||||||
Mitsubishi Heavy Industries Ltd. | Machinery | 1,700 | 56,305 | |||||||||||
Mitsubishi Logistics Corp. | Transportation Infrastructure | 324 | 8,115 | |||||||||||
Mitsubishi Materials Corp. | Metals & Mining | 672 | 11,865 | |||||||||||
| a | Mitsubishi Motors Corp. | Automobiles | 3,900 | 10,636 | ||||||||||
Mitsubishi UFJ Financial Group Inc. | Banks | 73,100 | 457,903 | |||||||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | Diversified Financial Services | 3,889 | 18,263 | |||||||||||
Mitsui & Co. Ltd. | Trading Companies & Distributors | 9,400 | 257,740 | |||||||||||
Mitsui Chemicals Inc. | Chemicals | 1,036 | 26,375 | |||||||||||
Mitsui Fudosan Co. Ltd. | Real Estate Management & Development | 5,500 | 118,723 | |||||||||||
Mitsui Fudosan Logistics Park Inc. | Equity Real Estate Investment Trusts (REITs | ) | 4 | 18,950 | ||||||||||
Mitsui High-Tec Inc. | Semiconductors & Semiconductor Equipment | 120 | 12,309 | |||||||||||
Mitsui Mining and Smelting Co. Ltd. | Metals & Mining | 372 | 10,283 | |||||||||||
Mitsui O.S.K. Lines Ltd. | Marine | 2,008 | 56,580 | |||||||||||
Miura Co. Ltd. | Machinery | 580 | 14,503 | |||||||||||
Mizuho Financial Group Inc. | Banks | 15,200 | 196,238 | |||||||||||
| a | Money Forward Inc. | Software | 300 | 13,569 | ||||||||||
Monotaro Co. Ltd. | Trading Companies & Distributors | 1,420 | 30,816 | |||||||||||
Mori Hills REIT Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 9 | 11,204 | ||||||||||
Morinaga & Co. Ltd. | Food Products | 204 | 6,404 | |||||||||||
Morinaga Milk Industry Co. Ltd. | Food Products | 208 | 8,963 | |||||||||||
MS&AD Insurance Group Holdings Inc. | Insurance | 2,772 | 90,851 | |||||||||||
Murata Manufacturing Co. Ltd. | Electronic Equipment, Instruments & Components | 3,432 | 229,516 | |||||||||||
Nabtesco Corp. | Machinery | 676 | 18,157 | |||||||||||
Nagase & Co. Ltd. | Trading Companies & Distributors | 600 | 9,002 | |||||||||||
Nagoya Railroad Co. Ltd. | Road & Rail | 1,176 | 21,025 | |||||||||||
Nankai Electric Railway Co. Ltd. | Road & Rail | 636 | 12,382 | |||||||||||
NEC Corp. | IT Services | 1,560 | 66,192 | |||||||||||
NEC System Integration & Construction Ltd. | IT Services | 400 | 5,886 | |||||||||||
Net One Systems Co. Ltd. | IT Services | 500 | 11,786 | |||||||||||
Nexon Co. Ltd. | Entertainment | 2,472 | 59,715 | |||||||||||
NGK Insulators Ltd. | Machinery | 1,500 | 21,664 | |||||||||||
NGK Spark Plug Co. Ltd. | Auto Components | 1,200 | 19,546 | |||||||||||
NH Foods Ltd. | Food Products | 636 | 21,746 | |||||||||||
NHK Spring Co. Ltd. | Auto Components | 900 | 6,562 | |||||||||||
Nichirei Corp. | Food Products | 636 | 12,413 | |||||||||||
Nidec Corp. | Electrical Equipment | 2,789 | 223,993 | |||||||||||
Nifco Inc. | Auto Components | 500 | 11,493 | |||||||||||
Nihon Kohden Corp. | Health Care Equipment & Supplies | 400 | 9,725 | |||||||||||
Nihon M&A Center Inc. | Professional Services | 1,544 | 21,969 | |||||||||||
Nihon Unisys Ltd. | IT Services | 512 | 13,140 | |||||||||||
Nikon Corp. | Household Durables | 1,900 | 20,569 | |||||||||||
Nintendo Co. Ltd. | Entertainment | 627 | 318,575 | |||||||||||
Nippon Accommodations Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 3 | 15,819 | ||||||||||
Nippon Building Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 9 | 51,312 | ||||||||||
Nippon Electric Glass Co. Ltd. | Electronic Equipment, Instruments & Components | 500 | 11,188 | |||||||||||
Nippon Express Co. Ltd. | Road & Rail | 400 | 27,749 | |||||||||||
Nippon Kayaku Co. Ltd. | Chemicals | 900 | 8,609 | |||||||||||
Nippon Paint Holdings Co. Ltd. | Chemicals | 6,052 | 53,951 | |||||||||||
Nippon Prologis REIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 14 | 41,120 | ||||||||||
| franklintempleton.com | Annual Report | 273 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Nippon Sanso Holdings Corp. | Chemicals | 824 | $ | 15,825 | ||||||||||
Nippon Shinyaku Co. Ltd. | Pharmaceuticals | 296 | 20,315 | |||||||||||
Nippon Shobukai Co. Ltd. | Chemicals | 156 | 6,850 | |||||||||||
Nippon Steel Corp. | Metals & Mining | 4,900 | 87,645 | |||||||||||
Nippon Telegraph & Telephone Corp. | Diversified Telecommunication Services | 7,100 | 207,370 | |||||||||||
Nippon Television Holdings Inc. | Media | 100 | 1,050 | |||||||||||
Nippon Yusen KK | Marine | 1,000 | 88,651 | |||||||||||
Nipro Corp. | Health Care Equipment & Supplies | 1,000 | 8,437 | |||||||||||
Nishi-Nippon Railroad Co. Ltd. | Road & Rail | 400 | 8,842 | |||||||||||
Nissan Chemical Corp. | Chemicals | 812 | 48,369 | |||||||||||
| a | Nissan Motor Co. Ltd. | Automobiles | 11,500 | 51,903 | ||||||||||
Nisshin Seifun Group Inc. | Food Products | 1,500 | 21,083 | |||||||||||
Nissin Foods Holdings Co. Ltd. | Food Products | 452 | 31,915 | |||||||||||
Nitori Holdings Co. Ltd. | Specialty Retail | 401 | 50,747 | |||||||||||
Nitto Denko Corp. | Chemicals | 900 | 65,401 | |||||||||||
Noevir Holdings Co. Ltd. | Personal Products | 92 | 3,748 | |||||||||||
NOF Corp. | Chemicals | 400 | 16,544 | |||||||||||
NOK Corp. | Auto Components | 672 | 6,350 | |||||||||||
Nomura Holdings Inc. | Capital Markets | 17,900 | 75,980 | |||||||||||
Nomura Real Estate Holdings Inc. | Real Estate Management & Development | 600 | 14,499 | |||||||||||
Nomura Real Estate Master Fund Inc. | Equity Real Estate Investment Trusts (REITs | ) | 27 | 35,859 | ||||||||||
Nomura Research Institute Ltd. | IT Services | 1,640 | 54,318 | |||||||||||
NS Solutions Corp. | IT Services | 136 | 4,123 | |||||||||||
NSK Ltd. | Machinery | 2,800 | 16,979 | |||||||||||
NTT Data Corp. | IT Services | 3,800 | 75,703 | |||||||||||
Obayashi Corp. | Construction & Engineering | 4,100 | 30,402 | |||||||||||
OBIC Business Consultants Co. Ltd. | Software | 284 | 9,991 | |||||||||||
OBIC Co. Ltd. | IT Services | 397 | 60,249 | |||||||||||
Odakyu Electric Railway Co. Ltd. | Road & Rail | 1,800 | 30,209 | |||||||||||
Oji Holdings Corp. | Paper & Forest Products | 5,200 | 26,005 | |||||||||||
Okuma Corp. | Machinery | 136 | 5,715 | |||||||||||
Olympus Corp. | Health Care Equipment & Supplies | 6,340 | 122,177 | |||||||||||
Omron Corp. | Electronic Equipment, Instruments & Components | 1,116 | 75,525 | |||||||||||
Ono Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,504 | 63,252 | |||||||||||
Open House Co. Ltd. | Household Durables | 400 | 17,862 | |||||||||||
Oracle Corp. Japan | Software | 160 | 11,205 | |||||||||||
Orient Corp. | Consumer Finance | 3,600 | 3,678 | |||||||||||
Oriental Land Co. Ltd. | Hotels, Restaurants & Leisure | 1,152 | 223,139 | |||||||||||
ORIX Corp. | Diversified Financial Services | 7,200 | 145,186 | |||||||||||
ORIX JREIT Inc. | Equity Real Estate Investment Trusts (REITs | ) | 16 | 21,790 | ||||||||||
Osaka Gas Co. Ltd. | Gas Utilities | 2,300 | 39,642 | |||||||||||
OSG Corp. | Machinery | 600 | 9,289 | |||||||||||
Otsuka Corp. | IT Services | 636 | 22,768 | |||||||||||
Otsuka Holdings Co. Ltd. | Pharmaceuticals | 2,504 | 87,307 | |||||||||||
Paltac Corp. | Distributors | 160 | 5,998 | |||||||||||
Pan Pacific International Holdings Corp. | Multiline Retail | 2,428 | 39,288 | |||||||||||
Panasonic Corp. | Household Durables | 12,700 | 124,358 | |||||||||||
| a | Park24 Co. Ltd. | Commercial Services & Supplies | 772 | 12,804 | ||||||||||
Penta-Ocean Construction Co. Ltd. | Construction & Engineering | 1,900 | 9,596 | |||||||||||
| a | PeptiDream Inc. | Biotechnology | 660 | 11,887 | ||||||||||
Persol Holdings Co. Ltd. | Professional Services | 1,000 | 22,772 | |||||||||||
Pigeon Corp. | Household Products | 636 | 11,282 | |||||||||||
Pola Orbis Holdings Inc. | Personal Products | 400 | 5,270 | |||||||||||
Rakus Co. Ltd. | Software | 600 | 8,250 | |||||||||||
Rakuten Inc. | Internet & Direct Marketing Retail | 4,800 | 38,242 | |||||||||||
Recruit Holdings Co. Ltd. | Professional Services | 8,576 | 382,537 | |||||||||||
Relo Group Inc. | Real Estate Management & Development | 536 | 8,095 | |||||||||||
| a | Renesas Electronics Corp. | Semiconductors & Semiconductor Equipment | 5,800 | 68,429 | ||||||||||
| 274 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Rengo Co. Ltd. | Containers & Packaging | 1,500 | $ | 9,664 | ||||||||||
| a | RENOVA Inc. | Independent Power and Renewable Electricity Producers | 300 | 4,239 | ||||||||||
Resona Holdings Inc. | Banks | 13,036 | 56,290 | |||||||||||
Resorttrust Inc. | Hotels, Restaurants & Leisure | 400 | 6,898 | |||||||||||
Ricoh Co. Ltd. | Technology Hardware, Storage & Peripherals | 3,700 | 32,374 | |||||||||||
Rinnai Corp. | Household Durables | 188 | 14,204 | |||||||||||
Rohm Co. Ltd. | Semiconductors & Semiconductor Equipment | 536 | 42,350 | |||||||||||
Rohto Pharmaceutical Co. Ltd. | Personal Products | 536 | 16,317 | |||||||||||
Ryohin Keikaku Co. Ltd. | Multiline Retail | 1,400 | 16,506 | |||||||||||
Sankyo Co. Ltd. | Leisure Products | 272 | 7,608 | |||||||||||
Sankyu Inc. | Road & Rail | 272 | 8,942 | |||||||||||
| a | Sansan Inc. | Software | 440 | 5,043 | ||||||||||
Santen Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,100 | 21,229 | |||||||||||
Sanwa Holdings Corp. | Building Products | 1,100 | 11,274 | |||||||||||
Sapporo Holdings Ltd. | Beverages | 400 | 7,603 | |||||||||||
Sawai Group Holdings Co. Ltd. | Pharmaceuticals | 188 | 6,908 | |||||||||||
SBI Holdings Inc. | Capital Markets | 1,412 | 36,063 | |||||||||||
SCREEN Holdings Co. Ltd. | Semiconductors & Semiconductor Equipment | 192 | 19,552 | |||||||||||
SCSK Corp. | IT Services | 672 | 11,632 | |||||||||||
Secom Co. Ltd. | Commercial Services & Supplies | 1,172 | 85,630 | |||||||||||
Sega Sammy Holdings Inc. | Leisure Products | 1,128 | 19,637 | |||||||||||
Seibu Holdings Inc. | Road & Rail | 1,200 | 12,576 | |||||||||||
Seiko Epson Corp. | Technology Hardware, Storage & Peripherals | 1,500 | 22,752 | |||||||||||
Seino Holdings Co. Ltd. | Road & Rail | 800 | 7,343 | |||||||||||
Sekisui Chemical Co. Ltd. | Household Durables | 2,000 | 28,985 | |||||||||||
Sekisui House Ltd. | Household Durables | 3,400 | 66,417 | |||||||||||
Sekisui House Reit Inc. | Equity Real Estate Investment Trusts (REITs | ) | 25 | 16,622 | ||||||||||
Seven & i Holdings Co. Ltd. | Food & Staples Retailing | 4,600 | 220,307 | |||||||||||
Seven Bank Ltd. | Banks | 4,300 | 8,467 | |||||||||||
SG Holdings Co. Ltd. | Air Freight & Logistics | 2,544 | 48,459 | |||||||||||
Sharp Corp. | Household Durables | 1,200 | 11,360 | |||||||||||
| a | SHIFT Inc. | IT Services | 60 | 10,707 | ||||||||||
Shikoku Electric Power Co. Inc. | Electric Utilities | 800 | 5,194 | |||||||||||
Shimadzu Corp. | Electronic Equipment, Instruments & Components | 1,600 | 55,827 | |||||||||||
Shimamura Co. Ltd. | Specialty Retail | 116 | 10,389 | |||||||||||
SHIMANO Inc. | Leisure Products | 440 | 102,065 | |||||||||||
Shimizu Corp. | Construction & Engineering | 3,200 | 19,378 | |||||||||||
Shin-Etsu Chemical Co. Ltd. | Chemicals | 2,370 | 366,898 | |||||||||||
Shinko Electric Industries Co. Ltd. | Semiconductors & Semiconductor Equipment | 400 | 19,279 | |||||||||||
| a | Shinsei Bank Ltd. | Banks | 400 | 7,372 | ||||||||||
Shionogi & Co. Ltd. | Pharmaceuticals | 1,612 | 100,007 | |||||||||||
Ship Healthcare Holdings Inc. | Health Care Providers & Services | 500 | 8,189 | |||||||||||
Shiseido Co. Ltd. | Personal Products | 2,308 | 118,238 | |||||||||||
SHO-BOND Holdings Co. Ltd. | Construction & Engineering | 240 | 10,539 | |||||||||||
| a | Shochiku Co. Ltd. | Entertainment | 56 | 5,666 | ||||||||||
Shoei Co. Ltd. | Real Estate Management & Development | 2,400 | 21,771 | |||||||||||
Showa Denko K.K. | Chemicals | 1,052 | 21,062 | |||||||||||
Skylark Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 1,300 | 16,912 | |||||||||||
SMC Corp. | Machinery | 340 | 192,837 | |||||||||||
SMS Co. Ltd. | Professional Services | 280 | 7,832 | |||||||||||
Softbank Corp. | Wireless Telecommunication Services | 16,300 | 191,773 | |||||||||||
SoftBank Group Corp. | Wireless Telecommunication Services | 7,860 | 359,990 | |||||||||||
Sohgo Security Services Co. Ltd. | Commercial Services & Supplies | 428 | 14,105 | |||||||||||
Sojitz Corp. | Trading Companies & Distributors | 1,400 | 23,265 | |||||||||||
Sompo Holdings Inc. | Insurance | 1,936 | 85,830 | |||||||||||
Sony Corp. | Household Durables | 7,400 | 776,124 | |||||||||||
Sotetsu Holdings Inc. | Road & Rail | 500 | 9,438 | |||||||||||
Square Enix Holdings Co. Ltd. | Entertainment | 500 | 22,369 | |||||||||||
| franklintempleton.com | Annual Report | 275 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Stanley Electric Co. Ltd. | Auto Components | 816 | $ | 15,624 | ||||||||||
Subaru Corp. | Automobiles | 3,600 | 57,778 | |||||||||||
Sugi Pharmacy Co. Ltd. | Food & Staples Retailing | 184 | 9,172 | |||||||||||
Sumco Corp. | Semiconductors & Semiconductor Equipment | 1,700 | 28,391 | |||||||||||
Sumitomo Bakelite Co. Ltd. | Chemicals | 236 | 9,702 | |||||||||||
Sumitomo Chemical Co. Ltd. | Chemicals | 8,800 | 40,746 | |||||||||||
Sumitomo Corp. | Trading Companies & Distributors | 6,700 | 116,971 | |||||||||||
Sumitomo Dainippon Pharma Co. Ltd. | Pharmaceuticals | 1,000 | 9,953 | |||||||||||
Sumitomo Electric Industries Ltd. | Auto Components | 4,500 | 54,204 | |||||||||||
Sumitomo Forestry Co. Ltd. | Household Durables | 900 | 16,076 | |||||||||||
Sumitomo Heavy Industries Ltd. | Machinery | 636 | 14,766 | |||||||||||
Sumitomo Metal Mining Co. Ltd. | Metals & Mining | 1,400 | 71,087 | |||||||||||
Sumitomo Mitsui Financial Group Inc. | Banks | 7,788 | 250,692 | |||||||||||
Sumitomo Realty & Development Co. Ltd. | Real Estate Management & Development | 2,300 | 64,220 | |||||||||||
Sumitomo Rubber Industries Ltd. | Auto Components | 1,000 | 9,261 | |||||||||||
Sundrug Co. Ltd. | Food & Staples Retailing | 440 | 10,785 | |||||||||||
Suntory Beverage & Food Ltd. | Beverages | 740 | 28,411 | |||||||||||
Sushiro Global Holdings Ltd. | Hotels, Restaurants & Leisure | 560 | 15,848 | |||||||||||
Suzuken Co. Ltd. | Health Care Providers & Services | 400 | 11,963 | |||||||||||
Suzuki Motor Corp. | Automobiles | 2,732 | 94,829 | |||||||||||
Sysmex Corp. | Health Care Equipment & Supplies | 1,180 | 86,749 | |||||||||||
T&D Holdings Inc. | Insurance | 3,100 | 42,678 | |||||||||||
Taiheiyo Cement Corp. | Construction Materials | 800 | 13,308 | |||||||||||
Taisei Corp. | Construction & Engineering | 940 | 27,377 | |||||||||||
Taisho Pharmaceutical Holdings Co. Ltd. | Pharmaceuticals | 316 | 14,788 | |||||||||||
Taiyo Yuden Co. Ltd. | Electronic Equipment, Instruments & Components | 741 | 33,883 | |||||||||||
Takara Bio Inc. | Biotechnology | 272 | 5,022 | |||||||||||
Takara Holdings Inc. | Beverages | 1,000 | 9,071 | |||||||||||
Takashimaya Co. Ltd. | Multiline Retail | 800 | 7,659 | |||||||||||
Takeda Pharmaceutical Co. Ltd. | Pharmaceuticals | 9,192 | 264,911 | |||||||||||
TBS Holdings Inc. | Media | 172 | 2,532 | |||||||||||
TDK Corp. | Electronic Equipment, Instruments & Components | 2,156 | 79,224 | |||||||||||
TechnoPro Holdings Inc. | Professional Services | 628 | 17,230 | |||||||||||
Teijin Ltd. | Chemicals | 1,100 | 12,353 | |||||||||||
Terumo Corp. | Health Care Equipment & Supplies | 3,960 | 121,500 | |||||||||||
The Bank of Kyoto Ltd. | Banks | 400 | 17,631 | |||||||||||
The Chiba Bank Ltd. | Banks | 3,700 | 22,101 | |||||||||||
The Chugoku Bank Ltd. | Banks | 1,000 | 7,209 | |||||||||||
The Chugoku Electric Power Co. Inc. | Electric Utilities | 1,800 | 12,561 | |||||||||||
The Iyo Bank Ltd. | Banks | 1,900 | 9,392 | |||||||||||
The Japan Steel Works Ltd. | Machinery | 400 | 12,589 | |||||||||||
The Shizuoka Bank Ltd. | Banks | 2,900 | 20,620 | |||||||||||
THK Co. Ltd. | Machinery | 680 | 15,244 | |||||||||||
TIS Inc. | IT Services | 1,400 | 33,185 | |||||||||||
Tobu Railway Co. Ltd. | Road & Rail | 1,272 | 31,220 | |||||||||||
Toda Corp. | Construction & Engineering | 1,600 | 9,768 | |||||||||||
Toho Co. Ltd. | Entertainment | 660 | 25,204 | |||||||||||
Toho Gas Co. Ltd. | Gas Utilities | 565 | 12,685 | |||||||||||
Tohoku Electric Power Co. Inc. | Electric Utilities | 2,800 | 16,425 | |||||||||||
Tokai Carbon Co. Ltd. | Chemicals | 1,100 | 10,431 | |||||||||||
Tokio Marine Holdings Inc. | Insurance | 3,764 | 221,049 | |||||||||||
Tokyo Century Corp. | Diversified Financial Services | 332 | 12,350 | |||||||||||
| a | Tokyo Electric Power Co. Holdings Inc. | Electric Utilities | 9,600 | 31,875 | ||||||||||
Tokyo Electron Ltd. | Semiconductors & Semiconductor Equipment | 883 | 460,142 | |||||||||||
Tokyo Gas Co. Ltd. | Gas Utilities | 2,497 | 45,918 | |||||||||||
Tokyo Ohka Kogyo Co. Ltd. | Chemicals | 192 | 11,643 | |||||||||||
Tokyo Tatemono Co. Ltd. | Real Estate Management & Development | 1,072 | 16,198 | |||||||||||
TOKYU Corp. | Road & Rail | 2,900 | 38,037 | |||||||||||
| 276 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
Tokyu Fudosan Holdings Corp. | Real Estate Management & Development | 3,700 | $ | 20,546 | ||||||||||
TOPPAN Inc. | Commercial Services & Supplies | 1,700 | 30,337 | |||||||||||
Toray Industries Inc. | Chemicals | 8,800 | 46,315 | |||||||||||
Toshiba Corp. | Industrial Conglomerates | 2,480 | 95,011 | |||||||||||
Toshiba Tec Corp. | Technology Hardware, Storage & Peripherals | 120 | 4,859 | |||||||||||
Tosoh Corp. | Chemicals | 1,672 | 24,989 | |||||||||||
TOTO Ltd. | Building Products | 856 | 34,839 | |||||||||||
Toyo Seikan Group Holdings Ltd. | Containers & Packaging | 800 | 9,267 | |||||||||||
Toyo Suisan Kaisha Ltd. | Food Products | 573 | 20,630 | |||||||||||
Toyo Tire Corp. | Auto Components | 636 | 8,190 | |||||||||||
Toyoda Gosei Co. Ltd. | Auto Components | 400 | 6,677 | |||||||||||
Toyota Boshoku Corp. | Auto Components | 400 | 6,598 | |||||||||||
Toyota Industries Corp. | Auto Components | 1,000 | 69,784 | |||||||||||
Toyota Motor Corp. | Automobiles | 72,709 | 1,331,376 | |||||||||||
Toyota Tsusho Corp. | Trading Companies & Distributors | 1,300 | 54,196 | |||||||||||
Trend Micro Inc. | Software | 708 | 41,765 | |||||||||||
TS TECH Co. Ltd. | Auto Components | 600 | 6,797 | |||||||||||
Tsumura & Co. | Pharmaceuticals | 400 | 10,546 | |||||||||||
Tsuruha Holdings Inc. | Food & Staples Retailing | 196 | 12,531 | |||||||||||
Ube Industries Ltd. | Chemicals | 536 | 8,819 | |||||||||||
Ulvac Inc. | Semiconductors & Semiconductor Equipment | 272 | 14,118 | |||||||||||
Unicharm Corp. | Household Products | 2,300 | 82,601 | |||||||||||
United Urban Investment Corp. | Equity Real Estate Investment Trusts (REITs | ) | 18 | 20,866 | ||||||||||
Ushio Inc. | Electrical Equipment | 600 | 9,027 | |||||||||||
USS Co. Ltd. | Specialty Retail | 1,300 | 22,053 | |||||||||||
Welcia Holdings Co. Ltd. | Food & Staples Retailing | 644 | 15,944 | |||||||||||
West Japan Railway Co. | Road & Rail | 1,420 | 59,561 | |||||||||||
Yakult Honsha Co. Ltd. | Food Products | 789 | 42,383 | |||||||||||
| a | Yamada Holdings Co. Ltd. | Specialty Retail | 4,300 | 13,462 | ||||||||||
Yamaguchi Financial Group Inc. | Banks | 1,300 | 7,283 | |||||||||||
Yamaha Corp. | Leisure Products | 900 | 39,670 | |||||||||||
Yamaha Motor Co. Ltd. | Automobiles | 1,896 | 43,051 | |||||||||||
Yamato Holdings Co. Ltd. | Air Freight & Logistics | 2,020 | 38,162 | |||||||||||
Yamato Kogyo Co. Ltd. | Metals & Mining | 236 | 7,223 | |||||||||||
Yamazaki Baking Co. Ltd. | Food Products | 772 | 9,534 | |||||||||||
Yaoko Co. Ltd. | Food & Staples Retailing | 136 | 7,440 | |||||||||||
YASKAWA Electric Corp. | Machinery | 1,520 | 60,299 | |||||||||||
Yokogawa Electric Corp. | Electronic Equipment, Instruments & Components | 1,500 | 25,940 | |||||||||||
Yokohama Rubber Co. Ltd. | Auto Components | 600 | 8,364 | |||||||||||
Z Holdings Corp. | Interactive Media & Services | 15,200 | 67,174 | |||||||||||
Zenkoku Hosho Co. Ltd. | Diversified Financial Services | 272 | 10,555 | |||||||||||
Zensho Holdings Co. Ltd. | Hotels, Restaurants & Leisure | 600 | 14,143 | |||||||||||
Zeon Corp. | Chemicals | 800 | 8,990 | |||||||||||
Zozo Inc. | Internet & Direct Marketing Retail | 636 | 17,213 | |||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $26,791,105) 99.2% | 24,525,653 | |||||||||||||
|
| |||||||||||||
| Short Term Investments (Cost $695,758) 2.8% | ||||||||||||||
Short-Term Investments 2.8% | ||||||||||||||
| United States 2.8% | ||||||||||||||
| b,c | Institutional Fiduciary Portfolio, 0.01% | Money Market Funds | 695,758 | 695,758 | ||||||||||
|
| |||||||||||||
Total Investments | 25,221,411 | |||||||||||||
Other Assets, less Liabilities (2.0)% | (501,616 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 24,719,795 | ||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 277 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
aNon-income producing.
bSee Note 3(c) regarding investments in affiliated management investment companies.
cThe rate shown is the annualized seven-day effective yield at period end.
At March 31, 2022 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Currency | Counterpartya | Type | Quantity | Contract Amount | Settlement Date | Unrealized Appreciation | Unrealized Depreciation | |||||||||||||||||||||
| OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Japanese Yen | DBAB | Buy | 799,070,000 | $ | 6,578,874 | 4/04/22 | $ | 4,607 | $ | — | ||||||||||||||||||
Japanese Yen | HSBK | Buy | 799,070,000 | 6,583,383 | 4/04/22 | 98 | — | |||||||||||||||||||||
Japanese Yen | MSCO | Buy | 326,892,000 | 2,693,173 | 4/04/22 | 67 | — | |||||||||||||||||||||
Japanese Yen | UBSW | Buy | 799,070,000 | 6,583,416 | 4/04/22 | 65 | — | |||||||||||||||||||||
Japanese Yen | DBAB | Sell | 399,535,000 | 3,472,376 | 4/04/22 | 180,635 | — | |||||||||||||||||||||
Japanese Yen | DBAB | Sell | 399,535,000 | 3,272,986 | 4/04/22 | — | (18,755 | ) | ||||||||||||||||||||
Japanese Yen | HSBK | Sell | 399,535,000 | 3,471,042 | 4/04/22 | 179,302 | — | |||||||||||||||||||||
Japanese Yen | HSBK | Sell | 399,535,000 | 3,273,753 | 4/04/22 | — | (17,988 | ) | ||||||||||||||||||||
Japanese Yen | MSCO | Sell | 163,446,000 | 1,420,105 | 4/04/22 | 73,485 | — | |||||||||||||||||||||
Japanese Yen | MSCO | Sell | 163,446,000 | 1,339,185 | 4/04/22 | — | (7,435 | ) | ||||||||||||||||||||
Japanese Yen | UBSW | Sell | 399,535,000 | 3,471,395 | 4/04/22 | 179,655 | — | |||||||||||||||||||||
Japanese Yen | UBSW | Sell | 399,535,000 | 3,273,771 | 4/04/22 | — | (17,969 | ) | ||||||||||||||||||||
Japanese Yen | DBAB | Sell | 879,130,000 | 7,242,189 | 5/06/22 | — | (5,114 | ) | ||||||||||||||||||||
Japanese Yen | HSBK | Sell | 879,130,000 | 7,247,215 | 5/06/22 | — | (87 | ) | ||||||||||||||||||||
Japanese Yen | MSCO | Sell | 359,644,000 | 2,964,708 | 5/06/22 | — | (96 | ) | ||||||||||||||||||||
Japanese Yen | UBSW | Sell | 879,130,000 | 7,247,180 | 5/06/22 | — | (122 | ) | ||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Total Forward Exchange Contracts |
| $ | 617,914 | $ | (67,566 | ) | ||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
| $ | 550,348 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
Nikkei 225 Mini | Long | 10 | $ | 229,289 | 6/09/22 | $ | 1,445 | |||||||||||||
*As of period end.
See Abbreviations on page 365
See Note 8 regarding other derivative information.
| 278 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Latin America ETF
| Year Ended March 31, | ||||||||||||||||
| 2022 | 2021 | 2020 | 2019a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||
Net asset value, beginning of year | $ | 22.40 | $ | 15.20 | $ | 26.41 | $ | 26.17 | ||||||||
|
| |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 1.54 | 0.57 | 0.77 | 0.38 | ||||||||||||
Net realized and unrealized gains (losses) | 2.83 | 7.13 | (11.08 | ) | (0.02 | ) | ||||||||||
|
| |||||||||||||||
Total from investment operations | 4.37 | 7.70 | (10.31 | ) | 0.36 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (1.52 | ) | (0.50 | ) | (0.90 | ) | (0.12 | ) | ||||||||
|
| |||||||||||||||
Net asset value, end of year | $ | 25.25 | $ | 22.40 | $ | 15.20 | $ | 26.41 | ||||||||
|
| |||||||||||||||
Total returnd | 21.12% | 50.80% | (40.49)% | 1.42% | ||||||||||||
| Ratios to average net assetse |
| |||||||||||||||
Total expenses | 0.19% | 0.19% | 0.21% | 0.19% | ||||||||||||
Net investment income | 6.75% | 2.86% | 2.97% | 3.08% | ||||||||||||
| Supplemental data |
| |||||||||||||||
Net assets, end of year (000’s) | $7,575 | $4,480 | $1,520 | $2,641 | ||||||||||||
Portfolio turnover ratef | 18.50% | g | 10.21% | g | 12.74% | g | 4.08% | |||||||||
aFor the period October 9, 2018 (commencement of operations) to March 31, 2019.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 18.50% | 10.21% | 12.74% | |||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 279 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE Latin America ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 80.1% | ||||||||||||||
| Brazil 47.4% | ||||||||||||||
Ambev SA | Beverages | 43,800 | $ | 141,946 | ||||||||||
Americanas SA | Internet & Direct Marketing Retail | 6,645 | 45,657 | |||||||||||
| a | Americanas SA | Internet & Direct Marketing Retail | 98 | 662 | ||||||||||
Armac Locacao Logistica E Servicos SA | Trading Companies & Distributors | 600 | 2,417 | |||||||||||
Atacadao Distribuicao Comercio Industria Ltd. | Food & Staples Retailing | 2,700 | 12,796 | |||||||||||
Auren Energia SA | Electric Utilities | 2,779 | 9,353 | |||||||||||
| a | Azul SA | Airlines | 2,700 | 13,591 | ||||||||||
B3 SA – Brasil Bolsa Balcao | Capital Markets | 61,800 | 204,311 | |||||||||||
Banco Bradesco SA | Banks | 14,419 | 55,437 | |||||||||||
Banco BTG Pactual SA | Capital Markets | 11,700 | 64,114 | |||||||||||
Banco do Brasil SA | Banks | 8,700 | 63,530 | |||||||||||
Banco Inter SA | Banks | 4,800 | 6,889 | |||||||||||
Banco Santander Brasil SA | Banks | 3,600 | 27,940 | |||||||||||
BB Seguridade Participacoes SA | Insurance | 6,900 | 37,114 | |||||||||||
| a | BR Malls Participacoes SA | Real Estate Management & Development | 8,400 | 16,404 | ||||||||||
Bradespar SA | Metals & Mining | 310 | 1,932 | |||||||||||
| a | BRF SA | Food Products | 10,800 | 42,250 | ||||||||||
Caixa Seguridade Participacoes S/A | Insurance | 4,500 | 8,419 | |||||||||||
CCR SA | Transportation Infrastructure | 11,400 | 32,866 | |||||||||||
Centrais Eletricas Brasileiras SA | Electric Utilities | 6,300 | 50,353 | |||||||||||
Cia Brasileira de Distribuicao | Food & Staples Retailing | 1,600 | 8,131 | |||||||||||
Cia Paranaense de Energia | Electric Utilities | 3,300 | 4,722 | |||||||||||
Cia Siderurgica Nacional SA | Metals & Mining | 6,600 | 36,153 | |||||||||||
Cielo SA | IT Services | 11,100 | 7,265 | |||||||||||
Companhia de Locacao das Americas | Road & Rail | 3,300 | 18,861 | |||||||||||
Companhia de Saneamento Basico do Estado de Sao Paulo | Water Utilities | 3,600 | 36,144 | |||||||||||
Companhia Energetica de Minas Gerais | Electric Utilities | 2,592 | 11,089 | |||||||||||
Cosan SA | Oil, Gas & Consumable Fuels | 12,012 | 59,783 | |||||||||||
CPFL Energia SA | Electric Utilities | 1,800 | 12,224 | |||||||||||
CSN Mineracao SA | Metals & Mining | 5,100 | 6,472 | |||||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | Household Durables | 2,700 | 9,938 | |||||||||||
Dexco SA | Paper & Forest Products | 3,180 | 9,824 | |||||||||||
EDP – Energias do Brasil SA | Electric Utilities | 2,700 | 13,364 | |||||||||||
| a | Embraer SA | Aerospace & Defense | 7,500 | 23,611 | ||||||||||
Energisa SA | Electric Utilities | 2,600 | 26,706 | |||||||||||
| a | Eneva SA | Independent Power and Renewable Electricity Producers | 9,900 | 30,792 | ||||||||||
Engie Brasil Energia SA | Independent Power and Renewable Electricity Producers | 1,800 | 16,379 | |||||||||||
Equatorial Energia SA | Electric Utilities | 9,300 | 53,252 | |||||||||||
Getnet Adquirencia e Servicos para Meios de Pagamento SA | IT Services | 950 | 730 | |||||||||||
| b | GPS Participacoes e Empreendimentos SA, 144A | Commercial Services & Supplies | 4,200 | 15,184 | ||||||||||
Grendene SA | Textiles, Apparel & Luxury Goods | 3,600 | 7,568 | |||||||||||
| a | GRUPO DE MODA SOMA SA | Textiles, Apparel & Luxury Goods | 4,500 | 14,432 | ||||||||||
| a | Grupo Mateus SA | Food & Staples Retailing | 4,200 | 4,720 | ||||||||||
| b,c | Hapvida Participacoes e Investimentos SA, 144A, Reg S | Health Care Providers & Services | 40,353 | 100,543 | ||||||||||
Hypera SA | Pharmaceuticals | 4,200 | 34,214 | |||||||||||
Itau Unibanco Holding SA | Banks | 4,500 | 22,349 | |||||||||||
Klabin SA | Containers & Packaging | 8,100 | 41,114 | |||||||||||
Localiza Rent a Car SA | Road & Rail | 6,005 | 77,212 | |||||||||||
| a,b | Locaweb Servicos de Internet SA, 144A | IT Services | 4,200 | 8,927 | ||||||||||
Lojas Renner SA | Multiline Retail | 9,846 | 56,980 | |||||||||||
M Dias Branco SA | Food Products | 1,200 | 6,217 | |||||||||||
| 280 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Brazil (continued) | ||||||||||||||
Magazine Luiza SA | Multiline Retail | 30,936 | $ | 44,399 | ||||||||||
Marfrig Global Foods SA | Food Products | 3,600 | 16,212 | |||||||||||
Multiplan Empreendimentos Imobiliarios SA | Real Estate Management & Development | 3,000 | 15,455 | |||||||||||
| a | Natura & Co. Holding SA | Personal Products | 9,600 | 52,627 | ||||||||||
Neoenergia SA | Electric Utilities | 2,400 | 8,697 | |||||||||||
Odontoprev SA | Health Care Providers & Services | 2,700 | 7,125 | |||||||||||
| a | Petro Rio SA | Oil, Gas & Consumable Fuels | 6,600 | 33,070 | ||||||||||
Petroleo Brasileiro SA | Oil, Gas & Consumable Fuels | 37,500 | 278,096 | |||||||||||
Porto Seguro SA | Insurance | 1,800 | 7,996 | |||||||||||
Raia Drogasil SA | Food & Staples Retailing | 10,800 | 54,410 | |||||||||||
| b | Rede D’Or Sao Luiz SA, 144A | Health Care Providers & Services | 4,800 | 50,405 | ||||||||||
| a | Rumo SA | Road & Rail | 12,600 | 49,186 | ||||||||||
Sao Martinho SA | Food Products | 1,500 | 14,003 | |||||||||||
| a | Sendas Distribuidora SA | Food & Staples Retailing | 8,100 | 27,767 | ||||||||||
SIMPAR SA | Road & Rail | 2,400 | 5,929 | |||||||||||
| a | Smartfit Escola de Ginastica e Danca SA | Hotels, Restaurants & Leisure | 1,200 | 5,429 | ||||||||||
Sul America SA | Insurance | 4,200 | 30,387 | |||||||||||
Suzano SA | Paper & Forest Products | 7,200 | 83,561 | |||||||||||
Telefonica Brasil SA | Diversified Telecommunication Services | 4,500 | 50,843 | |||||||||||
TIM SA | Wireless Telecommunication Services | 8,100 | 23,506 | |||||||||||
Totvs SA | Software | 4,500 | 34,451 | |||||||||||
Transmissora Alianca de Energia Eletrica SA | Electric Utilities | 2,100 | 19,507 | |||||||||||
Ultrapar Participacoes SA | Oil, Gas & Consumable Fuels | 9,042 | 26,925 | |||||||||||
Usinas Siderurgicas de Minas Gerais SA Usiminas | Metals & Mining | 1,800 | 4,939 | |||||||||||
Vale SA | Metals & Mining | 41,520 | 835,302 | |||||||||||
Vamos Locacao de Caminhoes Maquinas e Equipamentos SA | Road & Rail | 2,100 | 5,652 | |||||||||||
| a | Via SA | Specialty Retail | 15,900 | 13,953 | ||||||||||
Vibra Energia SA | Specialty Retail | 11,400 | 56,089 | |||||||||||
WEG SA | Electrical Equipment | 15,000 | 110,071 | |||||||||||
YDUQS Participacoes SA | Diversified Consumer Services | 3,000 | 13,220 | |||||||||||
|
| |||||||||||||
| 3,592,093 | ||||||||||||||
|
| |||||||||||||
| Chile 4.4% | ||||||||||||||
Banco de Chile | Banks | 437,454 | 46,829 | |||||||||||
| a | Banco de Credito e Inversiones SA | Banks | 498 | 17,938 | ||||||||||
Banco Santander Chile | Banks | 621,177 | 34,977 | |||||||||||
CAP SA | Metals & Mining | 768 | 11,907 | |||||||||||
Cencosud SA | Food & Staples Retailing | 13,278 | 26,154 | |||||||||||
Cencosud Shopping SA | Real Estate Management & Development | 4,944 | 5,800 | |||||||||||
Cia Cervecerias Unidas SA | Beverages | 1,350 | 10,103 | |||||||||||
Cia Sud Americana de Vapores SA | Marine | 178,758 | 19,304 | |||||||||||
Colbun SA | Independent Power and Renewable Electricity Producers | 74,241 | 6,088 | |||||||||||
Empresas CMPC SA | Paper & Forest Products | 12,255 | 22,690 | |||||||||||
Empresas COPEC SA | Oil, Gas & Consumable Fuels | 4,923 | 40,664 | |||||||||||
Enel Americas SA | Electric Utilities | 190,596 | 23,009 | |||||||||||
Enel Chile SA | Electric Utilities | 248,205 | 7,412 | |||||||||||
Falabella SA | Multiline Retail | 7,908 | 25,273 | |||||||||||
Itau CorpBanca Chile SA | Banks | 3,331,521 | 7,409 | |||||||||||
Plaza SA | Real Estate Management & Development | 3,051 | 3,160 | |||||||||||
Quinenco SA | Industrial Conglomerates | 2,703 | 8,209 | |||||||||||
Sociedad Quimica y Minera de Chile SA, A | Chemicals | 174 | 14,020 | |||||||||||
|
| |||||||||||||
| 330,946 | ||||||||||||||
|
| |||||||||||||
| franklintempleton.com | Annual Report | 281 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Colombia 1.8% | ||||||||||||||
Bancolombia SA | Banks | 2,751 | $ | 31,792 | ||||||||||
Cementos Argos SA | Construction Materials | 5,025 | 8,340 | |||||||||||
Ecopetrol SA | Oil, Gas & Consumable Fuels | 48,042 | 45,282 | |||||||||||
Grupo de Inversiones Suramericana SA | Diversified Financial Services | 2,226 | 21,123 | |||||||||||
Interconexion Electrica SA ESP | Electric Utilities | 4,422 | 28,626 | |||||||||||
|
| |||||||||||||
| 135,163 | ||||||||||||||
|
| |||||||||||||
| Mexico 25.0% | ||||||||||||||
Alfa SAB de CV, A | Industrial Conglomerates | 35,232 | 26,695 | |||||||||||
Alpek SAB de CV | Chemicals | 4,071 | 5,530 | |||||||||||
America Movil SAB de CV, L | Wireless Telecommunication Services | 291,813 | 309,051 | |||||||||||
Arca Continental SAB de CV | Beverages | 4,440 | 30,113 | |||||||||||
| b | Banco del Bajio SA, 144A | Banks | 7,182 | 19,667 | ||||||||||
Becle SAB de CV | Beverages | 5,424 | 13,314 | |||||||||||
| a | Cemex SAB de CV | Construction Materials | 147,903 | 79,284 | ||||||||||
Coca-Cola FEMSA SA de CV | Beverages | 5,286 | 29,033 | |||||||||||
Concentradora Fibra Danhos SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 2,112 | 2,504 | ||||||||||
| a | Controladora Vuela Cia de Aviacion SAB de CV, A | Airlines | 9,249 | 16,854 | ||||||||||
El Puerto de Liverpool SAB de CV, C1 | Multiline Retail | 1,950 | 9,921 | |||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 29,859 | 34,887 | ||||||||||
Fomento Economico Mexicano SAB de CV | Beverages | 18,438 | 152,889 | |||||||||||
GCC SAB de CV | Construction Materials | 1,668 | 11,995 | |||||||||||
Gruma SAB de CV, B | Food Products | 1,983 | 24,875 | |||||||||||
Grupo Aeroportuario del Centro Norte SAB de CV | Transportation Infrastructure | 2,739 | 20,442 | |||||||||||
Grupo Aeroportuario del Pacifico SAB de CV, B | Transportation Infrastructure | 3,513 | 56,831 | |||||||||||
Grupo Aeroportuario del Sureste SAB de CV, B | Transportation Infrastructure | 2,007 | 44,678 | |||||||||||
Grupo Bimbo SAB de CV, A | Food Products | 22,647 | 68,207 | |||||||||||
Grupo Carso SAB de CV, A1 | Industrial Conglomerates | 4,461 | 16,645 | |||||||||||
Grupo Comercial Chedraui SA de CV | Food & Staples Retailing | 4,653 | 11,937 | |||||||||||
| a | Grupo Elektra SAB de CV | Banks | 636 | 41,245 | ||||||||||
Grupo Financiero Banorte SAB de CV, O | Banks | 29,193 | 218,926 | |||||||||||
| a | Grupo Financiero Inbursa SAB de CV, O | Banks | 20,211 | 42,232 | ||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 32,055 | 191,282 | |||||||||||
Grupo Televisa SAB | Media | 24,054 | 56,402 | |||||||||||
Industrias Bachoco SAB de CV, B | Food Products | 1,683 | 6,559 | |||||||||||
Industrias Penoles SAB de CV | Metals & Mining | 1,281 | 16,142 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 8,586 | 12,047 | |||||||||||
Megacable Holdings SAB de CV | Media | 3,054 | 9,178 | |||||||||||
Operadora de Sites Mexicanos SA de CV, A-1 | Diversified Telecommunication Services | 12,393 | 15,735 | |||||||||||
Orbia Advance Corp. SAB de CV | Chemicals | 9,852 | 25,942 | |||||||||||
Prologis Property Mexico SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 4,611 | 12,007 | ||||||||||
Promotora y Operadora de Infraestructura SAB de CV | Transportation Infrastructure | 2,172 | 17,163 | |||||||||||
Qualitas Controladora SAB de CV | Insurance | 1,707 | 9,757 | |||||||||||
Regional SAB de CV | Banks | 2,358 | 16,528 | |||||||||||
Wal-Mart de Mexico SAB de CV | Food & Staples Retailing | 52,065 | 213,878 | |||||||||||
|
| |||||||||||||
| 1,890,375 | ||||||||||||||
|
| |||||||||||||
| Panama 0.0%† | ||||||||||||||
| a | BAC Holding International Corp. | Diversified Financial Services | 41,577 | 1,196 | ||||||||||
|
| |||||||||||||
| United States 1.5% | ||||||||||||||
JBS SA | Food Products | 14,700 | 115,170 | |||||||||||
|
| |||||||||||||
Total Common Stocks | 6,064,943 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 19.5% | ||||||||||||||
| Brazil 17.0% | ||||||||||||||
| d | Alpargatas SA, 1.669%, pfd. | Textiles, Apparel & Luxury Goods | 1,800 | 9,875 | ||||||||||
| 282 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Preferred Stocks (continued) | ||||||||||||||
| Brazil (continued) | ||||||||||||||
| d | Banco Bradesco SA, 4.514%, pfd. | Banks | 47,696 | $ | 223,025 | |||||||||
| b,d | Banco Inter SA, 0.376%, pfd., 144A | Banks | 8,100 | 12,239 | ||||||||||
| d | Banco Pan SA, 2.115%, pfd. | Banks | 3,000 | 6,686 | ||||||||||
| d | Bradespar SA, 32.252%, pfd. | Metals & Mining | 2,507 | 17,452 | ||||||||||
| d | Braskem SA, 17.018%, pfd., A | Chemicals | 1,900 | 17,713 | ||||||||||
| d | Centrais Eletricas Brasileiras SA, 5.651%, pfd. | Electric Utilities | 2,700 | 21,307 | ||||||||||
| d | Cia de Transmissao de Energia Eletrica Paulista, 7.515%, pfd. | Electric Utilities | 1,800 | 10,015 | ||||||||||
| d | Cia Energetica de Minas Gerais, 8.271%, pfd. | Electric Utilities | 9,789 | 31,333 | ||||||||||
| d | Companhia Paranaense de Energia, 17.328%, pfd. | Electric Utilities | 13,200 | 21,000 | ||||||||||
| d | Gerdau SA, 10.191%, pfd. | Metals & Mining | 10,800 | 70,023 | ||||||||||
| d | Itau Unibanco Holding SA, 2.533%, pfd. | Banks | 48,600 | 281,048 | ||||||||||
| d | Itausa SA, 5.293%, pfd. | Banks | 48,130 | 108,881 | ||||||||||
| d | Metalurgica Gerdau SA, 17.374%, pfd. | Metals & Mining | 7,200 | 18,576 | ||||||||||
| d | Petroleo Brasileiro SA, 16.900%, pfd. | Oil, Gas & Consumable Fuels | 56,700 | 399,124 | ||||||||||
| d | Raizen SA, 0.309%, pfd. | Oil, Gas & Consumable Fuels | 12,000 | 17,753 | ||||||||||
| d | Unipar Carbocloro SA, 14.844%, pfd., B | Chemicals | 400 | 8,759 | ||||||||||
| d | Usinas Siderurgicas de Minas Gerais SA Usiminas, 10.208%, pfd., A | Metals & Mining | 4,800 | 14,111 | ||||||||||
|
| |||||||||||||
| 1,288,920 | ||||||||||||||
|
| |||||||||||||
| Chile 1.7% | ||||||||||||||
| d | Embotelladora Andina SA, 6.926%, pfd., B | Beverages | 3,777 | 8,385 | ||||||||||
| d | Sociedad Quimica y Minera de Chile SA, 0.003%, pfd. | Chemicals | 1,383 | 119,526 | ||||||||||
|
| |||||||||||||
| 127,911 | ||||||||||||||
|
| |||||||||||||
| Colombia 0.8% | ||||||||||||||
| d | Bancolombia SA, 2.419%, pfd. | Banks | 4,536 | 48,711 | ||||||||||
| d | Grupo Aval Acciones y Valores SA, 6.341%, pfd. | Banks | 41,577 | 9,432 | ||||||||||
| d | Grupo de Inversiones Suramericana SA, 2.706%, pfd. | Diversified Financial Services | 810 | 4,812 | ||||||||||
|
| |||||||||||||
| 62,955 | ||||||||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $1,294,239) | 1,479,786 | |||||||||||||
|
| |||||||||||||
Total Investments (Cost $6,680,052) 99.6% | 7,544,729 | |||||||||||||
Other Assets, less Liabilities 0.4% | 30,103 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 7,574,832 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchabel tsed pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $206,965, representing 2.7% of net assets.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the value of this security was $100,543, representing 1.3% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
| franklintempleton.com | Annual Report | 283 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Index Contracts | ||||||||||||||||||||
Mini Bovespa Index | Long | 3 | $ | 15,199 | 4/13/22 | $ | 1,010 | |||||||||||||
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | 1,010 | |||||||||||||||||
|
| |||||||||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| 284 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Mexico ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 22.14 | $ | 14.35 | $ | 22.11 | $ | 24.98 | $ | 24.90 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb |
| |||||||||||||||||||
Net investment incomec | 0.66 | 0.33 | 0.64 | 0.51 | 0.12 | |||||||||||||||
Net realized and unrealized gains (losses) | 5.48 | 7.78 | (7.73 | ) | (2.86 | ) | 0.04 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 6.14 | 8.11 | (7.09 | ) | (2.35 | ) | 0.16 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.79 | ) | (0.32 | ) | (0.67 | ) | (0.52 | ) | (0.08 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 27.49 | $ | 22.14 | $ | 14.35 | $ | 22.11 | $ | 24.98 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 28.33% | 56.94% | (33.13)% | (9.28)% | 0.63% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Total Expenses | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
Net investment income | 2.73% | 1.80% | 2.93% | 2.21% | 1.18% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $12,372 | $5,536 | $2,871 | $4,422 | $2,498 | |||||||||||||||
Portfolio turnover ratef | 22.39% | g | 18.32% | g | 19.32% | g | 10.31% | 9.64% | ||||||||||||
aFor the period November 3, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 22.39% | 18.32% | 19.32% | |||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 285 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 100.0% | ||||||||||||||
| Mexico 100.0% | ||||||||||||||
Alfa SAB de CV, A | Industrial Conglomerates | 282,078 | $ | 213,730 | ||||||||||
Alpek SAB de CV | Chemicals | 30,330 | 41,201 | |||||||||||
America Movil SAB de CV, L | Wireless Telecommunication Services | 1,849,950 | 1,959,229 | |||||||||||
Arca Continental SAB de CV | Beverages | 35,874 | 243,303 | |||||||||||
| a | Banco del Bajio SA, 144A | Banks | 57,600 | 157,734 | ||||||||||
Becle SAB de CV | Beverages | 43,821 | 107,564 | |||||||||||
| b | Cemex SAB de CV | Construction Materials | 749,790 | 401,928 | ||||||||||
Coca-Cola FEMSA SAB de CV | Beverages | 42,714 | 234,604 | |||||||||||
Concentradora Fibra Danhos SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 18,981 | 22,501 | ||||||||||
| b | Controladora Vuela Cia de Aviacion SAB de CV, A | Airlines | 73,719 | 134,337 | ||||||||||
El Puerto de Liverpool SAB de CV, C1 | Multiline Retail | 16,074 | 81,781 | |||||||||||
Fibra Uno Administracion SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 240,759 | 281,300 | ||||||||||
Fomento Economico Mexicano SAB de CV | Beverages | 63,288 | 524,787 | |||||||||||
GCC SAB de CV | Construction Materials | 13,275 | 95,465 | |||||||||||
Gruma SAB de CV, B | Food Products | 16,083 | 201,743 | |||||||||||
Grupo Aeroportuario del Centro Norte SAB de CV | Transportation Infrastructure | 22,140 | 165,234 | |||||||||||
Grupo Aeroportuario del Pacifico SAB de CV, B | Transportation Infrastructure | 24,642 | 398,644 | |||||||||||
Grupo Aeroportuario del Sureste SAB de CV, B | Transportation Infrastructure | 15,669 | 348,808 | |||||||||||
Grupo Bimbo SAB de CV, A | Food Products | 126,270 | 380,292 | |||||||||||
Grupo Carso SAB de CV, A1 | Industrial Conglomerates | 36,774 | 137,216 | |||||||||||
Grupo Comercial Chedraui SA de CV | Food & Staples Retailing | 37,494 | 96,189 | |||||||||||
Grupo Elektra SAB de CV | Banks | 4,920 | 319,067 | |||||||||||
Grupo Financiero Banorte SAB de CV, O | Banks | 185,796 | 1,393,330 | |||||||||||
| b | Grupo Financiero Inbursa SAB de CV, O | Banks | 163,764 | 342,195 | ||||||||||
Grupo Mexico SAB de CV, B | Metals & Mining | 203,733 | 1,215,737 | |||||||||||
Grupo Televisa SAB | Media | 160,299 | 375,869 | |||||||||||
Industrias Bachoco SAB de CV, B | Food Products | 13,014 | 50,719 | |||||||||||
Industrias Penoles SAB de CV | Metals & Mining | 10,080 | 127,019 | |||||||||||
Kimberly-Clark de Mexico SAB de CV, A | Household Products | 67,653 | 94,922 | |||||||||||
Megacable Holdings SAB de CV | Media | 24,327 | 73,108 | |||||||||||
Operadora de Sites Mexicanos SA de CV, A-1 | Diversified Telecommunication Services | 101,853 | 129,321 | |||||||||||
Orbia Advance Corp. SAB de CV | Chemicals | 78,876 | 207,691 | |||||||||||
Prologis Property Mexico SA de CV | Equity Real Estate Investment Trusts (REITs | ) | 36,828 | 95,902 | ||||||||||
Promotora y Operadora de Infraestructura SAB de CV | Transportation Infrastructure | 17,775 | 140,457 | |||||||||||
Qualitas Controladora SAB de CV | Insurance | 13,716 | 78,402 | |||||||||||
Regional SAB de CV | Banks | 19,233 | 134,810 | |||||||||||
Wal-Mart de Mexico SAB de CV | Food & Staples Retailing | 331,956 | 1,363,646 | |||||||||||
|
| |||||||||||||
Total Investments | 12,369,785 | |||||||||||||
Other Assets, less Liabilities 0.0%† | 2,240 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 12,372,025 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $157,734, representing 1.3% of net assets.
bNon-income producing.
See Abbreviations on page 365.
| 286 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Russia ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 26.98 | $ | 18.91 | $ | 23.37 | $ | 24.24 | $ | 23.90 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
Net investment income (loss)c | 1.68 | 1.41 | 1.73 | 1.03 | (0.00 | )d | ||||||||||||||
Net realized and unrealized gains (losses) | (27.28 | ) | 8.34 | (4.44 | ) | (1.26 | ) | 0.34 | �� | |||||||||||
|
| |||||||||||||||||||
Total from investment operations | (25.60 | ) | 9.75 | (2.71 | ) | (0.23 | ) | 0.34 | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.38 | ) | (1.68 | ) | (1.75 | ) | (0.64 | ) | — | |||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | — | $ | 26.98 | $ | 18.91 | $ | 23.37 | $ | 24.24 | ||||||||||
|
| |||||||||||||||||||
Total returne | (100.00)% | 52.27% | (13.90)% | (0.63)% | 1.42% | |||||||||||||||
| Ratios to average net assetsf | ||||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.19% | 0.19% | 0.19% | —% | —% | |||||||||||||||
Net investment income (loss) | 6.19% | 6.02% | 6.49% | 4.57% | (0.13)% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $3 | $10,794 | $13,240 | $11,683 | $2,424 | |||||||||||||||
Portfolio turnover rateg | 20.45% | h | 18.82% | h | 15.74% | h | 31.57% | 7.58% | ||||||||||||
aFor the period February 6, 2018 (commencement of operations) 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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 20.45% | 18.82% | 15.74% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 287 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 0.0%† | ||||||||||||||
| a | Russia 0.0%† | |||||||||||||
| b | Aeroflot – Russian Airlines PJSC | Airlines | 174,496 | $ | — | |||||||||
| @ | Alrosa PJSC | Metals & Mining | 361,232 | — | ||||||||||
| b | Credit Bank of Moscow PJSC | Banks | 2,127,840 | — | ||||||||||
Federal Grid Co. Unified Energy System PJSC | Electric Utilities | 45,533,568 | — | |||||||||||
Gazprom PJSC | Oil, Gas & Consumable Fuels | 981,872 | — | |||||||||||
Inter RAO UES PJSC | Electric Utilities | 6,229,280 | — | |||||||||||
LUKOIL PJSC | Oil, Gas & Consumable Fuels | 36,048 | — | |||||||||||
M.Video PJSC | Specialty Retail | 8,000 | — | |||||||||||
Magnit PJSC | Food & Staples Retailing | 8,112 | — | |||||||||||
Magnitogorsk Iron & Steel WorksMagnitogorsk Iron & Steel Works | Metals & Mining | 370,640 | — | |||||||||||
MMC Norilsk Nickel PJSC | Metals & Mining | 2,888 | — | |||||||||||
Mobile TeleSystems PJSC | Wireless Telecommunication Services | 147,584 | — | |||||||||||
Moscow Exchange MICEX | Capital Markets | 253,248 | — | |||||||||||
Mosenergo PAOMosenergo PAO | Electric Utilities | 1,418,704 | — | |||||||||||
NLMK PJSC | Metals & Mining | 200,944 | — | |||||||||||
Novatek PJSCNovaTek PJSCNovaTek PJSC | Oil, Gas & Consumable Fuels | 47,472 | — | |||||||||||
PhosAgro PJSC | Chemicals | 6,208 | — | |||||||||||
Polyus Gold OJSC | Metals & Mining | 3,504 | — | |||||||||||
Raspadskaya OJSC | Metals & Mining | 10,720 | — | |||||||||||
Rosneft PJSC | Oil, Gas & Consumable Fuels | 92,320 | — | |||||||||||
Rosseti PJS | Electric Utilities | 5,157,472 | — | |||||||||||
Rostelecom PJSC | Diversified Telecommunication Services | 165,056 | — | |||||||||||
RusHydro PJSC | Electric Utilities | 20,149,712 | — | |||||||||||
| @ | Sberbank of Russia PJSC | Banks | 959,968 | — | ||||||||||
| c | Segezha Group PJSC, 144A | Paper & Forest Products | 666,096 | — | ||||||||||
Severstal PAO | Metals & Mining | 27,744 | — | |||||||||||
Sistema PJSFC | Wireless Telecommunication Services | 499,664 | — | |||||||||||
Sovcomflot OAOSovcomflot OAO | Oil, Gas & Consumable Fuels | 72,128 | — | |||||||||||
Surgutneftegas PJSC | Oil, Gas & Consumable Fuels | 634,480 | — | |||||||||||
Tatneft PAO | Oil, Gas & Consumable Fuels | 105,552 | — | |||||||||||
Unipro PJSC | Independent Power and Renewable Electricity Producers | 1,811,376 | — | |||||||||||
| b | United Co. RUSAL International PJSC | Metals & Mining | 447,600 | — | ||||||||||
| @ | VTB Bank PJSC | Banks | 886,353,216 | — | ||||||||||
|
| |||||||||||||
Total Common Stocks | — | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 0.0%† | ||||||||||||||
| a | Russia 0.0%† | |||||||||||||
| d | Bashneft PJSC, pfd. | Oil, Gas & Consumable Fuels | 3,392 | — | ||||||||||
| d | Surgutneftegas PJSC, pfd. | Oil, Gas & Consumable Fuels | 682,080 | — | ||||||||||
| d | Tatneft PJSC, pfd. | Oil, Gas & Consumable Fuels | 10,416 | — | ||||||||||
| d | Transneft PJSC, pfd. | Oil, Gas & Consumable Fuels | 276 | — | ||||||||||
|
| |||||||||||||
Total Preferred Stocks | — | |||||||||||||
|
| |||||||||||||
Total Investments | ||||||||||||||
Other Assets, less | 2,702 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 2,702 | ||||||||||||
|
| |||||||||||||
@Security subject to sanctions imposed by US Department of Treasury’s Office of Foreign Assets Control. See Note 6.
†Rounds to less than 0.1% of net assets.
aFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
bNon-income producing.
cSecurity exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of March 31, 2022, these securities had a total value of $0 or 0.0% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
| 288 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Saudi Arabia ETF
| Year Ended March 31, | ||||||||||||||||
| 2022 | 2021 | 2020 | 2019a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) | ||||||||||||||||
Net asset value, beginning of year | $ | 30.33 | $ | 20.15 | $ | 27.89 | $ | 24.71 | ||||||||
|
| |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.62 | 0.52 | 0.89 | 0.11 | ||||||||||||
Net realized and unrealized gains (losses) | 11.03 | 10.23 | (7.80 | ) | 3.07 | |||||||||||
|
| |||||||||||||||
Total from investment operations | 11.65 | 10.75 | (6.91 | ) | 3.18 | |||||||||||
|
| |||||||||||||||
Less distributions from net investment income | (0.68 | ) | (0.57 | ) | (0.83 | ) | — | |||||||||
|
| |||||||||||||||
Net asset value, end of year | $ | 41.30 | $ | 30.33 | $ | 20.15 | $ | 27.89 | ||||||||
|
| |||||||||||||||
Total returnd | 38.99% | 54.12% | (25.51)% | 12.87% | ||||||||||||
| Ratios to average net assetse | ||||||||||||||||
Total expenses | 0.39% | 0.39% | 0.39% | 0.39% | ||||||||||||
Net investment income | 1.77% | 2.11% | 3.46% | 0.93% | ||||||||||||
| Supplemental data | ||||||||||||||||
Net assets, end of year (000’s) | $4,130 | $3,033 | $2,015 | $2,789 | ||||||||||||
Portfolio turnover ratef | 15.51% | g | 16.74% | g | 32.37% | g | 12.41% | |||||||||
aFor the period October 9, 2018 (commencement of operations) to March 31, 2019.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 15.51% | 16.74% | 32.37% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 289 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE Saudi Arabia ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.9% | ||||||||||||||
| Saudi Arabia 99.9% | ||||||||||||||
Abdullah Al Othaim Markets Co. | Food & Staples Retailing | 604 | $ | 18,837 | ||||||||||
Advanced Petrochemical Co. | Chemicals | 1,748 | 32,849 | |||||||||||
Al-Rajhi Bank | Banks | 13,356 | 571,764 | |||||||||||
Alinma Bank | Banks | 13,458 | 139,369 | |||||||||||
Almarai Co. JSC | Food Products | 3,238 | 44,192 | |||||||||||
Arab National Bank | Banks | 7,572 | 56,111 | |||||||||||
Arabian Centres Co. Ltd. | Real Estate Management & Development | 1,030 | 6,068 | |||||||||||
| a | Arabian Internet & Communications Services Co. | IT Services | 294 | 16,536 | ||||||||||
Bank Al-Jazira | Banks | 5,518 | 38,758 | |||||||||||
| a | Bank AlBilad | Banks | 5,046 | 83,394 | ||||||||||
Banque Saudi Fransi | Banks | 8,070 | 115,516 | |||||||||||
Bupa Arabia for Cooperative Insurance Co. | Insurance | 786 | 37,503 | |||||||||||
Co. for Cooperative Insurance | Insurance | 786 | 15,127 | |||||||||||
Dallah Healthcare Co. | Health Care Providers & Services | 498 | 13,461 | |||||||||||
| a | Dar Al Arkan Real Estate Development Co. | Real Estate Management & Development | 8,058 | 23,498 | ||||||||||
Dr Sulaiman Al Habib Medical Services Group Co. | Health Care Providers & Services | 1,260 | 63,949 | |||||||||||
| a | Emaar Economic City | Real Estate Management & Development | 6,530 | 20,331 | ||||||||||
Etihad Etisalat Co. | Wireless Telecommunication Services | 5,182 | 57,324 | |||||||||||
| a | International Co. For Water & Power Projects | Independent Power and Renewable Electricity Producers | 2,002 | 71,403 | ||||||||||
Jarir Marketing Co. | Specialty Retail | 808 | 42,430 | |||||||||||
| a | Mobile Telecommunications Co. Saudi Arabia | Wireless Telecommunication Services | 6,042 | 21,453 | ||||||||||
Mouwasat Medical Services Co. | Health Care Providers & Services | 652 | 36,949 | |||||||||||
| a | Nahdi Medical Co. | Food & Staples Retailing | 460 | 19,006 | ||||||||||
| a | National Industrialization Co. | Chemicals | 4,500 | 27,709 | ||||||||||
National Petrochemical Co. | Chemicals | 1,906 | 23,625 | |||||||||||
Qassim Cement Co. | Construction Materials | 612 | 13,736 | |||||||||||
| a | Rabigh Refining & Petrochemical Co. | Oil, Gas & Consumable Fuels | 3,000 | 22,591 | ||||||||||
Riyad Bank | Banks | 19,398 | 194,161 | |||||||||||
Sahara International Petrochemical Co. | Chemicals | 4,934 | 70,627 | |||||||||||
| a | Saudi Airlines Catering Co. | Commercial Services & Supplies | 548 | 12,548 | ||||||||||
Saudi Arabian Fertilizer Co. | Chemicals | 2,710 | 131,328 | |||||||||||
| a | Saudi Arabian Mining Co. | Metals & Mining | 5,594 | 199,812 | ||||||||||
| b | Saudi Arabian Oil Co., 144A | Oil, Gas & Consumable Fuels | 28,826 | 331,174 | ||||||||||
Saudi Basic Industries Corp. | Chemicals | 9,354 | 326,636 | |||||||||||
Saudi British Bank | Banks | 12,500 | 132,614 | |||||||||||
Saudi Cement Co. | Construction Materials | 1,026 | 16,656 | |||||||||||
Saudi Electricity Co. | Electric Utilities | 10,256 | 72,447 | |||||||||||
| a | Saudi Ground Services Co. | Transportation Infrastructure | 1,238 | 11,072 | ||||||||||
Saudi Industrial Investment Group | Chemicals | 3,028 | 28,250 | |||||||||||
Saudi Investment Bank | Banks | 5,000 | 24,204 | |||||||||||
| a | Saudi Kayan Petrochemical Co. | Chemicals | 10,094 | 60,809 | ||||||||||
Saudi National Bank | Banks | 24,092 | 455,317 | |||||||||||
| a | Saudi Research & Media Group | Media | 440 | 29,533 | ||||||||||
Saudi Telecom Co. | Diversified Telecommunication Services | 8,260 | 237,352 | |||||||||||
Saudia Dairy & Foodstuff Co. | Food Products | 214 | 9,834 | |||||||||||
Savola Group | Food Products | 3,594 | 34,920 | |||||||||||
| a | Seera Group Holding | Hotels, Restaurants & Leisure | 2,038 | 11,452 | ||||||||||
Southern Province Cement Co. | Construction Materials | 880 | 16,537 | |||||||||||
| a | Yamama Cement Co. | Construction Materials | 1,226 | 10,588 | ||||||||||
| 290 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Saudi Arabia ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Saudi Arabia (continued) | ||||||||||||||
Yanbu Cement Co. | Construction Materials | 994 | $ | 11,181 | ||||||||||
Yanbu National Petrochemical Co. | Chemicals | 3,630 | 64,733 | |||||||||||
|
| |||||||||||||
Total Investments (Cost $2,472,888) 99.9% | 4,127,274 | |||||||||||||
Other Assets, less Liabilities 0.1% | 3,036 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 4,130,310 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $331,174, representing 8.0% of net assets.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 291 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Africa ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 26.22 | $ | 14.81 | $ | 26.62 | $ | 24.42 | ||||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.94 | 1.03 | 2.65 | 0.22 | ||||||||||||||||
Net realized and unrealized gains (losses) | 3.35 | 11.33 | (11.76 | ) | 2.04 | |||||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.29 | 12.36 | (9.11 | ) | 2.26 | |||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.72 | ) | (0.95 | ) | (2.70 | ) | (0.06 | ) | ||||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 29.79 | $ | 26.22 | $ | 14.81 | $ | 26.62 | ||||||||||||
|
| |||||||||||||||||||
Total returnd | 16.82% | 85.24% | (38.46)% | 9.26% | ||||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Total expenses | 0.19% | 0.19% | 0.19% | 0.19% | ||||||||||||||||
Net investment income | 3.56% | 4.94% | 10.42% | 1.75% | ||||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $5,958 | $2,622 | $1,481 | $2,662 | ||||||||||||||||
Portfolio turnover ratef | 13.19% | g | 11.08% | g | 21.44% | g | 7.12% | |||||||||||||
aFor the period October 10, 2018 (commencement of operations) to March 31, 2019.
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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 13.19% | 11.08% | 21.44% |
| 292 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE South Africa ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.9% | ||||||||||||||
| Luxembourg 0.9% | ||||||||||||||
Reinet Investments SCA | Capital Markets | 2,476 | $ | 55,537 | ||||||||||
|
| |||||||||||||
| Romania 0.9% | ||||||||||||||
NEPI Rockcastle PLC | Real Estate Management & Development | 8,216 | 54,578 | |||||||||||
|
| |||||||||||||
| South Africa 98.1% | ||||||||||||||
Absa Group Ltd. | Banks | 12,824 | 167,131 | |||||||||||
African Rainbow Minerals Ltd. | Metals & Mining | 1,948 | 38,147 | |||||||||||
Anglo American Platinum Ltd. | Metals & Mining | 1,076 | 147,751 | |||||||||||
AngloGold Ashanti Ltd. | Metals & Mining | 7,616 | 182,680 | |||||||||||
Aspen Pharmacare Holdings Ltd. | Pharmaceuticals | 6,952 | 94,500 | |||||||||||
AVI Ltd. | Food Products | 6,020 | 29,703 | |||||||||||
Barloworld Ltd. | Trading Companies & Distributors | 3,544 | 28,255 | |||||||||||
Bid Corp. Ltd. | Food & Staples Retailing | 6,076 | 132,235 | |||||||||||
Bidvest Group Ltd. | Industrial Conglomerates | 6,180 | 94,608 | |||||||||||
Capitec Bank Holdings Ltd. | Banks | 1,512 | 242,287 | |||||||||||
Clicks Group Ltd. | Food & Staples Retailing | 4,484 | 94,835 | |||||||||||
Coronation Fund Managers Ltd. | Capital Markets | 4,652 | 14,756 | |||||||||||
| b | Dis-Chem Pharmacies Ltd., Reg S | Food & Staples Retailing | 6,784 | 17,698 | ||||||||||
| a | Discovery Ltd. | Insurance | 7,456 | 92,952 | ||||||||||
| a | Distell Group Holdings Ltd. | Beverages | 1,448 | 17,143 | ||||||||||
Exxaro Resources Ltd. | Oil, Gas & Consumable Fuels | 4,488 | 68,039 | |||||||||||
FirstRand Ltd. | Diversified Financial Services | 89,536 | 474,686 | |||||||||||
| a | Fortress REIT Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 15,532 | 3,954 | |||||||||
Fortress REIT Ltd., A | Equity Real Estate Investment Trusts (REITs | ) | 21,596 | 18,385 | ||||||||||
Foschini Group Ltd. | Specialty Retail | 5,856 | 59,063 | |||||||||||
Gold Fields Ltd. | Metals & Mining | 15,888 | 247,956 | |||||||||||
Growthpoint Properties Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 61,364 | 61,815 | ||||||||||
Harmony Gold Mining Co. Ltd. | Metals & Mining | 9,692 | 49,002 | |||||||||||
Impala Platinum Holdings Ltd. | Metals & Mining | 14,796 | 227,856 | |||||||||||
Investec Ltd. | Capital Markets | 5,204 | 34,727 | |||||||||||
Kumba Iron Ore Ltd. | Metals & Mining | 984 | 44,132 | |||||||||||
Life Healthcare Group Holdings Ltd. | Health Care Providers & Services | 25,188 | 40,163 | |||||||||||
Momentum Metropolitan Holdings | Insurance | 18,472 | 21,882 | |||||||||||
Mr Price Group Ltd. | Specialty Retail | 4,668 | 69,165 | |||||||||||
MTN Group Ltd. | Wireless Telecommunication Services | 32,828 | 426,848 | |||||||||||
MultiChoice Group | Media | 6,540 | 58,957 | |||||||||||
Naspers Ltd., N | Internet & Direct Marketing Retail | 3,856 | 439,134 | |||||||||||
Nedbank Group Ltd. | Banks | 7,612 | 121,412 | |||||||||||
Netcare Ltd. | Health Care Providers & Services | 26,312 | 28,990 | |||||||||||
| a | Northam Platinum Ltd. | Metals & Mining | 6,704 | 100,052 | ||||||||||
Old Mutual Ltd. | Insurance | 83,232 | 78,433 | |||||||||||
| b,c | Pepkor Holdings Ltd., 144A, Reg S | Specialty Retail | 28,724 | 45,605 | ||||||||||
Pick ‘N Pay Stores Ltd. | Food & Staples Retailing | 6,296 | 23,163 | |||||||||||
| a | PSG Group Ltd. | Industrial Conglomerates | 2,844 | 18,647 | ||||||||||
Rand Merchant Investment Holdings Ltd. | Insurance | 13,680 | 48,859 | |||||||||||
Redefine Properties Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 128,108 | 40,504 | ||||||||||
Remgro Ltd. | Diversified Financial Services | 9,276 | 95,106 | |||||||||||
Resilient REIT Ltd. | Equity Real Estate Investment Trusts (REITs | ) | 5,900 | 24,618 | ||||||||||
Royal Bafokeng Platinum Ltd. | Metals & Mining | 1,472 | 16,269 | |||||||||||
Sanlam Ltd. | Insurance | 31,988 | 158,052 | |||||||||||
Santam Ltd. | Insurance | 748 | 14,794 | |||||||||||
| a | Sappi Ltd. | Paper & Forest Products | 10,316 | 40,170 | ||||||||||
| a | Sasol Ltd. | Chemicals | 10,156 | 246,733 | ||||||||||
Shoprite Holdings Ltd. | Food & Staples Retailing | 8,924 | 144,531 | |||||||||||
Sibanye Stillwater Ltd. | Metals & Mining | 50,728 | 207,599 | |||||||||||
SPAR Group Ltd. | Food & Staples Retailing | 3,516 | 40,835 | |||||||||||
Standard Bank Group Ltd. | Banks | 24,416 | 304,337 | |||||||||||
| a | Telkom SA SOC Ltd. | Diversified Telecommunication Services | 5,296 | 16,121 | ||||||||||
| franklintempleton.com | Annual Report | 293 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Africa ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| South Africa (continued) | ||||||||||||||
Tiger Brands Ltd. | Food Products | 3,016 | $ | 33,416 | ||||||||||
Transaction Capital Ltd. | Consumer Finance | 10,408 | 35,222 | |||||||||||
Truworths International Ltd. | Specialty Retail | 7,192 | 28,719 | |||||||||||
Vodacom Group Ltd. | Wireless Telecommunication Services | 10,872 | 119,043 | |||||||||||
Woolworths Holdings Ltd. | Multiline Retail | 17,468 | 69,071 | |||||||||||
|
| |||||||||||||
| 5,840,746 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $4,736,976) 99.9% | 5,950,861 | |||||||||||||
Other Assets, less Liabilities 0.1% | 6,884 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 5,957,745 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2022, the aggregate value of these securities was $63,303, representing 1.1% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $45,605, representing 0.8% of net assets.
| 294 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Korea ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 31.48 | $ | 16.52 | $ | 21.19 | $ | 25.98 | $ | 25.75 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.55 | 0.54 | 0.36 | 0.40 | 0.10 | |||||||||||||||
Net realized and unrealized gains (losses) | (5.87 | ) | 14.72 | (4.58 | ) | (4.81 | ) | 0.40 | ||||||||||||
|
| |||||||||||||||||||
Total from investment operations | (5.32 | ) | 15.26 | (4.22 | ) | (4.41 | ) | 0.50 | ||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.59 | ) | (0.30 | ) | (0.45 | ) | (0.38 | ) | (0.27 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 25.57 | $ | 31.48 | $ | 16.52 | $ | 21.19 | $ | 25.98 | ||||||||||
|
| |||||||||||||||||||
Total returnd | (17.15)% | 92.55% | (20.24)% | (16.92)% | 1.95% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | —% | |||||||||||||||
Net investment income | 1.86% | 2.07% | 1.78% | 1.74% | 0.94% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $61,361 | $62,966 | $11,562 | $16,948 | $25,981 | |||||||||||||||
Portfolio turnover ratef | 27.38% | g | 8.65% | g | 21.72% | g | 5.21% | 3.85% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 10.53% | 8.65% | 8.02% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 295 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 94.9% | ||||||||||||||
| South Korea 94.9% | ||||||||||||||
| a | Alteogen Inc. | Biotechnology | 2,136 | $ | 99,746 | |||||||||
Amorepacific Corp. | Personal Products | 2,424 | 319,987 | |||||||||||
AmorePacific Group | Personal Products | 2,184 | 79,104 | |||||||||||
BGF Retail Co. Ltd. | Food & Staples Retailing | 480 | 69,106 | |||||||||||
BNK Financial Group Inc. | Banks | 22,368 | 146,899 | |||||||||||
Celltrion Healthcare Co. Ltd. | Health Care Providers & Services | 5,712 | 306,324 | |||||||||||
Celltrion Inc. | Biotechnology | 8,328 | 1,178,377 | |||||||||||
| a | Celltrion Pharm Inc. | Pharmaceuticals | 1,488 | 120,066 | ||||||||||
Cheil Worldwide Inc. | Media | 5,280 | 102,590 | |||||||||||
CJ CheilJedang Corp. | Food Products | 600 | 182,913 | |||||||||||
CJ Corp. | Industrial Conglomerates | 984 | 68,520 | |||||||||||
CJ ENM Co. Ltd. | Internet & Direct Marketing Retail | 792 | 85,862 | |||||||||||
| a | CJ Logistics Corp. | Road & Rail | 624 | 66,671 | ||||||||||
Coway Co. Ltd. | Household Durables | 4,344 | 245,505 | |||||||||||
Daelim Industrial Co. Ltd. | Construction & Engineering | 936 | 47,261 | |||||||||||
| a | Daewoo Engineering & Construction Co. Ltd. | Construction & Engineering | 13,680 | 79,007 | ||||||||||
| a | Daewoo Shipbuilding & Marine Engineering Co. Ltd. | Machinery | 3,696 | 75,625 | ||||||||||
DB Insurance Co. Ltd. | Insurance | 3,432 | 197,926 | |||||||||||
DGB Financial Group Inc. | Banks | 11,904 | 91,732 | |||||||||||
DL E&C Co. Ltd. | Construction & Engineering | 1,176 | 128,559 | |||||||||||
Dongsuh Cos. Inc. | Food & Staples Retailing | 2,376 | 53,713 | |||||||||||
Doosan Bobcat Inc. | Machinery | 1,872 | 60,003 | |||||||||||
| a | Doosan Heavy Industries and Construction Co. Ltd. | Electrical Equipment | 27,360 | 461,625 | ||||||||||
| a | Doosan Infracore Co. Ltd. | Machinery | 10,272 | 56,273 | ||||||||||
Doosan Solus Co. Ltd. | Electronic Equipment, Instruments & Components | 888 | 50,552 | |||||||||||
E-MART Inc. | Food & Staples Retailing | 1,536 | 178,686 | |||||||||||
Ecopro BM Co. Ltd. | Electrical Equipment | 672 | 220,498 | |||||||||||
F&F Co. Ltd. | Textiles, Apparel & Luxury Goods | 250 | 153,665 | |||||||||||
Fila Holdings Corp. | Textiles, Apparel & Luxury Goods | 3,936 | 102,130 | |||||||||||
Green Cross Corp. | Biotechnology | 408 | 67,997 | |||||||||||
GS Engineering & Construction Corp. | Construction & Engineering | 4,824 | 184,674 | |||||||||||
GS Holdings Corp. | Oil, Gas & Consumable Fuels | 3,912 | 141,691 | |||||||||||
GS Retail Co. Ltd. | Food & Staples Retailing | 3,000 | 70,170 | |||||||||||
Hana Financial Group Inc. | Banks | 22,200 | 890,161 | |||||||||||
| a | Hanjin Kal Corp. | Airlines | 1,632 | 83,347 | ||||||||||
Hankook Tire & Technology Co. Ltd. | Auto Components | 5,688 | 157,915 | |||||||||||
Hanmi Pharm Co. Ltd. | Pharmaceuticals | 576 | 130,212 | |||||||||||
Hanmi Science Co. Ltd. | Pharmaceuticals | 1,104 | 40,670 | |||||||||||
Hanon Systems | Auto Components | 12,312 | 119,864 | |||||||||||
Hanssem Co. Ltd. | Household Durables | 720 | 50,612 | |||||||||||
Hanwha Aerospace Co. Ltd. | Aerospace & Defense | 2,688 | 115,766 | |||||||||||
Hanwha Corp. | Industrial Conglomerates | 3,240 | 84,071 | |||||||||||
Hanwha Corp. | Industrial Conglomerates | 1,752 | 22,694 | |||||||||||
| a | Hanwha Life Insurance Co. Ltd. | Insurance | 20,712 | 53,828 | ||||||||||
| a | Hanwha Solutions Corp. | Chemicals | 7,392 | 219,250 | ||||||||||
HDC Hyundai Development Co-Engineering & Construction | Construction & Engineering | 3,504 | 43,654 | |||||||||||
| a | Helixmith Co. Ltd. | Biotechnology | 2,472 | 43,544 | ||||||||||
Hite Jinro Co. Ltd. | Beverages | 2,352 | 72,672 | |||||||||||
| a | HLB Inc. | Leisure Products | 6,816 | 172,361 | ||||||||||
HMM Co. Ltd. | Marine | 32,496 | 781,534 | |||||||||||
Hotel Shilla Co. Ltd. | Specialty Retail | 2,376 | 159,178 | |||||||||||
| a | HYBE Co. Ltd. | Entertainment | 1,416 | 361,579 | ||||||||||
Hyundai Department Store Co. Ltd. | Multiline Retail | 1,128 | 70,451 | |||||||||||
Hyundai Engineering & Construction Co. Ltd. | Construction & Engineering | 5,616 | 221,943 | |||||||||||
| 296 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Korea ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| South Korea (continued) | ||||||||||||||
Hyundai Glovis Co. Ltd. | Air Freight & Logistics | 1,416 | $ | 224,892 | ||||||||||
| a | Hyundai Heavy Industries Co. Ltd. | Machinery | 1,128 | 111,213 | ||||||||||
Hyundai Heavy Industries Holdings Co. Ltd. | Machinery | 3,888 | 172,579 | |||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | Insurance | 4,536 | 120,319 | |||||||||||
| a | Hyundai Mipo Dockyard Co. Ltd. | Machinery | 1,560 | 100,778 | ||||||||||
Hyundai Mobis Co. Ltd. | Auto Components | 4,848 | 859,965 | |||||||||||
Hyundai Motor Co. | Automobiles | 10,728 | 1,597,627 | |||||||||||
Hyundai Steel Co. | Metals & Mining | 5,808 | 199,103 | |||||||||||
Hyundai Wia Corp. | Auto Components | 1,224 | 64,934 | |||||||||||
Iljin Materials Co. Ltd. | Electronic Equipment, Instruments & Components | 1,320 | 105,204 | |||||||||||
Industrial Bank of Korea | Banks | 19,440 | 174,023 | |||||||||||
Kakao Corp. | Interactive Media & Services | 21,024 | 1,847,330 | |||||||||||
| a | Kakao Games Corp. | Entertainment | 2,088 | 134,887 | ||||||||||
| a | KakaoBank Corp. | Banks | 10,512 | 447,522 | ||||||||||
| a | Kangwon Land Inc. | Hotels, Restaurants & Leisure | 8,208 | 188,600 | ||||||||||
KB Financial Group Inc. | Banks | 29,904 | 1,512,409 | |||||||||||
KCC Corp. | Chemicals | 336 | 94,808 | |||||||||||
KEPCO Plant Service and Engineering Co. Ltd. | Commercial Services & Supplies | 1,632 | 56,283 | |||||||||||
Kia Motors Corp. | Automobiles | 19,848 | 1,211,792 | |||||||||||
Korea Aerospace Industries Ltd. | Aerospace & Defense | 4,992 | 174,219 | |||||||||||
| a | Korea Electric Power Corp. | Electric Utilities | 19,680 | 367,767 | ||||||||||
Korea Gas Corp. | Gas Utilities | 2,016 | 65,867 | |||||||||||
Korea Investment Holdings Co. Ltd. | Capital Markets | 2,928 | 189,394 | |||||||||||
| a | Korea Shipbuilding & Offshore Engineering Co Ltd. | Machinery | 3,312 | 242,925 | ||||||||||
Korea Zinc Co. Ltd. | Metals & Mining | 768 | 370,678 | |||||||||||
| a | Korean Air Lines Co. Ltd. | Airlines | 13,464 | 335,475 | ||||||||||
| a | Krafton Inc. | Entertainment | 2,160 | 490,970 | ||||||||||
KT&G Corp. | Tobacco | 8,400 | 559,284 | |||||||||||
Kumho Petrochemical Co. Ltd. | Chemicals | 1,344 | 171,874 | |||||||||||
| a | L&F Co. Ltd. | Electronic Equipment, Instruments & Components | 1,656 | 308,506 | ||||||||||
LG Chem Ltd. | Chemicals | 3,576 | 1,569,599 | |||||||||||
LG Corp. | Industrial Conglomerates | 6,816 | 429,638 | |||||||||||
LG Display Co. Ltd. | Electronic Equipment, Instruments & Components | 17,232 | 293,586 | |||||||||||
LG Electronics Inc. | Household Durables | 8,304 | 825,570 | |||||||||||
LG Household & Health Care Ltd. | Personal Products | 672 | 475,703 | |||||||||||
LG Innotek Co. Ltd. | Electronic Equipment, Instruments & Components | 1,080 | 344,837 | |||||||||||
LG Uplus Corp. | Diversified Telecommunication Services | 16,344 | 188,784 | |||||||||||
Lotte Chemical Corp. | Chemicals | 1,128 | 194,972 | |||||||||||
Lotte Chilsung Beverage Co. Ltd. | Beverages | 264 | 39,642 | |||||||||||
Lotte Corp. | Industrial Conglomerates | 2,040 | 54,532 | |||||||||||
LOTTE Fine Chemical Co. Ltd. | Chemicals | 1,344 | 87,822 | |||||||||||
Lotte Shopping Co. Ltd. | Multiline Retail | 864 | 68,290 | |||||||||||
LS Corp. | Electrical Equipment | 1,344 | 58,548 | |||||||||||
Mando Corp. | Auto Components | 2,520 | 104,580 | |||||||||||
| a | Medytox Inc. | Biotechnology | 336 | 36,288 | ||||||||||
Meritz Financial Group Inc. | Diversified Financial Services | 2,088 | 70,028 | |||||||||||
Mirae Asset Daewoo Co. Ltd. | Capital Markets | 11,016 | 40,854 | |||||||||||
Mirae Asset Daewood Co. Ltd. | Capital Markets | 25,992 | 183,566 | |||||||||||
Naver Corp. | Interactive Media & Services | 10,512 | 2,953,126 | |||||||||||
NCSoft Corp. | Entertainment | 1,296 | 499,880 | |||||||||||
| b | Netmarble Corp., 144A | Entertainment | 1,320 | 121,431 | ||||||||||
NH Investment & Securities Co. Ltd. | Capital Markets | 11,112 | 104,515 | |||||||||||
| a | NHN Corp. | Entertainment | 1,440 | 43,780 | ||||||||||
Nongshim Co. Ltd. | Food Products | 240 | 59,304 | |||||||||||
OCI Co. Ltd. | Chemicals | 1,392 | 120,589 | |||||||||||
Orion Corp. | Food Products | 1,680 | 123,084 | |||||||||||
| franklintempleton.com | Annual Report | 297 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Korea ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| South Korea (continued) | ||||||||||||||
Ottogi Corp. | Food Products | 96 | $ | 35,365 | ||||||||||
Pan Ocean Co. Ltd. | Marine | 14,520 | 83,738 | |||||||||||
| a | Paradise Co. Ltd. | Hotels, Restaurants & Leisure | 3,432 | 46,862 | ||||||||||
| a | Pearl Abyss Corp. | Entertainment | 2,376 | 195,051 | ||||||||||
POSCO | Metals & Mining | 4,992 | 1,206,762 | |||||||||||
POSCO Chemical Co. Ltd. | Construction Materials | 2,088 | 207,585 | |||||||||||
Posco International Corp. | Trading Companies & Distributors | 3,816 | 67,690 | |||||||||||
S-1 Corp. | Commercial Services & Supplies | 1,464 | 86,121 | |||||||||||
S-Oil Corp. | Oil, Gas & Consumable Fuels | 3,168 | 252,750 | |||||||||||
| a,b | Samsung Biologics Co. Ltd., 144A | Life Sciences Tools & Services | 1,035 | 706,196 | ||||||||||
Samsung C&T Corp. | Industrial Conglomerates | 6,456 | 607,222 | |||||||||||
Samsung Card Co. Ltd. | Consumer Finance | 2,328 | 62,039 | |||||||||||
Samsung Electro-Mechanics Co. Ltd. | Electronic Equipment, Instruments & Components | 4,296 | 584,827 | |||||||||||
Samsung Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 175,896 | 10,100,542 | |||||||||||
| a | Samsung Engineering Co. Ltd. | Construction & Engineering | 12,168 | 263,027 | ||||||||||
Samsung Fire & Marine Insurance Co. Ltd. | Insurance | 2,520 | 455,328 | |||||||||||
| a | Samsung Heavy Industries Co. Ltd. | Machinery | 47,664 | 223,367 | ||||||||||
Samsung Life Insurance Co. Ltd. | Insurance | 4,896 | 266,199 | |||||||||||
Samsung SDI Co. Ltd. | Electronic Equipment, Instruments & Components | 4,056 | 1,994,452 | |||||||||||
Samsung SDS Co. Ltd. | IT Services | 2,688 | 307,156 | |||||||||||
Samsung Securities Co. Ltd. | Capital Markets | 4,872 | 168,423 | |||||||||||
SD Biosensor Inc. | Health Care Equipment & Supplies | 2,616 | 120,435 | |||||||||||
Seegene Inc. | Biotechnology | 2,184 | 92,077 | |||||||||||
| a | Shin Poong Pharmaceutical Co. Ltd. | Pharmaceuticals | 2,568 | 81,995 | ||||||||||
Shinhan Financial Group Co. Ltd. | Banks | 38,400 | 1,314,797 | |||||||||||
Shinsegae Co. Ltd. | Multiline Retail | 528 | 111,738 | |||||||||||
| a,c | SillaJen Inc. | Biotechnology | 1,616 | — | ||||||||||
| a | SK Biopharmaceuticals Co. Ltd. | Pharmaceuticals | 1,872 | 138,695 | ||||||||||
| a | SK Bioscience Co. Ltd. | Biotechnology | 1,536 | 198,962 | ||||||||||
SK Chemicals Co. Ltd. | Chemicals | 1,032 | 115,797 | |||||||||||
SK Holdings Co. Ltd. | Industrial Conglomerates | 2,784 | 555,858 | |||||||||||
SK Hynix Inc. | Semiconductors & Semiconductor Equipment | 39,936 | 3,887,998 | |||||||||||
| a,b | SK IE Technology Co. Ltd., 144A | Chemicals | 1,968 | 205,397 | ||||||||||
| a | SK Innovation Co. Ltd. | Oil, Gas & Consumable Fuels | 4,176 | 740,762 | ||||||||||
SK Networks Co. Ltd. | Trading Companies & Distributors | 10,128 | 39,441 | |||||||||||
| a | SK Square Co. Ltd. | Semiconductors & Semiconductor Equipment | 7,608 | 356,532 | ||||||||||
SK Telecom Co. Ltd. | Wireless Telecommunication Services | �� | 4,296 | 201,677 | ||||||||||
SKC Co. Ltd. | Chemicals | 1,464 | 186,616 | |||||||||||
Ssangyong Cement Industrial Co. Ltd. | Construction Materials | 7,872 | 53,452 | |||||||||||
Wemade Co. Ltd. | Entertainment | 1,272 | 108,619 | |||||||||||
Woori Financial Group Inc. | Banks | 48,816 | 618,230 | |||||||||||
Yuhan Corp. | Pharmaceuticals | 3,888 | 187,335 | |||||||||||
|
| |||||||||||||
Total Common Stocks (Cost $57,526,786) | 58,219,653 | |||||||||||||
|
| |||||||||||||
| Preferred Stocks 3.7% | ||||||||||||||
| South Korea 3.7% | ||||||||||||||
| d | Amorepacific Corp., 1.239%, pfd. | Personal Products | 792 | 51,948 | ||||||||||
| d | CJ CheilJedang Corp., 3.006%, pfd. | Food Products | 96 | 13,306 | ||||||||||
| d | Hyundai Motor Co., 5.858%, pfd. | Automobiles | 1,704 | 121,187 | ||||||||||
| d | Hyundai Motor Co., 5.889%, pfd. | Automobiles | 2,712 | 193,770 | ||||||||||
| d | LG Chem Ltd., 4.414%, pfd. | Chemicals | 600 | 135,143 | ||||||||||
| d | LG Electronics Inc., 1.538%, pfd. | Household Durables | 1,296 | 62,552 | ||||||||||
| d | LG Household & Health Care Ltd., 2.377%, pfd. | Personal Products | 168 | 70,274 | ||||||||||
| d | Samsung Electronics Co. Ltd., 1.721%, pfd. | Technology Hardware, Storage & Peripherals | 30,720 | 1,596,766 | ||||||||||
| d | Samsung Fire & Marine Insurance Co. Ltd., 7.298%, pfd. | Insurance | 216 | 29,316 | ||||||||||
| 298 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Korea ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Preferred Stocks (continued) | ||||||||||||||
| South Korea (continued) | ||||||||||||||
| d | Samsung SDI Co. Ltd., 0.343%, pfd. | Electronic Equipment, Instruments & Components | 96 | $ | 24,237 | |||||||||
|
| |||||||||||||
Total Preferred Stocks (Cost $2,300,485) | 2,298,499 | |||||||||||||
|
| |||||||||||||
| Rights 0.0%† | ||||||||||||||
| South Korea 0.0%† | ||||||||||||||
| a | Samsung Biologics Co. Ltd., rts. | Life Sciences Tools & Services | 69 | 10,703 | ||||||||||
|
| |||||||||||||
Total Investments (Cost $59,827,271) 98.6% | 60,528,855 | |||||||||||||
|
| |||||||||||||
Other Assets, less Liabilities 1.4% | 832,587 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 61,361,442 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $1,033,024, representing 1.7% of net assets.
cFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
dVariable rate security. The rate shown represents the yield at period end.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
Kospi 200 Mini | Long | 10 | $ | 754,301 | 6/09/22 | $ | 37,942 | |||||||||||||
*As of year end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 299 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Switzerland ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 30.36 | $ | 24.44 | $ | 23.86 | $ | 23.11 | $ | 23.56 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.70 | 0.88 | 1.06 | 0.53 | 0.22 | |||||||||||||||
Net realized and unrealized gains (losses) | 3.62 | 5.74 | (0.16 | ) | 0.83 | (0.67 | ) | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 4.32 | 6.62 | 0.90 | 1.36 | (0.45 | ) | ||||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.68 | ) | (0.70 | ) | (0.32 | ) | (0.61 | ) | — | |||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 34.00 | $ | 30.36 | $ | 24.44 | $ | 23.86 | $ | 23.11 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 14.22% | 27.54% | 3.70% | 6.13% | (1.91)% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Total expenses | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 2.07% | 3.13% | 4.12% | 2.35% | 6.54% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $47,593 | $48,570 | $34,213 | $2,386 | $2,311 | |||||||||||||||
Portfolio turnover ratef | 13.99%g | 12.59%g | 16.25%g | 14.06% | 2.72% | |||||||||||||||
aFor the period February 6, 2018 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 13.99% | 12.59% | 16.25% |
| 300 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 98.4% | ||||||||||||||
| Austria 0.2% | ||||||||||||||
| a | ams AG | Semiconductors & Semiconductor Equipment | 7,000 | $ | 108,509 | |||||||||
|
| |||||||||||||
| Switzerland 98.2% | ||||||||||||||
ABB Ltd. | Electrical Equipment | 47,446 | 1,555,497 | |||||||||||
Adecco Group AG | Professional Services | 4,494 | 205,154 | |||||||||||
Alcon Inc. | Health Care Equipment & Supplies | 13,034 | 1,043,853 | |||||||||||
Baloise Holding AG | Insurance | 1,274 | 228,566 | |||||||||||
Banque Cantonale Vaudoise | Banks | 798 | 69,546 | |||||||||||
Barry Callebaut AG | Food Products | 103 | 242,880 | |||||||||||
Belimo Holding AG | Building Products | 266 | 142,358 | |||||||||||
BKW AG | Electric Utilities | 518 | 65,295 | |||||||||||
Chocoladefabriken Lindt & Spruengli AG | Food Products | 59 | 706,525 | |||||||||||
Cie Financiere Richemont SA | Textiles, Apparel & Luxury Goods | 14,826 | 1,901,079 | |||||||||||
| a | Clariant AG | Chemicals | 6,412 | 112,110 | ||||||||||
Credit Suisse Group AG | Capital Markets | 72,940 | 581,776 | |||||||||||
DKSH Holding AG | Professional Services | 1,008 | 85,164 | |||||||||||
Emmi AG | Food Products | 56 | 61,522 | |||||||||||
EMS-Chemie Holding AG | Chemicals | 201 | 196,905 | |||||||||||
| a | Flughafen Zurich AG | Transportation Infrastructure | 532 | 96,312 | ||||||||||
Geberit AG | Building Products | 993 | 617,435 | |||||||||||
Georg Fischer AG | Machinery | 116 | 139,666 | |||||||||||
Givaudan AG | Chemicals | 262 | 1,089,567 | |||||||||||
Helvetia Holding AG | Insurance | 994 | 130,373 | |||||||||||
Julius Baer Group Ltd. | Capital Markets | 6,062 | 354,926 | |||||||||||
Kuehne + Nagel International AG | Marine | 1,428 | 408,266 | |||||||||||
| a | LafargeHolcim Ltd., B | Construction Materials | 15,568 | 766,177 | ||||||||||
Logitech International SA | Technology Hardware, Storage & Peripherals | 4,144 | 311,616 | |||||||||||
Lonza Group AG | Life Sciences Tools & Services | 2,136 | 1,560,249 | |||||||||||
Nestle SA | Food Products | 71,988 | 9,402,834 | |||||||||||
Novartis AG | Pharmaceuticals | 57,036 | 5,035,778 | |||||||||||
Partners Group Holding AG | Capital Markets | 636 | 797,203 | |||||||||||
PSP Swiss Property AG | Real Estate Management & Development | 1,218 | 160,944 | |||||||||||
Roche Holding AG, Bearer | Pharmaceuticals | 714 | 314,230 | |||||||||||
Roche Holding AG, Non-Voting | Pharmaceuticals | 19,012 | 7,570,712 | |||||||||||
Schindler Holding AG | Machinery | 532 | 114,407 | |||||||||||
Schindler Holding AG, PC | Machinery | 1,162 | 251,277 | |||||||||||
SGS SA | Professional Services | 167 | 467,473 | |||||||||||
SIG Combibloc Group AG | Containers & Packaging | 9,534 | 242,429 | |||||||||||
Sika AG | Chemicals | 4,396 | 1,468,438 | |||||||||||
Sonova Holding AG | Health Care Equipment & Supplies | 1,512 | 636,839 | |||||||||||
Straumann Holding AG | Health Care Equipment & Supplies | 286 | 461,982 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 812 | 232,681 | |||||||||||
Swatch Group AG | Textiles, Apparel & Luxury Goods | 1,274 | 69,774 | |||||||||||
Swiss Life Holding AG | Insurance | 882 | 569,502 | |||||||||||
Swiss Prime Site AG | Real Estate Management & Development | 2,128 | 211,008 | |||||||||||
Swiss Re AG | Insurance | 8,190 | 784,246 | |||||||||||
Swisscom AG | Diversified Telecommunication Services | 728 | 439,055 | |||||||||||
Tecan Group AG | Life Sciences Tools & Services | 350 | 139,962 | |||||||||||
Temenos AG | Software | 1,708 | 165,186 | |||||||||||
UBS Group AG | Capital Markets | 92,022 | 1,814,441 | |||||||||||
| b | VAT Group AG, 144A | Machinery | 728 | 280,362 | ||||||||||
| franklintempleton.com | Annual Report | 301 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Switzerland ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Switzerland (continued) | ||||||||||||||
| a | Vifor Pharma AG | Pharmaceuticals | 1,428 | $ | 255,651 | |||||||||
Zurich Insurance Group AG | Insurance | 4,326 | 2,147,370 | |||||||||||
|
| |||||||||||||
| 46,706,601 | ||||||||||||||
|
| |||||||||||||
Total Investments (Cost $43,069,926) 98.4% | 46,815,110 | |||||||||||||
Other Assets, less Liabilities 1.6% | 778,114 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 47,593,224 | ||||||||||||
|
| |||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the value of this security was $280,362, representing 0.6% of net assets.
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
Swiss Mid Cap Future Index | Long | 18 | $ | 593,643 | 6/17/22 | $ | 34,416 | |||||||||||||
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| 302 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Taiwan ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 41.12 | $ | 23.18 | $ | 24.72 | $ | 26.34 | $ | 25.59 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment income (loss)c | 0.98 | 0.74 | 0.89 | 0.47 | (0.02 | ) | ||||||||||||||
Net realized and unrealized gains (losses) | 2.64 | 17.99 | (1.56 | ) | (1.85 | ) | 0.77 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 3.62 | 18.73 | (0.67 | ) | (1.38 | ) | 0.75 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (1.07 | ) | (0.79 | ) | (0.87 | ) | (0.24 | ) | (— | )d | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 43.67 | $ | 41.12 | $ | 23.18 | $ | 24.72 | $ | 26.34 | ||||||||||
|
| |||||||||||||||||||
Total returne | 8.72% | 81.35% | (3.29)% | (5.15)% | 2.93% | |||||||||||||||
| Ratios to average net assetsf |
| |||||||||||||||||||
Total expenses | 0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
Net investment income (loss) | 2.20% | 2.24% | 3.39% | 1.96% | (0.19)% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $43,667 | $32,897 | $13,906 | $14,834 | $5,268 | |||||||||||||||
Portfolio turnover rateg | 17.76% | h | 10.63% | h | 12.57% | h | 8.71% | 3.63% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.001 per share.
eTotal 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.
fRatios are annualized for periods less than one year.
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”).
| hPortfolio turnover rate excluding cash creations was as follows: | 7.86% | 10.63% | 12.57% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 303 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
| Industry | Shares | Value | ||||||||||||
| Common Stocks 100.0% | ||||||||||||||
| China 1.4% | ||||||||||||||
Airtac International Group | Machinery | 7,483 | $ | 243,152 | ||||||||||
Silergy Corp. | Semiconductors & Semiconductor Equipment | 3,000 | 359,144 | |||||||||||
|
| |||||||||||||
| 602,296 | ||||||||||||||
|
| |||||||||||||
| Taiwan 98.6% | ||||||||||||||
Accton Technology Corp. | Communications Equipment | 25,390 | 197,172 | |||||||||||
Acer Inc. | Technology Hardware, Storage & Peripherals | 136,000 | 142,164 | |||||||||||
Advanced Energy Solution Holding Co. Ltd. | Electrical Equipment | 1,100 | 48,758 | |||||||||||
Advantech Co. Ltd. | Technology Hardware, Storage & Peripherals | 20,148 | 259,836 | |||||||||||
ASE Industrial Holding Co. Ltd. | Semiconductors & Semiconductor Equipment | 163,700 | 591,346 | |||||||||||
Asia Cement Corp. | Construction Materials | 116,370 | 197,392 | |||||||||||
ASMedia Technology Inc. | Semiconductors & Semiconductor Equipment | 1,810 | 122,871 | |||||||||||
ASPEED Technology Inc. | Semiconductors & Semiconductor Equipment | 1,640 | 186,601 | |||||||||||
Asustek Computer Inc. | Technology Hardware, Storage & Peripherals | 33,640 | 438,530 | |||||||||||
AU Optronics Corp. | Electronic Equipment, Instruments & Components | 420,000 | 290,980 | |||||||||||
Capital Securities Corp. | Capital Markets | 95,000 | 54,543 | |||||||||||
Catcher Technology Co. Ltd. | Technology Hardware, Storage & Peripherals | 34,550 | 174,248 | |||||||||||
Cathay Financial Holding Co. Ltd. | Insurance | 394,600 | 888,320 | |||||||||||
Chailease Holding Co. Ltd. | Diversified Financial Services | 63,640 | 563,068 | |||||||||||
Chang Hwa Commercial Bank Ltd. | Banks | 312,865 | 209,112 | |||||||||||
Cheng Shin Rubber Industry Co. Ltd. | Auto Components | 87,300 | 108,015 | |||||||||||
Chicony Electronics Co. Ltd. | Technology Hardware, Storage & Peripherals | 28,460 | 89,200 | |||||||||||
| a | China Airlines Ltd. | Airlines | 130,000 | 120,919 | ||||||||||
China Development Financial Holding Corp. | Insurance | 768,000 | 514,654 | |||||||||||
China Motor Corp. | Automobiles | 12,730 | 26,925 | |||||||||||
China Steel Corp. | Metals & Mining | 589,000 | 800,710 | |||||||||||
Chunghwa Telecom Co. Ltd. | Diversified Telecommunication Services | 181,820 | 805,931 | |||||||||||
Compal Electronics Inc. | Technology Hardware, Storage & Peripherals | 196,000 | 183,334 | |||||||||||
CTBC Financial Holding Co. Ltd. | Banks | 866,000 | 888,624 | |||||||||||
Delta Electronics Inc. | Electronic Equipment, Instruments & Components | 102,730 | 962,707 | |||||||||||
E Ink Holdings Inc. | Electronic Equipment, Instruments & Components | 42,800 | 276,355 | |||||||||||
E.Sun Financial Holding Co. Ltd. | Banks | 604,792 | 697,638 | |||||||||||
Eclat Textile Co. Ltd. | Textiles, Apparel & Luxury Goods | 9,500 | 158,325 | |||||||||||
eMemory Technology Inc. | Semiconductors & Semiconductor Equipment | 3,273 | 211,334 | |||||||||||
| a | ENNOSTAR Inc. | Semiconductors & Semiconductor Equipment | 30,910 | 77,136 | ||||||||||
Eternal Materials Co. Ltd. | Chemicals | 47,300 | 60,009 | |||||||||||
| a | EVA Airways Corp. | Airlines | 117,000 | 131,695 | ||||||||||
Evergreen Marine Corp. Taiwan Ltd. | Marine | 126,405 | 595,594 | |||||||||||
Far Eastern International Bank | Banks | 102,770 | 43,760 | |||||||||||
Far Eastern New Century Corp. | Industrial Conglomerates | 187,000 | 198,412 | |||||||||||
Far EasTone Telecommunications Co. Ltd. | Wireless Telecommunication Services | 76,000 | 194,964 | |||||||||||
Feng Tay Enterprise Co. Ltd. | Textiles, Apparel & Luxury Goods | 21,370 | 142,832 | |||||||||||
First Financial Holding Co. Ltd. | Banks | 488,069 | 484,636 | |||||||||||
Formosa Chemicals & Fibre Corp. | Chemicals | 163,700 | 451,366 | |||||||||||
Formosa Petrochemical Corp. | Oil, Gas & Consumable Fuels | 65,460 | 215,447 | |||||||||||
Formosa Plastics Corp. | Chemicals | 232,730 | 865,077 | |||||||||||
Formosa Sumco Technology Corp. | Semiconductors & Semiconductor Equipment | 2,730 | 27,584 | |||||||||||
Formosa Taffeta Co. Ltd. | Textiles, Apparel & Luxury Goods | 49,000 | 48,228 | |||||||||||
Foxconn Technology Co. Ltd. | Electronic Equipment, Instruments & Components | 52,730 | 115,577 | |||||||||||
Fubon Financial Holding Co. Ltd. | Insurance | 334,857 | 894,074 | |||||||||||
Genius Electronic Optical Co. Ltd. | Electronic Equipment, Instruments & Components | 3,790 | 60,253 | |||||||||||
Giant Manufacturing Co. Ltd. | Leisure Products | 14,550 | 132,289 | |||||||||||
Globalwafers Co. Ltd. | Semiconductors & Semiconductor Equipment | 10,090 | 236,301 | |||||||||||
Hiwin Technologies Corp. | Machinery | 13,187 | 110,461 | |||||||||||
Hon Hai Precision Industry Co. Ltd. | Electronic Equipment, Instruments & Components | 570,000 | 2,108,790 | |||||||||||
Hotai Motor Co. Ltd. | Specialty Retail | 15,190 | 317,038 | |||||||||||
| a | HTC Corp. | Technology Hardware, Storage & Peripherals | 34,000 | 70,251 | ||||||||||
Hua Nan Financial Holdings Co. Ltd. | Banks | 468,883 | 398,489 | |||||||||||
| 304 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Taiwan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Taiwan (continued) | ||||||||||||||
Innolux Corp. | Electronic Equipment, Instruments & Components | 434,000 | $ | 254,479 | ||||||||||
Inventec Corp. | Technology Hardware, Storage & Peripherals | 145,000 | 125,002 | |||||||||||
Largan Precision Co. Ltd. | Electronic Equipment, Instruments & Components | 4,900 | 322,374 | |||||||||||
Lite-On Technology Corp. | Technology Hardware, Storage & Peripherals | 101,900 | 242,200 | |||||||||||
MediaTek Inc. | Semiconductors & Semiconductor Equipment | 70,680 | 2,232,532 | |||||||||||
Mega Financial Holding Co. Ltd. | Banks | 520,000 | 778,598 | |||||||||||
Micro-Star International Co. Ltd. | Technology Hardware, Storage & Peripherals | 32,800 | 148,823 | |||||||||||
momo.com Inc. | Internet & Direct Marketing Retail | 2,165 | 71,105 | |||||||||||
Nan Ya Plastics Corp. | Chemicals | 269,100 | 875,351 | |||||||||||
Nan Ya Printed Circuit Board Corp. | Electronic Equipment, Instruments & Components | 10,000 | 182,887 | |||||||||||
Nanya Technology Corp. | Semiconductors & Semiconductor Equipment | 39,100 | 94,436 | |||||||||||
Nien Made Enterprise Co. Ltd. | Household Durables | 6,600 | 77,514 | |||||||||||
Novatek Microelectronics Corp. Ltd. | Semiconductors & Semiconductor Equipment | 27,140 | 404,000 | |||||||||||
| a | OBI Pharma Inc. | Biotechnology | 8,266 | 32,024 | ||||||||||
| a | Oneness Biotech Co. Ltd. | Pharmaceuticals | 14,300 | 107,057 | ||||||||||
Parade Technologies Ltd. | Semiconductors & Semiconductor Equipment | 3,360 | 212,261 | |||||||||||
Pegatron Corp. | Technology Hardware, Storage & Peripherals | 97,000 | 245,111 | |||||||||||
Pou Chen Corp. | Textiles, Apparel & Luxury Goods | 127,000 | 139,848 | |||||||||||
Powertech Technology Inc. | Semiconductors & Semiconductor Equipment | 33,700 | 111,739 | |||||||||||
President Chain Store Corp. | Food & Staples Retailing | 26,820 | 246,188 | |||||||||||
Quanta Computer Inc. | Technology Hardware, Storage & Peripherals | 127,280 | 392,260 | |||||||||||
Realtek Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 22,608 | 339,694 | |||||||||||
Ruentex Development Co. Ltd. | Real Estate Management & Development | 74,600 | 206,474 | |||||||||||
Shin Kong Financial Holding Co. Ltd. | Insurance | 609,565 | 229,772 | |||||||||||
Sino-American Silicon Products Inc. | Semiconductors & Semiconductor Equipment | 25,460 | 157,284 | |||||||||||
SinoPac Financial Holdings Co. Ltd. | Banks | 500,000 | 321,100 | |||||||||||
Synnex Technology International Corp. | Electronic Equipment, Instruments & Components | 64,600 | 169,777 | |||||||||||
Taishin Financial Holding Co. Ltd. | Banks | 516,985 | 369,900 | |||||||||||
Taiwan Business Bank | Banks | 243,653 | 109,277 | |||||||||||
Taiwan Cement Corp. | Construction Materials | 258,852 | 450,822 | |||||||||||
Taiwan Cooperative Financial Holding Co. Ltd. | Banks | 468,249 | 482,933 | |||||||||||
Taiwan Fertilizer Co. Ltd. | Chemicals | 35,000 | 89,542 | |||||||||||
Taiwan Glass Industry Corp. | Building Products | 78,000 | 68,604 | |||||||||||
Taiwan High Speed Rail Corp. | Transportation Infrastructure | 100,000 | 100,693 | |||||||||||
Taiwan Mobile Co. Ltd. | Wireless Telecommunication Services | 78,190 | 286,545 | |||||||||||
Taiwan Secom Co. Ltd. | Commercial Services & Supplies | 13,640 | 51,891 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | Semiconductors & Semiconductor Equipment | 424,350 | 8,842,013 | |||||||||||
Teco Electric & Machinery Co. Ltd. | Electrical Equipment | 92,000 | 103,234 | |||||||||||
The Shanghai Commercial & Savings Bank Ltd. | Banks | 156,000 | 273,326 | |||||||||||
Transcend Information Inc. | Technology Hardware, Storage & Peripherals | 13,640 | 35,419 | |||||||||||
U-Ming Marine Transport Corp. | Marine | 20,000 | 41,254 | |||||||||||
Uni-President Enterprises Corp. | Food Products | 229,100 | 524,544 | |||||||||||
Unimicron Technology Corp. | Electronic Equipment, Instruments & Components | 60,000 | 521,439 | |||||||||||
United Microelectronics Corp. | Semiconductors & Semiconductor Equipment | 555,460 | 1,046,885 | |||||||||||
Vanguard International Semiconductor Corp. | Semiconductors & Semiconductor Equipment | 42,730 | 185,676 | |||||||||||
Voltronic Power Technology Corp. | Electrical Equipment | 2,420 | 123,316 | |||||||||||
Walsin Lihwa Corp. | Electrical Equipment | 150,000 | 153,919 | |||||||||||
| a | Walsin Technology Corp. | Electronic Equipment, Instruments & Components | 23,640 | 117,162 | ||||||||||
Wan Hai Lines Ltd. | Marine | 38,200 | 211,322 | |||||||||||
Win Semiconductors Corp. | Semiconductors & Semiconductor Equipment | 19,500 | 181,038 | |||||||||||
Winbond Electronics Corp. | Semiconductors & Semiconductor Equipment | 140,000 | 152,453 | |||||||||||
Wistron Corp. | Technology Hardware, Storage & Peripherals | 137,000 | 142,253 | |||||||||||
Wiwynn Corp. | Technology Hardware, Storage & Peripherals | 4,340 | 154,505 | |||||||||||
Yageo Corp. | Electronic Equipment, Instruments & Components | 21,820 | 330,520 | |||||||||||
| a | Yang Ming Marine Transport Corp. | Marine | 79,000 | 343,280 | ||||||||||
Yuanta Financial Holding Co. Ltd. | Diversified Financial Services | 555,560 | 511,903 | |||||||||||
Yulon Motor Co. Ltd. | Automobiles | 26,165 | 37,168 | |||||||||||
| franklintempleton.com | Annual Report | 305 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Taiwan ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Taiwan (continued) | ||||||||||||||
Yulon Nissan Motor Co. Ltd. | Automobiles | 910 | $ | 7,988 | ||||||||||
Zhen Ding Technology Holding Ltd. | Electronic Equipment, Instruments & Components | 30,000 | 112,560 | |||||||||||
|
| |||||||||||||
| 43,073,149 | ||||||||||||||
|
| |||||||||||||
Total Investments | 43,675,445 | |||||||||||||
Other Assets, less Liabilities 0.0%† | (8,895 | ) | ||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 43,666,550 | ||||||||||||
|
| |||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
| 306 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE United Kingdom ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
| |||||||||||||||||||
Net asset value, beginning of year | $ | 23.78 | $ | 17.92 | $ | 24.23 | $ | 25.23 | $ | 24.89 | ||||||||||
|
| |||||||||||||||||||
| Income from investment operationsb: |
| |||||||||||||||||||
Net investment incomec | 0.95 | 0.84 | 1.08 | 1.05 | 0.38 | |||||||||||||||
Net realized and unrealized gains (losses) | 1.47 | 5.62 | (6.30 | ) | (1.21 | ) | 0.07 | |||||||||||||
|
| |||||||||||||||||||
Total from investment operations | 2.42 | 6.46 | (5.22 | ) | (0.16 | ) | 0.45 | |||||||||||||
|
| |||||||||||||||||||
Less distributions from net investment income | (0.74 | ) | (0.60 | ) | (1.09 | ) | (0.84 | ) | (0.11 | ) | ||||||||||
|
| |||||||||||||||||||
Net asset value, end of year | $ | 25.46 | $ | 23.78 | $ | 17.92 | $ | 24.23 | $ | 25.23 | ||||||||||
|
| |||||||||||||||||||
Total returnd | 10.27% | 36.19% | (22.42)% | (0.51)% | 1.80% | |||||||||||||||
| Ratios to average net assetse |
| |||||||||||||||||||
Expenses before waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Expenses net of waiver and payments by affiliates | 0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
Net investment income | 3.77% | 3.98% | 4.84% | 4.46% | 3.68% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
Net assets, end of year (000’s) | $613,573 | $205,673 | $89,624 | $29,076 | $2,523 | |||||||||||||||
Portfolio turnover ratef | 5.76% | g | 7.26% | g | 4.41% | g | 10.10% | 1.61% | ||||||||||||
aFor the period November 2, 2017 (commencement of operations) 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 and/or fluctuating fair 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 5.76% | 7.26% | 4.41% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 307 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2022
Franklin FTSE United Kingdom ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 98.9% | ||||||||||||||
| Australia 3.2% | ||||||||||||||
Rio Tinto PLC | Metals & Mining | 248,230 | $ | 19,874,663 | ||||||||||
|
| |||||||||||||
| Bermuda 0.1% | ||||||||||||||
Hiscox Ltd. | Insurance | 76,028 | 984,606 | |||||||||||
|
| |||||||||||||
| Chile 0.3% | ||||||||||||||
Antofagasta PLC | Metals & Mining | 78,566 | 1,730,618 | |||||||||||
|
| |||||||||||||
| Czech Republic 0.1% | ||||||||||||||
| a | Avast PLC, 144A | Software | 125,521 | 935,413 | ||||||||||
|
| |||||||||||||
| Germany 0.1% | ||||||||||||||
| b,c | TUI AG | Hotels, Restaurants & Leisure | 244,598 | 779,361 | ||||||||||
|
| |||||||||||||
| Ireland 4.0% | ||||||||||||||
CRH PLC | Construction Materials | 176,894 | 7,154,921 | |||||||||||
DCC PLC | Industrial Conglomerates | 22,654 | 1,767,572 | |||||||||||
Experian PLC | Professional Services | 208,706 | 8,109,137 | |||||||||||
| b | Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 40,006 | 4,677,444 | ||||||||||
Smurfit Kappa Group PLC | Containers & Packaging | 58,804 | 2,642,492 | |||||||||||
|
| |||||||||||||
| 24,351,566 | ||||||||||||||
|
| |||||||||||||
| Isle Of Man 0.5% | ||||||||||||||
| b | GVC Holdings PLC | Hotels, Restaurants & Leisure | 133,996 | 2,899,560 | ||||||||||
|
| |||||||||||||
| Mexico 0.1% | ||||||||||||||
Fresnillo PLC | Metals & Mining | 41,171 | 397,885 | |||||||||||
|
| |||||||||||||
| Netherlands 7.9% | ||||||||||||||
Shell PLC | Oil, Gas & Consumable Fuels | 1,744,358 | 48,426,127 | |||||||||||
|
| |||||||||||||
| Nigeria 0.1% | ||||||||||||||
| a | Airtel Africa PLC, 144A | Wireless Telecommunication Services | 227,986 | 418,748 | ||||||||||
|
| |||||||||||||
| d | Russia 0.0%† | |||||||||||||
Evraz PLC | Metals & Mining | 128,818 | — | |||||||||||
Raspadskaya OJSC | Metals & Mining | 54,475 | — | |||||||||||
|
| |||||||||||||
| — | ||||||||||||||
|
| |||||||||||||
| Switzerland 3.4% | ||||||||||||||
Coca-Cola HBC AG | Beverages | 44,111 | 928,970 | |||||||||||
| b | Glencore PLC | Metals & Mining | 2,994,666 | 19,714,642 | ||||||||||
|
| |||||||||||||
| 20,643,612 | ||||||||||||||
|
| |||||||||||||
| United Kingdom 79.1% | ||||||||||||||
3i Group PLC | Capital Markets | 217,382 | 3,974,111 | |||||||||||
Abrdn PLC | Capital Markets | 488,216 | 1,381,398 | |||||||||||
Admiral Group PLC | Insurance | 50,610 | 1,707,873 | |||||||||||
Anglo American PLC | Metals & Mining | 278,114 | 14,546,458 | |||||||||||
Ashtead Group PLC | Trading Companies & Distributors | 102,184 | 6,502,348 | |||||||||||
Associated British Foods PLC | Food Products | 79,530 | 1,740,334 | |||||||||||
AstraZeneca PLC | Pharmaceuticals | 353,306 | 47,132,090 | |||||||||||
| a | Auto Trader Group PLC, 144A | Interactive Media & Services | 211,116 | 1,758,969 | ||||||||||
AVEVA Group PLC | Software | 27,474 | 886,255 | |||||||||||
Aviva PLC | Insurance | 852,176 | 5,072,643 | |||||||||||
B&M European Value Retail SA | Multiline Retail | 212,562 | 1,495,065 | |||||||||||
BAE Systems PLC | Aerospace & Defense | 723,000 | 6,829,205 | |||||||||||
Barclays PLC | Banks | 3,826,116 | 7,470,846 | |||||||||||
Barratt Developments PLC | Household Durables | 229,887 | 1,581,205 | |||||||||||
Bellway PLC | Household Durables | 28,438 | 910,611 | |||||||||||
Berkeley Group Holdings PLC | Household Durables | 23,526 | 1,158,484 | |||||||||||
BP PLC | Oil, Gas & Consumable Fuels | 4,381,380 | 21,652,989 | |||||||||||
British American Tobacco PLC | Tobacco | 521,042 | 21,915,235 | |||||||||||
| 308 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE United Kingdom ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
British Land Co. PLC | Equity Real Estate Investment Trusts (REITs | ) | 213,526 | $ | 1,491,162 | |||||||||
BT Group PLC | Diversified Telecommunication Services | 1,590,600 | 3,815,750 | |||||||||||
Bunzl PLC | Trading Companies & Distributors | 76,638 | 2,994,874 | |||||||||||
Burberry Group PLC | Textiles, Apparel & Luxury Goods | 91,580 | 2,018,490 | |||||||||||
| b | Centrica PLC | Multi-Utilities | 1,343,816 | 1,416,884 | ||||||||||
Compass Group PLC | Hotels, Restaurants & Leisure | 406,808 | 8,837,795 | |||||||||||
| a | ConvaTec Group PLC, 144A | Health Care Equipment & Supplies | 373,068 | 1,059,028 | ||||||||||
Croda International PLC | Chemicals | 30,848 | 3,200,544 | |||||||||||
Dechra Pharmaceuticals PLC | Pharmaceuticals | 24,100 | 1,287,021 | |||||||||||
| a,b | Deliveroo PLC, 144A | Internet & Direct Marketing Retail | 294,020 | 436,286 | ||||||||||
Derwent London PLC | Equity Real Estate Investment Trusts (REITs | ) | 23,136 | 977,526 | ||||||||||
Diageo PLC | Beverages | 524,416 | 26,676,408 | |||||||||||
Direct Line Insurance Group PLC | Insurance | 302,214 | 1,094,651 | |||||||||||
Dr. Martens PLC | Textiles, Apparel & Luxury Goods | 127,248 | 400,088 | |||||||||||
DS Smith PLC | Containers & Packaging | 294,984 | 1,251,007 | |||||||||||
| b | easyJet PLC | Airlines | 84,071 | 616,112 | ||||||||||
Electrocomponents PLC | Trading Companies & Distributors | 107,486 | 1,534,093 | |||||||||||
Ferguson PLC | Trading Companies & Distributors | 50,610 | 6,916,784 | |||||||||||
GlaxoSmithKline PLC | Pharmaceuticals | 1,128,844 | 24,482,218 | |||||||||||
Halma PLC | Electronic Equipment, Instruments & Components | 86,760 | 2,867,238 | |||||||||||
Hargreaves Lansdown PLC | Capital Markets | 85,796 | 1,138,671 | |||||||||||
Hikma Pharmaceuticals PLC | Pharmaceuticals | 38,258 | 1,038,175 | |||||||||||
HomeServe PLC | Commercial Services & Supplies | 62,364 | 692,201 | |||||||||||
Howden Joinery Group PLC | Trading Companies & Distributors | 130,622 | 1,320,489 | |||||||||||
HSBC Holdings PLC | Banks | 4,667,688 | 32,289,580 | |||||||||||
IMI PLC | Machinery | 58,322 | 1,046,643 | |||||||||||
Imperial Brands PLC | Tobacco | 214,008 | 4,537,966 | |||||||||||
| b | Informa PLC | Media | 343,666 | 2,723,073 | ||||||||||
InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 41,934 | 2,865,525 | |||||||||||
Intermediate Capital Group PLC | Capital Markets | 63,624 | 1,495,724 | |||||||||||
| b | International Consolidated Airlines Group SA | Airlines | 251,458 | 470,931 | ||||||||||
Intertek Group PLC | Professional Services | 36,632 | 2,519,616 | |||||||||||
| b | ITV PLC | Media | 852,658 | 919,677 | ||||||||||
J Sainsbury PLC | Food & Staples Retailing | 388,974 | 1,294,185 | |||||||||||
JD Sports Fashion PLC | Specialty Retail | 559,299 | 1,091,715 | |||||||||||
Johnson Matthey PLC | Chemicals | 43,380 | 1,072,930 | |||||||||||
Kingfisher PLC | Specialty Retail | 469,468 | 1,578,692 | |||||||||||
Land Securities Group PLC | Equity Real Estate Investment Trusts (REITs | ) | 161,952 | 1,675,168 | ||||||||||
Legal & General Group PLC | Insurance | 1,349,600 | 4,833,308 | |||||||||||
Lloyds Banking Group PLC | Banks | 16,191,344 | 10,031,345 | |||||||||||
London Stock Exchange Group PLC | Capital Markets | 82,904 | 8,695,335 | |||||||||||
M&G PLC | Diversified Financial Services | 589,486 | 1,716,837 | |||||||||||
| b | Meggitt PLC | Aerospace & Defense | 176,466 | 1,766,279 | ||||||||||
Melrose Industries PLC | Industrial Conglomerates | 1,000,150 | 1,644,085 | |||||||||||
Mondi PLC | Paper & Forest Products | 110,378 | 2,167,586 | |||||||||||
National Grid PLC | Multi-Utilities | 825,184 | 12,737,879 | |||||||||||
Natwest Group PLC | Banks | 1,175,116 | 3,340,442 | |||||||||||
Next PLC | Multiline Retail | 28,920 | 2,296,837 | |||||||||||
| b | NMC Health PLC | Health Care Providers & Services | 3,705 | — | ||||||||||
| b | Ocado Group PLC | Food & Staples Retailing | 111,824 | 1,724,100 | ||||||||||
Pearson PLC | Media | 171,110 | 1,691,042 | |||||||||||
Pennon Group PLC | Water Utilities | 61,762 | 874,179 | |||||||||||
Persimmon PLC | Household Durables | 71,818 | 2,033,969 | |||||||||||
Phoenix Group Holdings PLC | Insurance | 166,290 | 1,344,327 | |||||||||||
Prudential PLC | Insurance | 627,564 | 9,370,043 | |||||||||||
Reckitt Benckiser Group PLC | Household Products | 144,600 | 11,103,408 | |||||||||||
RELX PLC | Professional Services | 424,642 | 13,323,475 | |||||||||||
| franklintempleton.com | Annual Report | 309 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE United Kingdom ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
Renishaw PLC | Electronic Equipment, Instruments & Components | 7,840 | $ | 399,482 | ||||||||||
Rentokil Initial PLC | Commercial Services & Supplies | 427,052 | 2,957,583 | |||||||||||
Rightmove PLC | Interactive Media & Services | 192,318 | 1,602,348 | |||||||||||
| b | Rolls-Royce Holdings PLC | Aerospace & Defense | 1,899,562 | 2,528,571 | ||||||||||
Royal Mail PLC | Air Freight & Logistics | 206,367 | 893,936 | |||||||||||
Schroders PLC | Capital Markets | 25,546 | 1,086,752 | |||||||||||
Segro PLC | Equity Real Estate Investment Trusts (REITs | ) | 272,812 | 4,833,010 | ||||||||||
Severn Trent PLC | Water Utilities | 57,358 | 2,324,519 | |||||||||||
Smith & Nephew PLC | Health Care Equipment & Supplies | 201,476 | 3,236,336 | |||||||||||
Smiths Group PLC | Industrial Conglomerates | 88,206 | 1,686,882 | |||||||||||
Spirax-Sarco Engineering PLC | Machinery | 16,870 | 2,784,261 | |||||||||||
SSE PLC | Electric Utilities | 243,410 | 5,603,696 | |||||||||||
St. James’s Place Capital PLC | Capital Markets | 120,500 | 2,298,138 | |||||||||||
Standard Chartered PLC | Banks | 576,954 | 3,875,718 | |||||||||||
Tate & Lyle PLC | Food Products | 106,853 | 1,030,118 | |||||||||||
Taylor Wimpey PLC | Household Durables | 822,038 | 1,414,614 | |||||||||||
Tesco PLC | Food & Staples Retailing | 1,723,150 | 6,261,850 | |||||||||||
The Sage Group PLC | Software | 233,770 | 2,158,247 | |||||||||||
| b | THG PLC | Internet & Direct Marketing Retail | 212,737 | 257,692 | ||||||||||
Travis Perkins PLC | Trading Companies & Distributors | 49,164 | 800,732 | |||||||||||
Unilever PLC | Personal Products | 583,220 | 26,530,838 | |||||||||||
United Utilities Group PLC | Water Utilities | 154,722 | 2,290,773 | |||||||||||
Vodafone Group PLC | Wireless Telecommunication Services | 6,172,492 | 10,145,765 | |||||||||||
Weir Group PLC | Machinery | 59,286 | 1,280,947 | |||||||||||
| b | Whitbread PLC | Hotels, Restaurants & Leisure | 45,581 | 1,714,607 | ||||||||||
| b | Wise PLC, A | IT Services | 106,522 | 694,249 | ||||||||||
WPP PLC | Media | 253,050 | 3,341,779 | |||||||||||
|
| |||||||||||||
| 485,588,958 | ||||||||||||||
|
| |||||||||||||
Total Common Stocks | 607,031,117 | |||||||||||||
|
| |||||||||||||
| Short Term Investments 0.1% | ||||||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.1% | ||||||||||||||
| United States 0.1% | ||||||||||||||
| e,f | Institutional Fiduciary Trust Portfolio, 0.01% | Money Market Funds | 620,830 | 620,830 | ||||||||||
|
| |||||||||||||
Total Short Term Investments | 620,830 | |||||||||||||
|
| |||||||||||||
Total Investments | 607,651,947 | |||||||||||||
Other Assets, less Liabilities 1.0% | 5,920,553 | |||||||||||||
|
| |||||||||||||
Net Assets 100.0% | $ | 613,572,500 | ||||||||||||
|
| |||||||||||||
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2022, the aggregate value of these securities was $4,608,444, representing 0.8% of net assets.
bNon-income producing.
cA portion or all of the security is on loan at March 31, 2022. See Note 1(d).
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eThe rate shown is the annualized seven-day effective yield at period end.
fSee Note 3(c) regarding investments in affiliated management investment companies.
| 310 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE United Kingdom ETF (continued)
At March 31, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
| Futures Contracts | ||||||||||||||||||||
| Description | Type | Number of Contracts | Notional Amount* | Expiration Date | Value/Unrealized Appreciation (Depreciation) | |||||||||||||||
| Equity Contracts | ||||||||||||||||||||
FTSE 100 Index | Long | 53 | $ | 5,223,916 | 6/17/22 | $ | 231,258 | |||||||||||||
*As of year end.
See Note 8 regarding other derivative information.
See Abbreviations on page 365.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 311 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
March 31, 2022
| Franklin FTSE Asia ex Japan ETF | Franklin Australia | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 38,246,312 | $ | 24,550,745 | $ | 480,558,386 | $ | 35,766,724 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 6,825 | — | — | — | ||||||||||||
Value – Unaffiliated issuers+ | $ | 38,855,934 | $ | 29,923,819 | $ | 524,011,692 | $ | 43,249,594 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 6,825 | — | — | — | ||||||||||||
Cash | — | — | 439,511 | — | ||||||||||||
Foreign currency, at value (cost $18,991, $263,226, $1,968,663 and $2,209, respectively) | 19,030 | 263,335 | 1,967,254 | 2,203 | ||||||||||||
Receivables: |
| |||||||||||||||
Dividends and interest | 95,445 | 93,931 | 877,932 | 74,407 | ||||||||||||
Investment securities sold | — | — | 1,025,597 | — | ||||||||||||
Capital shares sold | — | — | — | 1,828,371 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | — | 591,299 | — | ||||||||||||
|
| |||||||||||||||
Total assets | 38,977,234 | 30,281,085 | 528,913,285 | 45,154,575 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Investment securities purchased | — | — | 1,009,486 | 1,825,128 | ||||||||||||
Management fees | 5,346 | 2,158 | 73,350 | 3,075 | ||||||||||||
Variation margin on futures contracts | — | — | 10,946 | — | ||||||||||||
Funds advanced by custodian | 36,007 | 310,743 | — | 37,561 | ||||||||||||
Deferred tax | 178,005 | — | — | — | ||||||||||||
Payable upon return of securities loaned | 6,825 | — | — | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 226,183 | 312,901 | 1,093,782 | 1,865,764 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 38,751,051 | $ | 29,968,184 | $ | 527,819,503 | $ | 43,288,811 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 40,272,908 | $ | 25,245,438 | $ | 539,499,599 | $ | 36,011,481 | ||||||||
Total distributable earnings (loss) | (1,521,857 | ) | 4,722,746 | (11,680,096 | ) | 7,277,330 | ||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 38,751,051 | $ | 29,968,184 | $ | 527,819,503 | $ | 43,288,811 | ||||||||
|
| |||||||||||||||
Shares outstanding | 1,600,000 | 950,000 | 22,400,000 | 1,200,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 24.22 | $ | 31.55 | $ | 23.56 | $ | 36.07 | ||||||||
|
| |||||||||||||||
+Includes securities loaned | 6,552 | — | — | — | ||||||||||||
| 312 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin FTSE China ETF | Franklin Europe ETF | Franklin Europe | Franklin France | |||||||||||||
Assets: |
| |||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 137,359,778 | $ | 166,350,889 | $ | 21,194,332 | $ | 9,767,508 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 78,125 | — | — | — | ||||||||||||
Value – Unaffiliated issuers+ | $ | 111,432,476 | $ | 183,545,958 | $ | 21,610,612 | $ | 10,076,864 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 78,125 | — | — | — | ||||||||||||
Cash | 4,823 | 131,416 | — | 28 | ||||||||||||
Foreign currency, at value (cost $29,712, $214,975, $53,817 and $3,082, respectively) | 29,589 | 215,087 | 54,144 | 3,105 | ||||||||||||
Receivables: |
| |||||||||||||||
Dividends and interest++ | 4,014 | 892,312 | 76,683 | 8,617 | ||||||||||||
Investment securities sold | — | 54,901 | 8,196 | 4 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | 119,851 | — | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | — | 242,835 | — | ||||||||||||
Other assets | — | 121 | 36 | — | ||||||||||||
|
| |||||||||||||||
Total assets | 111,549,027 | 184,959,646 | 21,992,506 | 10,088,618 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Investment securities purchased | — | 79,932 | 218,919 | — | ||||||||||||
Management fees | 17,144 | 13,276 | 1,606 | 737 | ||||||||||||
Variation margin on futures contracts | — | 9,356 | — | — | ||||||||||||
Funds advanced by custodian | — | — | 57,004 | — | ||||||||||||
Payable upon return of securities loaned | 78,125 | — | — | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | — | 20,304 | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 95,269 | 102,564 | 297,833 | 737 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 111,453,758 | $ | 184,857,082 | $ | 21,694,673 | $ | 10,087,881 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 150,130,402 | $ | 170,751,611 | $ | 21,427,507 | $ | 9,920,684 | ||||||||
Total distributable earnings (loss) | (38,676,644 | ) | 14,105,471 | 267,166 | 167,197 | |||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 111,453,758 | $ | 184,857,082 | $ | 21,694,673 | $ | 10,087,881 | ||||||||
|
| |||||||||||||||
Shares outstanding | 5,200,000 | 6,800,000 | 800,000 | 350,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 21.43 | $ | 27.18 | $ | 27.12 | $ | 28.82 | ||||||||
|
| |||||||||||||||
+Includes securities loaned | 75,319 | — | — | — | ||||||||||||
+Includes European Union tax reclaim | — | 399,851 | 19,754 | — | ||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 313 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Assets: |
| |||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 18,541,027 | $ | 18,719,156 | $ | 42,099,389 | $ | 3,335,664 | ||||||||
Value – Unaffiliated issuers | $ | 16,761,581 | $ | 17,507,114 | $ | 51,026,869 | $ | 3,697,979 | ||||||||
Cash | 435 | 98 | 63,013 | — | ||||||||||||
Foreign currency, at value (cost $13,430, $22,140, $7,048 and $3, respectively) | 13,552 | 22,124 | 7,066 | 3 | ||||||||||||
Receivables: |
| |||||||||||||||
Dividends and interest++ | 383 | 38,330 | 6,675 | 426 | ||||||||||||
Variation margin on futures contracts | — | 130 | — | — | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | 6,912 | 5,280 | — | ||||||||||||
|
| |||||||||||||||
Total assets | 16,775,951 | 17,574,708 | 51,108,903 | 3,698,408 | ||||||||||||
|
| |||||||||||||||
Liabilities: |
| |||||||||||||||
Payables: |
| |||||||||||||||
Management fees | 1,242 | 1,318 | 7,785 | 267 | ||||||||||||
Variation margin on futures contracts | — | — | 160 | — | ||||||||||||
Funds advanced by custodian | — | — | — | 29 | ||||||||||||
Deferred tax | — | — | 961,042 | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 1,242 | 1,318 | 968,987 | 296 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 16,774,709 | $ | 17,573,390 | $ | 50,139,916 | $ | 3,698,112 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 18,985,683 | $ | 19,476,027 | $ | 44,627,756 | $ | 3,728,641 | ||||||||
Total distributable earnings (loss) | (2,210,974 | ) | (1,902,637 | ) | 5,512,160 | (30,529 | ) | |||||||||
|
| |||||||||||||||
Net assets, at value | $ | 16,774,709 | $ | 17,573,390 | $ | 50,139,916 | $ | 3,698,112 | ||||||||
|
| |||||||||||||||
Shares outstanding | 750,000 | 750,000 | 1,600,000 | 150,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 22.37 | $ | 23.43 | $ | 31.34 | $ | 24.65 | ||||||||
|
| |||||||||||||||
+Includes European Union tax reclaim | — | — | — | 450 | ||||||||||||
| 314 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: |
| |||||||||||||||
Cost – Unaffiliated issuers | $ | 825,353,088 | $ | 26,791,105 | $ | 6,680,052 | $ | 9,772,686 | ||||||||
Cost – Non-controlled affiliates (Note 3c) | 251,746 | 695,758 | — | — | ||||||||||||
Value – Unaffiliated issuers | $ | 780,672,736 | $ | 24,525,653 | $ | 7,544,729 | $ | 12,369,785 | ||||||||
Value – Non-controlled affiliates (Note 3c) | 251,746 | 695,758 | — | — | ||||||||||||
Cash | — | — | 8,285 | 3,596 | ||||||||||||
Foreign currency, at value (cost $884,250, $4,710, $7,275 and $495, respectively) | 888,647 | 4,740 | 7,386 | 501 | ||||||||||||
Receivables: | ||||||||||||||||
Dividends and interest | 7,483,677 | 219,278 | 12,796 | — | ||||||||||||
Investment securities sold | — | — | 9,833 | — | ||||||||||||
Variation margin on futures contracts | — | — | 1,012 | — | ||||||||||||
Deposits with brokers for: |
| |||||||||||||||
Futures contracts | 423,893 | 12,111 | 1,598 | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts | — | 617,914 | — | — | ||||||||||||
|
| |||||||||||||||
Total assets | 789,720,699 | 26,075,454 | 7,585,639 | 12,373,882 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | 1 | 1,286,262 | 9,682 | — | ||||||||||||
Management fees | 57,466 | 1,085 | 1,125 | 1,857 | ||||||||||||
Variation margin on futures contracts | 25,945 | 746 | — | — | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts | — | 67,566 | — | — | ||||||||||||
|
| |||||||||||||||
Total liabilities | 83,412 | 1,355,659 | 10,807 | 1,857 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 789,637,287 | $ | 24,719,795 | $ | 7,574,832 | $ | 12,372,025 | ||||||||
|
| |||||||||||||||
Net assets consist of: |
| |||||||||||||||
Paid-in capital | $ | 840,995,519 | $ | 26,243,566 | $ | 7,042,821 | $ | 10,586,132 | ||||||||
Total distributable earnings (loss) | (51,358,232 | ) | (1,523,771 | ) | 532,011 | 1,785,893 | ||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 789,637,287 | $ | 24,719,795 | $ | 7,574,832 | $ | 12,372,025 | ||||||||
|
| |||||||||||||||
Shares outstanding | 28,800,000 | 800,000 | 300,000 | 450,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | 27.42 | $ | 30.90 | $ | 25.25 | $ | 27.49 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 315 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Assets: | ||||||||||||||||
Investments in securities: | ||||||||||||||||
Cost – Unaffiliated issuers | $ | 22,476,787 | $ | 2,472,888 | $ | 4,736,976 | $ | 59,827,271 | ||||||||
Value – Unaffiliated issuers | $ | — | $ | 4,127,274 | $ | 5,950,861 | $ | 60,528,855 | ||||||||
Cash | 2,784 | — | — | — | ||||||||||||
Foreign currency, at value (cost $-, $9,425, $28,275, and $706, respectively) | — | 9,425 | 28,300 | 706 | ||||||||||||
Receivables: | ||||||||||||||||
Dividends and interest | — | — | 16,100 | 826,105 | ||||||||||||
Variation margin on futures contracts | — | — | — | 1,726 | ||||||||||||
Deposits with brokers for: | ||||||||||||||||
Futures contracts | — | — | — | 75,789 | ||||||||||||
Other assets | — | — | — | 3,264 | ||||||||||||
|
| |||||||||||||||
Total assets | 2,784 | 4,136,699 | 5,995,261 | 61,436,445 | ||||||||||||
|
| |||||||||||||||
Liabilities: | ||||||||||||||||
Payables: | ||||||||||||||||
Investment securities purchased | — | — | 15,584 | — | ||||||||||||
Management fees | 82 | 1,336 | 919 | 4,568 | ||||||||||||
Funds advanced by custodian | — | 5,053 | 21,013 | 70,435 | ||||||||||||
|
| |||||||||||||||
Total liabilities | 82 | 6,389 | 37,516 | 75,003 | ||||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 2,702 | $ | 4,130,310 | $ | 5,957,745 | $ | 61,361,442 | ||||||||
|
| |||||||||||||||
Net assets consist of: | ||||||||||||||||
Paid-in capital | $ | 23,177,931 | $ | 2,482,525 | $ | 5,004,297 | $ | 70,198,938 | ||||||||
Total distributable earnings (loss) | (23,175,229 | ) | 1,647,785 | 953,448 | (8,837,496 | ) | ||||||||||
|
| |||||||||||||||
Net assets, at value | $ | 2,702 | $ | 4,130,310 | $ | 5,957,745 | $ | 61,361,442 | ||||||||
|
| |||||||||||||||
Shares outstanding | 800,000 | 100,000 | 200,000 | 2,400,000 | ||||||||||||
|
| |||||||||||||||
Net asset value per share | $ | — | $ | 41.30 | $ | 29.79 | $ | 25.57 | ||||||||
|
| |||||||||||||||
| 316 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2022
| Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||
Assets: |
| |||||||||||
Investments in securities: |
| |||||||||||
Cost – Unaffiliated issuers | $ | 43,069,926 | $ | 30,275,748 | $ | 598,098,706 | ||||||
Cost – Non-controlled affiliates (Note 3c) | — | — | 620,830 | |||||||||
Value – Unaffiliated issuers+ | $ | 46,815,110 | $ | 43,675,445 | $ | 607,031,117 | ||||||
Value – Non-controlled affiliates (Note 3c) | — | — | 620,830 | |||||||||
Cash | — | — | 31 | |||||||||
Foreign currency, at value (cost $179,307, $3,296 and $1,671,409, respectively) | 181,497 | 3,291 | 1,672,722 | |||||||||
Receivables: |
| |||||||||||
Dividends and interest++ | 556,671 | 50,663 | 4,601,472 | |||||||||
Investment securities sold | — | 4,390,280 | 1,002,222 | |||||||||
Deposits with brokers for: |
| |||||||||||
Futures contracts | 62,911 | — | 333,281 | |||||||||
|
| |||||||||||
Total assets | 47,616,189 | 48,119,679 | 615,261,675 | |||||||||
|
| |||||||||||
Liabilities: |
| |||||||||||
Payables: |
| |||||||||||
Investment securities purchased | — | — | 1,001,788 | |||||||||
Capital shares redeemed | — | 4,387,475 | — | |||||||||
Management fees | 3,484 | 7,723 | 45,283 | |||||||||
Variation margin on futures contracts | 5,894 | — | 21,274 | |||||||||
Funds advanced by custodian | 13,587 | 57,931 | — | |||||||||
Payable upon return of securities loaned | — | — | 620,830 | |||||||||
|
| |||||||||||
Total liabilities | 22,965 | 4,453,129 | 1,689,175 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 47,593,224 | $ | 43,666,550 | $ | 613,572,500 | ||||||
|
| |||||||||||
Net assets consist of: |
| |||||||||||
Paid-in capital | $ | 43,894,084 | $ | 31,022,273 | $ | 606,589,387 | ||||||
Total distributable earnings (loss) | 3,699,140 | 12,644,277 | 6,983,113 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 47,593,224 | $ | 43,666,550 | $ | 613,572,500 | ||||||
|
| |||||||||||
Shares outstanding | 1,400,000 | 1,000,000 | 24,100,000 | |||||||||
|
| |||||||||||
Net asset value per share | $ | 34.00 | $ | 43.67 | $ | 25.46 | ||||||
|
| |||||||||||
+Includes securities loaned | — | — | 589,924 | |||||||||
++Includes European Union tax reclaim | — | — | 9,944 | |||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 317 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the year ended March 31, 2022
| Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 726,843 | $ | 1,146,795 | $ | 18,764,919 | $ | 752,998 | ||||||||
Non-cash dividends | — | 111,624 | 2,408,669 | — | ||||||||||||
Interest: | ||||||||||||||||
Unaffiliated issuers | 96 | — | — | — | ||||||||||||
Interest from securities loaned (Note 1d): | ||||||||||||||||
Unaffiliated issuers (net of fees and rebates) | 215 | — | — | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 727,154 | 1,258,419 | 21,173,588 | 752,998 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 62,932 | 22,546 | 444,127 | 27,497 | ||||||||||||
|
| |||||||||||||||
Total expenses | 62,932 | 22,546 | 444,127 | 27,497 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (199 | ) | — | — | — | |||||||||||
|
| |||||||||||||||
Net investment income | 664,421 | 1,235,873 | 20,729,461 | 725,501 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (926,498 | ) | (466,496 | ) | (18,940,832 | ) | (202,318 | ) | ||||||||
Foreign currency transactions | (17,931 | ) | 1,551 | 49,972 | 548 | |||||||||||
Futures contracts | (35,205 | ) | — | 8,892 | — | |||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (979,634 | ) | (464,945 | ) | (18,881,968 | ) | (201,770 | ) | ||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (3,172,680 | ) | 2,889,099 | 69,246,985 | 5,384,499 | |||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 1,030 | 3,390 | 109,436 | 399 | ||||||||||||
Futures contracts | 8,013 | — | 200,128 | — | ||||||||||||
Change in deferred taxes on unrealized appreciation | (111,783 | ) | — | — | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation | (3,275,420 | ) | 2,892,489 | 69,556,549 | 5,384,898 | |||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (4,255,054 | ) | 2,427,544 | 50,674,581 | 5,183,128 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (3,590,633 | ) | $ | 3,663,417 | $ | 71,404,042 | $ | 5,908,629 | |||||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 84,269 | $ | 12,360 | $ | 588,078 | $ | 142,573 | ||||||||
|
| |||||||||||||||
| 318 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 2,436,753 | $ | 5,678,990 | $ | 482,188 | $ | 151,937 | ||||||||
Non-cash dividends | — | 611,767 | 49,648 | 125,374 | ||||||||||||
Interest from securities loaned (Note 1d): | ||||||||||||||||
Unaffiliated issuers (net of fees and rebates) | 5572 | 879 | — | — | ||||||||||||
Non-Controlled affiliates (Note3c) | 72 | |||||||||||||||
|
| |||||||||||||||
Total investment income | 2,442,397 | 6,291,636 | 531,836 | 277,311 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 233,670 | 185,554 | 16,743 | 8,726 | ||||||||||||
Other | — | 355 | 41 | — | ||||||||||||
|
| |||||||||||||||
Total expenses | 233,670 | 185,909 | 16,784 | 8,726 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (537 | ) | (7 | ) | (24 | ) | — | |||||||||
|
| |||||||||||||||
Net investment income | 2,209,264 | 6,105,734 | 515,076 | 268,585 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: |
| |||||||||||||||
Investments: |
| |||||||||||||||
Unaffiliated issuers | (6,911,853 | ) | (181,796 | ) | (288,379 | ) | (83,592 | ) | ||||||||
In-kind redemptions | 2,285,872 | 26,311,861 | — | — | ||||||||||||
Foreign currency transactions | (12,775 | ) | (7,317 | ) | (1,621 | ) | (444 | ) | ||||||||
Forwards exchange contracts | — | — | 1,038,539 | — | ||||||||||||
Futures contracts | (136,258 | ) | 54,362 | 10,305 | — | |||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (4,775,014 | ) | 26,177,110 | 758,844 | (84,036 | ) | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (42,279,787 | ) | (24,328,883 | ) | (144,321 | ) | (57,318 | ) | ||||||||
Translation of other assets and liabilities denominated in foreign currencies | — | 3,437 | 444 | 123 | ||||||||||||
Futures contracts | 5,342 | 66,549 | (2,183 | ) | — | |||||||||||
Forward exchange contracts | — | — | (75,006 | ) | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (42,274,445 | ) | (24,258,897 | ) | (221,066 | ) | (57,195 | ) | ||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (47,049,459 | ) | 1,918,213 | 537,778 | (141,231 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (44,840,195 | ) | $ | 8,023,947 | $ | 1,052,854 | $ | 127,354 | |||||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 149,187 | $ | 681,560 | $ | 59,221 | $ | 48,466 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 319 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Investment income: | ||||||||||||||||
Dividends: (net of foreign taxes)a | ||||||||||||||||
Unaffiliated issuers | $ | 437,958 | $ | 504,886 | $ | 389,137 | $ | 131,408 | ||||||||
|
| |||||||||||||||
Total investment income | 437,958 | 504,886 | 389,137 | 131,408 | ||||||||||||
|
| |||||||||||||||
Expenses: | ||||||||||||||||
Management fees (Note 3a) | 13,958 | 15,764 | 70,533 | 3,652 | ||||||||||||
Other | 9 | — | — | 2 | ||||||||||||
|
| |||||||||||||||
Total expenses | 13,967 | 15,764 | 70,533 | 3,654 | ||||||||||||
|
| |||||||||||||||
Net investment income | 423,991 | 489,122 | 318,604 | 127,754 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (191,364 | ) | (400,282 | ) | (528,435 | ) | (27,387 | ) | ||||||||
Foreign currency transactions | (1,546 | ) | (267 | ) | (3,657 | ) | (199 | ) | ||||||||
Futures contracts | 983 | (7,052 | ) | (3,447 | ) | 1,105 | ||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (191,927 | ) | (407,601 | ) | (535,539 | ) | (26,481 | ) | ||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments: | ||||||||||||||||
Unaffiliated issuers | (2,763,147 | ) | (2,850,910 | ) | 4,417,705 | (211,263 | ) | |||||||||
Translation of other assets and liabilities denominated in foreign currencies | 192 | (18 | ) | (25 | ) | (18 | ) | |||||||||
Futures contracts | — | 587 | 1,364 | — | ||||||||||||
Change in deferred taxes on unrealized appreciation | — | — | (535,455 | ) | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (2,762,955 | ) | (2,850,341 | ) | 3,883,589 | (211,281 | ) | |||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (2,954,882 | ) | (3,257,942 | ) | 3,348,050 | (237,762 | ) | |||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (2,530,891 | ) | $ | (2,768,820 | ) | $ | 3,666,654 | $ | (110,008 | ) | |||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 42,993 | $ | 235 | $ | 116,817 | $ | 21,492 | ||||||||
|
| |||||||||||||||
| 320 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Investment income: |
| |||||||||||||||
Dividends: (net of foreign taxes)a |
| |||||||||||||||
Unaffiliated issuers | $ | 15,034,716 | $ | 380,846 | $ | 297,706 | $ | 272,158 | ||||||||
Non-cash dividends | — | — | 34,148 | — | ||||||||||||
|
| |||||||||||||||
Total investment income | 15,034,716 | 380,846 | 331,854 | 272,158 | ||||||||||||
|
| |||||||||||||||
Expenses: |
| |||||||||||||||
Management fees (Note 3a) | 606,129 | 14,846 | 9,089 | 17,736 | ||||||||||||
Other | 192 | 11 | — | — | ||||||||||||
|
| |||||||||||||||
Total expenses | 606,321 | 14,857 | 9,089 | 17,736 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | (666 | ) | (51 | ) | — | — | ||||||||||
|
| |||||||||||||||
Net investment income | 14,429,061 | 366,040 | 322,765 | 254,422 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): |
| |||||||||||||||
Net realized gain (loss) from: |
| |||||||||||||||
Investments: |
| |||||||||||||||
Unaffiliated issuers | (4,978,676 | ) | (226,261 | ) | (237,482 | ) | (159,406 | ) | ||||||||
In-kind redemptions | 17,578,996 | 663,170 | — | — | ||||||||||||
Foreign currency transactions | (239,194 | ) | (4,214 | ) | 3,112 | 1,301 | ||||||||||
Forwards exchange contracts | — | 1,377,586 | (19 | ) | — | |||||||||||
Futures contracts | (221,093 | ) | (23,426 | ) | (524 | ) | — | |||||||||
|
| |||||||||||||||
Net realized gain (loss) | 12,140,033 | 1,786,855 | (234,913 | ) | (158,105 | ) | ||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||||||
Investments: |
| |||||||||||||||
Unaffiliated issuers | (89,543,512 | ) | (1,845,466 | ) | 1,077,655 | 2,181,390 | ||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 47,330 | 1,688 | 1,117 | (58 | ) | |||||||||||
Futures contracts | 151,366 | 1,056 | 1,010 | — | ||||||||||||
Forward exchange contracts | — | (294,907 | ) | — | — | |||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (89,344,816 | ) | (2,137,629 | ) | 1,079,782 | 2,181,332 | ||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (77,204,783 | ) | (350,774 | ) | 844,869 | 2,023,227 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (62,775,722 | ) | $ | 15,266 | $ | 1,167,634 | $ | 2,277,649 | |||||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 1,662,588 | $ | 42,082 | $ | 17,577 | $ | 19,345 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 321 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
Investment income: |
| |||||||||||||||
Dividends: (net of foreign taxes)a |
| |||||||||||||||
Unaffiliated issuers | $ | 1,143,180 | $ | 75,674 | $ | 149,219 | $ | 1,070,512 | ||||||||
Non-cash dividends | — | — | — | 252,889 | ||||||||||||
Interest: |
| |||||||||||||||
Unaffiliated issuers | — | — | — | 2 | ||||||||||||
Income from securities loaned: (Note 1d) |
| |||||||||||||||
Unaffiliated issuers (net of fees and rebates) | — | — | — | 6,117 | ||||||||||||
|
| |||||||||||||||
Total investment income | 1,143,180 | 75,674 | 149,219 | 1,329,520 | ||||||||||||
|
| |||||||||||||||
Expenses: |
| |||||||||||||||
Management fees (Note 3a) | 34,065 | 13,658 | 7,552 | 61,504 | ||||||||||||
|
| |||||||||||||||
Total expenses | 34,065 | 13,658 | 7,552 | 61,504 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) | — | — | — | (41 | ) | |||||||||||
|
| |||||||||||||||
Net investment income | 1,109,115 | 62,016 | 141,667 | 1,268,057 | ||||||||||||
|
| |||||||||||||||
Realized and unrealized gains (losses): |
| |||||||||||||||
Net realized gain (loss) from: |
| |||||||||||||||
Investments: |
| |||||||||||||||
Unaffiliated issuers | (179,344 | ) | 42,116 | (80,518 | ) | (5,359,853 | ) | |||||||||
Foreign currency transactions | (5,625 | ) | (42 | ) | (1,224 | ) | (48,017 | ) | ||||||||
Forwards exchange contracts | 61 | (38 | ) | — | — | |||||||||||
Futures contracts | — | — | — | (42,446 | ) | |||||||||||
|
| |||||||||||||||
Net realized gain (loss) | (184,908 | ) | 42,036 | (81,742 | ) | (5,450,316 | ) | |||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||||||
Investments: |
| |||||||||||||||
Unaffiliated issuers | (23,582,020 | ) | 1,061,595 | 824,343 | (8,053,181 | ) | ||||||||||
Translation of other assets and liabilities denominated in foreign currencies | 523 | — | (93 | ) | 3,394 | |||||||||||
Futures contracts | — | — | — | 35,632 | ||||||||||||
|
| |||||||||||||||
Net change in unrealized appreciation (depreciation) | (23,581,497 | ) | 1,061,595 | 824,250 | (8,014,155 | ) | ||||||||||
|
| |||||||||||||||
Net realized and unrealized gain (loss) | (23,766,405 | ) | 1,103,631 | 742,508 | (13,464,471 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (22,657,290 | ) | $ | 1,165,647 | $ | 884,175 | $ | (12,196,414 | ) | ||||||
|
| |||||||||||||||
aForeign taxes withheld on dividends | $ | 132,011 | $ | 3,398 | $ | 23,247 | $ | 223,820 | ||||||||
|
| |||||||||||||||
| 322 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2022
| Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||
Investment income: |
| |||||||||||
Dividends: (net of foreign taxes)a |
| |||||||||||
Unaffiliated issuers | $ | 1,043,500 | $ | 1,076,457 | $ | 15,749,418 | ||||||
Income from securities loaned: (Note 1d) |
| |||||||||||
Unaffiliated issuers (net of fees and rebates) | — | — | 16,644 | |||||||||
Non-Controlled affiliates (Note 3c) | — | — | 25 | |||||||||
|
| |||||||||||
Total investment income | 1,043,500 | 1,076,457 | 15,766,087 | |||||||||
|
| |||||||||||
Expenses: |
| |||||||||||
Management fees (Note 3a) | 43,425 | 85,546 | 367,329 | |||||||||
Other | 220 | — | — | |||||||||
|
| |||||||||||
Total expenses | 43,645 | 85,546 | 367,329 | |||||||||
Expenses waived/paid by affiliates (Note 3c) | — | — | (153 | ) | ||||||||
|
| |||||||||||
Net investment income | 999,855 | 990,911 | 15,398,911 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): |
| |||||||||||
Net realized gain (loss) from: |
| |||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | (126,226 | ) | (543,294 | ) | (4,740,885 | ) | ||||||
In-kind redemptions | 3,468,239 | — | 4,503,589 | |||||||||
Foreign currency transactions | (317 | ) | (4,481 | ) | (95,952 | ) | ||||||
Forwards exchange contracts | — | (84 | ) | — | ||||||||
Futures contracts | (12,337 | ) | (2,809 | ) | 131,143 | |||||||
|
| |||||||||||
Net realized gain (loss) | 3,329,359 | (550,668 | ) | (202,105 | ) | |||||||
�� |
| |||||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||
Investments: |
| |||||||||||
Unaffiliated issuers | 2,566,021 | 2,786,927 | 7,764,880 | |||||||||
Translation of other assets and liabilities denominated in foreign currencies | 8,172 | (3,405 | ) | 4,217 | ||||||||
Futures contracts | 25,756 | — | 238,655 | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) | 2,599,949 | 2,783,522 | 8,007,752 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 5,929,308 | 2,232,854 | 7,805,647 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 6,929,163 | $ | 3,223,765 | $ | 23,204,558 | ||||||
|
| |||||||||||
aForeign taxes withheld on dividends | $ | 168,856 | $ | 272,514 | $ | 82,081 | ||||||
|
| |||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 323 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
| Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 664,421 | $ | 376,018 | $ | 1,235,873 | $ | 504,912 | ||||||||
Net realized gain (loss) | (979,634 | ) | (291,780 | ) | (464,945 | ) | 407,134 | |||||||||
Net change in unrealized appreciation (depreciation) | (3,275,420 | ) | 7,262,830 | 2,892,489 | 6,448,995 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | (3,590,633 | ) | 7,347,068 | 3,663,417 | 7,361,041 | |||||||||||
|
| |||||||||||||||
Distributions to shareholders: (Note 1f) | (744,268 | ) | (347,651 | ) | (1,262,140 | ) | (369,523 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 8,769,376 | 12,605,123 | 4,271,838 | 8,483,275 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 4,434,475 | 19,604,540 | 6,673,115 | 15,474,793 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 34,316,576 | 14,712,036 | 23,295,069 | 7,820,276 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 38,751,051 | $ | 34,316,576 | $ | 29,968,184 | $ | 23,295,069 | ||||||||
|
| |||||||||||||||
| 324 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 20,729,461 | $ | 2,583,991 | $ | 725,501 | $ | 244,759 | ||||||||
Net realized gain (loss) | (18,881,968 | ) | (25,392,559 | ) | (201,770 | ) | (81,484 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 69,556,549 | 68,757,511 | 5,384,898 | 3,599,762 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 71,404,042 | 45,948,943 | 5,908,629 | 3,763,037 | ||||||||||||
|
| |||||||||||||||
Distributions to shareholders: (Note 1f) | (16,614,538 | ) | (3,244,165 | ) | (639,656 | ) | (170,739 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 365,373,593 | (37,747,916 | ) | 13,859,588 | 15,691,933 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 420,163,097 | 4,956,862 | 19,128,561 | 19,284,231 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 107,656,406 | 102,699,544 | 24,160,250 | 4,876,019 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 527,819,503 | $ | 107,656,406 | $ | 43,288,811 | $ | 24,160,250 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 325 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE China ETF | Franklin FTSE Europe ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 2,209,264 | $ | 810,357 | $ | 6,105,734 | $ | 5,490,917 | ||||||||
Net realized gain (loss) | (4,775,014 | ) | (588,268 | ) | 26,177,110 | 9,094,885 | ||||||||||
Net change in unrealized appreciation | (42,274,445 | ) | 18,699,200 | (24,258,897 | ) | 64,726,941 | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting | (44,840,195 | ) | 18,921,289 | 8,023,947 | 79,312,743 | |||||||||||
|
| |||||||||||||||
Distributions to shareholders: (Note 1f) | (1,744,579 | ) | (880,709 | ) | (7,497,235 | ) | (4,581,765 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | 37,256,442 | 53,934,391 | (44,796,057 | ) | 63,039,215 | |||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | (9,328,332 | ) | 71,974,971 | (44,269,345 | ) | 137,770,193 | ||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 120,782,090 | 48,807,119 | 229,126,427 | 91,356,234 | ||||||||||||
|
| |||||||||||||||
End of year | $ | 111,453,758 | $ | 120,782,090 | $ | 184,857,082 | $ | 229,126,427 | ||||||||
|
| |||||||||||||||
| 326 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 515,076 | $ | 155,027 | $ | 268,585 | $ | 112,786 | ||||||||
Net realized gain (loss) | 758,844 | (555,366 | ) | (84,036 | ) | (675,930 | ) | |||||||||
Net change in unrealized appreciation (depreciation) | (221,066 | ) | 2,245,041 | (57,195 | ) | 3,137,166 | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,052,854 | 1,844,702 | 127,354 | 2,574,022 | ||||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (666,937 | ) | (93,163 | ) | (270,848 | ) | (109,487 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 5,879,630 | 9,846,602 | 3,120,862 | (4,055,531 | ) | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 6,265,547 | 11,598,141 | 2,977,368 | (1,590,996 | ) | |||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 15,429,126 | 3,830,985 | 7,110,513 | 8,701,509 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 21,694,673 | $ | 15,429,126 | $ | 10,087,881 | $ | 7,110,513 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 327 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 423,991 | $ | 186,390 | $ | 489,122 | $ | 499,556 | ||||||||
Net realized gain (loss) | (191,927 | ) | 64,451 | (407,601 | ) | 244,531 | ||||||||||
Net change in unrealized appreciation (depreciation) | (2,762,955 | ) | 2,486,044 | (2,850,341 | ) | 4,939,038 | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | (2,530,891 | ) | 2,736,885 | (2,768,820 | ) | 5,683,125 | ||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (404,523 | ) | (182,573 | ) | (478,429 | ) | (524,795 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 10,617,319 | 2,356,392 | 3,959,042 | (3,730,050 | ) | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 7,681,905 | 4,910,704 | 711,793 | 1,428,280 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 9,092,804 | 4,182,100 | 16,861,597 | 15,433,317 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 16,774,709 | $ | 9,092,804 | $ | 17,573,390 | $ | 16,861,597 | ||||||||
|
| |||||||||||||||
| 328 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 318,604 | $ | 116,966 | $ | 127,754 | $ | 100,370 | ||||||||
Net realized gain (loss) | (535,539 | ) | (608,636 | ) | (26,481 | ) | (136,896 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 3,883,589 | 6,744,772 | (211,281 | ) | 1,456,119 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 3,666,654 | 6,253,102 | (110,008 | ) | 1,419,593 | |||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (1,055,912 | ) | (92,142 | ) | (166,253 | ) | (86,540 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 23,985,026 | 8,593,234 | — | — | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 26,595,768 | 14,754,194 | (276,261 | ) | 1,333,053 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 23,544,148 | 8,789,954 | 3,974,373 | 2,641,320 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 50,139,916 | $ | 23,544,148 | $ | 3,698,112 | $ | 3,974,373 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 329 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 14,429,061 | $ | 9,355,858 | $ | 366,040 | $ | 237,408 | ||||||||
Net realized gain (loss) | 12,140,033 | 20,175,822 | 1,786,855 | 50,651 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (89,344,816 | ) | 124,382,389 | (2,137,629 | ) | 1,585,421 | ||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | (62,775,722 | ) | 153,914,069 | 15,266 | 1,873,480 | |||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (15,304,771 | ) | (8,307,221 | ) | (162,493 | ) | — | |||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 268,783,660 | 137,476,616 | 303,836 | 18,420,312 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 190,703,167 | 283,083,464 | 156,609 | 20,293,792 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 598,934,120 | 315,850,656 | 24,563,186 | 4,269,394 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 789,637,287 | $ | 598,934,120 | $ | 24,719,795 | $ | 24,563,186 | ||||||||
|
| |||||||||||||||
| 330 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 322,765 | $ | 62,831 | $ | 254,422 | $ | 78,918 | ||||||||
Net realized gain (loss) | (234,913 | ) | (78,302 | ) | (158,105 | ) | (219,622 | ) | ||||||||
Net change in unrealized appreciation | 1,079,782 | 833,245 | 2,181,332 | 1,997,216 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting | 1,167,634 | 817,774 | 2,277,649 | 1,856,512 | ||||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (304,300 | ) | (50,024 | ) | (302,647 | ) | (79,915 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 2,231,798 | 2,191,582 | 4,861,121 | 888,685 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 3,095,132 | 2,959,332 | 6,836,123 | 2,665,282 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 4,479,700 | 1,520,368 | 5,535,902 | 2,870,620 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 7,574,832 | $ | 4,479,700 | $ | 12,372,025 | $ | 5,535,902 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 331 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 1,109,115 | $ | 620,269 | $ | 62,016 | $ | 52,211 | ||||||||
Net realized gain (loss) | (184,908 | ) | 720,065 | 42,036 | 9,323 | |||||||||||
Net change in unrealized appreciation (depreciation) | (23,581,497 | ) | 3,655,069 | 1,061,595 | 1,013,320 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | (22,657,290 | ) | 4,995,403 | 1,165,647 | 1,074,854 | |||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (1,062,975 | ) | (587,880 | ) | (68,376 | ) | (56,892 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 12,929,102 | (6,853,353 | ) | — | — | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | (10,791,163 | ) | (2,445,830 | ) | 1,097,271 | 1,017,962 | ||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 10,793,865 | 13,239,695 | 3,033,039 | 2,015,077 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 2,702 | $ | 10,793,865 | $ | 4,130,310 | $ | 3,033,039 | ||||||||
|
| |||||||||||||||
| 332 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 141,667 | $ | 102,844 | $ | 1,268,057 | $ | 617,015 | ||||||||
Net realized gain (loss) | (81,742 | ) | (138,401 | ) | (5,450,316 | ) | (592,956 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | 824,250 | 1,271,635 | (8,014,155 | ) | 14,536,607 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 884,175 | 1,236,078 | (12,196,414 | ) | 14,560,666 | |||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (111,346 | ) | (95,139 | ) | (1,354,645 | ) | (364,846 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | 2,562,673 | — | 11,946,711 | 37,207,699 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | 3,335,502 | 1,140,939 | (1,604,348 | ) | 51,403,519 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 2,622,243 | 1,481,304 | 62,965,790 | 11,562,271 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 5,957,745 | $ | 2,622,243 | $ | 61,361,442 | $ | 62,965,790 | ||||||||
|
|
|
| |||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 333 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | |||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 999,855 | $ | 1,009,318 | $ | 990,911 | $ | 464,971 | ||||||||
Net realized gain (loss) | 3,329,359 | 1,987,339 | (550,668 | ) | 42,691 | |||||||||||
Net change in unrealized appreciation (depreciation) | 2,599,949 | 5,484,279 | 2,783,522 | 10,935,848 | ||||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 6,929,163 | 8,480,936 | 3,223,765 | 11,443,510 | ||||||||||||
|
|
|
| |||||||||||||
Distributions to shareholders: (Note 1f) | (1,077,037 | ) | (943,297 | ) | (1,073,757 | ) | (471,993 | ) | ||||||||
|
|
|
| |||||||||||||
Capital share transactions: (Note 2) | (6,828,650 | ) | 6,819,576 | 8,619,703 | 8,019,492 | |||||||||||
|
|
|
| |||||||||||||
Net increase (decrease) in net assets | (976,524 | ) | 14,357,215 | 10,769,711 | 18,991,009 | |||||||||||
Net assets: | ||||||||||||||||
Beginning of year | 48,569,748 | 34,212,533 | 32,896,839 | 13,905,830 | ||||||||||||
|
|
|
| |||||||||||||
End of year | $ | 47,593,224 | $ | 48,569,748 | $ | 43,666,550 | $ | 32,896,839 | ||||||||
|
|
|
| |||||||||||||
| 334 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE United Kingdom ETF | ||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||
Increase (decrease) in net assets: |
| |||||||
Operations: |
| |||||||
Net investment income | $ | 15,398,911 | $ | 4,203,945 | ||||
Net realized gain (loss) | (202,105 | ) | (6,238,675 | ) | ||||
Net change in unrealized appreciation (depreciation) | 8,007,752 | 30,968,158 | ||||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 23,204,558 | 28,933,428 | ||||||
|
| |||||||
Distributions to shareholders: (Note 1f) | (11,671,197 | ) | (2,701,500 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | 396,366,561 | 89,816,466 | ||||||
|
| |||||||
Net increase (decrease) in net assets | 407,899,922 | 116,048,394 | ||||||
Net assets: |
| |||||||
Beginning of year | 205,672,578 | 89,624,184 | ||||||
|
| |||||||
End of year | $ | 613,572,500 | $ | 205,672,578 | ||||
|
| |||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 335 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Cash Flows
Year ended March 31, 2022
| Franklin FTSE Russia ETF | ||||
Cash Flows from Operating Activities |
| |||
Net decrease in net assets resulting from operations | $ | (22,657,290 | ) | |
Adjustments to reconcile net decrease in net assets resulting from operations to net cash used in operating activities: | ||||
Investments securities purchased | (3,592,759 | )* | ||
Investments securities sold | 3,523,658 | |||
Decrease in dividends and interest receivable | 3,246 | |||
Decrease in management fees payable | (1,645 | ) | ||
Decrease in due to custodian | (6,681 | ) | ||
Net change in unrealized depreciation from investments | 23,582,020 | |||
Net change in unrealized appreciation from foreign currency translations | (523 | ) | ||
Net realized loss on investments in securities | 179,344 | |||
|
| |||
Net cash used in operating activities | 1,029,370 | |||
|
| |||
Cash Flows from Financing Activities |
| |||
Distributions paid to shareholders | (1,062,975 | ) | ||
Proceeds from shares sold | 36,389 | * | ||
|
| |||
Net cash provided by financing activities | $ | (1,026,586 | ) | |
|
| |||
Effect of exchange rate on cash | — | |||
|
| |||
Net change in cash | 2,784 | |||
Cash/(bank overdraft) at beginning of year | — | |||
|
| |||
Cash at end of year | $ | 2,784 | ||
|
| |||
*Amount shown excludes in-kind subscriptions of $12,892,713.
| 336 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-five separate funds, twenty-three 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). Each of the Funds are an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of each Fund’s corresponding underlying index.
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.
Equity securities and derivative financial instruments 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. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds’ pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ 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 discounted 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 uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At March 31, 2022, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”).
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds 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 Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.
Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price 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 a variation margin payable or receivable in the Statements of Assets and Liabilities.
Certain or all Funds entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
See Note 8 regarding other derivative information.
d. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Funds. These securities received as collateral are held in segregated accounts with the Funds’ custodian. The Fund cannot repledge or resell these securities received as collateral. As such, the non-cash collateral is excluded from the Statements of Assets and Liabilities. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from
securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.
e. Income and Deferred 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 be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each 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 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 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. Realized gains and losses on security transactions are determined on a specific identification basis. Interest Income and estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain
| franklintempleton.com | Annual Report | 339 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
f. Security Transactions, Investment Income, Expenses and Distributions (continued)
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. These expenses are paid by the Funds or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
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 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
Shares of the Funds 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 Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds 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 Funds.
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.
Effective 4 AM Eastern Time on March 4, 2022, the NYSE Arca, Inc. announced a trading halt of the Franklin FTSE Russia ETF. Effective March 1, 2022, the Franklin FTSE Russia ETF has temporarily suspended new creations of its shares until further notice. Please refer to the prospectus for further detail.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
At March 31, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
| Franklin FTSE Asia ex Japan ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 400,000 | $ | 8,769,376 | 400,000 | $ | 12,605,123 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 400,000 | $ | 8,769,376 | 400,000 | $ | 12,605,123 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Australia ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 150,000 | $ | 4,271,838 | 500,000 | $ | 11,932,219 | ||||||||||||||
Shares redeemed | — | — | (150,000 | ) | (3,448,944 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 150,000 | $ | 4,271,838 | 350,000 | $ | 8,483,275 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Brazil ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 17,500,000 | $ | 372,085,342 | 600,000 | $ | 12,225,064 | ||||||||||||||
Shares redeemed | (300,000 | ) | (6,711,749 | ) | (2,500,000 | ) | (49,972,980 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 17,200,000 | $ | 365,373,593 | (1,900,000 | ) | $ | (37,747,916 | ) | ||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Canada ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 400,000 | $ | 13,859,588 | 550,000 | $ | 15,691,933 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 400,000 | $ | 13,859,588 | 550,000 | $ | 15,691,933 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE China ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 1,600,000 | $ | 43,703,237 | 1,800,000 | $ | 58,841,102 | ||||||||||||||
Shares redeemed | (200,000 | ) | (6,446,795 | ) | (200,000 | ) | (4,906,711 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,400,000 | $ | 37,256,442 | 1,600,000 | $ | 53,934,391 | ||||||||||||||
|
| |||||||||||||||||||
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2. Shares of Beneficial Interest (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin FTSE Europe ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 1,400,000 | $ | 38,599,643 | 5,200,000 | $ | 101,611,880 | ||||||||||||||
Shares redeemed | (3,000,000 | ) | (83,395,700 | ) | (1,600,000 | ) | (38,572,665 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (1,600,000 | ) | $ | (44,796,057 | ) | 3,600,000 | $ | 63,039,215 | ||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 200,000 | $ | 5,879,630 | 400,000 | $ | 9,846,602 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 200,000 | $ | 5,879,630 | 400,000 | $ | 9,846,602 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE France ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 3,120,862 | — | $ | — | ||||||||||||||
Shares redeemed | — | — | (200,000 | ) | (4,055,531 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 100,000 | $ | 3,120,862 | (200,000 | ) | $ | (4,055,531 | ) | ||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Germany ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 400,000 | $ | 10,617,319 | 150,000 | $ | 3,514,675 | ||||||||||||||
Shares redeemed | — | — | (50,000 | ) | (1,158,283 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 400,000 | $ | 10,617,319 | 100,000 | $ | 2,356,392 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 150,000 | $ | 3,959,042 | — | $ | — | ||||||||||||||
Shares redeemed | — | — | (150,000 | ) | (3,730,050 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 150,000 | $ | 3,959,042 | (150,000 | ) | $ | (3,730,050 | ) | ||||||||||||
|
| |||||||||||||||||||
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
| Franklin FTSE India ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 750,000 | $ | 23,985,026 | 350,000 | $ | 9,485,085 | ||||||||||||||
Shares redeemed | — | — | (50,000 | ) | (891,851 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 750,000 | $ | 23,985,026 | 300,000 | $ | 8,593,234 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Japan ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 11,400,000 | $ | 340,542,812 | 7,800,000 | $ | 210,140,358 | ||||||||||||||
Shares redeemed | (2,400,000 | ) | (71,759,152 | ) | (2,400,000 | ) | (72,663,742 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 9,000,000 | $ | 268,783,660 | 5,400,000 | $ | 137,476,616 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 400,000 | $ | 12,446,606 | 600,000 | $ | 18,420,312 | ||||||||||||||
Shares redeemed | (400,000 | ) | (12,142,770 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | — | $ | 303,836 | 600,000 | $ | 18,420,312 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Latin America ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 2,231,798 | 100,000 | $ | 2,191,582 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 100,000 | $ | 2,231,798 | 100,000 | $ | 2,191,582 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Mexico ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 200,000 | $ | 4,861,121 | 50,000 | $ | 888,685 | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 200,000 | $ | 4,861,121 | 50,000 | $ | 888,685 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Russia ETF | ||||||||||||||||||||
| Year Ended March 31, 20221,2 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 400,000 | $ | 12,929,102 | 100,000 | $ | 2,631,824 | ||||||||||||||
Shares redeemed | — | — | (400,000 | ) | (9,485,177 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 400,000 | $ | 12,929,102 | (300,000 | ) | $ | (6,853,353 | ) | ||||||||||||
|
| |||||||||||||||||||
| franklintempleton.com | Annual Report | 343 | ||||||||
2. Shares of Beneficial Interest (continued)
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin FTSE South Africa ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 100,000 | $ | 2,562,673 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 100,000 | $ | 2,562,673 | — | $ | — | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE South Korea ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 800,000 | $ | 23,052,455 | 1,300,000 | $ | 37,207,699 | ||||||||||||||
Shares redeemed | (400,000 | ) | (11,105,744 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 400,000 | $ | 11,946,711 | 1,300,000 | $ | 37,207,699 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 300,000 | $ | 10,413,668 | 1,000,000 | $ | 30,006,453 | ||||||||||||||
Shares redeemed | (500,000 | ) | (17,242,318 | ) | (800,000 | ) | (23,186,877 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (200,000 | ) | $ | (6,828,650 | ) | 200,000 | $ | 6,819,576 | ||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE Taiwan ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 300,000 | $ | 13,007,178 | 200,000 | $ | 8,019,492 | ||||||||||||||
Shares redeemed | (100,000 | ) | (4,387,475 | ) | — | — | ||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 200,000 | $ | 8,619,703 | 200,000 | $ | 8,019,492 | ||||||||||||||
|
| |||||||||||||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||||||||||
| Year Ended March 31, 2022 | Year Ended March 31, 2021 | |||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold | 16,400,000 | $ | 419,981,074 | 5,250,000 | $ | 119,960,341 | ||||||||||||||
Shares redeemed | (950,000 | ) | (23,614,513 | ) | (1,600,000 | ) | (30,143,875 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 15,450,000 | $ | 396,366,561 | 3,650,000 | $ | 89,816,466 | ||||||||||||||
|
| |||||||||||||||||||
1. Effective 4 AM Eastern Time on March 4, 2022: The NYSE Arca, Inc. announced a trading halt of the Fund.
2. Effective March 1, 2022: The Fund has temporarily suspended new creations of its shares until further notice. Please refer to the prospectus for further detail.
| 344 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
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:
| Subsidiary | Affiliation | |
Franklin Advisers, Inc (Advisers) | Investment manager | |
Franklin Advisory Services, LLC (FASL) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Distributors, LLC. (Distributors) | Principal underwriter | |
a. Management Fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fees are based on the average daily net assets of each of the Funds as follows:
| Annualized Fee Rate | ||
Franklin FTSE Asia ex Japan ETF | 0.19% | |
Franklin FTSE Australia ETF | 0.09% | |
Franklin FTSE Brazil ETF | 0.19% | |
Franklin FTSE Canada ETF | 0.09% | |
Franklin FTSE China ETF | 0.19% | |
Franklin FTSE Europe ETF | 0.09% | |
Franklin FTSE Europe Hedged ETF | 0.09% | |
Franklin FTSE France ETF | 0.09% | |
Franklin FTSE Germany ETF | 0.09% | |
Franklin FTSE Hong Kong ETF | 0.09% | |
Franklin FTSE India ETF | 0.19% | |
Franklin FTSE Italy ETF | 0.09% | |
Franklin FTSE Japan ETF | 0.09% | |
Franklin FTSE Japan Hedged ETF | 0.09% | |
Franklin FTSE Latin America ETF | 0.19% | |
Franklin FTSE Mexico ETF | 0.19% | |
Franklin FTSE Russia ETF | 0.19% | |
Franklin FTSE Saudi Arabia ETF | 0.39% | |
Franklin FTSE South Africa ETF | 0.19% | |
Franklin FTSE South Korea ETF | 0.09% | |
Franklin FTSE Switzerland ETF | 0.09% | |
Franklin FTSE Taiwan ETF | 0.19% | |
Franklin FTSE United Kingdom ETF | 0.09% | |
| franklintempleton.com | Annual Report | 345 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
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. Investments in Affiliated Management Investment Companies
Certain or all Funds invest 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 Funds do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements 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, investments in affiliated management investment companies were as follows:
| Value at Beginning of Year | Purchases | Sales | Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Value at End of Year | Number of Shares | Investment Income | |||||||||||||||||||||||||
| Franklin FTSE Asia ex Japan ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Income from Securities loaned | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 58,810 | $ | 1,921,077 | $ | (1,973,062 | ) | $ | — | $ | — | $ | 6,825 | 6,825 | $ | — | ||||||||||||||||
| Franklin FTSE China ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Income from Securities loaned | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 517,219 | $ | 19,771,120 | $ | (20,210,214 | ) | $ | — | $ | — | $ | 78,125 | 78,125 | $ | 72 | ||||||||||||||||
| Franklin FTSE Japan ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 292,353 | $ | 21,044,412 | $ | (21,085,019 | ) | $ | — | $ | — | $ | 251,746 | 251,746 | $ | — | ||||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Dividend Income | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 13,379 | $ | 1,665,636 | $ | (983,257 | ) | $ | — | $ | — | $ | 695,758 | 695,758 | $ | ��� | ||||||||||||||||
| Franklin FTSE United Kingdom ETF |
| |||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Income from Securities loaned | |||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 0.01% | $ | 230,050 | $ | 6,219,784 | $ | (5,829,004 | ) | $ | — | $ | — | $ | 620,830 | 620,830 | $ | 25 | ||||||||||||||||
d. Other Affiliated Transactions
At March 31, 2022, the shares of the Funds were owned by the following entities:
| Funds | Shares | Percentage of Outstanding Sharesa | ||||||
| Franklin FTSE Europe ETF | ||||||||
Franklin 529 Portfolios | 4,786,439 | 70.4% | ||||||
|
| |||||||
| Franklin FTSE Hong Kong ETF | ||||||||
Franklin Resources Inc. | 40,000 | 5.3% | ||||||
|
| |||||||
| Franklin FTSE Italy ETF | ||||||||
Franklin Resources Inc. | 14,000 | 9.3% | ||||||
|
| |||||||
| 346 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
| Funds | Shares | Percentage of Outstanding Sharesa | ||||||
| Franklin FTSE Japan ETF | ||||||||
Franklin 529 Portfolios | 3,325,991.00 | 11.5% | ||||||
|
| |||||||
| Franklin FTSE Latin America ETF | ||||||||
Franklin Resources Inc. | 50,000 | 16.7% | ||||||
|
| |||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||
Franklin Resources Inc. | 36,000 | 36.0% | ||||||
|
| |||||||
| Franklin FTSE Taiwan ETF | ||||||||
Franklin Resources Inc. | 100,000 | 10.0% | ||||||
|
| |||||||
| Franklin FTSE United Kingdom ETF | ||||||||
Franklin Managed Income Fund | 1,250,000.00 | 5.2% | ||||||
|
| |||||||
aInvestment activities of significant shareholders could have a material impact on the Funds.
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:
Franklin FTSE | Franklin FTSE | Franklin FTSE | Franklin FTSE | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 1,019,119 | $ | 471,552 | $ | 11,677,841 | $ | 259,413 | ||||||||
Short term | 488,309 | 115,476 | 33,487,474 | 110,204 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 1,507,428 | $ | 587,028 | $ | 45,165,315 | $ | 369,617 | ||||||||
|
| |||||||||||||||
Franklin ETF | Franklin FTSE Europe ETF | Franklin ETF | Franklin FTSE France ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 6,279,868 | $ | 2,559,181 | $ | 198,810 | $ | 117,194 | ||||||||
Short term | 2,500,332 | 207,121 | 237,115 | 33,108 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 8,780,200 | $ | 2,766,302 | $ | 435,925 | $ | 150,302 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 334,959 | $ | 608,317 | $ | 911,568 | $ | 305,156 | ||||||||
Short term | 98,332 | 56,351 | 116,340 | 0 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 433,291 | $ | 664,668 | $ | 1,027,908 | $ | 305,156 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | Annual Report | 347 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 7,872,857 | $ | — | $ | 247,090 | $ | 642,825 | ||||||||
Short term | 1,327,693 | — | 34,299 | 49,392 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 9,200,550 | $ | — | $ | 281,389 | $ | 692,217 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | Franklin FTSE South Korea ETF | |||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 312,362 | $ | 3,202 | $ | 217,461 | $ | 2,942,488 | ||||||||
Short term | 235,236 | 0 | 48,981 | 2,571,495 | ||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 547,598 | $ | 3,202 | $ | 266,442 | $ | 5,513,983 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term | $ | 205,146 | $ | 204,085 | $ | 4,322,961 | ||||||||||
Short term | 211,939 | 361,975 | 2,707,270 | |||||||||||||
|
| |||||||||||||||
Total capital loss carryforwards | $ | 417,085 | $ | 566,060 | $ | 7,030,231 | ||||||||||
|
| |||||||||||||||
For tax purposes, the Funds may elect to defer any portion of late-year ordinary loss to the first day of the following fiscal year. At March 31, 2022, the deferred losses were as follows:
| Franklin FTSE India ETF | ||||
Late-year ordinary losses | $ | (319,958 | ) | |
The tax character of distributions paid during the years ended March 31, 2022 and 2021, were as follows:
| Franklin FTSE Asia ex Japan ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 744,268 | $ | 347,651 | ||||
|
| |||||||
| Franklin FTSE Australia ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,262,140 | $ | 369,523 | ||||
|
| |||||||
| Franklin FTSE Brazil ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 16,614,538 | $ | 3,244,165 | ||||
|
| |||||||
| 348 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE Canada ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 639,656 | $ | 170,739 | ||||
|
| |||||||
| Franklin FTSE China ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,744,579 | $ | 880,709 | ||||
|
| |||||||
| Franklin FTSE Europe ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 7,497,235 | $ | 4,581,765 | ||||
|
| |||||||
| Franklin FTSE Europe Hedged ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 666,937 | $ | 93,163 | ||||
|
| |||||||
| Franklin FTSE France ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 270,848 | $ | 109,487 | ||||
|
| |||||||
| Franklin FTSE Germany ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 404,523 | $ | 182,573 | ||||
|
| |||||||
| Franklin FTSE Hong Kong ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 478,429 | $ | 524,795 | ||||
|
| |||||||
| Franklin FTSE India ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,055,912 | $ | 92,142 | ||||
|
| |||||||
| Franklin FTSE Italy ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 166,253 | $ | 86,540 | ||||
|
| |||||||
| Franklin FTSE Japan ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 15,304,771 | $ | 8,307,221 | ||||
|
| |||||||
| Franklin FTSE Japan Hedged ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 162,493 | $ | — | ||||
|
| |||||||
| franklintempleton.com | Annual Report | 349 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE Latin America ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 304,300 | $ | 50,024 | ||||
|
| |||||||
| Franklin FTSE Mexico ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 302,647 | $ | 79,915 | ||||
|
| |||||||
| Franklin FTSE Russia ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,062,975 | $ | 587,880 | ||||
|
| |||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 68,376 | $ | 56,892 | ||||
|
| |||||||
| Franklin FTSE South Africa ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 111,346 | $ | 95,139 | ||||
|
| |||||||
| Franklin FTSE South Korea ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,354,645 | $ | 364,846 | ||||
|
| |||||||
| Franklin FTSE Switzerland ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,077,037 | $ | 943,297 | ||||
|
| |||||||
| Franklin FTSE Taiwan ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 1,073,757 | $ | 471,993 | ||||
|
| |||||||
| Franklin FTSE United Kingdom ETF | ||||||||
| 2022 | 2021 | |||||||
Distributions paid from ordinary income | $ | 11,671,197 | $ | 2,701,500 | ||||
|
| |||||||
| 350 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2022, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin FTSE Asia ex Japan | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Cost of investments | $ | 38,778,292 | $ | 24,983,153 | $ | 496,008,802 | $ | 35,808,022 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 4,712,314 | $ | 5,255,472 | $ | 42,243,107 | $ | 8,403,579 | ||||||||
Unrealized depreciation | (4,627,847 | ) | (314,806 | ) | (14,240,217 | ) | (962,007 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 84,467 | $ | 4,940,666 | $ | 28,002,890 | $ | 7,441,572 | ||||||||
|
| |||||||||||||||
Distributions earnings – undistributed ordinary Income | $ | 80,254 | $ | 366,760 | $ | 5,392,384 | $ | 204,958 | ||||||||
|
| |||||||||||||||
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged | Franklin FTSE France ETF | |||||||||||||
Cost of investments | $ | 141,841,998 | $ | 167,421,899 | $ | 21,954,588 | $ | 9,777,252 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 6,746,359 | $ | 26,183,938 | $ | 1,188,291 | $ | 1,094,332 | ||||||||
Unrealized depreciation | (37,077,755 | ) | (10,059,879 | ) | (1,532,267 | ) | (794,720 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (30,331,396 | ) | $ | 16,124,059 | $ | (343,976 | ) | $ | 299,612 | ||||||
|
| |||||||||||||||
Distributions earnings – undistributed ordinary Income and Capital Gains | $ | 435,075 | $ | 741,054 | $ | 610,496 | $ | 17,864 | ||||||||
|
| |||||||||||||||
Franklin FTSE Germany ETF | Franklin FTSE Hong Kong | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Cost of investments | $ | 18,574,594 | $ | 18,829,465 | $ | 43,207,119 | $ | 3,436,784 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 414,801 | $ | 1,451,108 | $ | 8,832,168 | $ | 414,757 | ||||||||
Unrealized depreciation | (2,227,814 | ) | (2,773,459 | ) | (1,012,418 | ) | (153,562 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (1,813,013 | ) | $ | (1,322,351 | ) | $ | 7,819,750 | $ | 261,195 | ||||||
|
| |||||||||||||||
Distributions earnings – undistributed ordinary Income | $ | 35,209 | $ | 84,420 | $ | — | $ | 13,456 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||
Cost of investments | $ | 830,013,194 | $ | 27,663,409 | $ | 6,783,262 | $ | 9,906,248 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 44,220,002 | $ | 973,822 | $ | 1,000,988 | $ | 2,543,356 | ||||||||
Unrealized depreciation | (93,308,714 | ) | (3,415,820 | ) | (239,521 | ) | (79,819 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (49,088,712 | ) | $ | (2,441,998 | ) | $ | 761,467 | $ | 2,463,537 | ||||||
|
| |||||||||||||||
Distributions earnings – undistributed ordinary Income and Capital Gains | $ | 6,904,832 | $ | 918,103 | $ | 51,060 | $ | 14,567 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | Annual Report | 351 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia | Franklin FTSE South Africa | Franklin FTSE South Korea | |||||||||||||
Cost of investments | $ | 22,662,434 | $ | 2,481,070 | $ | 4,793,223 | $ | 64,034,257 | ||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | — | $ | 1,647,728 | $ | 1,431,975 | $ | 1,241,104 | ||||||||
Unrealized depreciation | (22,662,434 | ) | (1,524 | ) | (274,337 | ) | (4,746,506 | ) | ||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | (22,662,434 | ) | $ | 1,646,204 | $ | 1,157,638 | $ | (3,505,402 | ) | ||||||
|
| |||||||||||||||
Distributions earnings – undistributed ordinary Income | $ | 34,803 | $ | 4,783 | $ | 62,319 | $ | 197,878 | ||||||||
|
| |||||||||||||||
Franklin FTSE | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom | ||||||||||||||
Cost of investments | $ | 43,087,879 | $ | 30,471,924 | $ | 600,071,597 | ||||||||||
|
| |||||||||||||||
Unrealized appreciation | $ | 4,782,032 | $ | 13,441,400 | $ | 48,412,258 | ||||||||||
Unrealized depreciation | (1,054,801 | ) | (237,879 | ) | (40,831,908 | ) | ||||||||||
|
| |||||||||||||||
Net unrealized appreciation (depreciation) | $ | 3,727,231 | $ | 13,203,521 | $ | 7,580,350 | ||||||||||
|
| |||||||||||||||
Distributions earnings – undistributed ordinary Income | $ | 375,394 | $ | 10,447 | $ | 6,435,619 | ||||||||||
|
| |||||||||||||||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions, financial futures transactions, passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2022, were as follows:
| Franklin FTSE Asia ex Japan ETF | Franklin FTSE ETF | Franklin FTSE Brazil ETF | Franklin ETF | |||||||||||||
Purchases | $ | 11,014,967 | $ | 3,814,475 | $ | 409,543,975 | $ | 1,819,144 | ||||||||
Sales | $ | 3,370,008 | $ | 3,822,330 | $ | 42,580,404 | $ | 1,719,327 | ||||||||
Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE | Franklin ETF | |||||||||||||
Purchases | $ | 53,447,666 | $ | 11,286,141 | $ | 3,194,430 | $ | 592,285 | ||||||||
Sales | $ | 15,597,299 | $ | 13,602,383 | $ | 2,161,775 | $ | 575,622 | ||||||||
Franklin ETF | Franklin FTSE | Franklin FTSE India ETF | Franklin Italy ETF | |||||||||||||
Purchases | $ | 1,041,261 | $ | 5,518,818 | $ | 27,006,500 | $ | 512,838 | ||||||||
Sales | $ | 1,020,755 | $ | 1,734,441 | $ | 4,075,857 | $ | 546,335 | ||||||||
| 352 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged | Franklin FTSE Latin America | Franklin ETF | |||||||||||||
Purchases | $ | 19,804,216 | $ | 3,178,395 | $ | 2,585,818 | $ | 2,105,200 | ||||||||
Sales | $ | 21,459,900 | $ | 914,390 | $ | 910,063 | $ | 2,145,642 | ||||||||
Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia | Franklin FTSE South Africa | Franklin FTSE South Korea ETF | |||||||||||||
Purchases | $ | 3,592,759 | $ | 542,969 | $ | 565,363 | $ | 29,886,213 | ||||||||
Sales | $ | 3,523,658 | $ | 547,560 | $ | 536,243 | $ | 18,371,250 | ||||||||
Franklin FTSE ETF | Franklin FTSE Taiwan ETF | Franklin FTSE | ||||||||||||||
Purchases | $ | 6,952,474 | $ | 16,458,978 | $ | 29,281,642 | ||||||||||
Sales | $ | 6,619,353 | $ | 7,878,625 | $ | 23,825,208 | ||||||||||
In-kind transactions associated with creation and redemptions for the year ended March 31, 2022, were as follows:
Franklin FTSE Asia ex Japan | Franklin FTSE Australia ETF | Franklin FTSE ETF | Franklin ETF | |||||||||||||
Cost of Securities Received | $ | 1,081,778 | $ | 4,270,736 | $ | — | $ | 13,829,474 | ||||||||
Value of Securities Delivereda | $ | — | $ | — | $ | — | $ | — | ||||||||
Franklin China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged | Franklin ETF | |||||||||||||
Cost of Securities Received | $ | 5,408,205 | $ | 38,243,001 | $ | 5,678,991 | $ | 3,114,402 | ||||||||
Value of Securities Delivereda | $ | 5,410,246 | $ | 82,379,694 | $ | — | $ | — | ||||||||
Franklin ETF | Franklin FTSE ETF | Franklin FTSE ETF | Franklin Italy ETF | |||||||||||||
Cost of Securities Received | $ | 10,600,756 | $ | 131,922 | $ | — | $ | — | ||||||||
Value of Securities Delivereda | $ | — | $ | — | $ | — | $ | — | ||||||||
Franklin Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE | Franklin ETF | |||||||||||||
Cost of Securities Received | $ | 336,779,851 | $ | 11,576,406 | $ | 553,859 | $ | 4,855,477 | ||||||||
Value of Securities Delivereda | $ | 70,532,561 | $ | 12,013,260 | $ | — | $ | — | ||||||||
Franklin Russia ETF | Franklin FTSE ETF | Franklin FTSE ETF | Franklin FTSE South Korea ETF | |||||||||||||
Cost of Securities Received | $ | 12,892,713 | $ | — | $ | 2,560,382 | $ | — | ||||||||
Value of Securities Delivereda | $ | — | $ | — | $ | — | $ | — | ||||||||
| franklintempleton.com | Annual Report | 353 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
| Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom | ||||||||||||||
Cost of Securities Received | $ | 10,266,498 | $ | — | $ | 415,218,458 | ||||||||||
Value of Securities Delivereda | $ | 16,959,884 | $ | — | $ | 23,183,264 | ||||||||||
aRealized gains and losses from in-kind redemptions, as shown on the Statements of Operations, are not recognized by the Funds for Tax purposes.
At March 31, 2022, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
Franklin FTSE | Franklin FTSE China ETF | Franklin FTSE | ||||||||||
| Securities lending transactionsa: | ||||||||||||
Equity investmentsb | $ | 6,825 | $ | 78,125 | $ | 620,830 | ||||||
|
| |||||||||||
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Political and financial uncertainty in many foreign regions may increase market volatility and the economic risk of investing in foreign securities. In addition, certain foreign securities may not be as liquid as U.S. securities.
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 certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Funds have exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments was impaired. The Funds could determine at any time that certain of the most affected securities have little or no value. In addition, any exposure that the Funds may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Funds, even beyond any direct exposure the Funds may have to Russian issuers or issuers in other countries affected by the invasion.
Beginning on February 28, 2022, the Moscow Exchange, where Russian equity securities are traded, closed for an extended holiday. The Valuation Committee determined that based on their analysis of the market and access to market participants, the Russian equity securities held by the Franklin FTSE Europe ETF, Franklin FTSE Europe Hedged ETF, Franklin FTSE Russia ETF and Franklin FTSE United Kingdom ETF had little or no value at March 31, 2022.
| 354 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
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.
8. Other Derivative Information
At March 31, 2022, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
| Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
| Franklin FTSE Asia ex Japan ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | — | Variation margin on futures contracts | $ | — | ||||||
|
|
|
| |||||||||
Totals | $ | — | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Brazil ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 213,502 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 213,502 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Europe ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 71,733 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 71,733 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||
Foreign exchange Contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 242,835 | Unrealized depreciation on OTC forward exchange contracts | $ | 20,304 | ||||||
|
|
|
| |||||||||
Totals | $ | 242,835 | $ | 20,304 | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 587 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 587 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE India ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 1,364 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 1,364 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Japan ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 147,742a | Variation margin on futures contracts | $ | — | ||||||
|
|
|
| |||||||||
Totals | $ | 147,742 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||
Foreign exchange Contracts | Unrealized appreciation on OTC forward exchange contracts | $ | 617,914 | Unrealized depreciation on OTC forward exchange contracts | $ | 67,566 | ||||||
Equity Contracts | Variation margin on futures contracts | $ | 1,445 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 619,359 | $ | 67,566 | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Latin America ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 1,010 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 1,010 | $ | — | ||||||||
|
|
|
| |||||||||
| franklintempleton.com | Annual Report | 355 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
| Statements of Assets and Liabilities Location | Fair Value | Statements of Assets and Liabilities Location | Fair Value | |||||||||
| Franklin FTSE South Korea ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 37,942 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 37,942 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 34,416 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 34,416 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||
Equity Contracts | Variation margin on futures contracts | $ | 231,258 | a | Variation margin on futures contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | 231,258 | $ | — | ||||||||
|
|
|
| |||||||||
aThis amount reflects the cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statements 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 Funds’ Statements of Operations was as follows:
| Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
| Franklin FTSE Asia ex Japan ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | (35,205 | ) | Futures contracts | $ | 8,013 | |||||
|
|
|
| |||||||||
Totals | $ | (35,205 | ) | $ | 8,013 | |||||||
|
|
|
| |||||||||
| Franklin FTSE Brazil ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | 8,892 | Futures contracts | $ | 200,128 | ||||||
|
|
|
| |||||||||
Totals | $ | 8,892 | $ | 200,128 | ||||||||
|
|
|
| |||||||||
| Franklin FTSE China ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | (136,258 | ) | Futures contracts | $ | 5,342 | |||||
|
|
|
| |||||||||
Totals | $ | (136,258 | ) | $ | 5,342 | |||||||
|
|
|
| |||||||||
| Franklin FTSE Europe ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||
Equity contracts | Futures contracts | $ | 54,362 | Futures contracts | $ | 66,549 | ||||||
|
|
|
| |||||||||
Totals | $ | 54,362 | $ | 66,549 | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized |
| |||||||||
Equity contracts | Futures contracts | $ | 10,305 | Futures contracts | $ | (2,183 | ) | |||||
Foreign exchange contracts | Forward exchange contracts | $ | 1,038,539 | Forward exchange contracts | $ | (75,006 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 1,048,844 | $ | (77,189 | ) | |||||||
|
|
|
| |||||||||
| 356 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
| Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
| Franklin FTSE Germany ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | 983 | Futures contracts | $ | — | ||||||
|
|
|
| |||||||||
Totals | $ | 983 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | (7,052 | ) | Futures contracts | $ | 587 | |||||
|
|
|
| |||||||||
Totals | $ | (7,052 | ) | $ | 587 | |||||||
|
|
|
| |||||||||
| Franklin FTSE India ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | (3,447 | ) | Futures contracts | $ | 1,364 | |||||
|
|
|
| |||||||||
Totals | $ | (3,447 | ) | $ | 1,364 | |||||||
|
|
|
| |||||||||
| Franklin FTSE Italy ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | 1,105 | Futures contracts | $ | — | ||||||
|
|
|
| |||||||||
Totals | $ | 1,105 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Japan ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | (221,093 | ) | Futures contracts | $ | 151,366 | |||||
|
|
|
| |||||||||
Totals | $ | (221,093 | ) | $ | 151,366 | |||||||
|
|
|
| |||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||
Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | (23,426 | ) | Futures contracts | $ | 1,056 | |||||
Foreign exchange contracts | Forward exchange contracts | $ | 1,377,586 | Forward exchange contracts | $ | (294,907 | ) | |||||
|
|
|
| |||||||||
Totals | $ | 1,354,160 | $ | (293,851 | ) | |||||||
|
|
|
| |||||||||
| Franklin FTSE Latin America ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized appreciation (depreciation) on: | ||||||||||
Equity contracts | Futures contracts | $ | (524 | ) | Futures contracts | $ | 1,010 | |||||
Foreign exchange contracts | Forward exchange contracts | $ | (19 | ) | ||||||||
|
|
|
| |||||||||
Totals | $ | (543 | ) | $ | 1,010 | |||||||
|
|
|
| |||||||||
| franklintempleton.com | Annual Report | 357 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
| Derivative Contracts Not Accounted for as Hedging Instruments | Statements of Operations Locations | Net Realized Gain (Loss) for the Period | Statements of Operations Locations | Net Change in Unrealized Appreciation (Depreciation) for the Period | ||||||||
| Franklin FTSE Russia ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized appreciation (depreciation) on: | ||||||||||
Foreign exchange contracts | Forward exchange contracts | $ | 61 | Forward exchange contracts | $ | — | ||||||
|
|
|
| |||||||||
Totals | $ | 61 | $ | — | ||||||||
|
|
|
| |||||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized appreciation (depreciation) on: | ||||||||||
Foreign exchange contracts | Forward exchange contracts | $ | (38 | ) | Forward exchange contracts | $ | — | |||||
|
|
|
| |||||||||
Totals | $ | (38 | ) | $ | — | |||||||
|
|
|
| |||||||||
| Franklin FTSE South Korea ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized appreciation (depreciation) on: | ||||||||||
Equity contracts | Futures contracts | $ | (42,446 | ) | Futures contracts | $ | 35,632 | |||||
|
|
|
| |||||||||
Totals | $ | (42,446 | ) | $ | 35,632 | |||||||
|
|
|
| |||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized appreciation (depreciation) on: | ||||||||||
Equity contracts | Futures contracts | $ | (12,337 | ) | Futures contracts | $ | 25,756 | |||||
|
|
|
| |||||||||
Totals | $ | (12,337 | ) | $ | 25,756 | |||||||
|
|
|
| |||||||||
| Franklin FTSE Taiwan ETF | ||||||||||||
Net realized gain (loss) from: |
| Net change in unrealized appreciation (depreciation) on: | ||||||||||
Equity contracts | Futures contracts | $ | (2,809 | ) | Futures contracts | $ | — | |||||
Foreign exchange contracts | Forward exchange contracts | $ | (84 | ) | ||||||||
|
|
|
| |||||||||
Totals | $ | (2,893 | ) | $ | — | |||||||
|
|
|
| |||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||
| Net realized gain (loss) from: | Net change in unrealized appreciation (depreciation) on: | |||||||||||
Equity contracts | Futures contracts | $ | 131,143 | Futures contracts | $ | 238,655 | ||||||
|
|
|
| |||||||||
Totals | $ | 131,143 | $ | 238,655 | ||||||||
|
|
|
| |||||||||
For the year ended March 31, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
Franklin Asia ex Japan ETF | Franklin Brazil ETF | Franklin China ETF | Franklin Europe ETF | |||||||||||||
Futures contracts | $ | 65,964 | $ | 1,631,602 | $ | 238,820 | $ | 850,363 | ||||||||
Foreign exchange contracts | $ | — | $ | — | $ | 10 | $ | — | ||||||||
| 358 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
Franklin Europe Hedged ETF | Franklin Germany ETF | Franklin Hong Kong | Franklin India | |||||||||||||
Futures contracts | $ | 62,397 | $ | 12,791 | $ | 35,009 | $ | 61,502 | ||||||||
Foreign exchange contracts | $ | 54,983,868 | $ | — | $ | — | $ | — | ||||||||
Franklin Italy ETF | Franklin Japan ETF | Franklin Japan Hedged | Franklin Latin America ETF | |||||||||||||
Futures contracts | $ | 2,358 | $ | 3,901,348 | $ | 186,658 | $ | 7,999 | ||||||||
Foreign exchange contracts | $ | — | $ | — | $ | 52,344,295 | $ | — | ||||||||
Franklin Russia ETF | Franklin ETF | Franklin ETF | Franklin FTSE Switzerland ETF | |||||||||||||
Futures contracts | $ | — | $ | — | $ | 275,244 | $ | 464,589 | ||||||||
Foreign exchange contracts | $ | 1,614 | $ | 1272 | $ | — | $ | — | ||||||||
Franklin Taiwan ETF | Franklin ETF | |||||||||||||||
Futures contracts | $ | 18,391 | $ | 1,984,114 | ||||||||||||
Foreign exchange contracts | $ | — | $ | — | ||||||||||||
At March 31, 2022, the Funds’ OTC derivative assets and liabilities are as follows:
| Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities | ||||||||
| Assetsa | Liabilitiesa | |||||||
| Franklin FTSE Europe Hedged ETF | ||||||||
Foreign exchange contracts | $ | 242,835 | $ | (20,304 | ) | |||
|
| |||||||
| Franklin FTSE Japan Hedged ETF | ||||||||
Foreign exchange contracts | $ | 617,914 | $ | (67,566 | ) | |||
|
| |||||||
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
| franklintempleton.com | Annual Report | 359 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
At March 31, 2022, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
| Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
| Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Receiveda | Cash Collateral Receiveda | Net Amount (Not less than zero) | ||||||||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||
BOFA | $ | 46,159 | $ | (16,050 | ) | $ | — | $ | — | $ | 30,109 | |||||||||
DBAB | 106,449 | (3,957 | ) | — | — | 102,492 | ||||||||||||||
HSBK | 37,754 | (82 | ) | — | — | 37,672 | ||||||||||||||
MSCO | 14,583 | (149 | ) | — | — | 14,434 | ||||||||||||||
UBSW | 37,890 | (66 | ) | — | — | 37,824 | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 242,835 | $ | (20,304 | ) | $ | — | $ | — | $ | 222,531 | |||||||||
|
| |||||||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||
DBAB | $ | 185,242 | $ | (23,869 | ) | $ | — | $ | — | $ | 161,373 | |||||||||
HSBK | 179,400 | (18,075 | ) | — | — | 161,325 | ||||||||||||||
MSCO | 73,552 | (7,531 | ) | — | — | 66,021 | ||||||||||||||
UBSW | 179,720 | (18,091 | ) | — | — | 161,629 | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 617,914 | $ | (67,566 | ) | $ | — | $ | — | $ | 550,348 | |||||||||
|
| |||||||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
At March 31, 2022, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
| Amounts Not Offset in the Statements of Assets and Liabilities | ||||||||||||||||||||
| Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero | ||||||||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||
BOFA | $ | 16,050 | $ | (16,050 | ) | $ | — | $ | — | $ | — | |||||||||
DBAB | 3,957 | (3,957 | ) | — | — | — | ||||||||||||||
HSBK | 82 | (82 | ) | — | — | — | ||||||||||||||
MSCO | 149 | (149 | ) | — | — | — | ||||||||||||||
UBSW | 66 | (66 | ) | — | — | — | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 20,304 | $ | (20,304 | ) | $ | — | $ | — | $ | — | |||||||||
|
| |||||||||||||||||||
| 360 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
| Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities | Financial Instruments Available for Offset | Financial Instruments Collateral Pledgeda | Cash Collateral Pledgeda | Net Amount (Not less than zero | ||||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||
DBAB | $ | 23,869 | $ | (23,869 | ) | $ | — | $ | — | $ | — | |||||||||
HSBK | 18,075 | (18,075 | ) | — | — | — | ||||||||||||||
MSCO | 7,531 | (7,531 | ) | — | — | — | ||||||||||||||
UBSW | 18,091 | (18,091 | ) | — | — | — | ||||||||||||||
|
| |||||||||||||||||||
Total | $ | 67,566 | $ | (67,566 | ) | $ | — | $ | — | $ | — | |||||||||
|
| |||||||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
See Note 1(c) regarding derivative financial instruments.
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.
A summary of inputs used as of March 31, 2022, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin FTSE Asia ex Japan ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 38,855,934 | $ | — | $ | — | C | $ | 38,855,934 | |||||||
Short-Term Investments | 6,825 | — | — | 6,825 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 38,862,759 | $ | — | $ | — | $ | 38,862,759 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Australia ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 29,923,819 | $ | — | $ | — | $ | 29,923,819 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Brazil ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 524,011,692 | $ | — | $ | — | $ | 524,011,692 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 213,502 | $ | — | $ | — | $ | 213,502 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | Annual Report | 361 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin FTSE Canada ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 43,249,594 | $ | — | $ | — | $ | 43,249,594 | ||||||||
|
| |||||||||||||||
| Franklin FTSE China ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 111,432,476 | $ | — | $ | — | C | $ | 111,432,476 | |||||||
Short-Term Investments | 78,125 | — | — | 78,125 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 111,510,601 | $ | — | $ | — | $ | 111,510,601 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Europe ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 183,545,958 | $ | — | $ | — | C | $ | 183,545,958 | |||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 71,733 | $ | — | $ | — | $ | 71,733 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 21,610,612 | $ | — | $ | — | C | $ | 21,610,612 | |||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 242,835 | $ | — | $ | 242,835 | ||||||||
|
| |||||||||||||||
| Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 20,304 | $ | — | $ | 20,304 | ||||||||
|
| |||||||||||||||
| Franklin FTSE France ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 10,076,864 | $ | — | $ | — | $ | 10,076,864 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Germany ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 16,761,581 | $ | — | $ | — | $ | 16,761,581 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 17,507,114 | $ | — | $ | — | $ | 17,507,114 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 587 | $ | — | $ | — | $ | 587 | ||||||||
|
| |||||||||||||||
| 362 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin FTSE India ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 51,026,869 | $ | — | $ | — | $ | 51,026,869 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 1,364 | $ | — | $ | — | $ | 1,364 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Italy ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 3,697,979 | $ | — | $ | — | $ | 3,697,979 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Japan ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 780,672,736 | $ | — | $ | — | $ | 780,672,736 | ||||||||
Short-Term Investments | 251,746 | — | — | 251,746 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 780,924,482 | $ | — | $ | — | $ | 780,924,482 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 147,742 | $ | — | $ | — | $ | 147,742 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 24,525,653 | $ | — | $ | — | $ | 24,525,653 | ||||||||
Short-Term Investments | 695,758 | — | — | 695,758 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 25,221,411 | $ | — | $ | — | $ | 25,221,411 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 617,914 | $ | — | $ | 617,914 | ||||||||
Futures Contracts | 1,445 | — | — | 1,445 | ||||||||||||
|
| |||||||||||||||
Total Other Financial Instruments | $ | 1,445 | $ | 617,914 | $ | — | $ | 619,359 | ||||||||
|
| |||||||||||||||
| Liabilities: | ||||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Forward Exchange Contracts | $ | — | $ | 67,566 | $ | — | $ | 67,566 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Latin America ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 7,544,729 | $ | — | $ | — | $ | 7,544,729 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 1,010 | $ | — | $ | — | $ | 1,010 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Mexico ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 12,369,785 | $ | — | $ | — | $ | 12,369,785 | ||||||||
|
| |||||||||||||||
| franklintempleton.com | Annual Report | 363 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin FTSE Russia ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | — | $ | — | $ | — | c | $ | — | |||||||
|
| |||||||||||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 4,127,274 | $ | — | $ | — | $ | 4,127,274 | ||||||||
|
| |||||||||||||||
| Franklin FTSE South Africa ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 5,950,861 | $ | — | $ | — | $ | 5,950,861 | ||||||||
|
| |||||||||||||||
| Franklin FTSE South Korea ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 60,528,855 | $ | — | $ | — | C | $ | 60,528,855 | |||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 37,942 | $ | — | $ | — | $ | 37,942 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 46,815,110 | $ | — | $ | — | $ | 46,815,110 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 34,416 | $ | — | $ | — | $ | 34,416 | ||||||||
|
| |||||||||||||||
| Franklin FTSE Taiwan ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 43,675,445 | $ | — | $ | — | $ | 43,675,445 | ||||||||
|
| |||||||||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
Investments in Securities:a | ||||||||||||||||
Equity Investments:b | $ | 607,031,117 | c | $ | — | $ | — | C | $ | 607,031,117 | ||||||
Short-Term Investments | 620,830 | — | — | 620,830 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 607,651,947 | $ | — | $ | — | $ | 607,651,947 | ||||||||
|
| |||||||||||||||
Other Financial Instruments: | ||||||||||||||||
Futures Contracts | $ | 231,258 | $ | — | $ | — | $ | 231,258 | ||||||||
|
| |||||||||||||||
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and convertible preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at March 31, 2022.
| 364 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
A reconciliation in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 assets and/or liabilities at the beginning and/or end of the period. At March 31, 2022, the reconciliation is as follows:
| Balance at Beginning of Period | Purchases | Sales | Transfer into Level 3 | Transfer Out of Level 3 | Net Accretion | Net Realized | Net Unrealized | Balanceat End of Period | Net Change in Unrealized Appreciation (Depreciation) on Assets Held at Period End | |||||||||||||||||||||||||||||||
| Franklin FTSE Russia ETF | ||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||
Investments in Securities: | ||||||||||||||||||||||||||||||||||||||||
Equity Investments: | $ | — | $ | 16,485,472 | $ | (3,523,658 | ) | $ | 10,799,550 | $ | — | $ | — | $ | (179,344 | ) | $ | (23,582,020 | ) | $ | — | $ | (23,582,020 | ) | ||||||||||||||||
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.
| Selected Portfolio | ||
| ADR | – American Depositary Receipt | |
| CDI | – Clearing House Electronic Subregister System Depositary Interest | |
| GDR | – Global Depositary Receipt | |
| IDR | – International Depositary Receipt | |
| NVDR | – Non-Voting Depositary Receipt | |
| REIT | – Real Estate Investment Trust | |
| SF | – Single Family | |
| Counterparty | ||
| BOFA | Bank of America Corp. | |
| HSBK | HSBC Bank PLC | |
| MSCO | Morgan Stanley | |
| UBSW | UBS AG | |
| franklintempleton.com | Annual Report | 365 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin FTSE Asia ex Japan ETF, Franklin FTSE Australia ETF, Franklin FTSE Brazil ETF, Franklin FTSE Canada ETF, Franklin FTSE China ETF, Franklin FTSE Europe ETF, Franklin FTSE Europe Hedged ETF, Franklin FTSE France ETF, Franklin FTSE Germany ETF, Franklin FTSE Hong Kong ETF, Franklin FTSE India ETF, Franklin FTSE Italy ETF, Franklin FTSE Japan ETF, Franklin FTSE Japan Hedged ETF, Franklin FTSE Latin America ETF, Franklin FTSE Mexico ETF, Franklin FTSE Russia ETF, Franklin FTSE Saudi Arabia ETF, Franklin FTSE South Africa ETF, Franklin FTSE South Korea ETF, Franklin FTSE Switzerland ETF, Franklin FTSE Taiwan ETF and Franklin FTSE United Kingdom ETF
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Franklin FTSE Asia ex Japan ETF, Franklin FTSE Australia ETF, Franklin FTSE Brazil ETF, Franklin FTSE Canada ETF, Franklin FTSE China ETF, Franklin FTSE Europe ETF, Franklin FTSE Europe Hedged ETF, Franklin FTSE France ETF, Franklin FTSE Germany ETF, Franklin FTSE Hong Kong ETF, Franklin FTSE India ETF, Franklin FTSE Italy ETF, Franklin FTSE Japan ETF, Franklin FTSE Japan Hedged ETF, Franklin FTSE Latin America ETF, Franklin FTSE Mexico ETF, Franklin FTSE Russia ETF, Franklin FTSE Saudi Arabia ETF, Franklin FTSE South Africa ETF, Franklin FTSE South Korea ETF, Franklin FTSE Switzerland ETF, Franklin FTSE Taiwan ETF, and Franklin FTSE United Kingdom ETF (twenty-three of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Funds”) as of March 31, 2022, the related statements of operations and cash flows for Franklin FTSE Russia ETF for the year ended March 31, 2022, the statements 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 periods indicated therein (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, the changes in each of their net assets for each of the two years in the period ended March 31, 2022, the cash flows for Franklin FTSE Russia ETF, and each of the financial highlights for each of the periods indicated therein 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 brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
May 19, 2022
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
| 366 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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 below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended March 31, 2022:
| Pursuant to: | Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | ||||||||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 362,187 | $ | 1,203,266 | $ | — | $ | 639,656 | |||||||||||
| Pursuant to: | Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | ||||||||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 1,493,221 | $ | 6,816,329 | $ | 572,546 | $ | 321,493 | |||||||||||
Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ | — | $ | — | $ | 43,903 | $ | — | |||||||||||
| Pursuant to: | Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | ||||||||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 404,523 | $ | 1,118 | $ | 452,076 | $ | 152,639 | |||||||||||
| Pursuant to: | Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America | Franklin FTSE Mexico ETF | ||||||||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 15,023,065 | $ | 162,493 | $ | 32,943 | $ | 268,997 | |||||||||||
| Pursuant to: | Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia | Franklin FTSE South Africa | Franklin FTSE South Korea ETF | ||||||||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 1,062,975 | $ | — | $ | 111,364 | $ | 1,354,645 | |||||||||||
| Pursuant to: | Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | |||||||||||||
Qualified Dividend Income (QDI) | §854(b)(1)(B) | $ | 1,077,037 | $ | — | $ | 11,671,197 | |||||||||
| franklintempleton.com | Annual Report | 367 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Tax Information (unaudited) (continued)
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:
| Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||
Foreign Taxes Paid | $ | 83,742 | $ | 12,360 | $ | 588,078 | $ | 142,555 | ||||||||
Foreign Source Income | $ | 964,046 | $ | 1,248,998 | $ | 21,317,539 | $ | 868,074 | ||||||||
| Franklin FTSE China ETF | Franklin FTSE Europe ETF | Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||
Foreign Taxes Paid | $ | 149,111 | $ | 466,812 | $ | 43,226 | $ | 274 | ||||||||
Foreign Source Income | $ | 2,352,807 | $ | 6,787,711 | $ | 575,250 | $ | 317,110 | ||||||||
| Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||
Foreign Taxes Paid | $ | 42,993 | $ | 235 | $ | 287,725 | $ | 21,492 | ||||||||
Foreign Source Income | $ | 581,758 | $ | 520,885 | $ | 329,187 | $ | 178,045 | ||||||||
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | Franklin FTSE Latin America | Franklin FTSE Mexico ETF | |||||||||||||
Foreign Taxes Paid | $ | 1,662,495 | $ | 42,082 | $ | 17,577 | $ | 19,340 | ||||||||
Foreign Source Income | $ | 18,967,975 | $ | 474,830 | $ | 340,088 | $ | 273,767 | ||||||||
| Franklin FTSE Russia ETF | Franklin FTSE Saudi Arabia | Franklin FTSE South Africa | Franklin FTSE South Korea ETF | |||||||||||||
Foreign Taxes Paid | $ | 132,011 | $ | 3,413 | $ | 23,243 | $ | 223,820 | ||||||||
Foreign Source Income | $ | 1,241,127 | $ | 65,423 | $ | 164,914 | $ | 1,822,150 | ||||||||
| Franklin FTSE Switzerland ETF | Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | ||||||||||
Foreign Taxes Paid | $ | 168,856 | $ | 272,525 | $ | 13,909 | ||||||
Foreign Source Income | $ | 1,169,465 | $ | 1,434,517 | $ | 15,464,548 | ||||||
| 368 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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 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) One Franklin Parkway San Mateo, CA 94403-1906 | Lead Independent Trustee | Since 2016 | 61 | 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). | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2020 | 61 | 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). | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2016 | 61 | None | ||||
| 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). | ||||||||
| franklintempleton.com | Annual Report | 369 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee and Chairperson of the Board | Since 2016 | 72 | None | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway | Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| 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) 620 Eighth Avenue, 47th Floor New York, NY 10018 | Chief Compliance Officer | Since July 2021 | Not Applicable | Not Applicable | ||||
| 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) New York, NY 10018 | Vice President – AML Compliance | Since September 2021 | Not Applicable | Not Applicable | ||||
| 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 | ||||||||
| 370 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| 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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| 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) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| 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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| 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 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 2016. 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.
| franklintempleton.com | Annual Report | 371 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
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.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
| 372 | Annual Report | franklintempleton.com | ||||||||
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 Templeton ETF Trust | |||||
| Investment Manager | Distributor | Investor Services | ||||
| Franklin Advisory Services, LLC | Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com | Transfer Agent State Street Bank and 1 Heritage Drive North Quincy, MA 02171 | ||||
| © 2022 Franklin Templeton Investments. All rights reserved. | ETF5 A 06/22 | |||||
| Item 2. | Code of Ethics. |
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
| Item 3. | Audit Committee Financial Expert. |
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial expert is Rohit Baghat and he is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.
| Item 4. | Principal Accountant Fees and Services. |
(a) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $832,900 for the fiscal year ended March 31, 2021 and $942,524 for the fiscal year ended March 31, 2020.
(b) Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c) Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $170,219 for the fiscal year ended March 31, 2021 and $232,351 for the fiscal year ended March 31, 2020. The services for which these fees were paid included tax compliance services related to year-end, and professional fees in connection with tax treatment of equipment lease transactions.
(d) All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended March 31, 2021 and $1,038 for the fiscal year ended March 31, 2020. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $31,861 for the fiscal year ended March 31, 2021 and $208,155 for the fiscal year ended March 31, 2020. The services for which these fees were paid included compliance examination for Investment Advisor Act rule 204-2 and 206(4)-2, the issuance of an Auditor’s Certificate for South Korean regulatory shareholders disclosures, and assets under management certification.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $202,080 for the fiscal year ended March 31, 2021 and $441,544 for the fiscal year ended March 31, 2020.
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
| Item 5. | Audit Committee of Listed Registrants. N/A |
| Item 6. | Schedule of Investments. N/A |
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A |
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. N/A |
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A |
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
| Item 11. | Controls and Procedures. |
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s
management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
| Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A |
| Item 13. | Exhibits. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FRANKLIN TEMPLETON ETF TRUST | ||
| By | /s/ Matthew T. Hinkle | |
| Matthew T. Hinkle | ||
| Chief Executive Officer – Finance and Administration | ||
| Date | June 27, 2022 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By | /s/ Matthew T. Hinkle | |
| Matthew T. Hinkle | ||
| Chief Executive Officer – Finance and Administration | ||
| Date | June 27, 2022 | |
| By | /s/ Vivek Pai | |
| Vivek Pai | ||
| Chief Financial Officer and Chief Accounting Officer | ||
| Date | June 27, 2022 | |