UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23124
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 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: 9/30/22
Item 1. Reports to Stockholders.
| a.) | The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.) |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2022
|
Franklin Emerging Market Core Dividend Tilt Index ETF |
Formerly, Franklin LibertyQ Emerging Markets ETF |
Franklin International Core Dividend Tilt Index ETF |
Formerly, Franklin LibertyQ International Equity Hedged ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Formerly, Franklin LibertyQ Global Dividend ETF |
|
Franklin U.S. Large Cap Multifactor Index ETF |
Formerly, Franklin LibertyQ U.S. Equity ETF |
Franklin U.S. Mid Cap Multifactor Index ETF |
Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF |
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| Not FDIC Insured | | | | | May Lose Value | | | | | No Bank Guarantee |
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools.
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SEMIANNUAL REPORT
Economic and Market Overview
Global developed and emerging market equities, as measured by the MSCI All Country World Index-NR (net of tax withholding when dividends are paid), posted a -21.41% total return for the six months ended September 30, 2022.1 Supply-chain disruptions and volatile prices for energy and commodities contributed to higher inflation in many countries. This inflationary pressure led many of the world’s central banks to adopt less accommodative stances regarding monetary policy. New lockdowns imposed by China’s government to quell the spread of the Omicron variant of COVID-19 pressured Asian and global emerging market stocks. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine and international sanctions on Russia, adding to investor uncertainty about the trajectory of the global economy.
U.S. equities, as measured by the Standard & Poor’s® 500 Index, posted a -20.20% total return for the six months ended September 30, 2022.1 Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end. In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore,
the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
Economies in the eurozone maintained a slow growth rate in the second quarter of 2022 as the easing of COVID-related restrictions and a strong start to the summer tourism season increased household spending. The war in Ukraine contributed to record high inflation across the eurozone as commodity and oil prices soared. The European Central Bank raised interest rates in July 2022 for the first time in more than a decade, increasing rates again at its subsequent meeting in September, to fight growing inflation. In this environment, European developed market equities, as measured by the MSCI Europe Index-NR, posted a -23.17% total return for the six months under review.1
Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index-NR, posted a -21.45% total return for the six-month period.1 Japan’s economy expanded in the second quarter of 2022 as private consumption increased following the lifting of COVID-related restrictions and expansion of government spending. For the first time since 2020, China’s economy contracted in the second quarter, pressured by COVID-related restrictions and government measures to limit real estate speculation. Unexpected regulatory changes by China’s government, which negatively impacted technology-related businesses, and investor concerns about the solvency of several large property developers in China further pressured stocks in that country.
Global emerging market stocks, as measured by the MSCI Emerging Markets Index-NR, posted a -21.70% total return for the six months under review.1 Following Russia’s invasion of Ukraine, climbing food and energy prices kindled inflationary pressures, which, combined with a strong U.S. dollar, raised concerns over the possibility of government debt defaults in some countries. Rising U.S. interest rates led investors to sell off many holdings in emerging markets, including the major markets of India, South Korea and Taiwan.
The foregoing information reflects our analysis and opinions as of September 30, 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 Emerging Market Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ Emerging Markets ETF
This semiannual report for Franklin Emerging Market Core Dividend Tilt Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ Emerging Markets ETF changed its name to Franklin Emerging Market Core Dividend Tilt Index ETF. The Fund also changed its ticker symbol, underlying index, investment universe, investment goal and strategy, distribution frequency and reduced its unified management fee.
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 Morningstar® Emerging Markets Dividend Enhanced Select IndexSM (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 is based on the Morningstar® Emerging Markets Target Market Exposure Index (the Parent Index), and is constructed by applying an optimization process to the Parent Index that aims to deliver a higher dividend yield than the Parent Index, while limiting expected tracking error to the Parent Index (i.e., to provide a “dividend tilt” through the selection and weighting of securities from the Parent Index). The Parent Index includes large- and mid-capitalization stocks representing the top 85% of emerging markets equity markets by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
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| Geographic Composition* | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Asia | | | 72.6% | |
Latin America & Caribbean | | | 11.9% | |
Middle East & Africa | | | 10.2% | |
North America | | | 2.8% | |
Europe | | | 1.9% | |
Other Net Assets | | | 0.6% | |
*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.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -23.78% based on market price and -23.72% based on net asset value (NAV).
On August 1, 2022, the Fund changed its underlying index from the LibertyQ Emerging Markets Index-NR to the Morningstar® Emerging Markets Dividend Enhanced Select IndexSM, which commenced calculation and publication on June 17, 2022. For the period from June 17, 2022, through September 30, 2022, the new Underlying Index posted a cumulative total return of -15.31%.2 For the six-month period under review, the Blended Morningstar® Emerging Markets Dividend Enhanced Select Index-NR, which measures the performance of the old underlying index through July 31, 2022, followed by the performance of the new Underlying Index, posted a -23.51% cumulative total return.2
The Parent Index posted a cumulative total return of -20.51% for the six-month period.2 The Blended Morningstar® Emerging Markets Target Market Exposure Index-NR, which measures the performance of the old primary benchmark, the MSCI Emerging Markets (EM) Index-NR, through July 31, 2022, followed by the performance of the Parent Index, posted a -20.79% cumulative total return for the same period.2 The MSCI EM Index-NR posted a -21.70% cumulative total return for the six-month period.3 The Underlying Index replaced the MSCI EM Index-NR as the Fund’s primary benchmark effective August 1, 2022 to more accurately reflect the Fund’s new investment strategy.
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.
1. The Morningstar® Emerging Markets Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.
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 35.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
| | | | |
| Top 10 Sectors/Industries | |
|
| 9/30/22 | |
| |
| | | % of Total
Net Assets | |
Banks | | | 17.5% | |
Semiconductors & Semiconductor Equipment | | | 9.0% | |
Oil, Gas & Consumable Fuels | | | 7.0% | |
Metals & Mining | | | 5.9% | |
Technology Hardware, Storage & Peripherals | | | 5.5% | |
Internet & Catalog Retail | | | 4.9% | |
Insurance | | | 4.4% | |
Interactive Media & Services | | | 3.8% | |
IT Services | | | 3.6% | |
Chemicals | | | 3.3% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is generally reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps and enter into foreign currency forward contracts and/or currency futures contracts to provide the Fund with additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
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| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
Taiwan Semiconductor Manufacturing Co. Ltd.
Semiconductors & Semiconductor Equipment, Taiwan | | | 4.6% | |
Samsung Electronics Co. Ltd.
Technology Hardware, Storage & Peripherals, South Korea | | | 3.1% | |
Tencent Holdings Ltd.
Interactive Media & Services, China | | | 3.0% | |
Alibaba Group Holding Ltd., A
Internet & Catalog Retail, China | | | 2.4% | |
Infosys Ltd.
IT Services, India | | | 1.6% | |
China Construction Bank Corp., H
Banks, China | | | 1.6% | |
Meituan Dianping, B, 144A
Internet & Catalog Retail, China | | | 1.5% | |
Vale SA
Metals & Mining, Brazil | | | 1.5% | |
Petroleo Brasileiro SA, 38.601%, pfd.
Oil, Gas & Consumable Fuels, Brazil | | | 1.3% | |
Industrial and Commercial Bank of China Ltd., H
Banks, China | | | 1.0% | |
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| Top 10 Countries | |
|
| 9/30/22 | |
| |
| | | % of Total
Net Assets | |
China | | | 29.9% | |
Taiwan | | | 17.9% | |
India | | | 11.5% | |
South Korea | | | 9.5% | |
Brazil | | | 6.5% | |
South Africa | | | 5.1% | |
Saudi Arabia | | | 2.9% | |
Mexico | | | 2.7% | |
Hong Kong | | | 2.4% | |
Malaysia | | | 2.4% | |
As of July 20, 2022, the Franklin Emerging Market Core Dividend Tilt Index ETF held Russian securities that were fair valued at zero. While Russian securities were removed from the Fund’s former underlying index and Russian securities are not included in the Fund’s new Underlying Index, as of July 20, 2022 the Fund has not been able to dispose of all such securities due to ongoing issues related to Russia’s invasion of Ukraine. The Fund will continue to monitor Russian related developments and will seek to dispose of such securities as soon as it is practicable.
Thank you for your participation in Franklin Emerging Market Core Dividend Tilt Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
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| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -23.72% | | | | -23.78% | | | | -23.72% | | | | -23.78% | |
1-Year | | | -27.49% | | | | +27.80% | | | | -27.49% | | | | +27.80% | |
5-Year | | | -16.06% | | | | -16.98% | | | | -5.67% | | | | -4.20% | |
Since Inception (6/1/16) | | | +2.55% | | | | +1.25% | | | | +0.40% | | | | +0.20% | |
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| Distribution Rate5 | | 30-Day Standardized Yield6 | |
12.34% | | | 6.83% | |
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.
See page 6 for Performance Summary footnotes.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment
Income
Total Annual Operating Expenses7
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. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. The Fund might not always include dividend paying companies, in attempt to reduce tracking error. The Fund may experience tracking error and may not closely track the Underlying Index for various reasons. Performance of the Fund may vary significantly from the performance of an index as a result of transaction costs, expenses and other factors. There can be no assurance that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. 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 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, 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. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
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. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX 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.
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| | | | Actual (actual return after expenses) | | | Hypothetical (5% annual return before expenses) | | | | |
| | | | | |
Beginning
Account
Value 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Net Annualized
Expense Ratio2 | |
| | $1,000.00 | | | $ | 762.80 | | | $ | 1.64 | | | $ | 1,023.21 | | | $ | 1.88 | | | | 0.37 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.45% to 0.19%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.84 based upon the Fund’s actual performance and $0.96 based upon a hypothetical 5% return.
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Franklin International Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ International Equity Hedged ETF
This semiannual report for Franklin International Core Dividend Tilt Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ International Equity Hedged ETF changed its name to Franklin International Core Dividend Tilt Index ETF. The Fund also changed its ticker symbol, underlying index, investment universe, distribution frequency, investment goal and strategy and reduced its unified management fee.
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 Morningstar® Developed Markets ex-North America Dividend Enhanced Select IndexSM (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 is based on the Morningstar® Developed Markets ex-North America Target Market Exposure Index (the Parent Index) and is constructed by applying an optimization process to the Parent Index that aims to deliver a higher dividend yield than the Parent Index, while limiting expected tracking error to the Parent Index (i.e., to provide a “dividend tilt” through the selection and weighting of securities from the Parent Index). The Parent Index includes large- and mid-capitalization stocks representing the top 85% of developed markets equity markets excluding North America by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
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| Geographic Composition* | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Europe | | | 59.0% | |
Asia | | | 28.7% | |
Australia & New Zealand | | | 10.5% | |
North America | | | 0.6% | |
Middle East & Africa | | | 0.5% | |
Other Net Assets | | | 0.7% | |
*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.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -16.72% based on market price and -16.78% based on net asset value (NAV).
On August 1, 2022, the Fund changed its underlying index from the LibertyQ International Equity Hedged Index-NR to the Morningstar® Developed Markets ex-North America Dividend Enhanced Select IndexSM, which commenced calculation and publication on June 17, 2022. For the period from June 17, 2022, through September 30, 2022, the new Underlying Index posted a cumulative total return of -9.57%.2 For the six-month period under review, the Blended Morningstar® Developed Markets ex-North America Dividend Enhanced Select Index-NR, which measures the performance of the old underlying index through July 31, 2022, followed by the performance of the new Underlying Index, posted a -16.48% cumulative total return.2
The Parent Index posted a cumulative total return of -22.51% for the six-month period.2 The Blended Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR, which measures the performance of the old primary benchmark, MSCI Europe, Australasia and the Far East (EAFE) 100% Hedged to USD Index-NR, through July 31, 2022, followed by the performance of the Parent Index,
1. The Morningstar® Developed Markets ex-North America Dividend Enhanced Select Index is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.
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 48.
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
posted a -15.70% cumulative total return for the same period.2 The MSCI EAFE 100% Hedged to USD Index-NR posted a -9.89% cumulative total return for the six-month period.3 The Underlying Index replaced the MSCI EAFE 100% Hedged to USD Index-NR as the Fund’s primary benchmark to more accurately reflect the Fund’s new investment strategy.
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.
| | | | |
| Top 10 Sectors/Industries | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Pharmaceuticals | | | 10.8% | |
Banks | | | 10.5% | |
Insurance | | | 6.6% | |
Metals & Mining | | | 5.0% | |
Automobiles | | | 4.2% | |
Semiconductors & Semiconductor Equipment | | | 3.6% | |
Oil, Gas & Consumable Fuels | | | 3.2% | |
Electric Utilities | | | 3.2% | |
Food Products | | | 2.8% | |
Textiles, Apparel & Luxury Goods | | | 2.7% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is generally reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps and enter into foreign currency forward contracts and/or currency futures contracts to provide the Fund with additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
| | | | |
| Top 10 Holdings | |
|
| 9/30/22 | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Nestle SA
Food Products, Switzerland | | | 2.4% | |
Novartis AG
Pharmaceuticals, Switzerland | | | 1.9% | |
BHP Group Ltd.
Metals & Mining, Australia | | | 1.6% | |
ASML Holding NV
Semiconductors & Semiconductor Equipment, Netherlands | | | 1.6% | |
Roche Holding AG, Non-Voting
Pharmaceuticals, Switzerland | | | 1.5% | |
AstraZeneca PLC
Pharmaceuticals, United Kingdom | | | 1.4% | |
Novo Nordisk AS, B
Pharmaceuticals, Denmark | | | 1.4% | |
LVMH Moet Hennessy Louis Vuitton SE
Textiles, Apparel & Luxury Goods, France | | | 1.3% | |
Toyota Motor Corp.
Automobiles, Japan | | | 1.2% | |
British American Tobacco PLC
Tobacco, United Kingdom | | | 1.1% | |
| | | | |
| Top 10 Countries | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Japan | | | 24.1% | |
United Kingdom | | | 12.7% | |
Switzerland | | | 10.5% | |
Australia | | | 10.2% | |
France | | | 9.1% | |
Germany | | | 7.9% | |
Netherlands | | | 4.6% | |
Hong Kong | | | 3.0% | |
Italy | | | 2.8% | |
Sweden | | | 2.5% | |
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Thank you for your participation in Franklin International Core Dividend Tilt Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on market price4 | | | Based on
NAV3 | | | Based on market price4 | |
6-Month | | | -16.78% | | | | -16.72% | | | | -16.78% | | | | -16.72% | |
1-Year | | | -12.50% | | | | -12.24% | | | | -12.50% | | | | -12.24% | |
5-Year | | | +16.37% | | | | +15.78% | | | | +3.08% | | | | +2.97% | |
Since Inception (6/1/16) | | | +32.04% | | | | +31.47% | | | | +4.49% | | | | +4.42% | |
| | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
10.18% | | | 4.48% | |
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.
See page12 for Performance Summary footnotes.
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
| | | | | | | | |
| | |
Net Investment
Income | | Long-Term
Capital Gain | | | Total | |
$1.139902 | | | $0.466738 | | | | $1.606640 | |
Total Annual Operating Expenses7
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. 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. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. The Fund might not always include dividend paying companies, in attempt to reduce tracking error. The Fund may experience tracking error and may not closely track the Underlying Index various reasons. Performance of the Fund may vary significantly from the performance of an index as a result of transaction costs, expenses and other factors. There can be no assurance that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. 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, 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. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
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. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Net Annualized
Expense Ratio2 | |
| | $1,000.00 | | | $ | 832.20 | | | $ | 1.24 | | | $ | 1,023.72 | | | $ | 1.37 | | | | 0.27 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.40% to 0.09%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.41 based upon the Fund’s actual performance and $0.46 based upon a hypothetical 5% return.
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Franklin U.S. Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ Global Dividend ETF
This semiannual report for Franklin U.S. Core Dividend Tilt Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ Global Dividend ETF changed its name to Franklin U.S. Core Dividend Tilt Index ETF. The Fund also changed its ticker, underlying index, investment universe, investment goal and strategy and reduced its unified management fee.
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 Morningstar® US Dividend Enhanced Select IndexSM (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 is based on the Morningstar® US Target Market Exposure Index (the Parent Index) and is constructed by applying an optimization process to the Parent Index that aims to deliver a higher dividend yield than the Parent Index, while limiting expected tracking error to the Parent Index (i.e., to provide a “dividend tilt” through the selection and weighting of securities from the Parent Index). The Parent Index includes large- and mid-capitalization stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
| | | | |
| Geographic Composition* | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
North America | | | 97.8% | |
Europe | | | 1.7% | |
Latin America & Caribbean | | | 0.2% | |
Other Net Assets | | | 0.3% | |
*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.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -20.01% based on market price and -20.14% based on net asset value (NAV).2
On August 1, 2022, the Fund changed its underlying index from the LibertyQ Global Dividend Index to the Morningstar® US Dividend Enhanced Select IndexSM, which commenced calculation and publication on June 17, 2022. For the period from June 17, 2022, through September 30, 2022, the new Underlying Index posted a cumulative total return of -3.05%.2 For the six-month period under review, the Blended Morningstar® US Dividend Enhanced Select Index, which measures the performance of the old underlying index through July 31, 2022, followed by the performance of the new Underlying Index, posted a -20.06% cumulative total return.2
The Parent Index posted a cumulative total return of -20.76% for the six-month period.2 The Blended Morningstar® US Target Market Exposure Index, which measures the performance of the old primary benchmark, the MSCI All Country World Index (ACWI) ex REITs Index-NR, through July 31, 2022, followed by the performance of the Parent Index, posted a -21.38% cumulative total return for the same period.2 The MSCI ACWI ex REITs Index-NR posted a -21.34% cumulative total return for the six-month period.2 The Underlying Index replaced the MSCI ACWI ex REITS Index-NR as the Fund’s primary benchmark to more accurately reflect the Fund’s new investment strategy.
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.
1. The Morningstar US Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.
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 61.
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
| | | | |
| Top 10 Sectors/Industries | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Software | | | 8.8% | |
Semiconductors & Semiconductor Equipment | | | 8.2% | |
Technology Hardware, Storage & Peripherals | | | 7.6% | |
Pharmaceuticals | | | 6.1% | |
Banks | | | 5.4% | |
Equity Real Estate Investment Trusts (REITs) | | | 5.3% | |
Oil, Gas & Consumable Fuels | | | 5.0% | |
Interactive Media & Services | | | 3.9% | |
IT Services | | | 3.9% | |
Internet & Direct Marketing Retail | | | 3.6% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is generally reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
| | | | |
| Top 10 Holdings | |
|
| 9/30/22 | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Apple Inc.
Information Technology | | | 7.1% | |
Microsoft Corp.
Information Technology | | | 5.9% | |
Amazon.com Inc.
Consumer Discretionary | | | 3.2% | |
Tesla Inc.
Consumer Discretionary | | | 2.1% | |
Johnson & Johnson
Health Care | | | 1.9% | |
Exxon Mobil Corp.
Energy | | | 1.6% | |
Alphabet Inc., A
Communication Services | | | 1.4% | |
Alphabet Inc., C
Information Technology | | | 1.3% | |
UnitedHealth Group Inc.
Health Care | | | 1.3% | |
AbbVie Inc.
Health Care | | | 1.3% | |
As of July 20, 2022, the Franklin U.S. Core Dividend Tilt Index ETF held Russian securities that were fair valued at zero. While Russian securities were removed from the Fund’s former underlying index and Russian securities are not included in the Fund’s new Underlying Index, as of July 20, 2022 the Fund has not been able to dispose of all such securities due to ongoing issues related to Russia’s invasion of Ukraine. The Fund will continue to monitor Russian related developments and will seek to dispose of such securities as soon as it is practicable.
Thank you for your participation in Franklin U.S. Core Dividend Tilt Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 U.S. CORE DIVIDEND TILT INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on market price4 | | | Based on
NAV3 | | | Based on market price4 | |
6-Month | | | -20.14% | | | | -20.01% | | | | -20.14% | | | | -20.01% | |
1-Year | | | -14.56% | | | | -14.69% | | | | -14.56% | | | | -14.69% | |
5-Year | | | +18.74% | | | | +18.21% | | | | +3.49% | | | | +3.40% | |
Since Inception (6/1/16) | | | +37.21% | | | | +37.17% | | | | +5.12% | | | | +5.12% | |
| | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
3.15% | | | 2.62% | |
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.
See page 17 for Performance Summary footnotes.
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.524014 |
Total Annual Operating Expenses7
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 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 industries, sectors or investments. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. The Fund might not always include dividend paying companies, in attempt to reduce tracking error. The Fund may experience tracking error and may not closely track the Underlying Index various reasons. Performance of the Fund may vary significantly from the performance of an index as a result of transaction costs, expenses and other factors. There can be no assurance that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. 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 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, 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. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
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. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Net Annualized
Expense Ratio2 | |
| | $1,000.00 | | | $ | 798.60 | | | $ | 1.35 | | | $ | 1,023.56 | | | $ | 1.52 | | | | 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 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.45% to 0.06%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.27 based upon the Fund’s actual performance and $0.30 based upon a hypothetical 5% return.
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Franklin U.S. Large Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Equity ETF
This semiannual report for Franklin U.S. Large Cap Multifactor Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ U.S. Equity ETF changed its name to Franklin U.S. Large Cap Multifactor Index ETF.
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 six-month period, the Fund posted cumulative total returns of -17.61% based on market price and -17.61% based on net asset value (NAV). In comparison, the LibertyQ U.S. Large Cap Equity Index posted a -17.56% cumulative total return for the same period, while the Russell 1000® Index posted a -20.51% cumulative total return.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Information Technology | | | 31.8% | |
Health Care | | | 20.2% | |
Consumer Discretionary | | | 11.6% | |
Energy | | | 7.8% | |
Industrials | | | 7.5% | |
Consumer Staples | | | 5.9% | |
Communication Services | | | 5.2% | |
Financials | | | 4.3% | |
Real Estate | | | 2.6% | |
Materials | | | 1.8% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s 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.
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 69.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Apple Inc.
Information Technology | | | 7.2% | |
Microsoft Corp.
Information Technology | | | 5.3% | |
Amazon.com Inc.
Consumer Discretionary | | | 2.0% | |
Eli Lilly & Co.
Health Care | | | 1.9% | |
Tesla Inc.
Consumer Discretionary | | | 1.9% | |
Chevron Corp.
Energy | | | 1.8% | |
AbbVie Inc.
Health Care | | | 1.7% | |
Pfizer Inc.
Health Care | | | 1.7% | |
Merck & Co. Inc.
Health Care | | | 1.7% | |
UnitedHealth Group Inc.
Health Care | | | 1.7% | |
Thank you for your participation in Franklin U.S. Large Cap Multifactor Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 U.S. LARGE CAP MULTIFACTOR INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -17.61% | | | | -17.61% | | | | -17.61% | | | | -17.61% | |
1-Year | | | -11.53% | | | | -11.42% | | | | -11.53% | | | | -11.42% | |
5-Year | | | +50.63% | | | | +50.86% | | | | +8.54% | | | | +8.57% | |
Since Inception (4/26/17) | | | +59.49% | | | | +59.61% | | | | +8.98% | | | | +8.99% | |
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 22 for Performance Summary footnotes.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.397917 |
Total Annual Operating Expenses5
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, 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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 823.90 | | | $ | 0.69 | | | $ | 1,024.32 | | | $ | 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 183/365 to reflect the one-half year period.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 23 |
Franklin U.S. Mid Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF
This semiannual report for Franklin U.S. Mid Cap Multifactor Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ U.S. Mid Cap Equity ETF changed its name to Franklin U.S. Mid Cap Multifactor Index ETF.
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 six-month period, the Fund posted cumulative total returns of -16.18% based on market price and -16.04% based on net asset value (NAV). In comparison, the LibertyQ U.S. Mid Cap Equity Index posted a -15.95% cumulative total return for the same period, while the Russell Midcap® Index posted a -19.71% 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 26.
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 | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Information Technology | | | 20.0% | |
Industrials | | | 17.7% | |
Consumer Discretionary | | | 16.3% | |
Health Care | | | 9.5% | |
Financials | | | 9.3% | |
Consumer Staples | | | 8.1% | |
Materials | | | 6.3% | |
Utilities | | | 5.6% | |
Real Estate | | | 3.9% | |
Communication Services | | | 2.5% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s 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.
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 75.
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Arista Networks Inc.
Information Technology | | | 1.3% | |
O’Reilly Automotive Inc.
Consumer Discretionary | | | 1.3% | |
ResMed Inc.
Health Care | | | 1.2% | |
Cadence Design Systems Inc.
Information Technology | | | 1.2% | |
Trane Technologies PLC
Industrials | | | 1.2% | |
AutoZone Inc.
Consumer Discretionary | | | 1.2% | |
The Hershey Co.
Consumer Staples | | | 1.2% | |
Motorola Solutions Inc.
Information Technology | | | 1.2% | |
W.W. Grainger Inc.
Industrials | | | 1.2% | |
Tractor Supply Co.
Consumer Discretionary | | | 1.1% | |
Thank you for your participation in Franklin U.S. Mid Cap Multifactor Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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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| franklintempleton.com | | Semiannual Report | | | | | | | | 25 |
FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -16.04% | | | | -16.18% | | | | -16.04% | | | | -16.18% | |
1-Year | | | -13.32% | | | | -13.42% | | | | -13.32% | | | | -13.42% | |
5-Year | | | +54.90% | | | | +54.79% | | | | +9.15% | | | | +9.13% | |
Since Inception (4/26/17) | | | +57.79% | | | | +57.79% | | | | +8.75% | | | | +8.76% | |
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.
See page 27 for Performance Summary footnotes.
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.279102 |
Total Annual Operating Expenses5
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, 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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 27 |
FRANKLIN U.S. MID CAP MULTIFACTOR INDEX 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 839.60 | | | $ | 1.38 | | | $ | 1,023.56 | | | $ | 1.52 | | | | 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 183/365 to reflect the one-half year period.
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| 28 | | | | | | | | Semiannual Report | | franklintempleton.com |
Franklin U.S. Small Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF
This semiannual report for Franklin U.S. Small Cap Multifactor Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ U.S. Small Cap Equity ETF changed its name to Franklin U.S. Small Cap Multifactor Index ETF.
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 six-month period, the Fund posted cumulative total returns of -16.83% based on market price and -16.74% based on net asset value (NAV). In comparison, the LibertyQ U.S. Small Cap Equity Index posted a -16.66% cumulative total return for the same period, while the Russell 2000® Index posted a -19.01% cumulative total return.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 31.
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 | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Industrials | | | 21.4% | |
Consumer Discretionary | | | 18.9% | |
Information Technology | | | 11.8% | |
Financials | | | 10.9% | |
Health Care | | | 9.5% | |
Utilities | | | 7.9% | |
Consumer Staples | | | 6.4% | |
Real Estate | | | 4.5% | |
Materials | | | 3.6% | |
Communication Services | | | 2.9% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s 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.
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 81.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 29 |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Texas Roadhouse Inc.
Consumer Discretionary | | | 1.3% | |
Murphy USA Inc.
Consumer Discretionary | | | 1.2% | |
Qualys Inc.
Information Technology | | | 1.1% | |
AMN Healthcare Services Inc.
Health Care | | | 1.0% | |
Saia Inc.
Industrials | | | 0.9% | |
Southwest Gas Holdings Inc.
Utilities | | | 0.9% | |
Kinsale Capital Group Inc.
Financials | | | 0.9% | |
Exponent Inc.
Industrials | | | 0.9% | |
SPS Commerce Inc.
Information Technology | | | 0.8% | |
LHC Group Inc.
Health Care | | | 0.8% | |
Thank you for your participation in Franklin U.S. Small Cap Multifactor Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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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| 30 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -16.74% | | | | -16.83% | | | | -16.74% | | | | -16.83% | |
1-Year | | | -19.61% | | | | -19.71% | | | | -19.61% | | | | -19.71% | |
5-Year | | | +24.09% | | | | +28.23% | | | | +4.41% | | | | +5.10% | |
Since Inception (4/26/17) | | | +26.36% | | | | +26.41% | | | | +4.40% | | | | +4.41% | |
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.
See page 32 for Performance Summary footnotes.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 31 |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.204570 |
Total Annual Operating Expenses5
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, 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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| 32 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 832.60 | | | $ | 1.61 | | | $ | 1,023.31 | | | $ | 1.78 | | | | 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 183/365 to reflect the one-half year period.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 33 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Emerging Market Core Dividend Tilt Index ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 28.33 | | | $ | 30.78 | | | $ | 22.20 | | | $ | 29.70 | | | $ | 33.41 | | | $ | 29.29 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 1.02 | | | | 1.32 | | | | 0.84 | | | | 1.24 | | | | 1.14 | | | | 0.83 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (7.65 | ) | | | (2.55 | ) | | | 8.55 | | | | (6.96 | ) | | | (3.76 | ) | | | 4.15 | |
| | | | |
| | | | | | |
Total from investment operations | | | (6.63 | ) | | | (1.23 | ) | | | 9.39 | | | | (5.72 | ) | | | (2.62 | ) | | | 4.98 | |
| | | | |
| | | | | | |
| Less distributions from net investment income | | | (0.99 | ) | | | (1.22 | ) | | | (0.81 | ) | | | (1.78 | ) | | | (1.09 | ) | | | (0.86 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 20.71 | | | $ | 28.33 | | | $ | 30.78 | | | $ | 22.20 | | | $ | 29.70 | | | $ | 33.41 | |
| | | | |
| | | | | | |
Total returnd | | | (23.72)% | | | | (4.21)% | | | | 42.57% | | | | (20.55)% | | | | (7.70)% | | | | 17.20% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.37% | | | | 0.45% | | | | 0.45% | | | | 0.49% | | | | 0.55% | | | | 0.69% | f |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.37% | | | | 0.45% | | | | 0.45% | | | | 0.49% | | | | 0.55% | | | | 0.54% | f |
| | | | | | |
Net investment income | | | 8.17% | | | | 4.28% | | | | 3.15% | | | | 4.26% | | | | 3.75% | | | | 2.61% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $12,427 | | | | $17,000 | | | | $24,627 | | | | $57,711 | | | | $344,484 | | | | $400,908 | |
| | | | | | |
Portfolio turnover rateg | | | 82.74% | h | | | 34.27% | h | | | 40.22% | h | | | 44.11% | h | | | 52.42% | | | | 32.87% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ Emerging Markets ETF was renamed Franklin Emerging Market Core Dividend Tilt Index ETF.
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: | | | 82.74% | | | | 34.27% | | | | 36.91% | | | | 41.78% | | | | | | | | | |
| | | | | | | | | | |
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| 34 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Emerging Market Core Dividend Tilt Index ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 97.4% | | | | | | | | | |
| | | Brazil 5.2% | | | | | | | | | |
| | Alupar Investimento SA, UNIT | | | Electric Utilities | | | | 600 | | | $ | 3,017 | |
| | Ambev SA | | | Beverages | | | | 27,000 | | | | 77,573 | |
| | Americanas SA | | | Internet & Catalog Retail | | | | 4,200 | | | | 13,185 | |
| | B3 SA – Brasil Bolsa Balcao | | | Capital Markets | | | | 31,800 | | | | 76,724 | |
| | Banco Bradesco SA | | | Banks | | | | 600 | | | | 1,809 | |
| | Banco do Brasil SA | | | Banks | | | | 5,400 | | | | 38,457 | |
| | BB Seguridade Participacoes SA | | | Insurance | | | | 4,200 | | | | 20,632 | |
| | Caixa Seguridade Participacoes S/A | | | Insurance | | | | 4,200 | | | | 6,608 | |
| | Cia Energetica de Minas Gerais | | | Electric Utilities | | | | 1,800 | | | | 5,391 | |
| | CPFL Energia SA | | | Electric Utilities | | | | 1,200 | | | | 7,490 | |
| | Energisa SA | | | Electric Utilities | | | | 1,800 | | | | 13,941 | |
| | Engie Brasil Energia SA | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 8,544 | |
| | Hypera SA | | | Pharmaceuticals | | | | 2,400 | | | | 19,635 | |
| | Itausa SA | | | Banks | | | | 600 | | | | 1,095 | |
| | Klabin SA | | | Containers & Packaging | | | | 5,400 | | | | 18,120 | |
| | Neoenergia SA | | | Electric Utilities | | | | 1,200 | | | | 3,394 | |
| | Petroleo Brasileiro SA | | | Oil, Gas & Consumable Fuels | | | | 13,200 | | | | 80,730 | |
| | Porto Seguro SA | | | Insurance | | | | 1,200 | | | | 4,688 | |
| a | | Rede D’Or Sao Luiz SA, 144A | | | Health Care Providers & Services | | | | 4,800 | | | | 26,375 | |
| | Telefonica Brasil SA | | | Diversified Telecommunication Services | | | | 3,000 | | | | 22,458 | |
| | TIM SA | | | Wireless Telecommunication Services | | | | 4,800 | | | | 10,720 | |
| | Transmissora Alianca de Energia Eletrica SA | | | Electric Utilities | | | | 1,200 | | | | 8,641 | |
| | Vale SA | | | Metals & Mining | | | | 13,720 | | | | 182,735 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 651,962 | |
| | | | | | | | | | | | | | |
| | | Chile 0.7% | | | | | | | | | |
| | Banco de Chile | | | Banks | | | | 269,028 | | | | 23,919 | |
| | Banco Santander Chile | | | Banks | | | | 383,760 | | | | 13,549 | |
| | Cencosud SA | | | Food & Staples Retailing | | | | 8,148 | | | | 10,420 | |
| | Cencosud Shopping SA | | | Real Estate Management & Development | | | | 3,174 | | | | 3,346 | |
| | Cia Cervecerias Unidas SA | | | Beverages | | | | 822 | | | | 4,514 | |
| | Cia Sud Americana de Vapores SA | | | Marine | | | | 102,078 | | | | 7,108 | |
| | Empresas CMPC SA | | | Paper & Forest Products | | | | 7,242 | | | | 11,137 | |
| | Empresas Copec SA | | | Oil, Gas & Consumable Fuels | | | | 2,190 | | | | 14,177 | |
| | Quinenco SA | | | Industrial Conglomerates | | | | 1,644 | | | | 3,604 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 91,774 | |
| | | | | | | | | | | | | | |
| | | China 29.9% | | | | | | | | | |
| | Agricultural Bank of China Ltd., A | | | Banks | | | | 84,000 | | | | 33,698 | |
| | Agricultural Bank of China Ltd., H | | | Banks | | | | 204,000 | | | | 61,071 | |
| b | | Alibaba Group Holding Ltd., A | | | Internet & Catalog Retail | | | | 29,400 | | | | 291,944 | |
| | Anhui Conch Cement Co. Ltd., A | | | Construction Materials | | | | 2,400 | | | | 9,699 | |
| | Anhui Conch Cement Co. Ltd., H | | | Construction Materials | | | | 8,000 | | | | 25,376 | |
| | Anta Sports Products Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 2,200 | | | | 23,317 | |
| b | | Baidu Inc. | | | Interactive Media & Services | | | | 3,300 | | | | 47,966 | |
| | Bank of Beijing Co. Ltd., A | | | Banks | | | | 10,800 | | | | 6,226 | |
| | Bank of Changsha Co. Ltd., A | | | Banks | | | | 2,400 | | | | 2,229 | |
| | Bank of Chengdu Co. Ltd., A | | | Banks | | | | 1,800 | | | | 4,131 | |
| | Bank of China Ltd., A | | | Banks | | | | 28,200 | | | | 12,223 | |
| | Bank of China Ltd., H | | | Banks | | | | 342,000 | | | | 111,968 | |
| | Bank of Communications Co. Ltd., A | | | Banks | | | | 20,400 | | | | 13,220 | |
| | Bank of Communications Co. Ltd., H | | | Banks | | | | 138,000 | | | | 72,781 | |
| | Bank of Jiangsu Co. Ltd., A | | | Banks | | | | 7,200 | | | | 7,514 | |
| | Bank of Nanjing Co. Ltd., A | | | Banks | | | | 4,800 | | | | 7,083 | |
| | Bank of Shanghai Co. Ltd., A | | | Banks | | | | 8,400 | | | | 6,893 | |
| | Baoshan Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 11,400 | | | | 8,411 | |
| b | | BeiGene Ltd. | | | Biotechnology | | | | 1,200 | | | | 12,390 | |
| | Beijing Enterprises Holdings Ltd., H | | | Industrial Conglomerates | | | | 3,000 | | | | 8,427 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 35 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Bilibili Inc. | | | Entertainment | | | | 600 | | | $ | 9,142 | |
| a | | Blue Moon Group Holdings Ltd., 144A | | | Household Products | | | | 9,000 | | | | 6,352 | |
| | BOC Hong Kong (Holdings) Ltd. | | | Banks | | | | 24,000 | | | | 79,950 | |
| | BOE Technology Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 20,500 | | | | 9,403 | |
| | BOE Technology Group Co. Ltd., B | | | Electronic Equipment, Instruments & Components | | | | 7,800 | | | | 3,329 | |
| | BYD Co. Ltd., A | | | Automobiles | | | | 100 | | | | 3,535 | |
| | BYD Co. Ltd., H | | | Automobiles | | | | 500 | | | | 12,382 | |
| | BYD Electronic International Co. Ltd. | | | Communications Equipment | | | | 3,000 | | | | 7,246 | |
| | Changjiang Securities Co. Ltd., A | | | Capital Markets | | | | 3,000 | | | | 2,192 | |
| | China CITIC Bank Corp. Ltd., H | | | Banks | | | | 54,000 | | | | 21,463 | |
| | China Conch Venture Holdings Ltd. | | | Construction & Engineering | | | | 12,000 | | | | 19,139 | |
| | China Construction Bank Corp., A | | | Banks | | | | 2,400 | | | | 1,858 | |
| | China Construction Bank Corp., H | | | Banks | | | | 339,000 | | | | 196,061 | |
| | China Everbright Bank Co. Ltd., A | | | Banks | | | | 22,200 | | | | 8,781 | |
| | China Everbright Bank Co. Ltd., H | | | Banks | | | | 18,000 | | | | 4,953 | |
| a,c | | China Feihe Ltd., 144A, Reg S | | | Food Products | | | | 18,000 | | | | 12,612 | |
| | China Hongqiao Group Ltd. | | | Metals & Mining | | | | 15,000 | | | | 12,421 | |
| | China International Marine Containers (Group) Co. Ltd., H | | | Machinery | | | | 4,800 | | | | 3,057 | |
| | China International Marine Containers Group Co. Ltd., A | | | Machinery | | | | 1,200 | | | | 1,163 | |
| | China Lesso Group Holdings Ltd. | | | Building Products | | | | 6,000 | | | | 5,587 | |
| | China Life Insurance Co. Ltd., H | | | Insurance | | | | 48,000 | | | | 61,514 | |
| | China Longyuan Power Group Corp., A | | | Independent Power Producers & Energy Traders | | | | 3,000 | | | | 3,764 | |
| | China Medical System Holdings Ltd. | | | Pharmaceuticals | | | | 9,000 | | | | 10,743 | |
| | China Merchants Bank Co. Ltd., A | | | Banks | | | | 5,400 | | | | 25,488 | |
| | China Merchants Bank Co. Ltd., H | | | Banks | | | | 12,500 | | | | 58,122 | |
| | China Merchants Expressway Network & Technology Holdings Co. Ltd., A | | | Transportation Infrastructure | | | | 1,800 | | | | 1,914 | |
| | China Merchants Port Holdings Co. Ltd. | | | Transportation Infrastructure | | | | 8,000 | | | | 10,059 | |
| a | | China Merchants Securities Co. Ltd., A, 144A | | | Capital Markets | | | | 1,200 | | | | 1,039 | |
| | China Merchants Securities Co. Ltd., A | | | Capital Markets | | | | 1,800 | | | | 3,116 | |
| | China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 4,200 | | | | 9,626 | |
| | China Minsheng Banking Corp. Ltd., A | | | Banks | | | | 18,600 | | | | 8,845 | |
| | China Minsheng Banking Corp. Ltd., H | | | Banks | | | | 42,000 | | | | 12,038 | |
| | China National Building Material Co. Ltd., H | | | Construction Materials | | | | 30,000 | | | | 22,968 | |
| | China Pacific Insurance Group Co. Ltd., A | | | Insurance | | | | 3,000 | | | | 8,555 | |
| | China Pacific Insurance Group Co. Ltd., H | | | Insurance | | | | 13,200 | | | | 24,315 | |
| | China Petroleum & Chemical Corp., A | | | Oil, Gas & Consumable Fuels | | | | 18,600 | | | | 11,193 | |
| | China Petroleum & Chemical Corp., H | | | Oil, Gas & Consumable Fuels | | | | 168,000 | | | | 72,123 | |
| | China Resources Cement Holdings Ltd. | | | Construction Materials | | | | 14,000 | | | | 6,492 | |
| | China Resources Power Holdings Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 1,000 | | | | 1,554 | |
| | China Shenhua Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 3,600 | | | | 15,977 | |
| | China Shenhua Energy Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 21,000 | | | | 62,733 | |
| | China Suntien Green Energy Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 12,000 | | | | 4,403 | |
| | China Taiping Insurance Holdings Co. Ltd. | | | Insurance | | | | 9,600 | | | | 8,084 | |
| a,c | | China Tower Corp. Ltd., H, 144A, Reg S | | | Diversified Telecommunication Services | | | | 276,000 | | | | 29,534 | |
| | China Vanke Co. Ltd., A | | | Real Estate Management & Development | | | | 4,800 | | | | 12,005 | |
| | China Vanke Co. Ltd., H | | | Real Estate Management & Development | | | | 10,200 | | | | 18,581 | |
| | China Yangtze Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 2,400 | | | | 7,655 | |
| b | | China Zheshang Bank Co. Ltd., A | | | Banks | | | | 9,000 | | | | 3,762 | |
| | Chongqing Rural Commercial Bank Co. Ltd., A | | | Banks | | | | 4,800 | | | | 2,404 | |
| | Chongqing Rural Commercial Bank Co. Ltd., H | | | Banks | | | | 12,000 | | | | 3,898 | |
| | Chow Tai Fook Jewellery Co. Ltd., A | | | Specialty Retail | | | | 14,400 | | | | 27,113 | |
| | CIFI Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 36,000 | | | | 3,669 | |
| | CITIC Ltd., B | | | Industrial Conglomerates | | | | 42,000 | | | | 39,593 | |
| | Citic Pacific Special Steel Group Co. Ltd., A | | | Metals & Mining | | | | 1,800 | | | | 4,449 | |
| | | | | | | | | | |
| | | | | | |
| 36 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | COSCO SHIPPING Holdings Co. Ltd., B | | | Marine | | | | 24,000 | | | $ | 28,158 | |
| | Country Garden Holdings Co. Ltd. | | | Real Estate Management & Development | | | | 48,000 | | | | 11,129 | |
| | Country Garden Services Holdings Co. Ltd. | | | Commercial Services & Supplies | | | | 8,000 | | | | 11,781 | |
| a | | Dali Foods Group Co. Ltd., 144A | | | Food Products | | | | 15,000 | | | | 6,459 | |
| b | | Datang International Power Generation Co. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 12,000 | | | | 2,293 | |
| | ENN Energy Holdings Ltd. | | | Gas Utilities | | | | 700 | | | | 9,363 | |
| | Far East Horizon Ltd. | | | Diversified Financial Services | | | | 12,000 | | | | 8,102 | |
| | Faw Jiefang Group Co. Ltd. | | | Automobiles | | | | 1,200 | | | | 1,209 | |
| | Focus Media Information Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 8,400 | | | | 6,504 | |
| | Fosun International Ltd. | | | Industrial Conglomerates | | | | 18,000 | | | | 11,167 | |
| | Foxconn Industrial Internet Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 6,453 | |
| b | | GDS Holdings Ltd. | | | IT Services | | | | 3,000 | | | | 6,573 | |
| | Gemdale Corp., A | | | Real Estate Management & Development | | | | 2,400 | | | | 3,868 | |
| | Gree Electric Appliances Inc. of Zhuhai | | | Household Durables | | | | 3,000 | | | | 13,647 | |
| | Guangxi Guiguan Electric Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 2,400 | | | | 1,973 | |
| | Guangzhou TInc.i Materials Technology Co. Ltd. | | | Chemicals | | | | 600 | | | | 3,708 | |
| | Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A | | | Capital Markets | | | | 2,400 | | | | 1,912 | |
| | Guosen Securities Co. Ltd. | | | Capital Markets | | | | 4,200 | | | | 5,067 | |
| a | | Guotai Junan Securities Co. Ltd., 144A | | | Capital Markets | | | | 6,000 | | | | 6,375 | |
| | Guotai Junan Securities Co. Ltd., A | | | Capital Markets | | | | 4,200 | | | | 8,053 | |
| | Guoyuan Securities Co. Ltd. | | | Capital Markets | | | | 2,400 | | | | 2,155 | |
| | Haitian International Holdings Ltd. | | | Machinery | | | | 5,000 | | | | 9,503 | |
| | Henan Shuanghui Investment & Development Co. Ltd. | | | Food Products | | | | 1,800 | | | | 6,176 | |
| | Hengan International Group Co. Ltd. | | | Personal Products | | | | 4,500 | | | | 20,121 | |
| | Hengli Petrochemical Co. Ltd., A | | | Chemicals | | | | 3,000 | | | | 7,120 | |
| | Hopson Development Holdings Ltd. | | | Real Estate Management & Development | | | | 6,000 | | | | 6,283 | |
| | Huadian Power International Corp. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 3,600 | | | | 3,005 | |
| | Huadian Power International Corp. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 12,000 | | | | 4,387 | |
| | Huaxia Bank Co. Ltd., A | | | Banks | | | | 8,400 | | | | 5,927 | |
| | Huaxin Cement Co. Ltd., H | | | Construction Materials | | | | 2,400 | | | | 2,473 | |
| | Huaxin Cement Co. Ltd., A | | | Construction Materials | | | �� | 600 | | | | 1,410 | |
| | Huayu Automotive Systems Co. Ltd. | | | Auto Components | | | | 1,800 | | | | 4,171 | |
| | Huizhou Desay Sv Automotive Co. Ltd. | | | Household Durables | | | | 200 | | | | 3,870 | |
| | Industrial and Commercial Bank of China Ltd. | | | Banks | | | | 33,000 | | | | 20,136 | |
| | Industrial and Commercial Bank of China Ltd., H . | | | Banks | | | | 264,000 | | | | 123,762 | |
| | Industrial Bank Co. Ltd., A | | | Banks | | | | 10,200 | | | | 23,822 | |
| b | | Industrial Securities Co. Ltd., A | | | Capital Markets | | | | 3,080 | | | | 2,355 | |
| a,b | | Innovent Biologics Inc., B, 144A | | | Biotechnology | | | | 3,000 | | | | 9,344 | |
| | JA Solar Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 600 | | | | 5,390 | |
| a,b | | JD Health International Inc., 144A | | | Internet & Catalog Retail | | | | 1,500 | | | | 8,618 | |
| | JD.com Inc., A | | | Internet & Catalog Retail | | | | 4,050 | | | | 102,464 | |
| | Jiangsu Expressway Co. Ltd., A | | | Transportation Infrastructure | | | | 600 | | | | 605 | |
| | Jiangsu Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 12,000 | | | | 9,004 | |
| b | | KE Holdings Inc., ADR | | | Real Estate Management & Development | | | | 1,044 | | | | 18,291 | |
| | Kingboard Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,000 | | | | 11,312 | |
| a,b | | Kuaishou Technology, B, 144A | | | Interactive Media & Services | | | | 3,000 | | | | 19,472 | |
| | Lenovo Group Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 48,000 | | | | 33,386 | |
| b | | Li Auto Inc., A | | | Automobiles | | | | 900 | | | | 10,387 | |
| | Li Ning Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 2,500 | | | | 19,140 | |
| | Livzon Pharmaceutical Group Inc., H | | | Pharmaceuticals | | | | 1,200 | | | | 3,008 | |
| | Lomon Billions Group Co. Ltd. | | | Chemicals | | | | 1,200 | | | | 2,651 | |
| a,c | | Longfor Group Holdings Ltd., 144A, Reg S | | | Real Estate Management & Development | | | | 9,500 | | | | 27,290 | |
| a,b | | Meituan Dianping, B, 144A | | | Internet & Catalog Retail | | | | 8,700 | | | | 183,534 | |
| b | | Microport Scientific Corp. | | | Health Care Equipment & Supplies | | | | 1,800 | | | | 3,100 | |
| | Midea Group Co. Ltd., A | | | Household Durables | | | | 2,400 | | | | 16,600 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 37 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Minth Group Ltd. | | | Auto Components | | | | 4,000 | | | $ | 8,856 | |
| | NetEase Inc. | | | Entertainment | | | | 4,100 | | | | 61,892 | |
| | New China Life Insurance Co. Ltd., A | | | Insurance | | | | 1,200 | | | | 4,535 | |
| | New China Life Insurance Co. Ltd., H | | | Insurance | | | | 5,400 | | | | 10,305 | |
| | Nine Dragons Paper Holdings Ltd. | | | Paper & Forest Products | | | | 12,000 | | | | 7,460 | |
| | Perfect World Co. Ltd. | | | Entertainment | | | | 1,200 | | | | 2,091 | |
| | PetroChina Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 132,000 | | | | 54,146 | |
| | PICC Property and Casualty Co. Ltd., H | | | Insurance | | | | 42,000 | | | | 43,552 | |
| | Ping An Insurance Group Co. of China Ltd., A | | | Insurance | | | | 3,000 | | | | 17,497 | |
| | Ping An Insurance Group Co. of China Ltd., H | | | Insurance | | | | 23,000 | | | | 114,855 | |
| | Poly Developments and Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 2,400 | | | | 6,060 | |
| a | | Pop Mart International Group Ltd., 144A | | | Specialty Retail | | | | 3,600 | | | | 6,622 | |
| a | | Postal Savings Bank of China Co. Ltd., 144A | | | Banks | | | | 60,000 | | | | 35,389 | |
| | Postal Savings Bank of China Co. Ltd. | | | Banks | | | | 19,200 | | | | 12,012 | |
| | SAIC Motor Corp Ltd. | | | Automobiles | | | | 5,400 | | | | 10,832 | |
| | Shaanxi Coal Industry Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,200 | | | | 13,414 | |
| | Shanghai Bairun Investment Holding Group Co. Ltd. | | | Beverages | | | | 600 | | | | 2,267 | |
| | Shanghai Baosight Software Co. Ltd., A | | | Software | | | | 600 | | | | 3,096 | |
| | Shanghai Baosight Software Co. Ltd., B | | | Software | | | | 3,000 | | | | 8,730 | |
| | Shanghai Construction Group Co. Ltd., A | | | Construction & Engineering | | | | 5,400 | | | | 1,916 | |
| | Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A | | | Real Estate Management & Development | | | | 1,200 | | | | 1,621 | |
| | Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | | | Real Estate Management & Development | | | | 7,800 | | | | 6,107 | |
| | Shanghai Pudong Development Bank Co. Ltd., A | | | Banks | | | | 15,600 | | | | 15,405 | |
| | Shanxi Xishan Coal & Electricity Power Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 1,800 | | | | 3,782 | |
| | Shengyi Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,200 | | | | 2,205 | |
| | Shenzhen Transsion Holdings Co. Ltd., A | | | Technology Hardware, Storage & Peripherals | | | | 510 | | | | 4,161 | |
| | Shenzhou International Group Holdings Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 2,400 | | | | 18,757 | |
| | Shijiazhuang Yiling Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 600 | | | | 1,827 | |
| | Sichuan Chuantou Energy Co Ltd., A | | | Independent Power Producers & Energy Traders | | | | 2,400 | | | | 4,050 | |
| | Sichuan Road & Bridge Co. Ltd., A | | | Construction & Engineering | | | | 2,400 | | | | 3,441 | |
| | Silergy Corp. | | | Semiconductors & Semiconductor Equipment | | | | 300 | | | | 3,978 | |
| | Sinotruk Hong Kong Ltd. | | | Machinery | | | | 3,000 | | | | 2,511 | |
| a | | Smoore International Holdings Ltd., 144A | | | Tobacco | | | | 12,000 | | | | 14,354 | |
| | Sun Art Retail Group Ltd. | | | Food & Staples Retailing | | | | 12,000 | | | | 2,568 | |
| | Sunac China Holdings Ltd. | | | Real Estate Management & Development | | | | 18,000 | | | | 2,440 | |
| | Sunny Optical Technology Group Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 2,400 | | | | 22,976 | |
| | Tencent Holdings Ltd. | | | Interactive Media & Services | | | | 10,800 | | | | 366,517 | |
| | The People’s Insurance Co. Group of China Ltd., H | | | Insurance | | | | 54,000 | | | | 15,684 | |
| | Tianshan Aluminum Group Co. Ltd., A | | | Machinery | | | | 2,400 | | | | 2,410 | |
| | Tongwei Co. Ltd., A | | | Food Products | | | | 1,800 | | | | 11,857 | |
| a | | Topsports International Holdings Ltd., 144A | | | Specialty Retail | | | | 18,000 | | | | 12,680 | |
| | Uni-President China Holdings Ltd. | | | Food Products | | | | 6,000 | | | | 5,037 | |
| | Universal Scientific Industrial Shanghai Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,200 | | | | 2,538 | |
| | Want Want China Holdings Ltd. | | | Food Products | | | | 18,000 | | | | 11,763 | |
| | Weichai Power Co. Ltd., H | | | Machinery | | | | 1,000 | | | | 949 | |
| | Wuhan Guide Infrared Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,800 | | | | 2,934 | |
| | Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | | | Entertainment | | | | 1,200 | | | | 2,932 | |
| | Xiamen C & D Inc., A | | | Trading Companies & Distributors | | | | 1,200 | | | | 2,331 | |
| | Xinyi Solar Holdings Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 30,000 | | | | 31,758 | |
| b | | XPeng Inc., A | | | Automobiles | | | | 1,800 | | | | 10,548 | |
| | Youngor Group Co. Ltd., A | | | Real Estate Management & Development | | | | 2,400 | | | | 2,128 | |
| | | | | | | | | | |
| | | | | | |
| 38 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Yunnan Baiyao Group Co. Ltd. | | | Pharmaceuticals | | | | 600 | | | $ | 4,406 | |
| | Yunnan Energy New Material Co. Ltd. | | | Containers & Packaging | | | | 500 | | | | 12,212 | |
| | Zhuzhou CRRC Times Electric Co. Ltd., H | | | Electrical Equipment | | | | 1,200 | | | | 5,045 | |
| | Zoomlion Heavy Industry Science and Technology Co. Ltd. | | | Machinery | | | | 4,200 | | | | 3,264 | |
| | Zoomlion Heavy Industry Science and Technology Co. Ltd., H | | | Machinery | | | | 10,800 | | | | 3,756 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,715,046 | |
| | | | | | | | | | | | | | |
| | | Colombia 0.4% | | | | | | | | | |
| | Banco de Bogota SA | | | Banks | | | | 642 | | | | 3,988 | |
| | Bancolombia SA | | | Banks | | | | 1,794 | | | | 12,145 | |
| b | | Corp. Financiera Colombiana SA | | | Diversified Financial Services | | | | 504 | | | | 1,832 | |
| | Ecopetrol SA | | | Oil, Gas & Consumable Fuels | | | | 32,484 | | | | 14,665 | |
| | Grupo Energia Bogota SA ESP | | | Gas Utilities | | | | 16,662 | | | | 6,786 | |
| | Interconexion Electrica SA ESP | | | Electric Utilities | | | | 3,252 | | | | 11,680 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 51,096 | |
| | | | | | | | | | | | | | |
| | | Czech Republic 0.4% | | | | | | | | | |
| | CEZ AS | | | Electric Utilities | | | | 1,002 | | | | 34,356 | |
| | Komercni Banka AS | | | Banks | | | | 462 | | | | 11,586 | |
| a | | Moneta Money Bank AS, 144A | | | Banks | | | | 2,844 | | | | 8,005 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 53,947 | |
| | | | | | | | | | | | | | |
| | | Greece 0.5% | | | | | | | | | |
| | Hellenic Petroleum Holdings SA | | | Oil, Gas & Consumable Fuels | | | | 378 | | | | 2,318 | |
| | Hellenic Telecommunications Organization SA | | | Diversified Telecommunication Services | | | | 1,494 | | | | 21,734 | |
| | JUMBO SA | | | Specialty Retail | | | | 792 | | | | 10,591 | |
| | Motor Oil Hellas Corinth Refineries SA | | | Oil, Gas & Consumable Fuels | | | | 450 | | | | 7,115 | |
| | OPAP SA | | | Hotels, Restaurants & Leisure | | | | 1,320 | | | | 15,880 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 57,638 | |
| | | | | | | | | | | | | | |
| | | Hong Kong 2.4% | | | | | | | | | |
| | Beijing Enterprises Water Group Ltd., A | | | Water Utilities | | | | 24,000 | | | | 5,534 | |
| | Bosideng International Holdings Ltd., A | | | Household Durables | | | | 24,000 | | | | 11,893 | |
| | China Everbright Environment Group Ltd., B | | | Commercial Services & Supplies | | | | 24,000 | | | | 9,967 | |
| | China Gas Holdings Ltd., A | | | Gas Utilities | | | | 15,600 | | | | 18,700 | |
| | China Jinmao Holdings Group Ltd., A | | | Real Estate Management & Development | | | | 24,000 | | | | 4,892 | |
| | China Overseas Land & Investment Ltd., A | | | Real Estate Management & Development | | | | 23,000 | | | | 59,918 | |
| | China Resources Gas Group Ltd., A | | | Gas Utilities | | | | 6,000 | | | | 19,070 | |
| | China Resources Land Ltd., H | | | Real Estate Management & Development | | | | 18,000 | | | | 70,854 | |
| | Geely Automobile Holdings Ltd. | | | Automobiles | | | | 13,000 | | | | 17,919 | |
| | Guangdong Investment Ltd. | | | Water Utilities | | | | 18,000 | | | | 14,423 | |
| | Kingboard Laminates Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 6,000 | | | | 5,404 | |
| | Orient Overseas International Ltd. | | | Marine | | | | 1,700 | | | | 29,778 | |
| | Shimao Group Holdings Ltd. | | | Real Estate Management & Development | | | | 9,000 | | | | 2,124 | |
| | Xinyi Glass Holdings Ltd. | | | Auto Components | | | | 18,000 | | | | 26,186 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 296,662 | |
| | | | | | | | | | | | | | |
| | | Hungary 0.4% | | | | | | | | | |
| | MOL Hungarian Oil & Gas PLC | | | Oil, Gas & Consumable Fuels | | | | 3,828 | | | | 21,326 | |
| | OTP Bank Nyrt | | | Banks | | | | 1,374 | | | | 25,160 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 46,486 | |
| | | | | | | | | | | | | | |
| | | India 11.5% | | | | | | | | | |
| | ACC Ltd. | | | Construction Materials | | | | 510 | | | | 15,144 | |
| b | | Adani Green Energy Ltd. | | | Independent Power Producers & Energy Traders | | | | 450 | | | | 12,506 | |
| | Ambuja Cements Ltd. | | | Construction Materials | | | | 3,264 | | | | 20,687 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 39 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | India (continued) | | | | | | | | | |
| | Apollo Hospitals Enterprise Ltd. | | | Health Care Providers & Services | | | | 18 | | | $ | 970 | |
| | Asian Paints Ltd. | | | Chemicals | | | | 402 | | | | 16,517 | |
| | Aurobindo Pharma Ltd. | | | Pharmaceuticals | | | | 1,848 | | | | 11,599 | |
| | Bajaj Auto Ltd. | | | Automobiles | | | | 450 | | | | 19,514 | |
| | Bajaj Holdings & Investment Ltd. | | | Diversified Financial Services | | | | 144 | | | | 11,312 | |
| | Bharat Electronics Ltd. | | | Aerospace & Defense | | | | 6,588 | | | | 8,175 | |
| | Bharat Petroleum Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 6,270 | | | | 23,492 | |
| | Bharti Infratel Ltd. | | | Diversified Telecommunication Services | | | | 4,950 | | | | 12,014 | |
| | Britannia Industries Ltd. | | | Food Products | | | | 312 | | | | 14,739 | |
| | Coal India Ltd. | | | Oil, Gas & Consumable Fuels | | | | 13,230 | | | | 34,518 | |
| | Colgate-Palmolive India Ltd. | | | Personal Products | | | | 852 | | | | 17,065 | |
| | Dr Reddy’s Laboratories Ltd. | | | Pharmaceuticals | | | | 204 | | | | 10,872 | |
| | Embassy Office Parks REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3,426 | | | | 14,565 | |
| | GAIL India Ltd. | | | Gas Utilities | | | | 17,316 | | | | 18,529 | |
| | HCL Technologies Ltd. | | | IT Services | | | | 6,954 | | | | 79,698 | |
| a | | HDFC Asset Management Co. Ltd., 144A | | | Capital Markets | | | | 222 | | | | 5,157 | |
| | Hero MotoCorp Ltd. | | | Automobiles | | | | 822 | | | | 25,758 | |
| | Hindustan Petroleum Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,098 | | | | 10,896 | |
| | Hindustan Unilever Ltd. | | | Household Products | | | | 2,268 | | | | 75,175 | |
| | Housing Development Finance Corp. Ltd. | | | Thrifts & Mortgage Finance | | | | 1,686 | | | | 47,414 | |
| | Indian Oil Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 23,646 | | | | 19,460 | |
| | Info Edge India Ltd. | | | Interactive Media & Services | | | | 384 | | | | 18,223 | |
| | Infosys Ltd. | | | IT Services | | | | 11,490 | | | | 199,635 | |
| | ITC Ltd. | | | Tobacco | | | | 18,228 | | | | 74,435 | |
| a,c | | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | | | IT Services | | | | 294 | | | | 16,110 | |
| | LIC Housing Finance Ltd. | | | Thrifts & Mortgage Finance | | | | 1,806 | | | | 9,187 | |
| | Mahindra & Mahindra Ltd. | | | Automobiles | | | | 162 | | | | 2,525 | |
| | Marico Ltd. | | | Personal Products | | | | 3,312 | | | | 21,897 | |
| | Mindtree Ltd. | | | IT Services | | | | 396 | | | | 15,378 | |
| | Mphasis Ltd. | | | IT Services | | | | 534 | | | | 13,704 | |
| | NMDC Ltd. | | | Metals & Mining | | | | 5,952 | | | | 9,347 | |
| | NTPC Ltd. | | | Independent Power Producers & Energy Traders | | | | 29,652 | | | | 58,191 | |
| | Oil & Natural Gas Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 8,556 | | | | 13,336 | |
| | Oracle Financial Services Software Ltd. | | | Software | | | | 162 | | | | 5,939 | |
| | Piramal Enterprises Ltd. | | | Pharmaceuticals | | | | 828 | | | | 8,796 | |
| | Power Finance Corp. Ltd. | | | Diversified Financial Services | | | | 7,506 | | | | 9,651 | |
| | Power Grid Corp. of India Ltd. | | | Electric Utilities | | | | 22,224 | | | | 57,970 | |
| | REC Ltd. | | | Diversified Financial Services | | | | 7,776 | | | | 8,985 | |
| | Reliance Industries Ltd. | | | Oil, Gas & Consumable Fuels | | | | 3,540 | | | | 103,468 | |
| | Shriram Transport Finance Co. Ltd. | | | Consumer Finance | | | | 1,266 | | | | 18,636 | |
| | Steel Authority of India Ltd. | | | Metals & Mining | | | | 9,162 | | | | 8,644 | |
| | Tata Consultancy Services Ltd. | | | IT Services | | | | 2,562 | | | | 94,623 | |
| | Tata Consumer Products Ltd. | | | Food Products | | | | 1,068 | | | | 10,540 | |
| | Tata Steel Ltd. | | | Metals & Mining | | | | 44,532 | | | | 54,357 | |
| | Tech Mahindra Ltd. | | | IT Services | | | | 1,302 | | | | 16,142 | |
| | Torrent Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 642 | | | | 12,310 | |
| | TVS Motor Co. Ltd. | | | Automobiles | | | | 774 | | | | 9,821 | |
| | Vedanta Ltd. | | | Metals & Mining | | | | 8,508 | | | | 28,243 | |
| b | | Zomato Ltd. | | | Internet & Catalog Retail | | | | 10,248 | | | | 7,854 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,433,723 | |
| | | | | | | | | | | | | | |
| | | Indonesia 1.0% | | | | | | | | | |
| | Adaro Energy Tbk PT, B | | | Oil, Gas & Consumable Fuels | | | | 80,400 | | | | 20,909 | |
| | Bank Mandiri Persero Tbk PT, A | | | Banks | | | | 24,600 | | | | 15,226 | |
| | Bank Rakyat Indonesia Persero Tbk PT, A | | | Banks | | | | 118,200 | | | | 34,853 | |
| | Bukit Asam Tbk PT, A | | | Oil, Gas & Consumable Fuels | | | | 25,800 | | | | 7,065 | |
| | Indocement Tunggal Prakarsa Tbk PT | | | Construction Materials | | | | 10,800 | | | | 6,738 | |
| | Indofood Sukses Makmur Tbk PT | | | Food Products | | | | 27,600 | | | | 10,920 | |
| | | | | | | | | | |
| | | | | | |
| 40 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Indonesia (continued) | | | | | | | | | |
| | Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | | | Diversified Telecommunication Services | | | | 67,800 | | | $ | 19,858 | |
| | Unilever Indonesia Tbk PT | | | Household Products | | | | 37,200 | | | | 11,799 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 127,368 | |
| | | | | | | | | | | | | | |
| | | Kuwait 0.2% | | | | | | | | | |
| | Mobile Telecommunications Co. KSCP | | | Wireless Telecommunication Services | | | | 13,848 | | | | 26,137 | |
| | | | | | | | | | | | | | |
| | | Malaysia 2.4% | | | | | | | | | |
| | CIMB Group Holdings Bhd., A | | | Banks | | | | 44,400 | | | | 49,121 | |
| | Digi.com Bhd | | | Wireless Telecommunication Services | | | | 22,200 | | | | 16,182 | |
| | HAP Seng Consolidated Bhd | | | Industrial Conglomerates | | | | 4,200 | | | | 5,543 | |
| | Hartalega Holdings Bhd | | | Health Care Equipment & Supplies | | | | 13,200 | | | | 4,725 | |
| | Kuala Lumpur Kepong Bhd | | | Food Products | | | | 3,600 | | | | 16,071 | |
| | Malayan Banking Bhd | | | Banks | | | | 44,400 | | | | 82,155 | |
| | Maxis Bhd | | | Wireless Telecommunication Services | | | | 15,600 | | | | 11,808 | |
| | MISC Bhd | | | Marine | | | | 8,400 | | | | 12,246 | |
| | Petronas Gas Bhd | | | Gas Utilities | | | | 6,000 | | | | 21,350 | |
| | RHB Bank Bhd | | | Banks | | | | 13,200 | | | | 15,827 | |
| | Sime Darby Bhd | | | Industrial Conglomerates | | | | 15,000 | | | | 6,923 | |
| | Sime Darby Plantation Bhd | | | Food Products | | | | 18,000 | | | | 15,877 | |
| | Tenaga Nasional Bhd | | | Electric Utilities | | | | 18,000 | | | | 31,249 | |
| | Top Glove Corp. Bhd | | | Health Care Equipment & Supplies | | | | 30,600 | | | | 4,124 | |
| | Westports Holdings Bhd | | | Transportation Infrastructure | | | | 5,400 | | | | 3,564 | |
| | YTL Corp. Bhd | | | Multi-Utilities | | | | 39,000 | | | | 4,878 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 301,643 | |
| | | | | | | | | | | | | | |
| | | Mexico 2.7% | | | | | | | | | |
| | America Movil SAB de CV | | | Wireless Telecommunication Services | | | | 67,218 | | | | 55,593 | |
| | Arca Continental SAB de CV | | | Beverages | | | | 2,598 | | | | 18,737 | |
| | Coca-Cola Femsa SAB de CV | | | Beverages | | | | 3,276 | | | | 19,171 | |
| | Fibra Uno Administracion SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 18,072 | | | | 18,632 | |
| | Gruma SAB de CV | | | Food Products | | | | 1,242 | | | | 11,915 | |
| | Grupo Aeroportuario del Pacifico SAB de CV | | | Transportation Infrastructure | | | | 2,154 | | | | 27,268 | |
| | Grupo Aeroportuario del Sureste SAB de CV | | | Transportation Infrastructure | | | | 1,230 | | | | 24,265 | |
| | Grupo Financiero Banorte SAB de CV | | | Banks | | | | 14,028 | | | | 90,220 | |
| | Grupo Mexico SAB de CV, B | | | Metals & Mining | | | | 18,726 | | | | 63,440 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 329,241 | |
| | | | | | | | | | | | | | |
| | | Pakistan 0.0% | | | | | | | | | |
| | Oil & Gas Development Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 6,156 | | | | 2,044 | |
| | | | | | | | | | | | | | |
| | | Peru 0.1% | | | | | | | | | |
| a | | InRetail Peru Corp., 144A | | | Food & Staples Retailing | | | | 174 | | | | 5,786 | |
| | | | | | | | | | | | | | |
| | | Philippines 0.3% | | | | | | | | | |
| | Aboitiz Power Corp., A | | | Independent Power Producers & Energy Traders | | | | 9,600 | | | | 5,043 | |
| | First Gen Corp. | | | Independent Power Producers & Energy Traders | | | | 6,000 | | | | 1,666 | |
| | Globe Telecom Inc. | | | Wireless Telecommunication Services | | | | 210 | | | | 7,272 | |
| | Manila Electric Co. | | | Electric Utilities | | | | 1,800 | | | | 8,075 | |
| | PLDT Inc. | | | Wireless Telecommunication Services | | | | 570 | | | | 14,662 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 36,718 | |
| | | | | | | | | | | | | | |
| | | Romania 0.1% | | | | | | | | | |
| | NEPI Rockcastle PLC | | | Real Estate Management & Development | | | | 3,078 | | | | 13,883 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| b,d | | Alrosa PJSC | | | Metals & Mining | | | | 54,971 | | | | — | |
| b,d | | Gazprom PJSC | | | Oil, Gas & Consumable Fuels | | | | 44,709 | | | | — | |
| b,d | | Inter RAO UES PJSC | | | Electric Utilities | | | | 811,741 | | | | — | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 41 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Russia† (continued) | | | | | | | | | |
| d | | LUKOIL PJSC | | | Oil, Gas & Consumable Fuels | | | | 2,268 | | | | — | |
| d | | MMC Norilsk Nickel PJSC | | | Metals & Mining | | | | 693 | | | | — | |
| b,d | | Moscow Exchange MICEX | | | Capital Markets | | | | 21,224 | | | | — | |
| b,d | | Novolipetsk Steel PJSC | | | Metals & Mining | | | | 35,119 | | | | — | |
| d | | PhosAgro PJSC | | | Chemicals | | | | 1,073 | | | | — | |
| d | | PhosAgro PJSC | | | Chemicals | | | | 21 | | | | — | |
| d | | PhosAgro PJSC | | | Chemicals | | | | 1 | | | | — | |
| b,d | | Polymetal International PLC | | | Metals & Mining | | | | 7,294 | | | | — | |
| b,d | | Polyus PJSC | | | Metals & Mining | | | | 756 | | | | — | |
| d | | Rosneft Oil Co. 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 | | | | — | |
| b,d | | TCS Group Holding PLC, GDR | | | Banks | | | | 1,778 | | | | — | |
| b,d | | United Co. RUSAL International PJSC | | | Metals & Mining | | | | 24,749 | | | | — | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | — | |
| | | | | | | | | | | | | | |
| | | Saudi Arabia 2.9% | | | | | | | | | |
| | Advanced Petrochemical Co. | | | Chemicals | | | | 816 | | | $ | 9,698 | |
| | Banque Saudi Fransi | | | Banks | | | | 1,068 | | | | 11,939 | |
| | Jarir Marketing Co. | | | Specialty Retail | | | | 384 | | | | 17,069 | |
| | SABIC Agri-Nutrients Co. | | | Chemicals | | | | 402 | | | | 16,906 | |
| | Sahara International Petrochemical Co. | | | Chemicals | | | | 2,340 | | | | 26,066 | |
| a | | Saudi Arabian Oil Co., 144A | | | Oil, Gas & Consumable Fuels | | | | 9,942 | | | | 94,868 | |
| | Saudi Basic Industries Corp. | | | Chemicals | | | | 450 | | | | 10,636 | |
| | Saudi Electricity Co. | | | Electric Utilities | | | | 2,076 | | | | 13,560 | |
| | Saudi Industrial Investment Group | | | Chemicals | | | | 2,490 | | | | 15,151 | |
| | Saudi Investment Bank | | | Banks | | | | 3,180 | | | | 14,457 | |
| | Saudi National Bank | | | Banks | | | | 198 | | | | 3,325 | |
| | Saudi Telecom Co. | | | Diversified Telecommunication Services | | | | 9,702 | | | | 101,617 | |
| | Yanbu National Petrochemical Co. | | | Chemicals | | | | 1,764 | | | | 21,739 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 357,031 | |
| | | | | | | | | | | | | | |
| | | South Africa 5.1% | | | | | | | | | |
| | Absa Group Ltd. | | | Banks | | | | 3,678 | | | | 36,147 | |
| | African Rainbow Minerals Ltd. | | | Metals & Mining | | | | 624 | | | | 8,490 | |
| | Anglo American Platinum Ltd. | | | Metals & Mining | | | | 408 | | | | 29,245 | |
| | Exxaro Resources Ltd. | | | Oil, Gas & Consumable Fuels | | | | 1,602 | | | | 18,044 | |
| | FirstRand Ltd. | | | Diversified Financial Services | | | | 30,846 | | | | 104,247 | |
| | Gold Fields Ltd. | | | Metals & Mining | | | | 3,708 | | | | 30,421 | |
| | Growthpoint Properties Ltd. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 21,936 | | | | 14,390 | |
| | Impala Platinum Holdings Ltd. | | | Metals & Mining | | | | 5,196 | | | | 49,053 | |
| | Kumba Iron Ore Ltd. | | | Metals & Mining | | | | 360 | | | | 7,768 | |
| | Mr Price Group Ltd. | | | Specialty Retail | | | | 1,656 | | | | 15,921 | |
| | MultiChoice Group | | | Media | | | | 2,976 | | | | 19,148 | |
| | Naspers Ltd., N | | | Internet & Direct Marketing Retail | | | | 378 | | | | 47,602 | |
| | Nedbank Group Ltd. | | | Banks | | | | 2,952 | | | | 32,807 | |
| | Old Mutual Ltd. | | | Insurance | | | | 29,142 | | | | 15,858 | |
| | Pick ‘N Pay Stores Ltd. | | | Food & Staples Retailing | | | | 2,526 | | | | 7,798 | |
| | Sanlam Ltd. | | | Insurance | | | | 11,424 | | | | 32,793 | |
| | Santam Ltd. | | | Insurance | | | | 288 | | | | 4,007 | |
| | Sibanye Stillwater Ltd. | | | Metals & Mining | | | | 16,680 | | | | 38,989 | |
| | SPAR Group Ltd. | | | Food & Staples Retailing | | | | 1,290 | | | | 10,290 | |
| | Standard Bank Group Ltd. | | | Banks | | | | 8,922 | | | | 71,485 | |
| | Tiger Brands Ltd. | | | Food Products | | | | 1,170 | | | | 11,030 | |
| | Vodacom Group Ltd. | | | Wireless Telecommunication Services | | | | 4,542 | | | | 30,852 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 636,385 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 42 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | �� | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | South Korea 9.1% | | | | | | | | | |
| | BNK Financial Group Inc., H | | | Banks | | | | 1,944 | | | $ | 8,180 | |
| | Cheil Worldwide Inc., A | | | Media | | | | 468 | | | | 7,425 | |
| | DB Insurance Co. Ltd., A | | | Insurance | | | | 324 | | | | 12,501 | |
| | GS Retail Co. Ltd. | | | Food & Staples Retailing | | | | 246 | | | | 4,402 | |
| | Hana Financial Group Inc. | | | Banks | | | | 2,082 | | | | 51,588 | |
| | Hanon Systems | | | Auto Components | | | | 978 | | | | 5,687 | |
| | HD Hyundai Co. Ltd. | | | Machinery | | | | 372 | | | | 14,067 | |
| b | | HYBE Co. Ltd. | | | Entertainment | | | | 30 | | | | 2,831 | |
| | Hyundai Marine & Fire Insurance Co. Ltd. | | | Insurance | | | | 78 | | | | 1,597 | |
| | Industrial Bank of Korea | | | Banks | | | | 1,824 | | | | 12,137 | |
| | Kakao Corp. | | | Interactive Media & Services | | | | 558 | | | | 22,270 | |
| b | | Kakao Games Corp. | | | Entertainment | | | | 258 | | | | 7,691 | |
| b | | KakaoBank Corp. | | | Banks | | | | 150 | | | | 2,102 | |
| | KB Financial Group Inc. | | | Banks | | | | 2,598 | | | | 79,355 | |
| | Kia Corp. | | | Automobiles | | | | 1,284 | | | | 64,528 | |
| | Korea Gas Corp.. | | | Gas Utilities | | | | 216 | | | | 5,103 | |
| | Korea Investment Holdings Co. Ltd. | | | Capital Markets | | | | 270 | | | | 8,964 | |
| | KT Corp. | | | Diversified Telecommunication Services | | | | 828 | | | | 20,950 | |
| | KT&G Corp. | | | Tobacco | | | | 744 | | | | 45,034 | |
| | Kumho Petrochemical Co. Ltd. | | | Chemicals | | | | 114 | | | | 9,203 | |
| b | | L&F Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 12 | | | | 1,490 | |
| | LG Chem Ltd. | | | Chemicals | | | | 48 | | | | 17,983 | |
| | LG Corp. | | | Industrial Conglomerates | | | | 480 | | | | 24,827 | |
| | LG Display Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,536 | | | | 12,883 | |
| | LG Uplus Corp. | | | Diversified Telecommunication Services | | | | 1,374 | | | | 10,324 | |
| | NH Investment & Securities Co. Ltd. | | | Capital Markets | | | | 960 | | | | 6,032 | |
| | POSCO Holdings Inc. | | | Metals & Mining | | | | 522 | | | | 76,985 | |
| | S-1 Corp. | | | Commercial Services & Supplies | | | | 120 | | | | 4,856 | |
| | Samsung Card Co. Ltd. | | | Consumer Finance | | | | 144 | | | | 3,040 | |
| | Samsung Electronics Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 9,060 | | | | 336,259 | |
| | Samsung Fire & Marine Insurance Co. Ltd. | | | Insurance | | | | 216 | | | | 27,779 | |
| | Samsung Securities Co. Ltd. | | | Capital Markets | | | | 414 | | | | 8,898 | |
| | SD Biosensor Inc. | | | Health Care Equipment & Supplies | | | | 234 | | | | 4,351 | |
| | Seegene Inc. | | | Biotechnology | | | | 306 | | | | 5,732 | |
| | Shinhan Financial Group Co. Ltd. | | | Banks | | | | 3,498 | | | | 81,906 | |
| b | | SK Biopharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 114 | | | | 4,534 | |
| b | | SK Bioscience Co. Ltd. | | | Biotechnology | | | | 54 | | | | 3,031 | |
| | SK Hynix Inc. | | | Semiconductors & Semiconductor Equipment | | | | 870 | | | | 50,533 | |
| | SK Telecom Co. Ltd. | | | Wireless Telecommunication Services | | | | 702 | | | | 24,926 | |
| | SSANGYONG C&E Co. Ltd. | | | Construction Materials | | | | 684 | | | | 2,806 | |
| | Wemade Co. Ltd. | | | Entertainment | | | | 78 | | | | 2,497 | |
| | Woori Financial Group Inc. | | | Banks | | | | 3,990 | | | | 29,841 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,127,128 | |
| | | | | | | | | | | | | | |
| | | Taiwan 17.9% | | | | | | | | | |
| | Acer Inc., H | | | Technology Hardware, Storage & Peripherals | | | | 18,000 | | | | 12,416 | |
| | ASE Industrial Holding Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 24,000 | | | | 60,550 | |
| | Asia Cement Corp. | | | Construction Materials | | | | 18,000 | | | | 22,338 | |
| | ASMedia Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 240 | | | | 5,019 | |
| | Asustek Computer Inc. | | | Technology Hardware, Storage & Peripherals | | | | 4,620 | | | | 34,051 | |
| | AU Optronics Corp., H | | | Electronic Equipment, Instruments & Components | | | | 54,000 | | | | 25,002 | |
| b | | Catcher Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 5,000 | | | | 27,166 | |
| | Cathay Financial Holding Co. Ltd., A | | | Insurance | | | | 57,000 | | | | 71,724 | |
| | Chicony Electronics Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 4,000 | | | | 10,381 | |
| | China Development Financial Holding Corp., A | | | Banks | | | | 114,000 | | | | 43,088 | |
| | China Steel Corp., A | | | Metals & Mining | | | | 78,000 | | | | 65,596 | |
| | Compal Electronics Inc., H | | | Technology Hardware, Storage & Peripherals | | | | 24,000 | | | | 16,404 | |
| | CTBC Financial Holding Co. Ltd., A | | | Banks | | | | 126,000 | | | | 78,777 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 43 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Taiwan (continued) | | | | | | | | | |
| | Far EasTone Telecommunications Co. Ltd. | | | Wireless Telecommunication Services | | | | 10,000 | | | $ | 22,804 | |
| | Farglory Land Development Co. Ltd. | | | Real Estate Management & Development | | | | 1,000 | | | | 1,811 | |
| | Feng Hsin Steel Co. Ltd. | | | Metals & Mining | | | | 3,000 | | | | 5,632 | |
| | Formosa Chemicals & Fibre Corp. | | | Chemicals | | | | 22,000 | | | | 47,882 | |
| | Formosa Plastics Corp. | | | Chemicals | | | | 30,000 | | | | 81,829 | |
| | Fubon Financial Holding Co. Ltd. | | | Insurance | | | | 12,600 | | | | 19,803 | |
| | Globalwafers Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 1,380 | | | | 15,930 | |
| | Hon Hai Precision Industry Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 29,000 | | | | 93,168 | |
| | Innolux Corp. | | | Electronic Equipment, Instruments & Components | | | | 66,000 | | | | 21,724 | |
| | Inventec Corp. | | | Technology Hardware, Storage & Peripherals | | | | 18,000 | | | | 12,983 | |
| | Largan Precision Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 600 | | | | 31,655 | |
| | Lite-On Technology Corp. | | | Technology Hardware, Storage & Peripherals | | | | 14,000 | | | | 28,133 | |
| | Macronix International Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 12,000 | | | | 11,774 | |
| | MediaTek Inc. | | | Semiconductors & Semiconductor Equipment | | | | 7,000 | | | | 121,484 | |
| | Micro-Star International Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 4,000 | | | | 13,544 | |
| | Nan Ya Plastics Corp. | | | Chemicals | | | | 36,000 | | | | 75,858 | |
| | Nanya Technology Corp. | | | Semiconductors & Semiconductor Equipment | | | | 6,000 | | | | 9,251 | |
| | Nien Made Enterprise Co. Ltd. | | | Household Durables | | | | 1,140 | | | | 9,031 | |
| | Novatek Microelectronics Corp. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 4,000 | | | | 27,591 | |
| | Pegatron Corp. | | | Technology Hardware, Storage & Peripherals | | | | 14,000 | | | | 25,796 | |
| | Phison Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 1,000 | | | | 8,362 | |
| | Powerchip Semiconductor Manufacturing Corp. | | | Semiconductors & Semiconductor Equipment | | | | 18,000 | | | | 16,158 | |
| | Powertech Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 6,000 | | | | 14,571 | |
| | Quanta Computer Inc. | | | Technology Hardware, Storage & Peripherals | | | | 18,000 | | | | 43,655 | |
| | Radiant Opto-Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 3,000 | | | | 9,496 | |
| | Realtek Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 3,200 | | | | 27,213 | |
| | Ruentex Industries Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 6,000 | | | | 9,657 | |
| | Shin Kong Financial Holding Co. Ltd. | | | Insurance | | | | 90,000 | | | | 23,273 | |
| | Simplo Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,000 | | | | 8,315 | |
| | Sino-American Silicon Products Inc. | | | Semiconductors & Semiconductor Equipment | | | | 4,000 | | | | 16,504 | |
| | SinoPac Financial Holdings Co. Ltd. | | | Banks | | | | 11,780 | | | | 6,419 | |
| | Synnex Technology International Corp. | | | Electronic Equipment, Instruments & Components | | | | 9,000 | | | | 14,967 | |
| | Taiwan Glass Industry Corp. | | | Building Products | | | | 6,000 | | | | 3,298 | |
| | Taiwan Mobile Co. Ltd. | | | Wireless Telecommunication Services | | | | 6,000 | | | | 18,067 | |
| | Taiwan Semiconductor Manufacturing Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 42,720 | | | | 567,824 | |
| | Teco Electric & Machinery Co. Ltd. | | | Electrical Equipment | | | | 6,000 | | | | 5,320 | |
| | Tripod Technology Corp. | | | Electronic Equipment, Instruments & Components | | | | 3,000 | | | | 8,825 | |
| | United Microelectronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 78,000 | | | | 87,830 | |
| | Vanguard International Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 6,000 | | | | 12,284 | |
| | Walsin Technology Corp. | | | Electronic Equipment, Instruments & Components | | | | 2,000 | | | | 4,693 | |
| | Wan Hai Lines Ltd. | | | Marine | | | | 11,000 | | | | 23,144 | |
| | Win Semiconductors Corp. | | | Semiconductors & Semiconductor Equipment | | | | 3,000 | | | | 11,670 | |
| | Wistron Corp. | | | Technology Hardware, Storage & Peripherals | | | | 18,000 | | | | 15,052 | |
| | Wiwynn Corp. | | | Technology Hardware, Storage & Peripherals | | | | 540 | | | | 13,743 | |
| | WPG Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 9,000 | | | | 13,167 | |
| | Yang Ming Marine Transport Corp. | | | Marine | | | | 12,000 | | | | 23,245 | |
| | Yuanta Financial Holding Co. Ltd. | | | Capital Markets | | | | 78,520 | | | | 48,350 | |
| | Zhen Ding Technology Holding Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,000 | | | | 13,355 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,218,652 | |
| | | | | | | | | | | | | | |
| | | Thailand 1.5% | | | | | | | | | |
| | Advanced Info Service PCL, NVDR | | | Wireless Telecommunication Services | | | | 6,400 | | | | 33,086 | |
| | BTS Group Holdings PCL, A, NVDR | | | Road & Rail | | | | 39,000 | | | | 8,582 | |
| | Intouch Holdings PCL, NVDR | | | Wireless Telecommunication Services | | | | 6,400 | | | | 12,344 | |
| | IRPC PCL, NVDR | | | Oil, Gas & Consumable Fuels | | | | 76,200 | | | | 6,303 | |
| | Land and Houses PCL, NVDR | | | Real Estate Management & Development | | | | 24,600 | | | | 5,804 | |
| | Osotspa PCL, NVDR | | | Beverages | | | | 10,000 | | | | 7,224 | |
| | PTT Global Chemical PCL, NVDR | | | Chemicals | | | | 10,800 | | | | 11,882 | |
| | | | | | | | | | |
| | | | | | |
| 44 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Thailand (continued) | | | | | | | | | |
| | PTT PCL, NVDR | | | Oil, Gas & Consumable Fuels | | | | 55,800 | | | $ | 50,297 | |
| | Ratch Group PCL, NVDR | | | Independent Power Producers & Energy Traders | | | | 2,400 | | | | 2,609 | |
| | Ratch Group PCL | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 1,304 | |
| | Sri Trang Gloves Thailand PCL, NVDR | | | Health Care Equipment & Supplies | | | | 9,600 | | | | 2,901 | |
| | Srisawad Corp. PCL, NVDR | | | Consumer Finance | | | | 4,200 | | | | 4,788 | |
| | Thai Union Group PCL, NVDR | | | Food Products | | | | 13,800 | | | | 6,842 | |
| | The Siam Cement PCL, NVDR | | | Construction Materials | | | | 1,800 | | | | 15,557 | |
| | Tisco Financial Group PCL, NVDR | | | Banks | | | | 2,400 | | | | 5,901 | |
| | Total Access Communication PCL, NVDR | | | Wireless Telecommunication Services | | | | 4,800 | | | | 5,790 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 181,214 | |
| | | | | | | | | | | | | | |
| | | Turkey 0.5% | | | | | | | | | |
| | Arcelik AS | | | Household Durables | | | | 1,704 | | | | 6,177 | |
| | BIM Birlesik Magazalar AS | | | Food & Staples Retailing | | | | 282 | | | | 1,760 | |
| | Enka Insaat ve Sanayi AS | | | Industrial Conglomerates | | | | 10,926 | | | | 9,966 | |
| | Eregli Demir ve Celik Fabrikalari TAS | | | Metals & Mining | | | | 8,064 | | | | 12,606 | |
| | Ford Otomotiv Sanayi AS | | | Automobiles | | | | 438 | | | | 7,726 | |
| | Haci Omer Sabanci Holding AS | | | Diversified Financial Services | | | | 7,512 | | | | 10,446 | |
| | Tofas Turk Otomobil Fabrikasi AS | | | Automobiles | | | | 762 | | | | 3,761 | |
| | Turk Telekomunikasyon AS | | | Diversified Telecommunication Services | | | | 1,968 | | | | 1,150 | |
| | Turkcell Iletisim Hizmetleri AS | | | Wireless Telecommunication Services | | | | 780 | | | | 834 | |
| | Turkiye Is Bankasi AS, C | | | Banks | | | | 14,892 | | | | 6,041 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 60,467 | |
| | | | | | | | | | | | | | |
| | | United Arab Emirates 2.0% | | | | | | | | | |
| | Abu Dhabi Commercial Bank PJSC | | | Banks | | | | 17,310 | | | | 42,509 | |
| | Abu Dhabi Islamic Bank PJSC | | | Banks | | | | 9,132 | | | | 22,500 | |
| | Abu Dhabi National Oil Co. for Distribution PJSC | | | Specialty Retail | | | | 20,304 | | | | 24,544 | |
| | Aldar Properties PJSC | | | Real Estate Management & Development | | | | 7,062 | | | | 8,094 | |
| | Dubai Islamic Bank PJSC | | | Banks | | | | 18,552 | | | | 30,204 | |
| | Emirates NBD Bank PJSC | | | Banks | | | | 12,594 | | | | 44,060 | |
| | Emirates Telecommunications Group Co. PJSC | | | Diversified Telecommunication Services | | | | 5,196 | | | | 33,046 | |
| b | | International Holding Co. PJSC | | | Industrial Conglomerates | | | | 432 | | | | 41,870 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 246,827 | |
| | | | | | | | | | | | | | |
| | | United States 0.2% | | | | | | | | | |
| | JBS SA | | | Food Products | | | | 4,800 | | | | 22,292 | |
| | Parade Technologies Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 360 | | | | 6,713 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 29,005 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $15,238,460) | | | | | | | | | | | 12,097,863 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 2.0% | | | | | | | | | |
| | | Brazil 1.3% | | | | | | | | | |
| e | | Banco Bradesco SA, 3.165%, pfd. | | | Banks | | | | 1,800 | | | | 6,602 | |
| e | | Braskem SA, 35.194%, pfd., A | | | Chemicals | | | | 1,200 | | | | 5,822 | |
| e | | Companhia Energetica de Minas Gerais, 12.825%, pfd. | | | Electric Utilities | | | | 9,001 | | | | 17,906 | |
| e | | Gerdau SA, 14.894%, pfd. | | | Metals & Mining | | | | 7,200 | | | | 32,533 | |
| e | | Itausa SA, 5.807%, pfd. | | | Banks | | | | 3,600 | | | | 6,476 | |
| e | | Petroleo Brasileiro SA, 38.601%, pfd. | | | Oil, Gas & Consumable Fuels | | | | 16,200 | | | | 89,254 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 158,593 | |
| | | | | | | | | | | | | | |
| | | Chile 0.2% | | | | | | | | | |
| e | | Sociedad Quimica y Minera de Chile SA, 0.005%, pfd., B | | | Chemicals | | | | 264 | | | | 24,831 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 45 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Preferred Stocks (continued) | | | | | | | | | |
| | | Colombia 0.1% | | | | | | | | | |
| | Bancolombia SA, 8.583%, pfd. | | | Banks | | | | 2,826 | | | $ | 17,237 | |
| | Grupo Aval Acciones y Valores SA, 5.062%, pfd. | | | Banks | | | | 26,250 | | | | 3,314 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 20,551 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| d,e | | Surgutneftegas PJSC, pfd. | | | Oil, Gas & Consumable Fuels | | | | 162,582 | | | | — | |
| | | | | | | | | | | | | | |
| | | South Korea 0.4% | | | | | | | | | |
| e | | Kumho Petrochemical Co. Ltd., 12.094%, pfd. | | | Chemicals | | | | 18 | | | | 1,045 | |
| e | | LG Chem Ltd., 4.782%, pfd. | | | Chemicals | | | | 6 | | | | 1,057 | |
| e | | Samsung Electronics Co. Ltd., 2.311%, pfd. | | | Technology Hardware, Storage & Peripherals | | | | 1,416 | | | | 46,418 | |
| e | | Samsung Fire & Marine Insurance Co. Ltd., 7.77%, pfd. | | | Insurance | | | | 18 | | | | 1,944 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 50,464 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks
(Cost $370,356) | | | | | | | | | | | 254,439 | |
| | | | | | | | | | | | | | |
| | | Right 0.0%† | | | | | | | | | |
| | | Philippines 0.0%† | | | | | | | | | |
| | GLOBE TELECOM Inc. RIGHTS | | | Wireless Telecommunication Services | | | | 15 | | | | 89 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $0) | | | | | | | | | | | 89 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $15,608,816) 99.4% | | | | | | | | | | | 12,352,391 | |
| | Other Assets, less Liabilities 0.6% | | | | | | | | | | | 74,916 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 12,427,307 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $535,975, representing 4.3% of net assets.
bNon-income producing.
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 September 30, 2022, the value of was $85,546, 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 September 30, 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 | | | $ | 87,150 | | | | 12/16/22 | | | $ | (9,794 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
| | | | | | | | | | |
| | | | | | |
| 46 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin International Core Dividend Tilt Index ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 28.65 | | | $ | 26.52 | | | $ | 22.55 | | | $ | 24.70 | | | $ | 24.25 | | | $ | 24.70 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.62 | | | | 1.00 | | | | 0.73 | | | | 0.89 | | | | 0.93 | | | | 0.77 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (5.27 | ) | | | 1.93 | | | | 5.27 | | | | (2.61 | ) | | | 0.79 | | | | 0.10 | |
| | | | |
| | | | | | |
Total from investment operations | | | (4.65 | ) | | | 2.93 | | | | 6.00 | | | | (1.72 | ) | | | 1.72 | | | | 0.87 | |
| | | | |
| | | | | | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | (1.14 | ) | | | (0.80 | ) | | | (0.91 | ) | | | (0.19 | ) | | | (0.30 | ) | | | (1.32 | ) |
| | | | | | |
Net realized gains | | | (0.47 | ) | | | — | | | | (1.12 | ) | | | (0.24 | ) | | | (0.97 | ) | | | — | |
| | | | |
| | | | | | |
Total Distributions | | | (1.61 | ) | | | (0.80 | ) | | | (2.03 | ) | | | (0.43 | ) | | | (1.27 | ) | | | (1.32 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 22.39 | | | $ | 28.65 | | | $ | 26.52 | | | $ | 22.55 | | | $ | 24.70 | | | $ | 24.25 | |
| | | | |
| | | | | | |
Total returnd | | | (16.78)% | | | | 11.13% | | | | 27.54% | | | | (7.12)% | | | | 7.53% | | | | 3.47% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.27% | | | | 0.40% | | | | 0.40% | | | | 0.40% | | | | 0.40% | | | | 1.42% | f |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.27% | | | | 0.40% | | | | 0.40% | | | | 0.40% | | | | 0.40% | | | | 0.40% | f |
| | | | | | |
Net investment income | | | 4.70% | | | | 3.54% | | | | 2.97% | | | | 3.44% | | | | 3.75% | | | | 3.07% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $31,343 | | | | $17,192 | | | | $13,260 | | | | $9,021 | | | | $7,410 | | | | $9,702 | |
| | | | | | |
Portfolio turnover rateg | | | 93.59% | h | | | 30.20% | h | | | 42.33% | h | | | 26.82% | h | | | 39.24% | | | | 32.55% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ International Equity Hedged ETF was renamed Franklin International Core Dividend Tilt Index ETF.
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: | | | 93.59% | | | | 30.20% | | | | 41.62% | | | 26.82% | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 47 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin International Core Dividend Tilt Index ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.9% | | | | | | | | | |
| | | Australia 10.2% | | | | | | | | | |
| | Alumina Ltd. | | | Metals & Mining | | | | 17,668 | | | $ | 14,370 | |
| | Apa Group | | | Gas Utilities | | | | 8,792 | | | | 54,211 | |
| | Aristocrat Leisure Ltd. | | | Hotels, Restaurants & Leisure | | | | 420 | | | | 8,890 | |
| | Aurizon Holdings Ltd. | | | Road & Rail | | | | 13,804 | | | | 30,620 | |
| | Australia & New Zealand Banking Group Ltd. | | | Banks | | | | 10,094 | | | | 147,971 | |
| | Australian Stock Exchange Ltd. | | | Capital Markets | | | | 756 | | | | 34,880 | |
| | Bendigo and Adelaide Bank Ltd. | | | Banks | | | | 4,312 | | | | 21,597 | |
| | BHP Group Ltd. | | | Metals & Mining | | | | 20,510 | | | | 507,960 | |
| | Challenger Ltd. | | | Diversified Financial Services | | | | 2,394 | | | | 9,004 | |
| | Cochlear Ltd. | | | Health Care Equipment & Supplies | | | | 98 | | | | 12,258 | |
| | Coles Group Ltd. | | | Food & Staples Retailing | | | | 4,410 | | | | 46,586 | |
| | Commonwealth Bank of Australia | | | Banks | | | | 4,088 | | | | 238,394 | |
| | Computershare Ltd. | | | IT Services | | | | 1,092 | | | | 17,384 | |
| | CSL Ltd. | | | Biotechnology | | | | 1,078 | | | | 197,547 | |
| | Dexus | | | Equity Real Estate Investment Trusts (REITs | ) | | | 7,980 | | | | 39,609 | |
| | Domino’s Pizza Enterprises Ltd. | | | Hotels, Restaurants & Leisure | | | | 504 | | | | 16,695 | |
| | Endeavour Group Ltd. | | | Food & Staples Retailing | | | | 6,300 | | | | 28,354 | |
| | Fortescue Metals Group Ltd. | | | Metals & Mining | | | | 13,706 | | | | 148,222 | |
| | Glencore PLC | | | Metals & Mining | | | | 7,448 | | | | 39,754 | |
| | Goodman Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,456 | | | | 14,772 | |
| | Harvey Norman Holdings Ltd. | | | Multiline Retail | | | | 4,942 | | | | 12,837 | |
| | Incitec Pivot Ltd. | | | Chemicals | | | | 5,096 | | | | 11,500 | |
| | Macquarie Group Ltd. | | | Capital Markets | | | | 994 | | | | 97,615 | |
| | Medibank Private Ltd. | | | Insurance | | | | 21,028 | | | | 46,914 | |
| | Mirvac Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 9,954 | | | | 12,448 | |
| | National Australia Bank Ltd. | | | Banks | | | | 8,232 | | | | 152,485 | |
| | Northern Star Resources Ltd. | | | Metals & Mining | | | | 2,450 | | | | 12,334 | |
| | Origin Energy Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,620 | | | | 15,357 | |
| | REA Group Ltd. | | | Media | | | | 154 | | | | 11,372 | |
| | Rio Tinto Ltd. | | | Metals & Mining | | | | 2,814 | | | | 168,967 | |
| | Rio Tinto PLC | | | Metals & Mining | | | | 5,740 | | | | 313,714 | |
| | Scentre Group | | | Real Estate Investment Trusts (REITs | ) | | | 38,766 | | | | 63,309 | |
| | SEEK Ltd. | | | Professional Services | | | | 1,330 | | | | 16,393 | |
| | Seven Group Holdings Ltd. | | | Trading Companies & Distributors | | | | 1,162 | | | | 12,663 | |
| | Sonic Healthcare Ltd. | | | Health Care Providers & Services | | | | 1,470 | | | | 28,902 | |
| | Stockland | | | Real Estate Investment Trusts (REITs | ) | | | 17,766 | | | | 37,352 | |
| | Suncorp-Metway Ltd. | | | Insurance | | | | 3,626 | | | | 23,383 | |
| | Tabcorp Holdings Ltd. | | | Hotels, Restaurants & Leisure | | | | 15,050 | | | | 9,047 | |
| | Telstra Corp. Ltd. | | | Diversified Telecommunication Services | | | | 8,232 | | | | 20,377 | |
| | The GPT Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 13,986 | | | | 34,441 | |
| | TPG Telecom Limited | | | Diversified Telecommunication Services | | | | 2,702 | | | | 8,426 | |
| | Transurban Group | | | Transportation Infrastructure | | | | 8,708 | | | | 69,089 | |
| | Treasury Wine Estates Ltd. | | | Beverages | | | | 1,148 | | | | 9,278 | |
| | Vicinity Centres | | | Real Estate Investment Trusts (REITs | ) | | | 27,468 | | | | 30,641 | |
| | Wesfarmers Ltd. | | | Multiline Retail | | | | 3,668 | | | | 100,748 | |
| | Westpac Banking Corp. | | | Banks | | | | 12,026 | | | | 159,591 | |
| | WiseTech Global Ltd. | | | Software | | | | 1,204 | | | | 40,254 | |
| | Woolworths Group Ltd. | | | Food & Staples Retailing | | | | 1,596 | | | | 34,838 | |
| | Worley Ltd. | | | Energy Equipment & Services | | | | 882 | | | | 7,219 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,190,572 | |
| | | | | | | | | | | | | | |
| | | Austria 0.3% | | | | | | | | | |
| a | | BAWAG Group AG, 144A | | | Banks | | | | 504 | | | | 21,952 | |
| | Erste Group Bank AG | | | Banks | | | | 2,296 | | | | 50,924 | |
| | Raiffeisen Bank International AG | | | Banks | | | | 378 | | | | 4,521 | |
| | Strabag SE | | | Construction & Engineering | | | | 98 | | | | 3,706 | |
| | Voestalpine AG | | | Metals & Mining | | | | 392 | | | | 6,724 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 87,827 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 48 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Belgium 0.8% | | | | | | | | | |
| | Ageas SA/NV | | | Insurance | | | | 1,344 | | | $ | 49,295 | |
| | Colruyt SA | | | Food & Staples Retailing | | | | 378 | | | | 8,332 | |
| | Groupe Bruxelles Lambert SA | | | Diversified Financial Services | | | | 658 | | | | 46,335 | |
| | KBC Groep NV | | | Banks | | | | 2,352 | | | | 112,119 | |
| | Proximus SADP | | | Diversified Telecommunication Services | | | | 1,204 | | | | 12,497 | |
| | Solvay SA | | | Chemicals | | | | 322 | | | | 25,122 | |
| | Telenet Group Holding NV | | | Media | | | | 378 | | | | 5,225 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 258,925 | |
| | | | | | | | | | | | | | |
| | | Chile 0.1% | | | | | | | | | |
| | Antofagasta PLC | | | Metals & Mining | | | | 2,422 | | | | 30,160 | |
| | | | | | | | | | | | | | |
| | | China 0.2% | | | | | | | | | |
| a,b | | WuXi Biologics (Cayman) Inc., 144A | | | Life Sciences Tools & Services | | | | 8,908 | | | | 53,789 | |
| | | | | | | | | | | | | | |
| | | Denmark 2.2% | | | | | | | | | |
| | AP Moller-Maersk A/S, A | | | Marine | | | | 26 | | | | 46,177 | |
| | AP Moller-Maersk A/S, B | | | Marine | | | | 46 | | | | 84,032 | |
| | Coloplast AS, B | | | Health Care Equipment & Supplies | | | | 322 | | | | 32,913 | |
| | DSV A/S | | | Air Freight & Logistics | | | | 140 | | | | 16,527 | |
| b | | Genmab A/S | | | Biotechnology | | | | 28 | | | | 9,079 | |
| | Novo Nordisk AS, B | | | Pharmaceuticals | | | | 4,298 | | | | 431,165 | |
| a | | Orsted AS, 144A | | | Electric Utilities | | | | 126 | | | | 10,085 | |
| | Pandora AS | | | Textiles, Apparel & Luxury Goods | | | | 140 | | | | 6,624 | |
| | Vestas Wind Systems A/S | | | Electrical Equipment | | | | 2,044 | | | | 38,139 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 674,741 | |
| | | | | | | | | | | | | | |
| | | Finland 1.7% | | | | | | | | | |
| | Elisa OYJ | | | Diversified Telecommunication Services | | | | 1,106 | | | | 50,220 | |
| c | | Fortum OYJ, Reg S | | | Electric Utilities | | | | 3,542 | | | | 47,781 | |
| | Huhtamaki OYJ | | | Containers & Packaging | | | | 252 | | | | 8,063 | |
| | Kesko OYJ | | | Food & Staples Retailing | | | | 1,078 | | | | 20,218 | |
| | Kesko OYJ, A | | | Food & Staples Retailing | | | | 378 | | | | 6,821 | |
| | Kone OYJ, B | | | Machinery | | | | 1,512 | | | | 58,672 | |
| | Neste Oil OYJ | | | Oil, Gas & Consumable Fuels | | | | 546 | | | | 23,963 | |
| | Nordea Bank Abp | | | Banks | | | | 24,276 | | | | 209,280 | |
| | Orion OYJ | | | Pharmaceuticals | | | | 350 | | | | 14,771 | |
| | Orion OYJ, A | | | Pharmaceuticals | | | | 70 | | | | 2,976 | |
| | Sampo OYJ, A | | | Insurance | | | | 1,764 | | | | 75,622 | |
| | UPM-Kymmene OYJ | | | Paper & Forest Products | | | | 364 | | | | 11,618 | |
| | Wartsila OYJ ABP | | | Machinery | | | | 2,072 | | | | 13,360 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 543,365 | |
| | | | | | | | | | | | | | |
| | | France 9.1% | | | | | | | | | |
| | Air Liquide SA | | | Chemicals | | | | 224 | | | | 25,798 | |
| | Airbus SE | | | Aerospace & Defense | | | | 280 | | | | 24,383 | |
| a | | Amundi SA, 144A | | | Capital Markets | | | | 434 | | | | 18,265 | |
| | AXA SA | | | Insurance | | | | 9,226 | | | | 203,135 | |
| | BNP Paribas SA | | | Banks | | | | 6,328 | | | | 270,317 | |
| | Bouygues SA | | | Construction & Engineering | | | | 1,582 | | | | 41,612 | |
| | Capgemini SE | | | IT Services | | | | 70 | | | | 11,349 | |
| | Cie Generale des Etablissements Michelin SCA | | | Auto Components | | | | 546 | | | | 12,385 | |
| | Compagnie de Saint-Gobain | | | Building Products | | | | 1,092 | | | | 39,635 | |
| | Covivio | | | Equity Real Estate Investment Trusts (REITs | ) | | | 378 | | | | 18,338 | |
| | Credit Agricole SA | | | Banks | | | | 9,940 | | | | 81,446 | |
| | Danone SA | | | Food Products | | | | 1,764 | | | | 83,934 | |
| | Dassault Systemes SE | | | Software | | | | 1,316 | | | | 46,070 | |
| | EDF SA | | | Electric Utilities | | | | 2,226 | | | | 25,929 | |
| | Engie SA | | | Multi-Utilities | | | | 10,108 | | | | 117,263 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 49 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | France (continued) | | | | | | | | | |
| | EssilorLuxottica SA | | | Textiles, Apparel & Luxury Goods | | | | 476 | | | $ | 65,447 | |
| | Gecina SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 294 | | | | 23,171 | |
| | Hermes International | | | Textiles, Apparel & Luxury Goods | | | | 32 | | | | 38,152 | |
| | Kering SA | | | Textiles, Apparel & Luxury Goods | | | | 140 | | | | 62,891 | |
| | Legrand SA | | | Electrical Equipment | | | | 252 | | | | 16,456 | |
| | L’Oreal SA | | | Personal Products | | | | 210 | | | | 67,941 | |
| | LVMH Moet Hennessy Louis Vuitton SE | | | Textiles, Apparel & Luxury Goods | | | | 672 | | | | 401,841 | |
| | Orange SA | | | Diversified Telecommunication Services | | | | 13,874 | | | | 125,696 | |
| | Pernod Ricard SA | | | Beverages | | | | 238 | | | | 44,032 | |
| | Safran SA | | | Aerospace & Defense | | | | 42 | | | | 3,868 | |
| | Sanofi | | | Pharmaceuticals | | | | 4,004 | | | | 307,525 | |
| | Sartorius Stedim Biotech | | | Life Sciences Tools & Services | | | | 84 | | | | 26,094 | |
| | Schneider Electric SE | | | Electrical Equipment | | | | 1,414 | | | | 161,988 | |
| | Societe Generale SA | | | Banks | | | | 2,352 | | | | 47,039 | |
| | Teleperformance | | | Professional Services | | | | 42 | | | | 10,735 | |
| | TotalEnergies SE | | | Oil, Gas & Consumable Fuels | | | | 6,230 | | | | 294,633 | |
| | Veolia Environnement SA | | | Multi-Utilities | | | | 1,134 | | | | 21,896 | |
| | Vinci SA | | | Construction & Engineering | | | | 1,204 | | | | 98,099 | |
| a,b,c | | Worldline SA, 144A, Reg S | | | IT Services | | | | 196 | | | | 7,811 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,845,174 | |
| | | | | | | | | | | | | | |
| | | Germany 7.5% | | | | | | | | | |
| | Adidas AG | | | Textiles, Apparel & Luxury Goods | | | | 420 | | | | 48,913 | |
| | Allianz SE | | | Insurance | | | | 1,890 | | | | 299,579 | |
| | Aroundtown SA | | | Real Estate Management & Development | | | | 7,574 | | | | 16,747 | |
| | BASF SE | | | Chemicals | | | | 5,124 | | | | 198,781 | |
| | Bayer AG | | | Pharmaceuticals | | | | 2,674 | | | | 124,208 | |
| | Bayerische Motoren Werke AG | | | Automobiles | | | | 2,044 | | | | 140,148 | |
| | Continental AG | | | Auto Components | | | | 70 | | | | 3,151 | |
| a | | Covestro AG, 144A | | | Chemicals | | | | 1,358 | | | | 39,299 | |
| | Daimler AG | | | Automobiles | | | | 4,396 | | | | 225,447 | |
| a,b | | Delivery Hero SE, 144A | | | Internet & Direct Marketing Retail | | | | 590 | | | | 21,929 | |
| | Deutsche Boerse AG | | | Capital Markets | | | | 336 | | | | 55,382 | |
| | Deutsche Post AG | | | Air Freight & Logistics | | | | 3,738 | | | | 113,941 | |
| | Deutsche Telekom AG | | | Diversified Telecommunication Services | | | | 8,652 | | | | 148,261 | |
| | E.ON SE | | | Multi-Utilities | | | | 14,980 | | | | 115,875 | |
| | Evonik Industries AG | | | Chemicals | | | | 1,372 | | | | 23,185 | |
| | GEA Group AG | | | Machinery | | | | 364 | | | | 11,889 | |
| | HeidelbergCement AG | | | Construction Materials | | | | 308 | | | | 12,326 | |
| | Infineon Technologies AG | | | Semiconductors & Semiconductor Equipment | | | | 4,564 | | | | 101,539 | |
| | KION Group AG | | | Machinery | | | | 504 | | | | 9,784 | |
| | Merck KGaA | | | Pharmaceuticals | | | | 42 | | | | 6,863 | |
| | Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | | | Insurance | | | | 406 | | | | 98,440 | |
| | RWE AG | | | Multi-Utilities | | | | 658 | | | | 24,360 | |
| | SAP SE | | | Software | | | | 2,506 | | | | 206,515 | |
| | Siemens AG | | | Industrial Conglomerates | | | | 2,072 | | | | 205,419 | |
| | Telefonica Deutschland Holding AG | | | Diversified Telecommunication Services | | | | 7,028 | | | | 14,273 | |
| | Vonovia SE | | | Real Estate Management & Development | | | | 3,486 | | | | 75,848 | |
| a,b | | Zalando SE, 144A | | | Internet & Direct Marketing Retail | | | | 224 | | | | 4,439 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,346,541 | |
| | | | | | | | | | | | | | |
| | | Hong Kong 3.0% | | | | | | | | | |
| | AIA Group Ltd., A | | | Insurance | | | | 20,200 | | | | 168,421 | |
| | CK Asset Holdings Ltd. | | | Real Estate Management & Development | | | | 3,600 | | | | 21,646 | |
| | CK Infrastructure Holdings Ltd., A | | | Electric Utilities | | | | 4,200 | | | | 21,428 | |
| | CLP Holdings Ltd. | | | Electric Utilities | | | | 5,600 | | | | 42,339 | |
| | Dairy Farm International Holdings Ltd., A | | | Food & Staples Retailing | | | | 2,800 | | | | 6,468 | |
| | | | | | | | | | |
| | | | | | |
| 50 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Hong Kong (continued) | | | | | | | | | |
| | Hang Lung Properties Ltd. | | | Real Estate Management & Development | | | | 14,000 | | | $ | 22,971 | |
| | Hang Seng Bank Ltd. | | | Banks | | | | 3,500 | | | | 53,147 | |
| | Henderson Land Development Co. Ltd. | | | Real Estate Management & Development | | | | 10,500 | | | | 29,427 | |
| | HK Electric Investments & HK Electric Investments Ltd. | | | Electric Utilities | | | | 14,000 | | | | 9,809 | |
| | HKT Trust and HKT Ltd. | | | Diversified Telecommunication Services | | | | 26,157 | | | | 30,656 | |
| | Hong Kong and China Gas Co. Ltd. | | | Gas Utilities | | | | 42,000 | | | | 37,025 | |
| | Hong Kong Exchanges and Clearing Ltd. | | | Capital Markets | | | | 2,200 | | | | 75,558 | |
| | Jardine Matheson Holdings Ltd. | | | Industrial Conglomerates | | | | 600 | | | | 30,384 | |
| | Link REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 14,000 | | | | 97,912 | |
| | MTR Corp. Ltd. | | | Road & Rail | | | | 1,000 | | | | 4,593 | |
| | New World Development Co. Ltd. | | | Real Estate Management & Development | | | | 10,000 | | | | 28,408 | |
| | Power Assets Holdings Ltd. | | | Electric Utilities | | | | 10,500 | | | | 52,701 | |
| | Sino Land Co. Ltd. | | | Real Estate Management & Development | | | | 21,700 | | | | 28,694 | |
| | Sun Hung Kai Properties Ltd. | | | Real Estate Management & Development | | | | 7,378 | | | | 81,629 | |
| | Swire Pacific Ltd., A | | | Real Estate Management & Development | | | | 1,000 | | | | 7,484 | |
| | Swire Properties Ltd. | | | Real Estate Management & Development | | | | 6,800 | | | | 14,640 | |
| | Techtronic Industries Co. Ltd. | | | Household Durables | | | | 5,600 | | | | 54,110 | |
| | Wharf Real Estate Investment Co. Ltd. | | | Real Estate Management & Development | | | | 6,220 | | | | 28,288 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 947,738 | |
| | | | | | | | | | | | | | |
| | | Ireland 0.2% | | | | | | | | | |
| | Experian PLC | | | Professional Services | | | | 420 | | | | 12,476 | |
| | Smurfit Kappa Group PLC | | | Containers & Packaging | | | | 1,610 | | | | 46,260 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 58,736 | |
| | | | | | | | | | | | | | |
| | | Isle Of Man 0.0%† | | | | | | | | | |
| | GVC Holdings PLC | | | Hotels, Restaurants & Leisure | | | | 532 | | | | 6,449 | |
| | | | | | | | | | | | | | |
| | | Israel 0.5% | | | | | | | | | |
| | Bank Leumi Le-Israel BM | | | Banks | | | | 8,918 | | | | 76,768 | |
| | ICL Group Ltd. | | | Chemicals | | | | 5,306 | | | | 42,961 | |
| | Mizrahi Tefahot Bank Ltd. | | | Banks | | | | 112 | | | | 3,952 | |
| b | | Nice Ltd. | | | Software | | | | 182 | | | | 34,772 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 158,453 | |
| | | | | | | | | | | | | | |
| | | Italy 2.8% | | | | | | | | | |
| | A2A SpA | | | Multi-Utilities | | | | 12,922 | | | | 12,656 | |
| | Banca Mediolanum SpA | | | Diversified Financial Services | | | | 1,442 | | | | 9,140 | |
| | Banco BPM SpA | | | Banks | | | | 10,556 | | | | 27,859 | |
| | DiaSorin SpA | | | Health Care Equipment & Supplies | | | | 14 | | | | 1,574 | |
| | Enel SpA | | | Electric Utilities | | | | 53,914 | | | | 223,098 | |
| | Eni SpA | | | Oil, Gas & Consumable Fuels | | | | 12,320 | | | | 131,676 | |
| | Ferrari NV | | | Automobiles | | | | 112 | | | | 21,033 | |
| | FinecoBank Banca Fineco SpA | | | Banks | | | | 4,340 | | | | 54,145 | |
| | Hera SpA | | | Multi-Utilities | | | | 5,908 | | | | 12,652 | |
| a,c | | Infrastrutture Wireless Italiane SpA, 144A, Reg S | | | Diversified Telecommunication Services | | | | 2,590 | | | | 22,760 | |
| | Intesa Sanpaolo SpA | | | Banks | | | | 45,654 | | | | 76,158 | |
| | Mediobanca Banca di Credito Finanziario SpA | | | Banks | | | | 5,012 | | | | 39,575 | |
| | Moncler SpA | | | Textiles, Apparel & Luxury Goods | | | | 616 | | | | 25,581 | |
| a,c | | Poste Italiane SpA, 144A, Reg S | | | Insurance | | | | 3,262 | | | | 24,894 | |
| | Prysmian SpA | | | Electrical Equipment | | | | 266 | | | | 7,719 | |
| | Recordati Industria Chimica e Farmaceutica SpA | | | Pharmaceuticals | | | | 756 | | | | 27,914 | |
| | Snam SpA | | | Gas Utilities | | | | 15,134 | | | | 61,469 | |
| | Terna – Rete Elettrica Nazionale | | | Electric Utilities | | | | 10,486 | | | | 64,204 | |
| | UniCredit SpA | | | Banks | | | | 3,836 | | | | 39,300 | |
| | UnipolSai Assicurazioni SpA | | | Insurance | | | | 3,304 | | | | 6,894 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 890,301 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 51 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan 24.1% | | | | | | | | | |
| | ABC-Mart Inc. | | | Specialty Retail | | | | 155 | | | $ | 6,671 | |
| | Advance Residence Investment | | | Equity Real Estate Investment Trusts (REITs | ) | | | 4 | | | | 9,797 | |
| | Advantest Corp. | | | Semiconductors & Semiconductor Equipment | | | | 1,400 | | | | 64,804 | |
| | AEON Co. Ltd. | | | Food & Staples Retailing | | | | 400 | | | | 7,471 | |
| | AGC Inc. | | | Building Products | | | | 600 | | | | 18,612 | |
| | Air Water Inc. | | | Chemicals | | | | 700 | | | | 8,260 | |
| | Aisin Seiki Co. Ltd. | | | Auto Components | | | | 1,400 | | | | 35,884 | |
| | Asahi Group Holdings Ltd. | | | Beverages | | | | 700 | | | | 21,685 | |
| | Asahi Kasei Corp. | | | Chemicals | | | | 2,800 | | | | 18,484 | |
| | Astellas Pharma Inc. | | | Pharmaceuticals | | | | 5,370 | | | | 71,120 | |
| | Bridgestone Corp. | | | Auto Components | | | | 2,600 | | | | 83,868 | |
| | Brother Industries Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 120 | | | | 2,065 | |
| | CANON Inc. | | | Technology Hardware, Storage & Peripherals | | | | 4,800 | | | | 105,189 | |
| | Capcom Co. Ltd. | | | Entertainment | | | | 579 | | | | 14,561 | |
| | Chubu Electric Power Co. Inc. | | | Electric Utilities | | | | 3,200 | | | | 28,829 | |
| | Chugai Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 1,770 | | | | 44,340 | |
| | Concordia Financial Group Ltd. | | | Banks | | | | 1,400 | | | | 4,323 | |
| | CyberAgent Inc. | | | Media | | | | 2,800 | | | | 23,561 | |
| | Daifuku Co. Ltd. | | | Machinery | | | | 300 | | | | 14,115 | |
| | Daiichi Sankyo Co. Ltd. | | | Pharmaceuticals | | | | 4,100 | | | | 114,492 | |
| | Daikin Industries Ltd. | | | Building Products | | | | 412 | | | | 63,460 | |
| | Daito Trust Construction Co. Ltd. | | | Real Estate Management & Development | | | | 510 | | | | 47,813 | |
| | Daiwa House Industry Co. Ltd. | | | Real Estate Management & Development | | | | 1,720 | | | | 34,978 | |
| | Daiwa House Residential Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 14 | | | | 29,113 | |
| | Daiwa Securities Group Inc. | | | Capital Markets | | | | 11,200 | | | | 43,827 | |
| | Denso Corp. | | | Auto Components | | | | 1,600 | | | | 72,801 | |
| | Dentsu Group Inc. | | | Media | | | | 100 | | | | 2,839 | |
| | Disco Corp. | | | Semiconductors & Semiconductor Equipment | | | | 230 | | | | 50,848 | |
| | East Japan Railway Co. | | | Road & Rail | | | | 420 | | | | 21,533 | |
| | Eisai Co. Ltd. | | | Pharmaceuticals | | | | 1,200 | | | | 64,243 | |
| | ENEOS Holdings Inc. | | | Oil, Gas & Consumable Fuels | | | | 16,800 | | | | 53,982 | |
| | FANUC Corp. | | | Machinery | | | | 280 | | | | 39,192 | |
| | Fast Retailing Co. Ltd. | | | Specialty Retail | | | | 89 | | | | 47,167 | |
| | Fuji Electric Co. Ltd. | | | Electrical Equipment | | | | 100 | | | | 3,655 | |
| | FUJIFILM Holdings Corp. | | | Technology Hardware, Storage & Peripherals | | | | 150 | | | | 6,849 | |
| | Fujitsu Ltd. | | | IT Services | | | | 600 | | | | 65,432 | |
| | GLP J-Reit | | | Equity Real Estate Investment Trusts (REITs | ) | | | 17 | | | | 18,803 | |
| | GMO Payment Gateway Inc. | | | IT Services | | | | 340 | | | | 23,372 | |
| | Hamamatsu Photonics K.K. | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 4,283 | |
| | Haseko Corp. | | | Household Durables | | | | 1,400 | | | | 15,195 | |
| | Hirose Electric Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 60 | | | | 7,868 | |
| | Hitachi Construction Machinery Co. Ltd. | | | Machinery | | | | 800 | | | | 14,790 | |
| | Hitachi Ltd. | | | Industrial Conglomerates | | | | 1,200 | | | | 50,688 | |
| | Honda Motor Co. Ltd. | | | Automobiles | | | | 6,000 | | | | 130,036 | |
| | Hoya Corp. | | | Health Care Equipment & Supplies | | | | 620 | | | | 59,454 | |
| | Hulic Co. Ltd. | | | Real Estate Management & Development | | | | 4,260 | | | | 31,285 | |
| | Ibiden Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,000 | | | | 27,358 | |
| | Iida Group Holdings Co. Ltd. | | | Household Durables | | | | 1,379 | | | | 18,702 | |
| | Isuzu Motors Ltd. | | | Automobiles | | | | 2,900 | | | | 31,996 | |
| | ITOCHU Corp. | | | Trading Companies & Distributors | | | | 2,120 | | | | 51,277 | |
| | ITOCHU Techno-Solutions Corp. | | | IT Services | | | | 600 | | | | 14,052 | |
| | Japan Exchange Group Inc. | | | Capital Markets | | | | 1,800 | | | | 24,281 | |
| | Japan Post Holdings Co. Ltd. | | | Insurance | | | | 8,800 | | | | 58,225 | |
| | Japan Prime Realty Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 6 | | | | 16,291 | |
| | Japan Real Estate Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 6 | | | | 24,747 | |
| | Japan Retail Fund Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 56 | | | | 42,093 | |
| | Japan Tobacco Inc. | | | Tobacco | | | | 8,140 | | | | 133,506 | |
| | JFE Holdings Inc. | | | Metals & Mining | | | | 4,200 | | | | 38,911 | |
| | | | | | | | | | |
| | | | | | |
| 52 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | JSR Corp. | | | Chemicals | | | | 600 | | | $ | 11,399 | |
| | Kajima Corp. | | | Construction & Engineering | | | | 1,840 | | | | 17,454 | |
| | Kakaku.com Inc. | | | Interactive Media & Services | | | | 600 | | | | 10,206 | |
| | KAO Corp. | | | Personal Products | | | | 930 | | | | 37,895 | |
| | KDDI Corp. | | | Wireless Telecommunication Services | | | | 3,732 | | | | 109,398 | |
| | Keyence Corp. | | | Electronic Equipment, Instruments & Components | | | | 448 | | | | 148,255 | |
| | Kirin Holdings Co. Ltd. | | | Beverages | | | | 2,800 | | | | 43,080 | |
| | Koei Tecmo Holdings Co. Ltd. | | | Entertainment | | | | 986 | | | | 16,178 | |
| | Komatsu Ltd. | | | Machinery | | | | 2,100 | | | | 37,881 | |
| | Kubota Corp. | | | Machinery | | | | 600 | | | | 8,307 | |
| | Kyocera Corp. | | | Electronic Equipment, Instruments & Components | | | | 700 | | | | 35,303 | |
| | Kyowa Kirin Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 9,161 | |
| | Kyushu Electric Power Co. Inc. | | | Electric Utilities | | | | 4,200 | | | | 22,401 | |
| | Kyushu Railway Co. | | | Road & Rail | | | | 800 | | | | 17,272 | |
| | Lasertec Corp. | | | Semiconductors & Semiconductor Equipment | | | | 560 | | | | 56,853 | |
| | Lawson Inc. | | | Food & Staples Retailing | | | | 350 | | | | 11,462 | |
| | LIXIL Group Corp. | | | Building Products | | | | 2,100 | | | | 30,743 | |
| | M3 Inc. | | | Health Care Technology | | | | 1,400 | | | | 39,182 | |
| | Marubeni Corp. | | | Trading Companies & Distributors | | | | 5,600 | | | | 49,057 | |
| | Marui Group Co. Ltd. | | | Multiline Retail | | | | 100 | | | | 1,657 | |
| | Minebea Mitsumi Inc. | | | Machinery | | | | 700 | | | | 10,344 | |
| | Mitsubishi Chemical Holdings Corp. | | | Chemicals | | | | 9,800 | | | | 44,794 | |
| | Mitsubishi Corp. | | | Trading Companies & Distributors | | | | 3,600 | | | | 98,689 | |
| | Mitsubishi Electric Corp. | | | Electrical Equipment | | | | 4,200 | | | | 37,852 | |
| | Mitsubishi Gas Chemical Co. Inc. | | | Chemicals | | | | 1,400 | | | | 18,338 | |
| | Mitsubishi Heavy Industries Ltd. | | | Machinery | | | | 500 | | | | 16,602 | |
| | Mitsubishi UFJ Financial Group Inc. | | | Banks | | | | 37,800 | | | | 170,139 | |
| | Mitsubishi UFJ Lease & Finance Co. Ltd. | | | Diversified Financial Services | | | | 4,200 | | | | 18,048 | |
| | Mitsui & Co. Ltd. | | | Trading Companies & Distributors | | | | 2,100 | | | | 44,816 | |
| | Mitsui OSK Lines Ltd. | | | Marine | | | | 2,900 | | | | 52,132 | |
| | Mizuho Financial Group Inc. | | | Banks | | | | 9,000 | | | | 97,154 | |
| | MonotaRO Co. Ltd. | | | Trading Companies & Distributors | | | | 1,030 | | | | 15,812 | |
| | MS&AD Insurance Group Holdings Inc. | | | Insurance | | | | 2,580 | | | | 68,375 | |
| | Murata Manufacturing Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,970 | | | | 90,262 | |
| | NEC Corp. | | | IT Services | | | | 500 | | | | 15,976 | |
| | Nexon Co. Ltd. | | | Entertainment | | | | 150 | | | | 2,645 | |
| | NGK Spark Plug Co. Ltd. | | | Auto Components | | | | 1,400 | | | | 24,780 | |
| | Nidec Corp. | | | Electrical Equipment | | | | 1,400 | | | | 78,635 | |
| | Nihon M&A Center Inc. | | | Professional Services | | | | 2,380 | | | | 27,344 | |
| | Nintendo Co. Ltd. | | | Entertainment | | | | 5,880 | | | | 237,808 | |
| | Nippon Building Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 2 | | | | 8,788 | |
| | Nippon Paint Holdings Co. Ltd. | | | Chemicals | | | | 2,800 | | | | 18,938 | |
| | Nippon Prologis REIT Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 4 | | | | 8,746 | |
| | Nippon Steel Corp. | | | Metals & Mining | | | | 3,300 | | | | 45,746 | |
| | Nippon Telegraph & Telephone Corp. | | | Diversified Telecommunication Services | | | | 1,557 | | | | 42,016 | |
| | Nippon Yusen KK | | | Marine | | | | 4,200 | | | | 71,584 | |
| | Nitto Denko Corp. | | | Chemicals | | | | 1,085 | | | | 58,693 | |
| | Nomura Holdings Inc. | | | Capital Markets | | | | 11,200 | | | | 37,017 | |
| | Nomura Real Estate Master Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 16 | | | | 17,653 | |
| | Nomura Research Institute Ltd. | | | IT Services | | | | 1,030 | | | | 25,262 | |
| | NSK Ltd. | | | Machinery | | | | 1,400 | | | | 6,838 | |
| | Obayashi Corp. | | | Construction & Engineering | | | | 1,400 | | | | 8,976 | |
| | OBIC Co. Ltd. | | | IT Services | | | | 40 | | | | 5,358 | |
| | Olympus Corp. | | | Health Care Equipment & Supplies | | | | 2,200 | | | | 42,231 | |
| | Omron Corp. | | | Electronic Equipment, Instruments & Components | | | | 300 | | | | 13,712 | |
| | Ono Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 1,850 | | | | 43,213 | |
| | Open House Co. Ltd. | | | Household Durables | | | | 100 | | | | 3,382 | |
| | Oracle Corp. Japan | | | Software | | | | 70 | | | | 3,724 | |
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 53 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | ORIX Corp. | | | Diversified Financial Services | | | | 4,200 | | | $ | 58,860 | |
| | ORIX JREIT Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 14 | | | | 17,894 | |
| | Otsuka Corp. | | | IT Services | | | | 600 | | | | 18,757 | |
| | Otsuka Holdings Co. Ltd. | | | Pharmaceuticals | | | | 900 | | | | 28,503 | |
| | Panasonic Corp. | | | Household Durables | | | | 2,800 | | | | 19,625 | |
| | Recruit Holdings Co. Ltd. | | | Professional Services | | | | 4,200 | | | | 120,738 | |
| b | | Renesas Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 500 | | | | 4,152 | |
| | Rohm Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 700 | | | | 45,749 | |
| | Santen Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 3,200 | | | | 21,555 | |
| | SBI Holdings Inc. | | | Capital Markets | | | | 1,900 | | | | 34,077 | |
| | Sega Sammy Holdings Inc. | | | Leisure Products | | | | 1,400 | | | | 19,045 | |
| | Seiko Epson Corp. | | | Technology Hardware, Storage & Peripherals | | | | 1,400 | | | | 19,054 | |
| | Sekisui House Ltd. | | | Household Durables | | | | 2,300 | | | | 38,152 | |
| | Seven & i Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 1,800 | | | | 72,201 | |
| | SG Holdings Co. Ltd. | | | Air Freight & Logistics | | | | 720 | | | | 9,849 | |
| | Sharp Corp. | | | Household Durables | | | | 1,400 | | | | 8,347 | |
| | Shimadzu Corp. | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 2,622 | |
| | SHIMANO Inc. | | | Leisure Products | | | | 183 | | | | 28,750 | |
| | Shin-Etsu Chemical Co. Ltd. | | | Chemicals | | | | 840 | | | | 83,161 | |
| | Shionogi & Co. Ltd. | | | Pharmaceuticals | | | | 383 | | | | 18,493 | |
| | Shiseido Co. Ltd. | | | Personal Products | | | | 1,200 | | | | 41,916 | |
| | Showa Denko K.K. | | | Chemicals | | | | 450 | | | | 6,386 | |
| | Softbank Corp. | | | Wireless Telecommunication Services | | | | 21,000 | | | | 209,862 | |
| | SoftBank Group Corp. | | | Wireless Telecommunication Services | | | | 1,800 | | | | 60,935 | |
| | Sompo Holdings Inc. | | | Insurance | | | | 150 | | | | 5,971 | |
| | Sony Corp. | | | Household Durables | | | | 2,600 | | | | 166,801 | |
| | Square Enix Holdings Co. Ltd. | | | Entertainment | | | | 500 | | | | 21,521 | |
| | Subaru Corp. | | | Automobiles | | | | 2,800 | | | | 41,919 | |
| | Sumco Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,400 | | | | 27,989 | |
| | Sumitomo Chemical Co. Ltd. | | | Chemicals | | | | 11,200 | | | | 38,457 | |
| | Sumitomo Corp. | | | Trading Companies & Distributors | | | | 8,600 | | | | 107,095 | |
| | Sumitomo Electric Industries Ltd. | | | Auto Components | | | | 1,400 | | | | 14,160 | |
| | Sumitomo Metal Mining Co. Ltd. | | | Metals & Mining | | | | 1,800 | | | | 51,732 | |
| | Sumitomo Mitsui Financial Group Inc. | | | Banks | | | | 9,046 | | | | 251,484 | |
| | Suzuki Motor Corp. | | | Automobiles | | | | 200 | | | | 6,192 | |
| | Sysmex Corp. | | | Health Care Equipment & Supplies | | | | 392 | | | | 21,037 | |
| | Taisei Corp. | | | Construction & Engineering | | | | 28 | | | | 778 | |
| | Takeda Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 10,200 | | | | 265,456 | |
| | TDK Corp. | | | Electronic Equipment, Instruments & Components | | | | 1,700 | | | | 52,323 | |
| | The Kansai Electric Power Co. Inc. | | | Electric Utilities | | | | 2,000 | | | | 16,747 | |
| | Tokio Marine Holdings Inc. | | | Insurance | | | | 3,552 | | | | 62,944 | |
| | Tokyo Century Corp. | | | Diversified Financial Services | | | | 300 | | | | 9,555 | |
| | Tokyo Electron Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 756 | | | | 186,460 | |
| | Toray Industries Inc. | | | Chemicals | | | | 2,800 | | | | 13,769 | |
| | Toshiba Corp. | | | Industrial Conglomerates | | | | 800 | | | | 28,453 | |
| | Tosoh Corp. | | | Chemicals | | | | 2,203 | | | | 24,504 | |
| | Toyota Boshoku Corp. | | | Auto Components | | | | 500 | | | | 6,121 | |
| | Toyota Industries Corp. | | | Auto Components | | | | 800 | | | | 38,026 | |
| | Toyota Motor Corp. | | | Automobiles | | | | 29,030 | | | | 376,250 | |
| | Trend Micro Inc. | | | Software | | | | 570 | | | | 30,795 | |
| | United Urban Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 20 | | | | 20,657 | |
| | USS Co. Ltd. | | | Specialty Retail | | | | 1,400 | | | | 21,637 | |
| | Yamaha Motor Co. Ltd. | | | Automobiles | | | | 2,200 | | | | 41,144 | |
| | YASKAWA Electric Corp. | | | Machinery | | | | 1,500 | | | | 43,162 | |
| | Z Holdings Corp. | | | Interactive Media & Services | | | | 11,200 | | | | 29,419 | |
| | Zozo Inc. | | | Internet & Direct Marketing Retail | | | | 480 | | | | 9,597 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 7,549,480 | |
| | | | | | | | | | | | | | |
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| 54 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Luxembourg 0.1% | | | | | | | | | |
| | Eurofins Scientific SE | | | Life Sciences Tools & Services | | | | 224 | | | $ | 13,412 | |
| | RTL Group SA | | | Media | | | | 280 | | | | 8,926 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 22,338 | |
| | | | | | | | | | | | | | |
| | | Mexico 0.0%† | | | | | | | | | |
| | Fresnillo PLC | | | Metals & Mining | | | | 938 | | | | 8,054 | |
| | | | | | | | | | | | | | |
| | | Netherlands 4.6% | | | | | | | | | |
| a,b | | Adyen NV, 144A | | | IT Services | | | | 112 | | | | 142,835 | |
| b | | Argenx SE | | | Biotechnology | | | | 69 | | | | 24,909 | |
| b | | Argenx SE | | | Biotechnology | | | | 7 | | | | 2,527 | |
| b | | Argenx SE | | | Biotechnology | | | | 22 | | | | 7,942 | |
| | ASM International NV | | | Semiconductors & Semiconductor Equipment | | | | 238 | | | | 54,501 | |
| | ASML Holding NV | | | Semiconductors & Semiconductor Equipment | | | | 1,148 | | | | 487,643 | |
| | ING Groep NV | | | Banks | | | | 19,586 | | | | 169,962 | |
| | Koninklijke Ahold Delhaize NV | | | Food & Staples Retailing | | | | 798 | | | | 20,431 | |
| | Koninklijke DSM NV | | | Chemicals | | | | 14 | | | | 1,611 | |
| | Koninklijke KPN NV | | | Diversified Telecommunication Services | | | | 25,438 | | | | 69,079 | |
| | Koninklijke Philips NV | | | Health Care Equipment & Supplies | | | | 2,758 | | | | 43,230 | |
| | NN Group NV | | | Insurance | | | | 1,694 | | | | 66,331 | |
| | Prosus NV | | | Internet & Direct Marketing Retail | | | | 2,212 | | | | 116,952 | |
| | Shell PLC | | | Oil, Gas & Consumable Fuels | | | | 9,296 | | | | 233,122 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,441,075 | |
| | | | | | | | | | | | | | |
| | | New Zealand 0.4% | | | | | | | | | |
| | Contact Energy Ltd. | | | Electric Utilities | | | | 5,516 | | | | 23,338 | |
| | Fisher & Paykel Healthcare Corp. Ltd. | | | Health Care Equipment & Supplies | | | | 1,834 | | | | 19,192 | |
| | Fletcher Building Ltd. | | | Building Products | | | | 5,992 | | | | 16,405 | |
| | Mercury NZ Ltd. | | | Electric Utilities | | | | 3,500 | | | | 11,285 | |
| | Meridian Energy Ltd. | | | Independent Power Producers & Energy Traders | | | | 8,610 | | | | 23,377 | |
| | Spark New Zealand Ltd. | | | Diversified Telecommunication Services | | | | 13,720 | | | | 38,804 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 132,401 | |
| | | | | | | | | | | | | | |
| | | Norway 1.2% | | | | | | | | | |
| b | | Adevinta ASA, B | | | Interactive Media & Services | | | | 1,134 | | | | 6,764 | |
| | Aker ASA | | | Diversified Financial Services | | | | 168 | | | | 10,884 | |
| | Aker BP ASA | | | Oil, Gas & Consumable Fuels | | | | 812 | | | | 23,293 | |
| | DNB Bank ASA | | | Banks | | | | 6,762 | | | | 107,258 | |
| | Equinor ASA | | | Oil, Gas & Consumable Fuels | | | | 196 | | | | 6,441 | |
| | Gjensidige Forsikring ASA | | | Insurance | | | | 1,274 | | | | 21,862 | |
| | Norsk Hydro ASA | | | Metals & Mining | | | | 3,724 | | | | 20,108 | |
| | Orkla ASA | | | Food Products | | | | 4,270 | | | | 31,034 | |
| | Salmar ASA | | | Food Products | | | | 420 | | | | 14,153 | |
| | Schibsted ASA, A | | | Media | | | | 70 | | | | 949 | |
| | Schibsted ASA, B | | | Media | | | | 126 | | | | 1,586 | |
| | Storebrand ASA | | | Insurance | | | | 3,570 | | | | 24,721 | |
| | Telenor ASA | | | Diversified Telecommunication Services | | | | 4,858 | | | | 44,428 | |
| | TOMRA Systems ASA | | | Commercial Services & Supplies | | | | 1,246 | | | | 21,997 | |
| | Yara International ASA | | | Chemicals | | | | 1,204 | | | | 42,350 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 377,828 | |
| | | | | | | | | | | | | | |
| | | Poland 0.3% | | | | | | | | | |
| | Bank Pekao SA | | | Banks | | | | 1,274 | | | | 15,658 | |
| | LPP SA | | | Textiles, Apparel & Luxury Goods | | | | 9 | | | | 14,204 | |
| | Polski Koncern Naftowy Orlen SA | | | Oil, Gas & Consumable Fuels | | | | 2,352 | | | | 25,496 | |
| | Powszechna Kasa Oszczednosci Bank Polski SA | | | Banks | | | | 6,342 | | | | 28,044 | |
| | Powszechny Zaklad Ubezpieczen SA | | | Insurance | | | | 4,578 | | | | 21,467 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 104,869 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 55 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Portugal 0.3% | | | | | | | | | |
| | EDP – Energias de Portugal SA | | | Electric Utilities | | | | 14,518 | | | $ | 63,148 | |
| | Galp Energia SGPS SA, B | | | Oil, Gas & Consumable Fuels | | | | 3,402 | | | | 32,741 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 95,889 | |
| | | | | | | | | | | | | | |
| | | Singapore 1.0% | | | | | | | | | |
| | Ascendas REIT, A | | | Equity Real Estate Investment Trusts (REITs | ) | | | 23,800 | | | | 44,618 | |
| | DBS Group Holdings Ltd., A | | | Banks | | | | 2,800 | | | | 65,156 | |
| | Mapletree Commercial Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 15,400 | | | | 18,460 | |
| | Olam Group Ltd. | | | Food & Staples Retailing | | | | 8,400 | | | | 7,669 | |
| | Oversea-Chinese Banking Corp. Ltd. | | | Banks | | | | 7,500 | | | | 61,833 | |
| | Singapore Exchange Ltd. | | | Capital Markets | | | | 4,468 | | | | 29,457 | |
| | Singapore Technologies Engineering Ltd. | | | Aerospace & Defense | | | | 9,800 | | | | 24,450 | |
| | United Overseas Bank Ltd. | | | Banks | | | | 2,000 | | | | 36,462 | |
| | Venture Corp. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,938 | | | | 22,191 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 310,296 | |
| | | | | | | | | | | | | | |
| | | Spain 2.0% | | | | | | | | | |
| | ACS Actividades de Construccion y Servicios SA | | | Construction & Engineering | | | | 1,806 | | | | 40,923 | |
| | Banco Bilbao Vizcaya Argentaria SA | | | Banks | | | | 10,976 | | | | 49,682 | |
| a | | Cellnex Telecom SA, 144A | | | Diversified Telecommunication Services | | | | 364 | | | | 11,336 | |
| | Corporacion Mapfre SA | | | Insurance | | | | 7,378 | | | | 11,492 | |
| | Enagas SA | | | Gas Utilities | | | | 1,904 | | | | 29,545 | |
| | Endesa SA | | | Electric Utilities | | | | 2,240 | | | | 33,838 | |
| | Iberdrola SA | | | Electric Utilities | | | | 16,968 | | | | 159,279 | |
| | Industria de Diseno Textil SA | | | Specialty Retail | | | | 2,184 | | | | 45,530 | |
| | Naturgy Energy Group SA | | | Gas Utilities | | | | 2,436 | | | | 56,630 | |
| | Red Electrica Corp. SA | | | Electric Utilities | | | | 3,164 | | �� | | 48,695 | |
| | Repsol SA | | | Oil, Gas & Consumable Fuels | | | | 3,276 | | | | 37,886 | |
| | Telefonica SA | | | Diversified Telecommunication Services | | | | 26,166 | | | | 86,539 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 611,375 | |
| | | | | | | | | | | | | | |
| | | Sweden 2.5% | | | | | | | | | |
| | Assa Abloy AB, B | | | Building Products | | | | 742 | | | | 14,021 | |
| | Atlas Copco AB, A | | | Machinery | | | | 3,612 | | | | 34,110 | |
| | Atlas Copco AB, B | | | Machinery | | | | 2,212 | | | | 18,589 | |
| | Axfood AB | | | Food & Staples Retailing | | | | 756 | | | | 17,365 | |
| | Castellum AB | | | Real Estate Management & Development | | | | 406 | | | | 4,579 | |
| | Electrolux AB, B | | | Household Durables | | | | 2,114 | | | | 22,139 | |
| b | | Embracer Group AB | | | Entertainment | | | | 3,808 | | | | 22,802 | |
| | EQT AB | | | Capital Markets | | | | 1,946 | | | | 38,420 | |
| | Ericsson, B | | | Communications Equipment | | | | 4,858 | | | | 28,669 | |
| | Essity AB, B | | | Household Products | | | | 602 | | | | 11,978 | |
| a,c | | Evolution Gaming Group AB, 144A, Reg S | | | Hotels, Restaurants & Leisure | | | | 826 | | | | 66,005 | |
| | Hennes & Mauritz AB, B | | | Specialty Retail | | | | 5,544 | | | | 51,686 | |
| | Husqvarna AB, B | | | Household Durables | | | | 3,346 | | | | 18,724 | |
| | Intrum AB | | | Commercial Services & Supplies | | | | 574 | | | | 7,275 | |
| | Investor AB, A | | | Diversified Financial Services | | | | 84 | | | | 1,298 | |
| | Investor AB, B | | | Diversified Financial Services | | | | 560 | | | | 8,254 | |
| | Lifco AB, B | | | Industrial Conglomerates | | | | 1,512 | | | | 21,282 | |
| | Nibe Industrier AB, B | | | Building Products | | | | 2,324 | | | | 20,963 | |
| | Nordnet AB publ | | | Capital Markets | | | | 1,134 | | | | 12,937 | |
| | Orron Energy AB | | | Oil, Gas & Consumable Fuels | | | | 910 | | | | 1,638 | |
| | Samhallsbyggnadsbolaget i Norden AB | | | Real Estate Management & Development | | | | 8,848 | | | | 9,699 | |
| | Samhallsbyggnadsbolaget i Norden AB, D | | | Real Estate Management & Development | | | | 1,232 | | | | 1,857 | |
| | Securitas AB, B | | | Commercial Services & Supplies | | | | 2,857 | | | | 19,978 | |
| a,b | | Sinch AB, 144A | | | Software | | | | 1,162 | | | | 1,576 | |
| | Skandinaviska Enskilda Banken AB, A | | | Banks | | | | 2,212 | | | | 21,288 | |
| | | | | | | | | | |
| | | | | | |
| 56 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Sweden (continued) | | | | | | | | | |
| | SKF AB, B | | | Machinery | | | | 462 | | | $ | 6,255 | |
| | SSAB AB, A | | | Metals & Mining | | | | 1,624 | | | | 7,236 | |
| | SSAB AB, B | | | Metals & Mining | | | | 4,900 | | | | 21,123 | |
| | Svenska Handelsbanken AB, A | | | Banks | | | | 5,782 | | | | 47,736 | |
| | Swedbank AB, A | | | Banks | | | | 4,494 | | | | 59,468 | |
| | Swedish Match AB | | | Tobacco | | | | 2,436 | | | | 24,146 | |
| | Tele2 AB, B | | | Wireless Telecommunication Services | | | | 4,354 | | | | 37,665 | |
| | Telia Co. AB | | | Diversified Telecommunication Services | | | | 19,460 | | | | 56,166 | |
| | Vitrolife AB | | | Biotechnology | | | | 532 | | | | 7,622 | |
| | Volvo AB, A | | | Machinery | | | | 224 | | | | 3,326 | |
| | Volvo AB, B | | | Machinery | | | | 1,666 | | | | 23,732 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 771,607 | |
| | | | | | | | | | | | | | |
| | | Switzerland 10.5% | | | | | | | | | |
| | ABB Ltd. | | | Electrical Equipment | | | | 3,346 | | | | 87,708 | |
| | Alcon Inc. | | | Health Care Equipment & Supplies | | | | 84 | | | | 4,962 | |
| | Baloise Holding AG | | | Insurance | | | | 168 | | | | 21,626 | |
| | Cie Financiere Richemont SA | | | Textiles, Apparel & Luxury Goods | | | | 1,722 | | | | 164,948 | |
| | Geberit AG | | | Building Products | | | | 70 | | | | 30,404 | |
| | Givaudan AG | | | Chemicals | | | | 15 | | | | 45,766 | |
| | Holcim Ltd., B | | | Construction Materials | | | | 3,402 | | | | 141,645 | |
| | Julius Baer Group Ltd. | | | Capital Markets | | | | 1,078 | | | | 47,643 | |
| | Kuehne + Nagel International AG | | | Marine | | | | 322 | | | | 66,085 | |
| | Lonza Group AG | | | Life Sciences Tools & Services | | | | 210 | | | | 103,757 | |
| | Nestle SA | | | Food Products | | | | 6,860 | | | | 746,323 | |
| | Novartis AG | | | Pharmaceuticals | | | | 7,910 | | | | 607,003 | |
| | Partners Group Holding AG | | | Capital Markets | | | | 98 | | | | 80,112 | |
| | Roche Holding AG, Bearer | | | Pharmaceuticals | | | | 56 | | | | 22,064 | |
| | Roche Holding AG, Non-Voting | | | Pharmaceuticals | | | | 1,414 | | | | 464,677 | |
| | Schindler Holding AG, PC | | | Machinery | | | | 14 | | | | 2,200 | |
| | SGS SA | | | Professional Services | | | | 29 | | | | 62,611 | |
| | Sika AG | | | Chemicals | | | | 42 | | | | 8,564 | |
| | STMicroelectronics NV | | | Semiconductors & Semiconductor Equipment | | | | 1,498 | | | | 47,320 | |
| | Straumann Holding AG | | | Health Care Equipment & Supplies | | | | 42 | | | | 3,919 | |
| | Swiss Life Holding AG | | | Insurance | | | | 98 | | | | 43,661 | |
| | Swiss Re AG | | | Insurance | | | | 1,960 | | | | 145,688 | |
| | Swisscom AG | | | Diversified Telecommunication Services | | | | 196 | | | | 92,300 | |
| | Temenos AG | | | Software | | | | 168 | | | | 11,511 | |
| | The Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 28 | | | | 6,387 | |
| | Zurich Insurance Group AG | | | Insurance | | | | 560 | | | | 224,740 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,283,624 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 12.7% | | | | | | | | | |
| | 3i Group PLC | | | Capital Markets | | | | 2,884 | | | | 35,188 | |
| | Abrdn PLC | | | Capital Markets | | | | 15,736 | | | | 24,434 | |
| | Admiral Group PLC | | | Insurance | | | | 1,932 | | | | 41,290 | |
| | Anglo American PLC | | | Metals & Mining | | | | 4,662 | | | | 142,361 | |
| | Ashtead Group PLC | | | Trading Companies & Distributors | | | | 364 | | | | 16,603 | |
| | AstraZeneca PLC | | | Pharmaceuticals | | | | 3,976 | | | | 441,355 | |
| | AVEVA Group PLC | | | Software | | | | 686 | | | | 24,061 | |
| | Aviva PLC | | | Insurance | | | | 20,104 | | | | 87,120 | |
| | B&M European Value Retail SA | | | Multiline Retail | | | | 6,706 | | | | 22,914 | |
| | BAE Systems PLC | | | Aerospace & Defense | | | | 7,952 | | | | 70,109 | |
| | Barratt Developments PLC | | | Household Durables | | | | 7,840 | | | | 29,949 | |
| | BP PLC | | | Oil, Gas & Consumable Fuels | | | | 25,802 | | | | 124,745 | |
| | British American Tobacco PLC | | | Tobacco | | | | 9,660 | | | | 347,928 | |
| | Burberry Group PLC | | | Textiles, Apparel & Luxury Goods | | | | 854 | | | | 17,236 | |
| | CK Hutchison Holdings Ltd., A | | | Real Estate Management & Development | | | | 7,500 | | | | 41,465 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 57 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United Kingdom (continued) | | | | | | | | | |
| | Coca-Cola Europacific Partners PLC | | | Beverages | | | | 98 | | | $ | 4,177 | |
| a | | ConvaTec Group PLC, 144A | | | Health Care Equipment & Supplies | | | | 3,248 | | | | 7,454 | |
| b | | Darktrace PLC | | | Software | | | | 2,618 | | | | 8,624 | |
| | Diageo PLC | | | Beverages | | | | 3,864 | | | | 163,801 | |
| | Direct Line Insurance Group PLC | | | Insurance | | | | 9,912 | | | | 20,525 | |
| | Ferguson PLC | | | Trading Companies & Distributors | | | | 518 | | | | 54,378 | |
| | GSK PLC | | | Pharmaceuticals | | | | 18,438 | | | | 268,764 | |
| | Hargreaves Lansdown PLC | | | Capital Markets | | | | 966 | | | | 9,351 | |
| | HSBC Holdings PLC | | | Banks | | | | 41,496 | | | | 216,463 | |
| | Imperial Brands PLC | | | Tobacco | | | | 6,804 | | | | 140,893 | |
| | Intermediate Capital Group PLC | | | Capital Markets | | | | 2,366 | | | | 25,957 | |
| | J Sainsbury PLC | | | Food & Staples Retailing | | | | 13,258 | | | | 25,796 | |
| | Kingfisher PLC | | | Specialty Retail | | | | 5,908 | | | | 14,536 | |
| | Land Securities Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 5,502 | | | | 32,048 | |
| | Legal & General Group PLC | | | Insurance | | | | 43,190 | | | | 104,381 | |
| | London Stock Exchange Group PLC | | | Capital Markets | | | | 602 | | | | 51,261 | |
| | M&G PLC | | | Diversified Financial Services | | | | 18,424 | | | | 34,254 | |
| | Mondi PLC | | | Paper & Forest Products | | | | 3,066 | | | | 47,711 | |
| | National Grid PLC | | | Multi-Utilities | | | | 16,352 | | | | 169,942 | |
| | Next PLC | | | Multiline Retail | | | | 182 | | | | 9,754 | |
| b | | Ocado Group PLC | | | Food & Staples Retailing | | | | 812 | | | | 4,283 | |
| | Persimmon PLC | | | Household Durables | | | | 2,310 | | | | 31,911 | |
| | Phoenix Group Holdings PLC | | | Insurance | | | | 6,328 | | | | 37,213 | |
| | Reckitt Benckiser Group PLC | | | Household Products | | | | 1,680 | | | | 112,073 | |
| | RELX PLC | | | Professional Services | | | | 3,416 | | | | 83,968 | |
| | Royal Mail PLC | | | Air Freight & Logistics | | | | 6,202 | | | | 12,770 | |
| | Schroders PLC | | | Capital Markets | | | | 1,152 | | | | 5,006 | |
| | Severn Trent PLC | | | Water Utilities | | | | 1,778 | | | | 46,742 | |
| | Smith & Nephew PLC | | | Health Care Equipment & Supplies | | | | 630 | | | | 7,388 | |
| | SSE PLC | | | Electric Utilities | | | | 5,796 | | | | 98,830 | |
| | St. James’s Place Capital PLC | | | Capital Markets | | | | 3,906 | | | | 45,172 | |
| | Taylor Wimpey PLC | | | Household Durables | | | | 27,034 | | | | 26,647 | |
| | Tesco PLC | | | Food & Staples Retailing | | | | 9,114 | | | | 21,040 | |
| | The Sage Group PLC | | | Software | | | | 1,372 | | | | 10,678 | |
| | Unilever PLC | | | Personal Products | | | | 7,154 | | | | 316,965 | |
| | United Utilities Group PLC | | | Water Utilities | | | | 4,914 | | | | 48,755 | |
| | Vodafone Group PLC | | | Wireless Telecommunication Services | | | | 170,240 | | | | 192,167 | |
| b | | Wise PLC, A | | | IT Services | | | | 392 | | | | 2,891 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,981,327 | |
| | | | | | | | | | | | | | |
| | | United States 0.6% | | | | | | | | | |
| | Stellantis NV | | | Automobiles | | | | 16,590 | | | | 199,449 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $34,018,116) | | | | | | | | | | | 30,982,383 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 0.4% | | | | | | | | | |
| | | Germany 0.4% | | | | | | | | | |
| d | | Bayerische Motoren Werke AG, 8.700%, pfd. | | | Automobiles | | | | 378 | | | | 24,774 | |
| d | | Porsche Automobil Holding SE, 4.402%, pfd. | | | Automobiles | | | | 448 | | | | 25,525 | |
| d | | Sartorius AG, 0.353%, pfd. | | | Health Care Equipment & Supplies | | | | 98 | | | | 34,284 | |
| d | | Volkswagen AG, 5.981%, pfd. | | | Automobiles | | | | 322 | | | | 39,872 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $141,598) | | | | | | | | | | | 124,455 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 58 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Right 0.0%† | | | | | | | | | |
| | | Sweden 0.0%† | | | | | | | | | |
| b | | Securitas AB, rts., 10/11/2022 | | | Commercial Services & Supplies | | | | 8,008 | | | $ | 3,341 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $3,331) | | | | | | | | | | | 3,341 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $34,163,045) 99.3% | | | | | | | | | | | 31,110,179 | |
| | Other Assets, less Liabilities 0.7% | | | | | | | | | | | 233,045 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 31,343,224 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $454,429, representing 1.5% of net assets.
bNon-income producing.
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 September 30, 2022, the value of was $169,251, representing 0.5% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
At September 30, 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 | | | | 3 | | | $ | 249,090 | | | | 12/16/22 | | | $ | (921 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 59 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Core Dividend Tilt Index ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 36.29 | | | $ | 33.29 | | | $ | 23.32 | | | $ | 28.20 | | | $ | 28.22 | | | $ | 27.31 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.45 | | | | 1.03 | | | | 0.92 | | | | 1.04 | | | | 0.95 | | | | 0.86 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (7.72 | ) | | | 2.98 | | | | 9.95 | | | | (4.90 | ) | | | (0.02 | ) | | | 1.03 | |
| | | | |
| | | | | | |
Total from investment operations | | | (7.27 | ) | | | 4.01 | | | | 10.87 | | | | (3.86 | ) | | | 0.93 | | | | 1.89 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.52 | ) | | | (1.01 | ) | | | (0.90 | ) | | | (1.02 | ) | | | (0.95 | ) | | | (0.98 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 28.50 | | | $ | 36.29 | | | $ | 33.29 | | | $ | 23.32 | | | $ | 28.20 | | | $ | 28.22 | |
| | | | |
| | | | | | |
Total returnd | | | (20.14)% | | | | 12.14% | | | | 47.20% | | | | (14.34)% | | | | 3.51% | | | | 6.91% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.30% | | | | 0.45% | | | | 0.45% | | | | 0.45% | | | | 0.45% | | | | 0.75% | f |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.30% | | | | 0.45% | | | | 0.45% | | | | 0.45% | | | | 0.45% | | | | 0.45% | f |
| | | | | | |
Net investment income | | | 2.71% | | | | 2.92% | | | | 3.21% | | | | 3.60% | | | | 3.43% | | | | 3.05% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $41,324 | | | | $30,851 | | | | $26,632 | | | | $18,653 | | | | $16,920 | | | | $16,933 | |
| | | | | | |
Portfolio turnover rateg | | | 110.97% | h | | | 28.73% | h | | | 42.38% | h | | | 19.79% | h | | | 25.75% | | | | 43.32% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ Global Dividend ETF was renamed Franklin U.S. Core Dividend Tilt Index ETF.
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: | | | 110.97% | | | | 27.86% | | | | 42.38% | | | | 19.79% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 60 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Core Dividend Tilt Index ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.7% | | | | | | | | | |
| | | Brazil 0.2% | | | | | | | | | |
| a | | MercadoLibre Inc. | | | Internet & Direct Marketing Retail | | | | 116 | | | $ | 96,023 | |
| | | | | | | | | | | | | | |
| | | China 0.3% | | | | | | | | | |
| | NXP Semiconductors NV | | | Semiconductors & Semiconductor Equipment | | | | 667 | | | | 98,389 | |
| | | | | | | | | | | | | | |
| | | Ireland 0.1% | | | | | | | | | |
| | Seagate Technology Holdings PLC | | | Technology Hardware, Storage & Peripherals | | | | 783 | | | | 41,679 | |
| | | | | | | | | | | | | | |
| | | Peru 0.0%† | | | | | | | | | |
| | Southern Copper Corp. | | | Metals & Mining | | | | 348 | | | | 15,604 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| b | | Polymetal International PLC | | | Metals & Mining | | | | 4,860 | | | | — | |
| b | | Tatneft PAO | | | Oil, Gas & Consumable Fuels | | | | 15,990 | | | | — | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | — | |
| | | | | | | | | | | | | | |
| | | United Kingdom 0.2% | | | | | | | | | |
| a | | Linde PLC | | | Chemicals | | | | 319 | | | | 85,999 | |
| | | | | | | | | | | | | | |
| | | United States 98.9% | | | | | | | | | |
| | 3M Co. | | | Industrial Conglomerates | | | | 2,349 | | | | 259,564 | |
| | Abbott Laboratories | | | Health Care Equipment & Supplies | | | | 3,161 | | | | 305,858 | |
| | AbbVie Inc. | | | Biotechnology | | | | 3,886 | | | | 521,540 | |
| | Accenture PLC, A | | | IT Services | | | | 725 | | | | 186,542 | |
| a | | Adobe Inc. | | | Software | | | | 464 | | | | 127,693 | |
| | Advance Auto Parts Inc. | | | Specialty Retail | | | | 29 | | | | 4,534 | |
| a | | Advanced Micro Devices Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,552 | | | | 161,695 | |
| | AES Corp. | | | Independent Power Producers & Energy Traders | | | | 2,494 | | | | 56,364 | |
| | Agilent Technologies Inc. | | | Life Sciences Tools & Services | | | | 87 | | | | 10,575 | |
| a | | agilon health Inc. | | | Health Care Providers & Services | | | | 174 | | | | 4,075 | |
| | Air Products and Chemicals Inc. | | | Chemicals | | | | 841 | | | | 195,726 | |
| a | | Airbnb Inc., A | | | Hotels, Restaurants & Leisure | | | | 493 | | | | 51,785 | |
| | Albemarle Corp. | | | Chemicals | | | | 29 | | | | 7,669 | |
| | Alexandria Real Estate Equities Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 580 | | | | 81,310 | |
| a | | Align Technology Inc. | | | Health Care Equipment & Supplies | | | | 29 | | | | 6,006 | |
| | Alliant Energy Corp. | | | Electric Utilities | | | | 406 | | | | 21,514 | |
| | Ally Financial Inc. | | | Consumer Finance | | | | 1,276 | | | | 35,511 | |
| a | | Alnylam Pharmaceuticals Inc. | | | Biotechnology | | | | 58 | | | | 11,609 | |
| a | | Alphabet Inc., A | | | Interactive Media & Services | | | | 6,148 | | | | 588,056 | |
| a | | Alphabet Inc., C | | | Interactive Media & Services | | | | 5,626 | | | | 540,940 | |
| | Altria Group Inc. | | | Tobacco | | | | 7,163 | | | | 289,242 | |
| a | | Amazon.com Inc. | | | Internet & Direct Marketing Retail | | | | 11,542 | | | | 1,304,246 | |
| a | | AMC Entertainment Holdings Inc., A | | | Entertainment | | | | 551 | | | | 3,840 | |
| | Amcor PLC | | | Containers & Packaging | | | | 5,887 | | | | 63,168 | |
| | American Electric Power Co. Inc. | | | Electric Utilities | | | | 1,044 | | | | 90,254 | |
| | American Tower Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 522 | | | | 112,073 | |
| | AmerisourceBergen Corp. | | | Health Care Providers & Services | | | | 174 | | | | 23,547 | |
| | Amgen Inc. | | | Biotechnology | | | | 841 | | | | 189,561 | |
| | Analog Devices Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,059 | | | | 286,901 | |
| | Annaly Capital Management Inc. | | | Mortgage Real Estate Investment Trusts (REITs | ) | | | 1,559 | | | | 26,748 | |
| | Apollo Global Management Inc. | | | Diversified Financial Services | | | | 1,450 | | | | 67,425 | |
| | Apple Inc. | | | Technology Hardware, Storage & Peripherals | | | | 21,083 | | | | 2,913,671 | |
| | Applied Materials Inc. | | | Semiconductors & Semiconductor Equipment | | | | 1,392 | | | | 114,047 | |
| a | | AppLovin Corp., A | | | Software | | | | 145 | | | | 2,826 | |
| | AT&T Inc. | | | Diversified Telecommunication Services | | | | 23,664 | | | | 363,006 | |
| a | | Autodesk Inc. | | | Software | | | | 203 | | | | 37,920 | |
| | Automatic Data Processing Inc. | | | IT Services | | | | 116 | | | | 26,238 | |
| | AvalonBay Communities Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 522 | | | | 96,147 | |
| | Avangrid Inc. | | | Electric Utilities | | | | 290 | | | | 12,093 | |
| | Baker Hughes Co. | | | Energy Equipment & Services | | | | 638 | | | | 13,372 | |
| | Bank of America Corp. | | | Banks | | | | 5,974 | | | | 180,415 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 61 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Bank of New York Mellon Corp. | | | Capital Markets | | | | 1,392 | | | $ | 53,620 | |
| | Bath & Body Works Inc. | | | Specialty Retail | | | | 435 | | | | 14,181 | |
| | Baxter International Inc. | | | Health Care Equipment & Supplies | | | | 522 | | | | 28,115 | |
| | Becton Dickinson and Co. | | | Health Care Equipment & Supplies | | | | 116 | | | | 25,848 | |
| | Best Buy Co. Inc. | | | Specialty Retail | | | | 754 | | | | 47,758 | |
| a | | Bill.com Holdings Inc. | | | Software | | | | 174 | | | | 23,032 | |
| | BlackRock Inc. | | | Capital Markets | | | | 361 | | | | 198,651 | |
| | Blackstone Inc. | | | Capital Markets | | | | 2,697 | | | | 225,739 | |
| a | | Block Inc. | | | IT Services | | | | 899 | | | | 49,436 | |
| a | | Booking Holdings Inc. | | | Hotels, Restaurants & Leisure | | | | 7 | | | | 11,502 | |
| | Boston Properties Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 522 | | | | 39,134 | |
| | Bristol-Myers Squibb Co. | | | Pharmaceuticals | | | | 5,423 | | | | 385,521 | |
| | Broadcom Inc. | | | Semiconductors & Semiconductor Equipment | | | | 986 | | | | 437,794 | |
| | Broadridge Financial Solutions Inc. | | | IT Services | | | | 464 | | | | 66,964 | |
| | Camden Property Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 377 | | | | 45,033 | |
| | Campbell Soup Co. | | | Food Products | | | | 870 | | | | 40,994 | |
| | Cardinal Health Inc. | | | Health Care Providers & Services | | | | 1,073 | | | | 71,548 | |
| | Carlyle Group Inc. | | | Capital Markets | | | | 580 | | | | 14,987 | |
| | Caterpillar Inc. | | | Machinery | | | | 754 | | | | 123,716 | |
| | Chevron Corp. | | | Oil, Gas & Consumable Fuels | | | | 3,016 | | | | 433,309 | |
| | Cincinnati Financial Corp. | | | Insurance | | | | 406 | | | | 36,365 | |
| | Cisco Systems Inc. | | | Communications Equipment | | | | 9,483 | | | | 379,320 | |
| | Citigroup Inc. | | | Banks | | | | 6,612 | | | | 275,522 | |
| | Citizens Financial Group Inc. | | | Banks | | | | 1,885 | | | | 64,769 | |
| | Clorox Co. | | | Household Products | | | | 493 | | | | 63,296 | |
| a | | Cloudflare Inc., A | | | Software | | | | 609 | | | | 33,684 | |
| | CMS Energy Corp. | | | Multi-Utilities | | | | 174 | | | | 10,134 | |
| | Coca-Cola Co. | | | Beverages | | | | 8,845 | | | | 495,497 | |
| | Cognex Corp. | | | Electronic Equipment, Instruments & Components | | | | 435 | | | | 18,031 | |
| a | | Coinbase Global Inc., A | | | Capital Markets | | | | 58 | | | | 3,740 | |
| | Colgate-Palmolive Co. | | | Household Products | | | | 696 | | | | 48,894 | |
| | Comcast Corp., A | | | Media | | | | 7,105 | | | | 208,390 | |
| | Comerica Inc. | | | Banks | | | | 493 | | | | 35,052 | |
| | Conagra Brands Inc. | | | Food Products | | | | 1,856 | | | | 60,561 | |
| | Consolidated Edison Inc. | | | Multi-Utilities | | | | 1,276 | | | | 109,430 | |
| | Corning Inc. | | | Electronic Equipment, Instruments & Components | | | | 3,074 | | | | 89,207 | |
| | Costco Wholesale Corp. | | | Food & Staples Retailing | | | | 174 | | | | 82,175 | |
| | Coterra Energy Inc., A | | | Oil, Gas & Consumable Fuels | | | | 1,914 | | | | 49,994 | |
| a | | Crowdstrike Holdings Inc., A | | | Software | | | | 406 | | | | 66,913 | |
| | Crown Castle Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,682 | | | | 243,133 | |
| | Cummins Inc. | | | Machinery | | | | 435 | | | | 88,527 | |
| | CVS Health Corp. | | | Health Care Providers & Services | | | | 2,465 | | | | 235,087 | |
| | Danaher Corp. | | | Life Sciences Tools & Services | | | | 435 | | | | 112,356 | |
| | Darden Restaurants Inc. | | | Hotels, Restaurants & Leisure | | | | 464 | | | | 58,612 | |
| a | | Datadog Inc., A | | | Software | | | | 493 | | | | 43,769 | |
| | Deere & Co. | | | Machinery | | | | 203 | | | | 67,780 | |
| | Devon Energy Corp. | | | Oil, Gas & Consumable Fuels | | | | 2,494 | | | | 149,964 | |
| | Digital Realty Trust Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,131 | | | | 112,173 | |
| | Discover Financial Services | | | Consumer Finance | | | | 348 | | | | 31,640 | |
| a | | DocuSign Inc. | | | Software | | | | 406 | | | | 21,709 | |
| | Dominion Energy Inc. | | | Multi-Utilities | | | | 2,494 | | | | 172,360 | |
| a | | DoorDash Inc., A | | | Internet & Direct Marketing Retail | | | | 493 | | | | 24,379 | |
| | Dow Inc. | | | Chemicals | | | | 2,987 | | | | 131,219 | |
| | Duke Energy Corp. | | | Electric Utilities | | | | 2,871 | | | | 267,060 | |
| | Duke Realty Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 696 | | | | 33,547 | |
| a | | Dynatrace Inc. | | | Software | | | | 551 | | | | 19,180 | |
| | Eastman Chemical Co. | | | Chemicals | | | | 522 | | | | 37,088 | |
| | Eaton Corp. PLC | | | Electrical Equipment | | | | 957 | | | | 127,626 | |
| | | | | | | | | | |
| | | | | | |
| 62 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | eBay Inc. | | | Internet & Direct Marketing Retail | | | | 1,653 | | | $ | 60,847 | |
| | Edison International | | | Electric Utilities | | | | 1,479 | | | | 83,682 | |
| | Eli Lilly & Co. | | | Pharmaceuticals | | | | 1,189 | | | | 384,463 | |
| | Emerson Electric Co. | | | Electrical Equipment | | | | 928 | | | | 67,948 | |
| a | | Enphase Energy Inc. | | | Semiconductors & Semiconductor Equipment | | | | 261 | | | | 72,420 | |
| | Entegris Inc. | | | Semiconductors & Semiconductor Equipment | | | | 232 | | | | 19,261 | |
| | Entergy Corp. | | | Electric Utilities | | | | 783 | | | | 78,793 | |
| a | | EPAM Systems Inc. | | | IT Services | | | | 87 | | | | 31,511 | |
| | Equinix Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 154 | | | | 87,601 | |
| | Equity Residential | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,305 | | | | 87,722 | |
| | Essex Property Trust Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 261 | | | | 63,222 | |
| | Estee Lauder Cos Inc., A | | | Personal Products | | | | 174 | | | | 37,567 | |
| a | | Etsy Inc. | | | Internet & Direct Marketing Retail | | | | 203 | | | | 20,326 | |
| | Evergy Inc. | | | Electric Utilities | | | | 899 | | | | 53,401 | |
| | Eversource Energy | | | Electric Utilities | | | | 609 | | | | 47,478 | |
| a | | Exact Sciences Corp. | | | Biotechnology | | | | 232 | | | | 7,538 | |
| | Exelon Corp. | | | Electric Utilities | | | | 725 | | | | 27,159 | |
| | Extra Space Storage Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 522 | | | | 90,155 | |
| | Exxon Mobil Corp. | | | Oil, Gas & Consumable Fuels | | | | 7,598 | | | | 663,381 | |
| | Fastenal Co. | | | Trading Companies & Distributors | | | | 2,233 | | | | 102,807 | |
| | Federal Realty Investment Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 290 | | | | 26,135 | |
| | Fidelity National Financial Inc. | | | Insurance | | | | 1,073 | | | | 38,843 | |
| | Fidelity National Information Services Inc. | | | IT Services | | | | 58 | | | | 4,383 | |
| | Fifth Third Bancorp | | | Banks | | | | 2,639 | | | | 84,342 | |
| | FirstEnergy Corp. | | | Electric Utilities | | | | 2,175 | | | | 80,475 | |
| | Ford Motor Co. | | | Automobiles | | | | 9,164 | | | | 102,637 | |
| a | | Fortinet Inc. | | | Software | | | | 435 | | | | 21,372 | |
| | Franklin Resources Inc. | | | Capital Markets | | | | 1,102 | | | | 23,715 | |
| | Freeport-McMoRan Inc. | | | Metals & Mining | | | | 406 | | | | 11,096 | |
| | Garmin Ltd. | | | Household Durables | | | | 609 | | | | 48,909 | |
| | General Dynamics Corp. | | | Aerospace & Defense | | | | 116 | | | | 24,612 | |
| | General Mills Inc. | | | Food Products | | | | 435 | | | | 33,325 | |
| | Genuine Parts Co. | | | Distributors | | | | 377 | | | | 56,294 | |
| | Gilead Sciences Inc. | | | Biotechnology | | | | 4,843 | | | | 298,765 | |
| | Goldman Sachs Group Inc. | | | Capital Markets | | | | 13 | | | | 3,810 | |
| | Hasbro Inc. | | | Leisure Products | | | | 522 | | | | 35,193 | |
| | Healthpeak Properties Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 2,146 | | | | 49,186 | |
| | Hewlett Packard Enterprise Co. | | | Technology Hardware, Storage & Peripherals | | | | 5,133 | | | | 61,493 | |
| | Honeywell International Inc. | | | Industrial Conglomerates | | | | 377 | | | | 62,948 | |
| | HP Inc. | | | Technology Hardware, Storage & Peripherals | | | | 2,581 | | | | 64,319 | |
| | Hubbell Inc., B | | | Electrical Equipment | | | | 174 | | | | 38,802 | |
| a | | HubSpot Inc. | | | Software | | | | 116 | | | | 31,334 | |
| | Huntington Bancshares Inc. | | | Banks | | | | 5,365 | | | | 70,711 | |
| | Illinois Tool Works Inc. | | | Machinery | | | | 783 | | | | 141,449 | |
| a | | Illumina Inc. | | | Life Sciences Tools & Services | | | | 174 | | | | 33,197 | |
| a | | Insulet Corp. | | | Health Care Equipment & Supplies | | | | 87 | | | | 19,958 | |
| | Intel Corp. | | | Semiconductors & Semiconductor Equipment | | | | 13,108 | | | | 337,793 | |
| | International Business Machines Corp. | | | IT Services | | | | 2,987 | | | | 354,885 | |
| | International Flavors & Fragrances Inc. | | | Chemicals | | | | 986 | | | | 89,558 | |
| | International Paper Co. | | | Containers & Packaging | | | | 1,479 | | | | 46,884 | |
| | Interpublic Group of Cos Inc. | | | Media | | | | 1,566 | | | | 40,090 | |
| | Intuit Inc. | | | Software | | | | 377 | | | | 146,020 | |
| a | | Intuitive Surgical Inc. | | | Health Care Equipment & Supplies | | | | 87 | | | | 16,307 | |
| | Invesco Ltd. | | | Capital Markets | | | | 1,247 | | | | 17,084 | |
| | Iron Mountain Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,131 | | | | 49,730 | |
| | Jefferies Financial Group Inc. | | | Capital Markets | | | | 725 | | | | 21,388 | |
| | Johnson & Johnson | | | Pharmaceuticals | | | | 4,698 | | | | 767,465 | |
| | JPMorgan Chase & Co. | | | Banks | | | | 4,263 | | | | 445,483 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 63 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Juniper Networks Inc. | | | Communications Equipment | | | | 1,276 | | | $ | 33,329 | |
| | Kellogg Co. | | | Food Products | | | | 1,015 | | | | 70,705 | |
| | KeyCorp. | | | Banks | | | | 3,538 | | | | 56,679 | |
| | Kimberly-Clark Corp. | | | Household Products | | | | 1,363 | | | | 153,392 | |
| | Kimco Realty Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 2,378 | | | | 43,779 | |
| | Kinder Morgan Inc. | | | Oil, Gas & Consumable Fuels | | | | 7,830 | | | | 130,291 | |
| | KKR & Co. Inc. | | | Capital Markets | | | | 580 | | | | 24,940 | |
| | KLA Corp. | | | Semiconductors & Semiconductor Equipment | | | | 493 | | | | 149,197 | |
| | Kraft Heinz Co. | | | Food Products | | | | 2,900 | | | | 96,715 | |
| | Lam Research Corp. | | | Semiconductors & Semiconductor Equipment | | | | 319 | | | | 116,754 | |
| | Lear Corp. | | | Auto Components | | | | 232 | | | | 27,768 | |
| | Lincoln National Corp. | | | Insurance | | | | 609 | | | | 26,741 | |
| | Lockheed Martin Corp. | | | Aerospace & Defense | | | | 319 | | | | 123,227 | |
| | Lowe’s Cos Inc. | | | Specialty Retail | | | | 435 | | | | 81,697 | |
| | Lumen Technologies Inc. | | | Diversified Telecommunication Services | | | | 3,828 | | | | 27,868 | |
| | LyondellBasell Industries NV, A | | | Chemicals | | | | 1,044 | | | | 78,592 | |
| | M&T Bank Corp. | | | Banks | | | | 493 | | | | 86,926 | |
| | MarketAxess Holdings Inc. | | | Capital Markets | | | | 87 | | | | 19,357 | |
| | Marvell Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 1,450 | | | | 62,219 | |
| | Mastercard Inc., A | | | IT Services | | | | 783 | | | | 222,638 | |
| a | | Match Group Inc. | | | Interactive Media & Services | | | | 174 | | | | 8,309 | |
| | Medtronic PLC | | | Health Care Equipment & Supplies | | | | 2,871 | | | | 231,833 | |
| | Merck & Co. Inc. | | | Pharmaceuticals | | | | 5,916 | | | | 509,486 | |
| a | | Meta Platforms Inc., A | | | Interactive Media & Services | | | | 2,929 | | | | 397,407 | |
| | MetLife Inc. | | | Insurance | | | | 2,175 | | | | 132,196 | |
| | Microchip Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,204 | | | | 134,510 | |
| | Micron Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 1,044 | | | | 52,304 | |
| | Microsoft Corp. | | | Software | | | | 10,411 | | | | 2,424,722 | |
| | Mid-America Apartment Communities Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 435 | | | | 67,455 | |
| a | | Moderna Inc. | | | Biotechnology | | | | 174 | | | | 20,576 | |
| | Mondelez International Inc., A | | | Food Products | | | | 58 | | | | 3,180 | |
| a | | MongoDB Inc. | | | IT Services | | | | 203 | | | | 40,308 | |
| | Monolithic Power Systems Inc. | | | Semiconductors & Semiconductor Equipment | | | | 174 | | | | 63,232 | |
| | Morgan Stanley | | | Capital Markets | | | | 3,132 | | | | 247,459 | |
| | MSCI Inc. | | | Capital Markets | | | | 261 | | | | 110,087 | |
| | NetApp Inc. | | | Technology Hardware, Storage & Peripherals | | | | 899 | | | | 55,603 | |
| a | | Netflix Inc. | | | Entertainment | | | | 609 | | | | 143,383 | |
| | Newell Brands Inc. | | | Household Durables | | | | 1,479 | | | | 20,543 | |
| | Newmont Corp. | | | Metals & Mining | | | | 2,755 | | | | 115,793 | |
| | NextEra Energy Inc. | | | Electric Utilities | | | | 1,015 | | | | 79,586 | |
| | NIKE Inc., B | | | Textiles, Apparel & Luxury Goods | | | | 1,276 | | | | 106,061 | |
| | NiSource Inc. | | | Multi-Utilities | | | | 1,421 | | | | 35,795 | |
| | Northern Trust Corp. | | | Capital Markets | | | | 783 | | | | 66,993 | |
| | NortonLifeLock Inc. | | | Software | | | | 638 | | | | 12,849 | |
| | NRG Energy Inc. | | | Electric Utilities | | | | 928 | | | | 35,515 | |
| | NVIDIA Corp. | | | Semiconductors & Semiconductor Equipment | | | | 3,799 | | | | 461,161 | |
| a | | Okta Inc. | | | IT Services | | | | 290 | | | | 16,492 | |
| | Omnicom Group Inc. | | | Media | | | | 812 | | | | 51,229 | |
| a | | ON Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 580 | | | | 36,151 | |
| | ONEOK Inc. | | | Oil, Gas & Consumable Fuels | | | | 1,769 | | | | 90,644 | |
| | Oracle Corp. | | | Software | | | | 2,291 | | | | 139,911 | |
| | Packaging Corp. of America | | | Containers & Packaging | | | | 348 | | | | 39,077 | |
| a | | Palantir Technologies Inc., A | | | Software | | | | 4,814 | | | | 39,138 | |
| a | | Palo Alto Networks Inc. | | | Software | | | | 207 | | | | 33,905 | |
| | Paychex Inc. | | | IT Services | | | | 1,189 | | | | 133,418 | |
| a | | PayPal Holdings Inc. | | | IT Services | | | | 1,392 | | | | 119,809 | |
| | PepsiCo Inc. | | | Beverages | | | | 3,103 | | | | 506,596 | |
| | PerkinElmer Inc. | | | Life Sciences Tools & Services | | | | 145 | | | | 17,448 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Pfizer Inc. | | | Pharmaceuticals | | | | 10,353 | | | $ | 453,047 | |
| | Philip Morris International Inc. | | | Tobacco | | | | 4,466 | | | | 370,723 | |
| | Phillips 66 | | | Oil, Gas & Consumable Fuels | | | | 1,595 | | | | 128,748 | |
| | Pinnacle West Capital Corp. | | | Electric Utilities | | | | 435 | | | | 28,062 | |
| a | | Pinterest Inc., A | | | Interactive Media & Services | | | | 1,769 | | | | 41,218 | |
| | Pioneer Natural Resources Co. | | | Oil, Gas & Consumable Fuels | | | | 957 | | | | 207,219 | |
| a | | Plug Power Inc. | | | Electrical Equipment | | | | 1,189 | | | | 24,981 | |
| | PNC Financial Services Group Inc. | | | Banks | | | | 1,595 | | | | 238,325 | |
| | PPG Industries Inc. | | | Chemicals | | | | 551 | | | | 60,990 | |
| | PPL Corp. | | | Electric Utilities | | | | 2,900 | | | | 73,515 | |
| | Principal Financial Group Inc. | | | Insurance | | | | 899 | | | | 64,863 | |
| | Prologis Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 609 | | | | 61,874 | |
| | Prudential Financial Inc. | | | Insurance | | | | 1,479 | | | | 126,869 | |
| | Public Service Enterprise Group Inc. | | | Multi-Utilities | | | | 1,827 | | | | 102,732 | |
| | Public Storage | | | Equity Real Estate Investment Trusts (REITs | ) | | | 435 | | | | 127,372 | |
| | QUALCOMM Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,668 | | | | 301,431 | |
| | Raytheon Technologies Corp. | | | Aerospace & Defense | | | | 1,682 | | | | 137,689 | |
| | Realty Income Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 2,465 | | | | 143,463 | |
| | Regency Centers Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 609 | | | | 32,795 | |
| | Regions Financial Corp. | | | Banks | | | | 3,596 | | | | 72,172 | |
| | ResMed Inc. | | | Health Care Equipment & Supplies | | | | 87 | | | | 18,992 | |
| | Rockwell Automation Inc. | | | Electrical Equipment | | | | 319 | | | | 68,620 | |
| a | | Roku Inc. | | | Entertainment | | | | 319 | | | | 17,992 | |
| | Ross Stores Inc. | | | Specialty Retail | | | | 203 | | | | 17,107 | |
| | S&P Global Inc. | | | Capital Markets | | | | 145 | | | | 44,276 | |
| a | | Salesforce Inc. | | | Software | | | | 957 | | | | 137,655 | |
| a | | ServiceNow Inc. | | | Software | | | | 261 | | | | 98,556 | |
| | Sherwin-Williams Co. | | | Chemicals | | | | 58 | | | | 11,876 | |
| | Simon Property Group Inc. | | | Real Estate Investment Trusts (REITs | ) | | | 1,305 | | | | 117,124 | |
| | Skyworks Solutions Inc. | | | Semiconductors & Semiconductor Equipment | | | | 638 | | | | 54,402 | |
| a | | Snap Inc., A | | | Interactive Media & Services | | | | 1,537 | | | | 15,093 | |
| | Snap-on Inc. | | | Machinery | | | | 203 | | | | 40,874 | |
| a | | Snowflake Inc., A | | | IT Services | | | | 493 | | | | 83,790 | |
| a | | SolarEdge Technologies Inc. | | | Semiconductors & Semiconductor Equipment | | | | 58 | | | | 13,425 | |
| | Southern Co. | | | Electric Utilities | | | | 4,060 | | | | 276,080 | |
| a | | Splunk Inc. | | | Software | | | | 58 | | | | 4,362 | |
| | Stanley Black & Decker Inc. | | | Machinery | | | | 609 | | | | 45,803 | |
| | Starbucks Corp. | | | Hotels, Restaurants & Leisure | | | | 2,871 | | | | 241,910 | |
| | State Street Corp. | | | Capital Markets | | | | 1,392 | | | | 84,648 | |
| | Synchrony Financial | | | Consumer Finance | | | | 1,334 | | | | 37,605 | |
| | Sysco Corp. | | | Food & Staples Retailing | | | | 406 | | | | 28,708 | |
| | T Rowe Price Group Inc. | | | Capital Markets | | | | 899 | | | | 94,404 | |
| | Tapestry Inc. | | | Textiles, Apparel & Luxury Goods | | | | 1,015 | | | | 28,856 | |
| | Target Corp. | | | Multiline Retail | | | | 667 | | | | 98,976 | |
| | Teradyne Inc. | | | Semiconductors & Semiconductor Equipment | | | | 203 | | | | 15,255 | |
| a | | Tesla Inc. | | | Automobiles | | | | 3,306 | | | | 876,916 | |
| | Texas Instruments Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,552 | | | | 394,999 | |
| | The Home Depot Inc. | | | Specialty Retail | | | | 1,450 | | | | 400,113 | |
| | The J.M. Smucker Co. | | | Food Products | | | | 174 | | | | 23,909 | |
| | The Procter & Gamble Co. | | | Household Products | | | | 3,393 | | | | 428,366 | |
| | The Progressive Corp. | | | Insurance | | | | 377 | | | | 43,811 | |
| | The TJX Cos Inc. | | | Specialty Retail | | | | 435 | | | | 27,022 | |
| | Thermo Fisher Scientific Inc. | | | Life Sciences Tools & Services | | | | 319 | | | | 161,794 | |
| a | | T-Mobile US Inc. | | | Wireless Telecommunication Services | | | | 58 | | | | 7,782 | |
| | Tractor Supply Co. | | | Specialty Retail | | | | 203 | | | | 37,734 | |
| a | | Trade Desk Inc., A | | | Software | | | | 870 | | | | 51,983 | |
| | Truist Financial Corp. | | | Banks | | | | 5,133 | | | | 223,491 | |
| a | | Twilio Inc., A | | | IT Services | | | | 319 | | | | 22,056 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| a | | Twitter Inc. | | | Interactive Media & Services | | | | 638 | | | $ | 27,970 | |
| a | | Uber Technologies Inc. | | | Road & Rail | | | | 1,769 | | | | 46,879 | |
| | UDR Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,131 | | | | 47,174 | |
| | UGI Corp. | | | Gas Utilities | | | | 841 | | | | 27,190 | |
| a | | UiPath Inc., A | | | Software | | | | 1,305 | | | | 16,456 | |
| | Union Pacific Corp. | | | Road & Rail | | | | 638 | | | | 124,295 | |
| | United Parcel Service Inc., B | | | Air Freight & Logistics | | | | 1,624 | | | | 262,341 | |
| | UnitedHealth Group Inc. | | | Health Care Providers & Services | | | | 1,044 | | | | 527,262 | |
| a | | Unity Software Inc. | | | Software | | | | 696 | | | | 22,175 | |
| | US Bancorp | | | Banks | | | | 5,191 | | | | 209,301 | |
| | Vail Resorts Inc. | | | Hotels, Restaurants & Leisure | | | | 145 | | | | 31,268 | |
| | Valero Energy Corp. | | | Oil, Gas & Consumable Fuels | | | | 493 | | | | 52,677 | |
| a | | Veeva Systems Inc., A | | | Health Care Technology | | | | 58 | | | | 9,563 | |
| | Ventas Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,566 | | | | 62,906 | |
| | Verizon Communications Inc. | | | Diversified Telecommunication Services | | | | 11,194 | | | | 425,036 | |
| | VF Corp. | | | Textiles, Apparel & Luxury Goods | | | | 1,247 | | | | 37,298 | |
| | ViacomCBS Inc., B | | | Media | | | | 2,523 | | | | 48,038 | |
| | Viatris Inc. | | | Pharmaceuticals | | | | 4,727 | | | | 40,274 | |
| | VICI Properties Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3,770 | | | | 112,534 | |
| | Visa Inc., A | | | IT Services | | | | 1,479 | | | | 262,744 | |
| | Vistra Corp. | | | Independent Power Producers & Energy Traders | | | | 1,682 | | | | 35,322 | |
| | Vornado Realty Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 580 | | | | 13,433 | |
| | Walgreens Boots Alliance Inc. | | | Food & Staples Retailing | | | | 2,784 | | | | 87,418 | |
| | Walmart Inc. | | | Food & Staples Retailing | | | | 1,015 | | | | 131,645 | |
| a | | Walt Disney Co. | | | Media | | | | 667 | | | | 62,918 | |
| | Watsco Inc. | | | Trading Companies & Distributors | | | | 116 | | | | 29,865 | |
| | WEC Energy Group Inc. | | | Multi-Utilities | | | | 464 | | | | 41,496 | |
| | Wells Fargo & Co. | | | Banks | | | | 3,654 | | | | 146,964 | |
| | Welltower Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,740 | | | | 111,917 | |
| | Weyerhaeuser Co. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3,016 | | | | 86,137 | |
| | Whirlpool Corp. | | | Household Durables | | | | 232 | | | | 31,276 | |
| | Williams Companies Inc. | | | Oil, Gas & Consumable Fuels | | | | 5,133 | | | | 146,958 | |
| a | | Workday Inc., A | | | Software | | | | 174 | | | | 26,486 | |
| | WP Carey Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 725 | | | | 50,605 | |
| a | | Zillow Group Inc., C | | | Real Estate Management & Development | | | | 203 | | | | 5,808 | |
| | Zions Bancorp NA | | | Banks | | | | 435 | | | | 22,124 | |
| a | | Zoom Video Communications Inc., A | | | Software | | | | 319 | | | | 23,475 | |
| a | | ZoomInfo Technologies Inc., A | | | Interactive Media & Services | | | | 319 | | | | 13,290 | |
| a | | Zscaler Inc. | | | Software | | | | 203 | | | | 33,367 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 40,848,959 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $46,849,813) 99.7% | | | | | | | | | | | 41,186,653 | |
| | Other Assets, less Liabilities 0.3% | | | | | | | | | | | 137,800 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 41,324,453 | |
| | | | | | | |
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Franklin U.S. Core Dividend Tilt Index ETF (continued)
At September 30, 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 | | | | | | | | | | | | | | | |
S&P 500 E-Mini | | | Long | | | | 6 | | | $ | 108,045 | | | | 12/16/22 | | | $ | (10,481 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Large Cap Multifactor Index ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018b | |
| | | | | | |
Per share operating performance (for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 44.86 | | | $ | 40.04 | | | $ | 27.61 | | | $ | 31.41 | | | $ | 28.51 | | | $ | 25.44 | |
| | | | |
| | | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomed | | | 0.42 | | | | 0.77 | | | | 0.72 | | | | 0.76 | | | | 0.66 | | | | 0.53 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (8.30 | ) | | | 4.89 | | | | 12.49 | | | | (3.89 | ) | | | 2.71 | | | | 2.98 | |
| | | | |
| | | | | | |
Total from investment operations | | | (7.88 | ) | | | 5.66 | | | | 13.21 | | | | (3.13 | ) | | | 3.37 | | | | 3.51 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.40 | ) | | | (0.84 | ) | | | (0.78 | ) | | | (0.67 | ) | | | (0.47 | ) | | | (0.44 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 36.58 | | | $ | 44.86 | | | $ | 40.04 | | | $ | 27.61 | | | $ | 31.41 | | | $ | 28.51 | |
| | | | |
| | | | | | |
Total returne | | | (17.61)% | | | | 14.19% | | | | 48.22% | | | | (10.27)% | | | | 11.97% | | | | 13.84% | |
| | | | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.15% | | | | 0.15% | | | | 0.15% | | | | 0.18% | | | | 0.25% | | | | 0.32% | g |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.15% | | | | 0.15% | | | | 0.15% | | | | 0.18% | | | | 0.25% | | | | 0.25% | g |
| | | | | | |
Net investment income | | | 2.05% | | | | 1.77% | | | | 2.06% | | | | 2.32% | | | | 2.20% | | | | 2.10% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $863,305 | | | | $966,737 | | | | $1,353,407 | | | | $1,311,583 | | | | $1,008,255 | | | | $108,326 | |
| | | | | | |
Portfolio turnover rateh | | | 28.49% | i | | | 68.37% | i | | | 25.05% | i | | | 19.44% | i | | | 18.04% | | | | 20.80% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Equity ETF was renamed Franklin U.S. Large Cap Multifactor Index ETF.
bFor the period April 26, 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.
gEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
hPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| | | | | | | | | | | | | | | | | | | | | | | | |
| i Portfolio turnover rate excluding cash creations was as follows: | | | 28.49% | | | | 68.37% | | | | 25.05% | | | | 19.44% | | | | | | | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Large Cap Multifactor Index ETF
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks 99.8% | | | | | | |
| | | Communication Services 5.2% | | | | | | |
| a | | Alphabet Inc., A | | | 140,184 | | | $ | 13,408,600 | |
| | AT&T Inc. | | | 569,704 | | | | 8,739,259 | |
| | Lumen Technologies Inc. | | | 115,640 | | | | 841,859 | |
| a | | Meta Platforms Inc., A | | | 47,672 | | | | 6,468,137 | |
| | Nexstar Media Group Inc. | | | 5,192 | | | | 866,285 | |
| | Omnicom Group Inc. | | | 19,352 | | | | 1,220,918 | |
| | Verizon Communications Inc. | | | 322,848 | | | | 12,258,539 | |
| | World Wrestling Entertainment Inc., A | | | 13,688 | | | | 960,487 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 44,764,084 | |
| | | | | | | | | | |
| | | Consumer Discretionary 11.6% | | | | | | |
| a | | Amazon.com Inc. | | | 151,512 | | | | 17,120,856 | |
| a | | AutoNation Inc. | | | 7,552 | | | | 769,322 | |
| a | | AutoZone Inc. | | | 2,360 | | | | 5,054,955 | |
| | Choice Hotels International Inc. | | | 8,024 | | | | 878,788 | |
| | D.R. Horton Inc. | | | 28,792 | | | | 1,939,141 | |
| | Dick’s Sporting Goods Inc. | | | 9,912 | | | | 1,037,192 | |
| | Dollar General Corp. | | | 12,744 | | | | 3,056,776 | |
| a | | Dollar Tree Inc. | | | 20,768 | | | | 2,826,525 | |
| | Genuine Parts Co. | | | 14,632 | | | | 2,184,850 | |
| a | | Grand Canyon Education Inc. | | | 11,328 | | | | 931,728 | |
| | H&R Block Inc. | | | 27,376 | | | | 1,164,575 | |
| | Kohl’s Corp. | | | 33,040 | | | | 830,956 | |
| | Lennar Corp., A | | | 23,128 | | | | 1,724,192 | |
| | Lithia Motors Inc. | | | 3,304 | | | | 708,873 | |
| | LKQ Corp. | | | 17,464 | | | | 823,428 | |
| | Lowe’s Cos Inc. | | | 60,888 | | | | 11,435,375 | |
| | Macy’s Inc. | | | 54,280 | | | | 850,568 | |
| a | | Mattel Inc. | | | 42,480 | | | | 804,571 | |
| | McDonald’s Corp. | | | 54,752 | | | | 12,633,477 | |
| a | | NVR Inc. | | | 250 | | | | 996,770 | |
| a | | O’Reilly Automotive Inc. | | | 7,080 | | | | 4,979,718 | |
| | Penske Automotive Group Inc. | | | 8,024 | | | | 789,802 | |
| | PulteGroup Inc. | | | 24,072 | | | | 902,700 | |
| | Service Corp. International/US | | | 16,520 | | | | 953,865 | |
| | Tapestry Inc. | | | 28,792 | | | | 818,557 | |
| | Tempur Sealy International Inc. | | | 36,344 | | | | 877,344 | |
| a | | Tesla Inc. | | | 61,764 | | | | 16,382,901 | |
| | Toll Brothers Inc. | | | 21,240 | | | | 892,080 | |
| a | | Ulta Beauty Inc. | | | 4,076 | | | | 1,635,250 | |
| | Williams-Sonoma Inc. | | | 8,496 | | | | 1,001,254 | |
| | Yum! Brands Inc. | | | 26,904 | | | | 2,860,971 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 99,867,360 | |
| | | | | | | | | | |
| | | Consumer Staples 5.9% | | | | | | |
| | Altria Group Inc. | | | 201,072 | | | | 8,119,287 | |
| | Archer-Daniels-Midland Co. | | | 60,888 | | | | 4,898,440 | |
| a | | BJ’s Wholesale Club Holdings Inc. | | | 12,744 | | | | 927,891 | |
| | Bunge Ltd. | | | 12,744 | | | | 1,052,272 | |
| | Costco Wholesale Corp. | | | 28,466 | | | | 13,443,638 | |
| | General Mills Inc. | | | 57,112 | | | | 4,375,350 | |
| | Philip Morris International Inc. | | | 134,048 | | | | 11,127,325 | |
| | The Hershey Co. | | | 14,160 | | | | 3,121,855 | |
| | Tyson Foods Inc., A | | | 26,432 | | | | 1,742,662 | |
| | Walgreens Boots Alliance Inc. | | | 63,248 | | | | 1,985,987 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 50,794,707 | |
| | | | | | | | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Energy 7.8% | | | | | | |
| a | | Antero Resources Corp. | | | 23,600 | | | $ | 720,508 | |
| | Chevron Corp. | | | 106,672 | | | | 15,325,566 | |
| | ConocoPhillips | | | 115,168 | | | | 11,786,293 | |
| | Coterra Energy Inc., A | | | 80,240 | | | | 2,095,869 | |
| | Devon Energy Corp. | | | 66,552 | | | | 4,001,772 | |
| | EOG Resources Inc. | | | 54,752 | | | | 6,117,441 | |
| | Exxon Mobil Corp. | | | 148,680 | | | | 12,981,251 | |
| | HF Sinclair Corp. | | | 17,936 | | | | 965,674 | |
| | Marathon Oil Corp. | | | 36,816 | | | | 831,305 | |
| | Marathon Petroleum Corp. | | | 24,544 | | | | 2,437,955 | |
| | Ovintiv Inc. | | | 17,464 | | | | 803,344 | |
| | PDC Energy Inc. | | | 13,688 | | | | 791,030 | |
| | Pioneer Natural Resources Co. | | | 23,128 | | | | 5,007,906 | |
| | Valero Energy Corp. | | | 30,208 | | | | 3,227,725 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 67,093,639 | |
| | | | | | | | | | |
| | | Financials 4.3% | | | | | | |
| | American International Group Inc. | | | 55,696 | | | | 2,644,446 | |
| | Arthur J Gallagher & Co. | | | 10,384 | | | | 1,777,948 | |
| | Assured Guaranty Ltd. | | | 18,408 | | | | 891,868 | |
| | Axis Capital Holdings Ltd. | | | 17,936 | | | | 881,554 | |
| a | | Berkshire Hathaway Inc., B | | | 33,984 | | | | 9,074,408 | |
| a | | Brighthouse Financial Inc. | | | 19,824 | | | | 860,758 | |
| | Capital One Financial Corp. | | | 35,400 | | | | 3,262,818 | |
| a | | Credit Acceptance Corp. | | | 1,692 | | | | 741,096 | |
| | Erie Indemnity Co., A | | | 4,248 | | | | 944,373 | |
| | FactSet Research Systems Inc. | | | 2,162 | | | | 865,038 | |
| | First Horizon Corp. | | | 50,976 | | | | 1,167,350 | |
| | Lazard Ltd., A | | | 25,960 | | | | 826,307 | |
| | LPL Financial Holdings Inc. | | | 4,248 | | | | 928,103 | |
| | MGIC Investment Corp. | | | 65,608 | | | | 841,095 | |
| | Principal Financial Group Inc. | | | 12,744 | | | | 919,480 | |
| | Rithm Capital Corp. | | | 99,592 | | | | 729,013 | |
| | Starwood Property Trust Inc. | | | 41,064 | | | | 748,186 | |
| | Synchrony Financial | | | 49,088 | | | | 1,383,791 | |
| | The Progressive Corp. | | | 43,896 | | | | 5,101,154 | |
| | Unum Group | | | 30,208 | | | | 1,172,070 | |
| | W R Berkley Corp. | | | 18,408 | | | | 1,188,789 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 36,949,645 | |
| | | | | | | | | | |
| | | Health Care 20.2% | | | | | | |
| | AbbVie Inc. | | | 111,864 | | | | 15,013,267 | |
| | Amgen Inc. | | | 51,448 | | | | 11,596,379 | |
| | Becton Dickinson and Co. | | | 25,488 | | | | 5,679,491 | |
| | Bristol-Myers Squibb Co. | | | 188,328 | | | | 13,388,238 | |
| | Cardinal Health Inc. | | | 26,904 | | | | 1,793,959 | |
| a | | Centene Corp. | | | 55,696 | | | | 4,333,706 | |
| | Chemed Corp. | | | 1,922 | | | | 839,068 | |
| | Cigna Corp. | | | 32,568 | | | | 9,036,643 | |
| | Elevance Health Inc. | | | 25,430 | | | | 11,551,323 | |
| | Eli Lilly & Co. | | | 51,448 | | | | 16,635,711 | |
| | HCA Healthcare Inc. | | | 19,824 | | | | 3,643,453 | |
| a | | Hologic Inc. | | | 17,936 | | | | 1,157,231 | |
| | Humana Inc. | | | 6,136 | | | | 2,977,126 | |
| | Johnson & Johnson | | | 74,104 | | | | 12,105,629 | |
| | Merck & Co. Inc. | | | 169,920 | | | | 14,633,510 | |
| a | | Molina Healthcare Inc. | | | 5,192 | | | | 1,712,529 | |
| | Organon & Co. | | | 33,040 | | | | 773,136 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Health Care (continued) | | | | | | |
| | Pfizer Inc. | | | 342,200 | | | $ | 14,974,672 | |
| | Premier Inc., A | | | 26,904 | | | | 913,122 | |
| | Quest Diagnostics Inc. | | | 11,328 | | | | 1,389,832 | |
| a | | Regeneron Pharmaceuticals Inc. | | | 10,384 | | | | 7,153,226 | |
| a | | United Therapeutics Corp. | | | 5,192 | | | | 1,087,101 | |
| | UnitedHealth Group Inc. | | | 28,320 | | | | 14,302,733 | |
| a | | Vertex Pharmaceuticals Inc. | | | 28,320 | | | | 8,199,773 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 174,890,858 | |
| | | | | | | | | | |
| | | Industrials 7.5% | | | | | | |
| | Allison Transmission Holdings Inc. | | | 25,488 | | | | 860,475 | |
| a | | Avis Budget Group Inc. | | | 5,664 | | | | 840,877 | |
| a | | Builders FirstSource Inc. | | | 18,880 | | | | 1,112,410 | |
| | C.H. Robinson Worldwide Inc. | | | 12,272 | | | | 1,181,916 | |
| | Carlisle Companies Inc. | | | 5,664 | | | | 1,588,242 | |
| | Crane Holdings Co. | | | 9,912 | | | | 867,697 | |
| | Cummins Inc. | | | 6,608 | | | | 1,344,794 | |
| | Curtiss-Wright Corp. | | | 6,136 | | | | 853,886 | |
| a | | FTI Consulting Inc. | | | 5,664 | | | | 938,581 | |
| | General Dynamics Corp. | | | 25,016 | | | | 5,307,645 | |
| | Hubbell Inc., B | | | 4,720 | | | | 1,052,560 | |
| | Huntington Ingalls Industries Inc. | | | 4,720 | | | | 1,045,480 | |
| | Knight-Swift Transportation Holdings Inc. | | | 19,352 | | | | 946,893 | |
| | Leidos Holdings Inc. | | | 13,216 | | | | 1,156,004 | |
| | Lockheed Martin Corp. | | | 27,335 | | | | 10,559,237 | |
| | MSC Industrial Direct Co. Inc., A | | | 11,800 | | | | 859,158 | |
| | Nielsen Holdings PLC | | | 33,512 | | | | 928,953 | |
| | Northrop Grumman Corp. | | | 16,614 | | | | 7,813,897 | |
| | Owens Corning | | | 11,800 | | | | 927,598 | |
| | PACCAR Inc. | | | 32,096 | | | | 2,686,114 | |
| | Quanta Services Inc. | | | 7,080 | | | | 901,921 | |
| | Republic Services Inc. | | | 10,384 | | | | 1,412,639 | |
| | Rollins Inc. | | | 26,904 | | | | 933,031 | |
| | Ryder System Inc. | | | 12,272 | | | | 926,413 | |
| | Schneider National Inc., B | | | 41,064 | | | | 833,599 | |
| | Snap-on Inc. | | | 4,248 | | | | 855,335 | |
| | United Parcel Service Inc., B | | | 65,136 | | | | 10,522,069 | |
| | W.W. Grainger Inc. | | | 4,755 | | | | 2,326,098 | |
| | Waste Management Inc. | | | 21,712 | | | | 3,478,480 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 65,062,002 | |
| | | | | | | | | | |
| | | Information Technology 31.8% | | | | | | |
| a | | Alphabet Inc., C | | | 126,496 | | | | 12,162,590 | |
| | Amdocs Ltd. | | | 15,104 | | | | 1,200,013 | |
| | Amphenol Corp., A | | | 51,920 | | | | 3,476,563 | |
| | Apple Inc. | | | 446,040 | | | | 61,642,728 | |
| | Applied Materials Inc. | | | 78,352 | | | | 6,419,379 | |
| a | | Arista Networks Inc. | | | 25,488 | | | | 2,877,340 | |
| a | | Arrow Electronics Inc. | | | 8,968 | | | | 826,760 | |
| | Automatic Data Processing Inc. | | | 21,712 | | | | 4,911,037 | |
| | Avnet Inc. | | | 20,768 | | | | 750,140 | |
| | Booz Allen Hamilton Holding Corp. | | | 9,912 | | | | 915,373 | |
| | Broadcom Inc. | | | 28,090 | | | | 12,472,241 | |
| a | | CACI International Inc., A | | | 3,304 | | | | 862,542 | |
| a | | Cadence Design Systems Inc. | | | 22,184 | | | | 3,625,531 | |
| a | | Cirrus Logic Inc. | | | 12,272 | | | | 844,314 | |
| | Cisco Systems Inc. | | | 307,272 | | | | 12,290,880 | |
| | Corning Inc. | | | 70,800 | | | | 2,054,616 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 71 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Information Technology (continued) | | | | | | |
| | Dell Technologies Inc., C | | | 29,264 | | | $ | 999,951 | |
| a | | Fortinet Inc. | | | 60,888 | | | | 2,991,428 | |
| a | | Gartner Inc. | | | 4,248 | | | | 1,175,379 | |
| | Hewlett Packard Enterprise Co. | | | 143,488 | | | | 1,718,986 | |
| | HP Inc. | | | 123,664 | | | | 3,081,707 | |
| | Intel Corp. | | | 367,216 | | | | 9,463,156 | |
| | International Business Machines Corp. | | | 92,984 | | | | 11,047,429 | |
| | Jabil Inc. | | | 16,048 | | | | 926,130 | |
| | Jack Henry & Associates Inc. | | | 6,608 | | | | 1,204,440 | |
| | KLA Corp. | | | 15,104 | | | | 4,570,924 | |
| | Lam Research Corp. | | | 12,544 | | | | 4,591,104 | |
| a | | Manhattan Associates Inc. | | | 6,608 | | | | 879,062 | |
| | Mastercard Inc., A | | | 49,560 | | | | 14,091,890 | |
| | Microsoft Corp. | | | 194,464 | | | | 45,290,666 | |
| | Motorola Solutions Inc. | | | 8,024 | | | | 1,797,135 | |
| | National Instruments Corp. | | | 23,600 | | | | 890,664 | |
| | NetApp Inc. | | | 21,240 | | | | 1,313,694 | |
| a | | ON Semiconductor Corp. | | | 46,256 | | | | 2,883,137 | |
| a | | Palo Alto Networks Inc. | | | 26,236 | | | | 4,297,195 | |
| | Paychex Inc. | | | 32,096 | | | | 3,601,492 | |
| a | | Pure Storage Inc., A | | | 32,568 | | | | 891,386 | |
| | QUALCOMM Inc. | | | 96,760 | | | | 10,931,945 | |
| | Science Applications International Corp. | | | 10,384 | | | | 918,257 | |
| | Switch Inc., A | | | 27,376 | | | | 922,298 | |
| a | | Synopsys Inc. | | | 11,800 | | | | 3,605,018 | |
| | Texas Instruments Inc. | | | 78,352 | | | | 12,127,323 | |
| | Western Union Co. | | | 65,136 | | | | 879,336 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 274,423,179 | |
| | | | | | | | | | |
| | | Materials 1.8% | | | | | | |
| | CF Industries Holdings Inc. | | | 21,240 | | | | 2,044,350 | |
| a | | Cleveland-Cliffs Inc. | | | 55,224 | | | | 743,867 | |
| | Graphic Packaging Holding Co. | | | 43,424 | | | | 857,190 | |
| | Louisiana-Pacific Corp. | | | 17,464 | | | | 893,982 | |
| | LyondellBasell Industries NV, A | | | 25,016 | | | | 1,883,204 | |
| | Mosaic Co. | | | 36,344 | | | | 1,756,506 | |
| | Nucor Corp. | | | 26,904 | | | | 2,878,459 | |
| | Packaging Corp. of America | | | 8,968 | | | | 1,007,017 | |
| | Reliance Steel & Aluminum Co. | | | 6,136 | | | | 1,070,180 | |
| | Sonoco Products Co. | | | 15,104 | | | | 856,850 | |
| | Steel Dynamics Inc. | | | 19,352 | | | | 1,373,024 | |
| | United States Steel Corp. | | | 39,648 | | | | 718,422 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 16,083,051 | |
| | | | | | | | | | |
| | | Real Estate 2.6% | | | | | | |
| | EPR Properties | | | 21,712 | | | | 778,592 | |
| | Extra Space Storage Inc. | | | 12,744 | | | | 2,201,016 | |
| �� | Gaming and Leisure Properties Inc. | | | 25,488 | | | | 1,127,589 | |
| | Kimco Realty Corp. | | | 59,000 | | | | 1,086,190 | |
| | Life Storage Inc. | | | 8,968 | | | | 993,296 | |
| | Medical Properties Trust Inc. | | | 64,192 | | | | 761,317 | |
| | National Retail Properties Inc. | | | 22,656 | | | | 903,068 | |
| | Omega Healthcare Investors Inc. | | | 33,512 | | | | 988,269 | |
| | Public Storage | | | 16,048 | | | | 4,699,015 | |
| | Realty Income Corp. | | | 47,672 | | | | 2,774,511 | |
| | SL Green Realty Corp. | | | 21,240 | | | | 852,998 | |
| | STORE Capital Corp. | | | 34,928 | | | | 1,094,294 | |
| | VICI Properties Inc. | | | 94,400 | | | | 2,817,840 | |
| | | | | | | | | | |
| | | | | | |
| 72 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Real Estate (continued) | | | | | | |
| | WP Carey Inc. | | | 20,296 | | | $ | 1,416,661 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 22,494,656 | |
| | | | | | | | | | |
| | | Utilities 1.1% | | | | | | |
| | Consolidated Edison Inc. | | | 34,456 | | | | 2,954,946 | |
| | National Fuel Gas Co. | | | 13,216 | | | | 813,445 | |
| | NRG Energy Inc. | | | 28,792 | | | | 1,101,870 | |
| | OGE Energy Corp. | | | 24,072 | | | | 877,665 | |
| | Southern Co. | | | 53,336 | | | | 3,626,848 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 9,374,774 | |
| | | | | | | | | | |
| | Total Common Stocks (Cost $950,184,166) | | | | | | | 861,797,955 | |
| | | | | | | | | | |
| | Total Investments (Cost $950,184,166) 99.8% | | | | | | | 861,797,955 | |
| | Other Assets, less Liabilities 0.2% | | | | | | | 1,506,917 | |
| | | | | | | | | | |
| | Net Assets 100.0% | | | | | | $ | 863,304,872 | |
| | | | | | | | | | |
aNon-income producing.
At September 30, 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 | | | | 6 | | | $ | 1,080,450 | | | | 12/16/22 | | | $ | (86,762 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 73 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Mid Cap Multifactor Index ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018b | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 44.90 | | | $ | 40.84 | | | $ | 24.94 | | | $ | 30.32 | | | $ | 27.70 | | | $ | 25.51 | |
| | | | |
| | | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomed | | | 0.35 | | | | 0.54 | | | | 0.45 | | | | 0.50 | | | | 0.47 | | | | 0.38 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (7.54 | ) | | | 4.03 | | | | 15.86 | | | | (5.41 | ) | | | 2.53 | | | | 2.18 | |
| | | | |
| | | | | | |
Total from investment operations | | | (7.19 | ) | | | 4.57 | | | | 16.31 | | | | (4.91 | ) | | | 3.00 | | | | 2.56 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.28 | ) | | | (0.51 | ) | | | (0.41 | ) | | | (0.47 | ) | | | (0.38 | ) | | | (0.37 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 37.43 | | | $ | 44.90 | | | $ | 40.84 | | | $ | 24.94 | | | $ | 30.32 | | | $ | 27.70 | |
| | | | |
| | | | | | |
Total returne | | | (16.04)% | | | | 11.18% | | | | 65.69% | | | | (16.50)% | | | | 10.92% | | | | 10.09% | |
|
| Ratios to average net assetsf | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.30% | | | | 0.30% | | | | 0.30% | | | | 0.30% | | | | 0.30% | | | | 0.99% | g |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.30% | | | | 0.30% | | | | 0.30% | | | | 0.30% | | | | 0.30% | | | | 0.30% | g |
| | | | | | |
Net investment income | | | 1.67% | | | | 1.21% | | | | 1.30% | | | | 1.60% | | | | 1.65% | | | | 1.58% | |
|
| Supplemental data | |
| | | | | | |
Net assets, end of period (000’s) | | | $65,503 | | | | $62,855 | | | | $36,759 | | | | $13,718 | | | | $10,612 | | | | $2,770 | |
| | | | | | |
Portfolio turnover rateh | | | 15.58% | i | | | 22.76% | i | | | 25.02% | i | | | 24.20% | i | | | 23.49% | | | | 36.21% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF was renamed Franklin U.S. Mid Cap Multifactor Index ETF.
bFor the period April 26, 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.
gEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
hPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| | | | | | | | | | | | | | | | | | | | | | | | |
| iPortfolio turnover rate excluding cash creations was as follows: | | | 15.58% | | | | 22.76% | | | | 25.02% | | | | 24.20% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 74 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Mid Cap Multifactor Index ETF
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks 100.7% | | | | | | |
| | | Communication Services 2.5% | | | | | | |
| | Electronic Arts Inc. | | | 4,095 | | | $ | 473,832 | |
| | Lumen Technologies Inc. | | | 34,650 | | | | 252,252 | |
| | Omnicom Group Inc. | | | 7,525 | | | | 474,752 | |
| a,b | | Playtika Holding Corp. | | | 3,150 | | | | 29,579 | |
| | ViacomCBS Inc., B | | | 15,540 | | | | 295,882 | |
| | World Wrestling Entertainment Inc., A | | | 1,505 | | | | 105,606 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,631,903 | |
| | | | | | | | | | |
| | | Consumer Discretionary 16.3% | | | | | | |
| | Advance Auto Parts Inc. | | | 2,030 | | | | 317,370 | |
| a | | AutoNation Inc. | | | 1,260 | | | | 128,356 | |
| a | | AutoZone Inc. | | | 365 | | | | 781,804 | |
| | Bath & Body Works Inc. | | | 7,560 | | | | 246,456 | |
| | Best Buy Co. Inc. | | | 8,155 | | | | 516,538 | |
| | Brunswick Corp. | | | 1,995 | | | | 130,573 | |
| | Carter’s Inc. | | | 1,540 | | | | 100,916 | |
| | Choice Hotels International Inc. | | | 490 | | | | 53,665 | |
| | Columbia Sportswear Co. | | | 1,085 | | | | 73,021 | |
| | D.R. Horton Inc. | | | 4,830 | | | | 325,300 | |
| | Dick’s Sporting Goods Inc. | | | 2,310 | | | | 241,718 | |
| a | | Dollar Tree Inc. | | | 4,690 | | | | 638,309 | |
| | Gap Inc. | | | 2,975 | | | | 24,425 | |
| | Garmin Ltd. | | | 5,005 | | | | 401,952 | |
| | Genuine Parts Co. | | | 4,655 | | | | 695,085 | |
| | H&R Block Inc. | | | 7,280 | | | | 309,691 | |
| | Hanesbrands Inc. | | | 13,055 | | | | 90,863 | |
| | Hasbro Inc. | | | 4,095 | | | | 276,085 | |
| | Kohl’s Corp. | | | 2,100 | | | | 52,815 | |
| a | | Leslie’s Inc. | | | 3,745 | | | | 55,089 | |
| | LKQ Corp. | | | 7,420 | | | | 349,853 | |
| | Macy’s Inc. | | | 5,075 | | | | 79,525 | |
| a | | Mattel Inc. | | | 10,080 | | | | 190,915 | |
| | Newell Brands Inc. | | | 10,185 | | | | 141,470 | |
| | Nordstrom Inc. | | | 1,820 | | | | 30,449 | |
| a | | Ollie’s Bargain Outlet Holdings Inc. | | | 1,855 | | | | 95,718 | |
| a | | O’Reilly Automotive Inc. | | | 1,179 | | | | 829,250 | |
| | Penske Automotive Group Inc. | | | 1,050 | | | | 103,351 | |
| | Polaris Inc. | | | 1,855 | | | | 177,431 | |
| | Pool Corp. | | | 1,462 | | | | 465,223 | |
| | PulteGroup Inc. | | | 3,500 | | | | 131,250 | |
| | Ralph Lauren Corp. | | | 735 | | | | 62,424 | |
| a | | Skechers USA Inc., A | | | 1,960 | | | | 62,171 | |
| | Tapestry Inc. | | | 9,275 | | | | 263,688 | |
| | Tempur Sealy International Inc. | | | 7,175 | | | | 173,204 | |
| | Thor Industries Inc. | | | 805 | | | | 56,334 | |
| | Tractor Supply Co. | | | 3,990 | | | | 741,661 | |
| a | | Ulta Beauty Inc. | | | 805 | | | | 322,958 | |
| | VF Corp. | | | 5,145 | | | | 153,887 | |
| a | | Victoria’s Secret & Co. | | | 2,975 | | | | 86,632 | |
| | Whirlpool Corp. | | | 1,925 | | | | 259,509 | |
| | Williams-Sonoma Inc. | | | 3,010 | | | | 354,728 | |
| a | | YETI Holdings Inc. | | | 2,205 | | | | 62,887 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 10,654,549 | |
| | | | | | | | | | |
| | | Consumer Staples 8.1% | | | | | | |
| | Albertsons Cos Inc. | | | 5,565 | | | | 138,346 | |
| a | | BJ’s Wholesale Club Holdings Inc. | | | 2,275 | | | | 165,643 | |
| | Bunge Ltd. | | | 3,710 | | | | 306,335 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Consumer Staples (continued) | | | | | | |
| | Campbell Soup Co. | | | 6,405 | | | $ | 301,804 | |
| | Casey’s General Stores Inc. | | | 910 | | | | 184,293 | |
| | Church & Dwight Co. Inc. | | | 8,260 | | | | 590,094 | |
| | Clorox Co. | | | 4,480 | | | | 575,187 | |
| | Flowers Foods Inc. | | | 7,840 | | | | 193,570 | |
| | Kellogg Co. | | | 8,925 | | | | 621,716 | |
| | The Hershey Co. | | | 3,535 | | | | 779,361 | |
| | The J.M. Smucker Co. | | | 3,850 | | | | 529,029 | |
| | The Kroger Co. | | | 14,035 | | | | 614,031 | |
| | Tyson Foods Inc., A | | | 4,165 | | | | 274,598 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 5,274,007 | |
| | | | | | | | | | |
| | | Energy 1.5% | | | | | | |
| | Antero Midstream Corp. | | | 10,010 | | | | 91,892 | |
| | Chesapeake Energy Corp. | | | 1,925 | | | | 181,354 | |
| | Ovintiv Inc. | | | 4,235 | | | | 194,810 | |
| | PDC Energy Inc. | | | 1,435 | | | | 82,928 | |
| | Range Resources Corp. | | | 3,745 | | | | 94,599 | |
| a | | Southwestern Energy Co. | | | 16,765 | | | | 102,602 | |
| | Texas Pacific Land Corp. | | | 147 | | | | 261,253 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,009,438 | |
| | | | | | | | | | |
| | | Financials 9.3% | | | | | | |
| | Affiliated Managers Group Inc. | | | 1,470 | | | | 164,419 | |
| | Allstate Corp. | | | 4,515 | | | | 562,253 | |
| | Ally Financial Inc. | | | 11,270 | | | | 313,644 | |
| | Assured Guaranty Ltd. | | | 980 | | | | 47,481 | |
| | Brown & Brown Inc. | | | 8,225 | | | | 497,448 | |
| | Cincinnati Financial Corp. | | | 5,845 | | | | 523,537 | |
| | CNA Financial Corp. | | | 910 | | | | 33,579 | |
| a | | Credit Acceptance Corp. | | | 287 | | | | 125,706 | |
| | Discover Financial Services | | | 6,615 | | | | 601,436 | |
| | Erie Indemnity Co., A | | | 805 | | | | 178,960 | |
| | Evercore Inc., A | | | 1,295 | | | | 106,514 | |
| | Everest Re Group Ltd. | | | 595 | | | | 156,152 | |
| | FactSet Research Systems Inc. | | | 1,540 | | | | 616,169 | |
| | First American Financial Corp. | | | 3,710 | | | | 171,031 | |
| | Globe Life Inc. | | | 3,115 | | | | 310,565 | |
| | Hanover Insurance Group Inc. | | | 1,120 | | | | 143,517 | |
| | Janus Henderson Group PLC | | | 4,060 | | | | 82,459 | |
| | MGIC Investment Corp. | | | 5,075 | | | | 65,061 | |
| | Prosperity Bancshares Inc. | | | 2,870 | | | | 191,372 | |
| | Regions Financial Corp. | | | 13,930 | | | | 279,575 | |
| | Reinsurance Group of America Inc. | | | 1,015 | | | | 127,697 | |
| | SEI Investments Co. | | | 4,340 | | | | 212,877 | |
| | Synchrony Financial | | | 17,255 | | | | 486,418 | |
| | Unum Group | | | 3,010 | | | | 116,788 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 6,114,658 | |
| | | | | | | | | | |
| | | Health Care 9.5% | | | | | | |
| a | | ABIOMED Inc. | | | 1,330 | | | | 326,728 | |
| a | | Acadia Healthcare Co. Inc. | | | 1,365 | | | | 106,716 | |
| | Chemed Corp. | | | 453 | | | | 197,762 | |
| | Encompass Health Corp. | | | 4,060 | | | | 183,634 | |
| a | | Enhabit Inc. | | | 2,030 | | | | 28,501 | |
| a | | Hologic Inc. | | | 6,545 | | | | 422,283 | |
| a | | IDEXX Laboratories Inc. | | | 1,925 | | | | 627,165 | |
| a | | Incyte Corp. | | | 5,145 | | | | 342,863 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Health Care (continued) | | | | | | |
| a | | Maravai LifeSciences Holdings Inc., A | | | 1,645 | | | $ | 41,997 | |
| a | | Masimo Corp. | | | 1,575 | | | | 222,327 | |
| a | | Mettler-Toledo International Inc. | | | 579 | | | | 627,705 | |
| a | | Neurocrine Biosciences Inc. | | | 2,870 | | | | 304,823 | |
| | Organon & Co. | | | 6,510 | | | | 152,334 | |
| a | | Quidel Corp. | | | 1,540 | | | | 110,079 | |
| | ResMed Inc. | | | 3,675 | | | | 802,253 | |
| | Royalty Pharma PLC | | | 9,695 | | | | 389,545 | |
| a | | Tenet Healthcare Corp. | | | 1,645 | | | | 84,849 | |
| a | | United Therapeutics Corp. | | | 1,330 | | | | 278,475 | |
| | Universal Health Services Inc., B | | | 2,485 | | | | 219,127 | |
| | Viatris Inc. | | | 18,725 | | | | 159,537 | |
| a | | Waters Corp. | | | 2,275 | | | | 613,181 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 6,241,884 | |
| | | | | | | | | | |
| | | Industrials 17.7% | | | | | | |
| | A O Smith Corp. | | | 3,570 | | | | 173,431 | |
| | Allegion PLC | | | 3,220 | | | | 288,770 | |
| | Allison Transmission Holdings Inc. | | | 3,570 | | | | 120,523 | |
| a | | Builders FirstSource Inc. | | | 4,410 | | | | 259,837 | |
| | C.H. Robinson Worldwide Inc. | | | 4,620 | | | | 444,952 | |
| | Carrier Global Corp. | | | 19,040 | | | | 677,062 | |
| | Cintas Corp. | | | 1,890 | | | | 733,679 | |
| | Curtiss-Wright Corp. | | | 1,120 | | | | 155,859 | |
| | Donaldson Co. Inc. | | | 4,235 | | | | 207,557 | |
| | Dover Corp. | | | 5,005 | | | | 583,483 | |
| | Esab Corp. | | | 770 | | | | 25,687 | |
| | Expeditors International of Washington Inc. | | | 6,055 | | | | 534,717 | |
| | Fastenal Co. | | | 13,895 | | | | 639,726 | |
| | Fortune Brands Home & Security Inc. | | | 3,640 | | | | 195,432 | |
| | Graco Inc. | | | 5,845 | | | | 350,408 | |
| | Landstar System Inc. | | | 1,295 | | | | 186,959 | |
| | Lennox International Inc. | | | 1,155 | | | | 257,184 | |
| | Lincoln Electric Holdings Inc. | | | 2,030 | | | | 255,212 | |
| | ManpowerGroup Inc. | | | 1,890 | | | | 122,264 | |
| | Masco Corp. | | | 3,395 | | | | 158,513 | |
| | MSC Industrial Direct Co. Inc., A | | | 1,750 | | | | 127,417 | |
| | Nordson Corp. | | | 1,820 | | | | 386,331 | |
| | Old Dominion Freight Line Inc. | | | 2,905 | | | | 722,677 | |
| | Otis Worldwide Corp. | | | 10,080 | | | | 643,104 | |
| | Robert Half International Inc. | | | 3,990 | | | | 305,235 | |
| | Rollins Inc. | | | 9,135 | | | | 316,802 | |
| | Ryder System Inc. | | | 1,365 | | | | 103,044 | |
| | Schneider National Inc., B | | | 2,135 | | | | 43,340 | |
| | Snap-on Inc. | | | 2,100 | | | | 422,835 | |
| | Toro Co. | | | 3,290 | | | | 284,519 | |
| | Trane Technologies PLC | | | 5,425 | | | | 785,594 | |
| | W.W. Grainger Inc. | | | 1,540 | | | | 753,353 | |
| | Watsco Inc. | | | 1,295 | | | | 333,411 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 11,598,917 | |
| | | | | | | | | | |
| | | Information Technology 20.0% | | | | | | |
| a | | Akamai Technologies Inc. | | | 4,375 | | | | 351,400 | |
| | Amdocs Ltd. | | | 4,550 | | | | 361,498 | |
| a | | Arista Networks Inc. | | | 7,350 | | | | 829,741 | |
| a | | Aspen Technology Inc. | | | 1,050 | | | | 250,110 | |
| | Booz Allen Hamilton Holding Corp. | | | 5,915 | | | | 546,250 | |
| a | | Cadence Design Systems Inc. | | | 4,865 | | | | 795,087 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Information Technology (continued) | | | | | | |
| | CDW Corp. | | | 4,410 | | | $ | 688,313 | |
| | Citrix Systems Inc. | | | 4,865 | | | | 505,473 | |
| | Dolby Laboratories Inc., A | | | 1,855 | | | | 120,853 | |
| a | | F5 Networks Inc. | | | 2,100 | | | | 303,933 | |
| a | | Fair Isaac Corp. | | | 875 | | | | 360,509 | |
| a | | Fortinet Inc. | | | 12,740 | | | | 625,916 | |
| a | | Gartner Inc. | | | 1,820 | | | | 503,576 | |
| | Hewlett Packard Enterprise Co. | | | 34,895 | | | | 418,042 | |
| | HP Inc. | | | 19,320 | | | | 481,454 | |
| | Juniper Networks Inc. | | | 10,465 | | | | 273,346 | |
| a | | Manhattan Associates Inc. | | | 2,030 | | | | 270,051 | |
| | Monolithic Power Systems Inc. | | | 1,435 | | | | 521,479 | |
| | Motorola Solutions Inc. | | | 3,395 | | | | 760,378 | |
| | National Instruments Corp. | | | 4,305 | | | | 162,471 | |
| | NetApp Inc. | | | 8,995 | | | | 556,341 | |
| | NortonLifeLock Inc. | | | 14,035 | | | | 282,665 | |
| | Paychex Inc. | | | 6,020 | | | | 675,504 | |
| a | | Paycom Software Inc. | | | 1,470 | | | | 485,085 | |
| a | | Synopsys Inc. | | | 2,345 | | | | 716,421 | |
| | Teradyne Inc. | | | 4,795 | | | | 360,344 | |
| a | | VeriSign Inc. | | | 3,290 | | | | 571,473 | |
| | Vontier Corp. | | | 5,425 | | | | 90,652 | |
| | Western Union Co. | | | 16,625 | | | | 224,438 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 13,092,803 | |
| | | | | | | | | | |
| | | Materials 6.3% | | | | | | |
| | Avery Dennison Corp. | | | 2,940 | | | | 478,338 | |
| | CF Industries Holdings Inc. | | | 3,290 | | | | 316,663 | |
| | Chemours Co. | | | 2,205 | | | | 54,353 | |
| a | | Cleveland-Cliffs Inc. | | | 11,305 | | | | 152,278 | |
| | Huntsman Corp. | | | 2,905 | | | | 71,289 | |
| | International Paper Co. | | | 9,800 | | | | 310,660 | |
| | Louisiana-Pacific Corp. | | | 2,835 | | | | 145,124 | |
| | LyondellBasell Industries NV, A | | | 6,475 | | | | 487,438 | |
| | Nucor Corp. | | | 5,670 | | | | 606,633 | |
| | Packaging Corp. of America | | | 1,330 | | | | 149,346 | |
| | Reliance Steel & Aluminum Co. | | | 2,135 | | | | 372,365 | |
| | RPM International Inc. | | | 3,955 | | | | 329,491 | |
| | Sealed Air Corp. | | | 3,745 | | | | 166,690 | |
| | Sonoco Products Co. | | | 2,940 | | | | 166,786 | |
| | Steel Dynamics Inc. | | | 4,795 | | | | 340,205 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 4,147,659 | |
| | | | | | | | | | |
| | | Real Estate 3.9% | | | | | | |
| | AvalonBay Communities Inc. | | | 3,605 | | | | 664,005 | |
| | Camden Property Trust | | | 3,115 | | | | 372,087 | |
| | Extra Space Storage Inc. | | | 3,920 | | | | 677,023 | |
| | First Industrial Realty Trust Inc. | | | 3,885 | | | | 174,087 | |
| | Healthcare Realty Trust Inc. | | | 5,950 | | | | 124,058 | |
| | Highwoods Properties Inc. | | | 3,570 | | | | 96,247 | |
| | National Retail Properties Inc. | | | 6,020 | | | | 239,957 | |
| | STORE Capital Corp. | | | 7,455 | | | | 233,565 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 2,581,029 | |
| | | | | | | | | | |
| | | Utilities 5.6% | | | | | | |
| | Ameren Corp. | | | 7,875 | | | | 634,331 | |
| | American Water Works Co. Inc. | | | 4,970 | | | | 646,895 | |
| | Consolidated Edison Inc. | | | 7,560 | | | | 648,346 | |
| | | | | | | | | | |
| | | | | | |
| 78 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Utilities (continued) | | | | | | |
| | FirstEnergy Corp. | | | 16,485 | | | $ | 609,945 | |
| | National Fuel Gas Co. | | | 2,450 | | | | 150,797 | |
| | NRG Energy Inc. | | | 6,265 | | | | 239,762 | |
| | PPL Corp. | | | 24,010 | | | | 608,653 | |
| | UGI Corp. | | | 3,045 | | | | 98,445 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 3,637,174 | |
| | | | | | | | | | |
| | Total Common Stocks (Cost $72,198,299) | | | | | | | 65,984,021 | |
| | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $72,198,299) | | | | | | | 65,984,021 | |
| | | | | | | | | | |
| | | Short-Term Investments 0.1% | | | | | | |
| | Investments from Cash Collateral Received for Loaned Securities 0.1% | | | | | | | | |
| | | Money Market Funds 0.1% | | | | | | |
| c,d | | Institutional Fiduciary Trust Portfolio, 2.45% | | $ | 23,000 | | | | 23,000 | |
| | | | | | | | | | |
| | Total Short-Term Investments (Cost $23,000) | | | | | | | 23,000 | |
| | | | | | | | | | |
| | Total Investments (Cost $72,221,299) 100.8% | | | | | | | 66,007,021 | |
| | Other Assets, less Liabilities (0.8)% | | | | | | | (504,421 | ) |
| | | | | | | | | | |
| | Net Assets 100.0% | | | | | | $ | 65,502,600 | |
| | | | | | | | | | |
aNon-income producing.
bA portion or all of the security is on loan at September 30, 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.
See Abbreviations on page 110.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Small Cap Multifactor Index ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018b | |
| | | | | | |
Per share operating performance (for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 36.16 | | | $ | 36.53 | | | $ | 20.48 | | | $ | 27.66 | | | $ | 26.66 | | | $ | 25.36 | |
| | | | |
| | | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomed | | | 0.27 | | | | 0.38 | | | | 0.28 | | | | 0.39 | | | | 0.47 | | | | 0.33 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (6.32 | ) | | | (0.36 | ) | | | 16.15 | | | | (7.15 | ) | | | 0.87 | | | | 1.27 | |
| | | | |
| | | | | | |
Total from investment operations | | | (6.05 | ) | | | 0.02 | | | | 16.43 | | | | (6.76 | ) | | | 1.34 | | | | 1.60 | |
| | | | |
| | | | | | |
| Less distributions from net investment income | | | (0.20 | ) | | | (0.39 | ) | | | (0.38 | ) | | | (0.42 | ) | | | (0.34 | ) | | | (0.30 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 29.91 | | | $ | 36.16 | | | $ | 36.53 | | | $ | 20.48 | | | $ | 27.66 | | | $ | 26.66 | |
| | | | |
| | | | | | |
Total returne | | | (16.74)% | | | | 0.02% | | | | 80.74% | | | | (24.83)% | | | | 5.05% | | | | 6.34% | |
| | | | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 1.15% | g |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.35% | g |
| | | | | | |
Net investment income | | | 1.61% | | | | 1.00% | | | | 0.99% | | | | 1.41% | | | | 1.69% | | | | 1.40% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $13,458 | | | | $16,273 | | | | $14,613 | | | | $13,310 | | | | $17,979 | | | | $2,666 | |
| | | | | | |
Portfolio turnover rateh | | | 19.80% | i | | | 27.64% | i | | | 34.77% | i | | | 23.83% | i | | | 22.17% | | | | 23.99% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF was renamed Franklin U.S. Small Cap Multifactor Index ETF.
bFor the period April 26, 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.
gEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
hPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| | | | | | | | | | | | | | | | | | | | | | | | |
| iPortfolio turnover rate excluding cash creations was as follows: | | | 19.80% | | | | 27.64% | | | | 34.77% | | | | 23.83% | | | | | | | | | |
| | | | | | | | | | |
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| 80 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Small Cap Multifactor Index ETF
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks 100.1% | | | | | | |
| | | Communication Services 2.9% | | | | | | |
| a | | AMC Networks Inc., A | | | 738 | | | $ | 14,982 | |
| | Cogent Communications Holdings Inc. | | | 999 | | | | 52,108 | |
| a | | IDT Corp., B | | | 378 | | | | 9,386 | |
| | John Wiley & Sons Inc., A | | | 945 | | | | 35,494 | |
| a | | Liberty Latin America Ltd., A | | | 900 | | | | 5,571 | |
| a | | Liberty Latin America Ltd., C | | | 3,321 | | | | 20,424 | |
| a | | Ooma Inc. | | | 288 | | | | 3,542 | |
| | Scholastic Corp. | | | 603 | | | | 18,548 | |
| | Sinclair Broadcast Group Inc., A | | | 477 | | | | 8,629 | |
| | TEGNA Inc. | | | 5,112 | | | | 105,716 | |
| | Telephone and Data Systems Inc. | | | 2,313 | | | | 32,151 | |
| a | | Thryv Holdings Inc. | | | 342 | | | | 7,808 | |
| a | | TrueCar Inc. | | | 2,304 | | | | 3,479 | |
| a | | United States Cellular Corp. | | | 297 | | | | 7,731 | |
| a | | Yelp Inc. | | | 1,809 | | | | 61,343 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 386,912 | |
| | | | | | | | | | |
| | | Consumer Discretionary 18.9% | | | | | | |
| a | | 1-800- Flowers.com Inc., A | | | 765 | | | | 4,965 | |
| a | | Abercrombie & Fitch Co., A | | | 1,530 | | | | 23,791 | |
| | Academy Sports & Outdoors Inc. | | | 1,620 | | | | 68,332 | |
| | Acushnet Holdings Corp. | | | 927 | | | | 40,315 | |
| | American Eagle Outfitters Inc. | | | 3,654 | | | | 35,553 | |
| a | | American Public Education Inc. | | | 414 | | | | 3,784 | |
| a | | America’s Car-Mart Inc. | | | 153 | | | | 9,336 | |
| a | | Asbury Automotive Group Inc. | | | 513 | | | | 77,514 | |
| b | | Big 5 Sporting Goods Corp. | | | 450 | | | | 4,833 | |
| | Big Lots Inc. | | | 990 | | | | 15,454 | |
| | Bloomin’ Brands Inc. | | | 2,421 | | | | 44,377 | |
| | Buckle Inc. | | | 954 | | | | 30,204 | |
| | Build-A-Bear Workshop Inc. | | | 189 | | | | 2,519 | |
| | Caleres Inc. | | | 459 | | | | 11,117 | |
| | Camping World Holdings Inc., A | | | 693 | | | | 17,547 | |
| a | | CarParts.com Inc. | | | 909 | | | | 4,699 | |
| | Cato Corp., A | | | 306 | | | | 2,919 | |
| a | | Century Casinos Inc. | | | 396 | | | | 2,598 | |
| | Cheesecake Factory Inc. | | | 1,323 | | | | 38,737 | |
| a | | Children’s Place Inc. | | | 162 | | | | 5,004 | |
| a | | Chuy’s Holdings Inc. | | | 243 | | | | 5,633 | |
| a | | Citi Trends Inc. | | | 243 | | | | 3,769 | |
| a | | Container Store Group Inc. | | | 801 | | | | 3,925 | |
| | Cracker Barrel Old Country Store Inc. | | | 702 | | | | 64,991 | |
| a | | Destination XL Group Inc. | | | 657 | | | | 3,561 | |
| | Dillard’s Inc., A | | | 144 | | | | 39,277 | |
| a | | Dorman Products Inc. | | | 558 | | | | 45,823 | |
| a | | Duluth Holdings Inc., B | | | 270 | | | | 1,901 | |
| | Ethan Allen Interiors Inc. | | | 693 | | | | 14,650 | |
| | Foot Locker Inc. | | | 999 | | | | 31,099 | |
| a | | Fossil Group Inc. | | | 540 | | | | 1,847 | |
| | Franchise Group Inc. | | | 567 | | | | 13,778 | |
| a | | Frontdoor Inc. | | | 945 | | | | 19,269 | |
| a | | Funko Inc., A | | | 567 | | | | 11,465 | |
| a | | Genesco Inc. | | | 333 | | | | 13,094 | |
| a | | G-III Apparel Group Ltd. | | | 504 | | | | 7,535 | |
| a | | GoPro Inc., A | | | 2,088 | | | | 10,294 | |
| a | | Green Brick Partners Inc. | | | 549 | | | | 11,738 | |
| | Group 1 Automotive Inc. | | | 396 | | | | 56,576 | |
| | Guess? Inc. | | | 387 | | | | 5,677 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 81 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Consumer Discretionary (continued) | | | | | | |
| | Haverty Furniture Companies Inc. | | | 513 | | | $ | 12,774 | |
| a | | Helen of Troy Ltd. | | | 549 | | | | 52,946 | |
| | Hibbett Inc. | | | 378 | | | | 18,828 | |
| | Installed Building Products Inc. | | | 504 | | | | 40,819 | |
| | Jack in Box Inc. | | | 234 | | | | 17,332 | |
| | JOANN Inc. | | | 243 | | | | 1,609 | |
| | Johnson Outdoors Inc., A | | | 144 | | | | 7,389 | |
| | Kontoor Brands Inc. | | | 1,485 | | | | 49,911 | |
| | La-Z-Boy Inc. | | | 1,080 | | | | 24,376 | |
| | LCI Industries | | | 567 | | | | 57,528 | |
| a | | LGI Homes Inc. | | | 459 | | | | 37,349 | |
| | Lifetime Brands Inc. | | | 297 | | | | 2,011 | |
| a | | Liquidity Services Inc. | | | 585 | | | | 9,512 | |
| a | | LL Flooring Holdings Inc. | | | 612 | | | | 4,241 | |
| a | | Malibu Boats Inc., A | | | 432 | | | | 20,732 | |
| | Marine Products Corp. | | | 208 | | | | 1,760 | |
| a | | MarineMax Inc. | | | 486 | | | | 14,478 | |
| a | | MasterCraft Boat Holdings Inc. | | | 315 | | | | 5,938 | |
| | MDC Holdings Inc. | | | 684 | | | | 18,755 | |
| a | | Monarch Casino & Resort Inc. | | | 162 | | | | 9,095 | |
| | Monro Inc. | | | 720 | | | | 31,291 | |
| | Movado Group Inc. | | | 450 | | | | 12,681 | |
| | Murphy USA Inc. | | | 603 | | | | 165,771 | |
| a | | National Vision Holdings Inc. | | | 1,728 | | | | 56,419 | |
| a | | ODP Corp. | | | 1,044 | | | | 36,697 | |
| a | | ONE Group Hospitality Inc. | | | 387 | | | | 2,570 | |
| a | | OneWater Marine Inc., A | | | 252 | | | | 7,588 | |
| | Oxford Industries Inc. | | | 432 | | | | 38,785 | |
| | Papa John’s International Inc. | | | 738 | | | | 51,667 | |
| | Patrick Industries Inc. | | | 252 | | | | 11,048 | |
| a | | Perdoceo Education Corp. | | | 1,710 | | | | 17,613 | |
| | PetMed Express Inc. | | | 522 | | | | 10,189 | |
| a | | Portillo’s Inc., A | | | 378 | | | | 7,443 | |
| | Rent-A-Center Inc. | | | 1,629 | | | | 28,524 | |
| a | | Revolve Group Inc. | | | 837 | | | | 18,154 | |
| | Rocky Brands Inc. | | | 171 | | | | 3,430 | |
| a | | Sally Beauty Holdings Inc. | | | 2,844 | | | | 35,834 | |
| | Shoe Carnival Inc. | | | 459 | | | | 9,841 | |
| | Shutterstock Inc. | | | 603 | | | | 30,252 | |
| | Signet Jewelers Ltd. | | | 1,152 | | | | 65,883 | |
| a | | Sleep Number Corp. | | | 549 | | | | 18,562 | |
| | Smith & Wesson Brands Inc. | | | 1,233 | | | | 12,786 | |
| | Sonic Automotive Inc., A | | | 567 | | | | 24,551 | |
| a | | Sonos Inc. | | | 2,736 | | | | 38,030 | |
| a | | Sportsman’s Warehouse Holdings Inc. | | | 1,287 | | | | 10,682 | |
| | Standard Motor Products Inc. | | | 549 | | | | 17,842 | |
| | Steven Madden Ltd. | | | 1,989 | | | | 53,047 | |
| a | | Stitch Fix Inc., A | | | 1,827 | | | | 7,217 | |
| | Strategic Education Inc. | | | 567 | | | | 34,819 | |
| a | | Stride Inc. | | | 927 | | | | 38,962 | |
| | Sturm Ruger & Co. Inc. | | | 486 | | | | 24,684 | |
| | Superior Group of Companies Inc. | | | 288 | | | | 2,557 | |
| | Texas Roadhouse Inc. | | | 1,971 | | | | 171,989 | |
| a | | The Lovesac Co. | | | 279 | | | | 5,686 | |
| | Tile Shop Holdings Inc. | | | 468 | | | | 1,647 | |
| | Tilly’s Inc., A | | | 486 | | | | 3,363 | |
| a | | Torrid Holdings Inc. | | | 180 | | | | 751 | |
| a | | Tupperware Brands Corp. | | | 1,341 | | | | 8,784 | |
| | | | | | | | | | |
| | | | | | |
| 82 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Consumer Discretionary (continued) | | | | | | |
| a | | Turtle Beach Corp. | | | 297 | | | $ | 2,026 | |
| a | | Universal Technical Institute Inc. | | | 405 | | | | 2,203 | |
| a | | Vista Outdoor Inc. | | | 1,251 | | | | 30,424 | |
| a | | Weber Inc., A | | | 360 | | | | 2,365 | |
| | Weyco Group Inc. | | | 81 | | | | 1,648 | |
| | Wingstop Inc. | | | 711 | | | | 89,174 | |
| | Winmark Corp. | | | 81 | | | | 17,523 | |
| | Wolverine World Wide Inc. | | | 1,773 | | | | 27,286 | |
| a | | XPEL Inc. | | | 423 | | | | 27,258 | |
| a | | Zumiez Inc. | | | 423 | | | | 9,107 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 2,543,536 | |
| | | | | | | | | | |
| | | Consumer Staples 6.4% | | | | | | |
| | Alico Inc. | | | 72 | | | | 2,033 | |
| b | | B&G Foods Inc., A | | | 1,395 | | | | 23,004 | |
| a | | BellRing Brands Inc. | | | 1,593 | | | | 32,832 | |
| a | | Central Garden & Pet Co. | | | 225 | | | | 8,109 | |
| a | | Central Garden & Pet Co., A | | | 945 | | | | 32,281 | |
| | Coca-Cola Consolidated Inc. | | | 126 | | | | 51,878 | |
| | Edgewell Personal Care Co. | | | 855 | | | | 31,977 | |
| a | | elf Beauty Inc. | | | 531 | | | | 19,976 | |
| | Energizer Holdings Inc. | | | 1,161 | | | | 29,188 | |
| | Ingles Markets Inc., A | | | 414 | | | | 32,793 | |
| | Inter Parfums Inc. | | | 459 | | | | 34,636 | |
| | John B Sanfilippo & Son Inc. | | | 234 | | | | 17,721 | |
| | Lancaster Colony Corp. | | | 468 | | | | 70,331 | |
| | Medifast Inc. | | | 342 | | | | 37,059 | |
| | National Beverage Corp. | | | 657 | | | | 25,321 | |
| | Natural Grocers by Vitamin Cottage Inc. | | | 248 | | | | 2,676 | |
| | Nu Skin Enterprises Inc., A | | | 1,296 | | | | 43,248 | |
| | PriceSmart Inc. | | | 558 | | | | 32,135 | |
| | SpartanNash Co. | | | 1,044 | | | | 30,297 | |
| a | | Sprouts Farmers Market Inc. | | | 2,484 | | | | 68,931 | |
| | Tootsie Roll Industries Inc. | | | 351 | | | | 11,681 | |
| a | | United Natural Foods Inc. | | | 1,107 | | | | 38,048 | |
| | Universal Corp. | | | 630 | | | | 29,005 | |
| a | | USANA Health Sciences Inc. | | | 288 | | | | 16,142 | |
| | Vector Group Ltd. | | | 3,699 | | | | 32,588 | |
| | Village Super Market Inc., A | | | 279 | | | | 5,393 | |
| | WD-40 Co. | | | 414 | | | | 72,756 | |
| | Weis Markets Inc. | | | 477 | | | | 33,981 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 866,020 | |
| | | | | | | | | | |
| | | Energy 2.3% | | | | | | |
| | Arch Resources Inc. | | | 189 | | | | 22,415 | |
| | Brigham Minerals Inc., A | | | 567 | | | | 13,988 | |
| | California Resources Corp. | | | 945 | | | | 36,316 | |
| | Chord Energy Corp. | | | 486 | | | | 66,470 | |
| | CONSOL Energy Inc. | | | 819 | | | | 52,678 | |
| a | | Laredo Petroleum Inc. | | | 189 | | | | 11,879 | |
| | Magnolia Oil & Gas Corp., A | | | 2,016 | | | | 39,937 | |
| a | | Peabody Energy Corp. | | | 1,341 | | | | 33,283 | |
| | SFL Corp. Ltd. | | | 2,106 | | | | 19,186 | |
| a | | SilverBow Resources Inc. | | | 144 | | | | 3,871 | |
| | Sitio Royalties Corp. | | | 144 | | | | 3,184 | |
| | VAALCO Energy Inc. | | | 675 | | | | 2,943 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 306,150 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 83 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Financials 10.9% | | | | | | |
| | 1st Source Corp. | | | 387 | | | $ | 17,918 | |
| | A-Mark Precious Metals Inc. | | | 342 | | | | 9,709 | |
| | Arrow Financial Corp. | | | 324 | | | | 9,338 | |
| | Associated Banc-Corp. | | | 3,168 | | | | 63,613 | |
| | Banco Latinoamericano de Comercio Exterior SA, E | | | 738 | | | | 9,638 | |
| | Blackstone Mortgage Trust Inc., A | | | 3,420 | | | | 79,823 | |
| | Brookline Bancorp Inc. | | | 1,422 | | | | 16,566 | |
| | Citizens & Northern Corp. | | | 297 | | | | 7,181 | |
| | City Holding Co. | | | 288 | | | | 25,543 | |
| | Community Trust Bancorp Inc. | | | 324 | | | | 13,138 | |
| | Compass Diversified Holdings | | | 702 | | | | 12,678 | |
| a | | Consumer Portfolio Services Inc. | | | 153 | | | | 1,112 | |
| | CVB Financial Corp. | | | 2,034 | | | | 51,501 | |
| | Donegal Group Inc., A | | | 405 | | | | 5,463 | |
| a | | Donnelley Financial Solutions Inc. | | | 621 | | | | 22,958 | |
| | Dynex Capital Inc. | | | 414 | | | | 4,823 | |
| | Enact Holdings Inc. | | | 432 | | | | 9,577 | |
| | Enterprise Bancorp Inc. | | | 207 | | | | 6,191 | |
| | Essent Group Ltd. | | | 2,421 | | | | 84,420 | |
| a | | EZCORP Inc., A | | | 1,080 | | | | 8,327 | |
| | Farmers National Banc Corp. | | | 603 | | | | 7,893 | |
| | Financial Institutions Inc. | | | 306 | | | | 7,365 | |
| | First Business Financial Services Inc. | | | 90 | | | | 2,908 | |
| | First Community Bankshares Inc. | | | 297 | | | | 9,513 | |
| | First Merchants Corp. | | | 1,035 | | | | 40,034 | |
| | First of Long Island Corp. | | | 477 | | | | 8,224 | |
| | GCM Grosvenor Inc., A | | | 504 | | | | 3,977 | |
| a | | Genworth Financial Inc., A | | | 11,601 | | | | 40,604 | |
| | German American Bancorp Inc. | | | 585 | | | | 20,890 | |
| | Guaranty Bancshares Inc. | | | 162 | | | | 5,604 | |
| | Hanmi Financial Corp. | | | 594 | | | | 14,066 | |
| | Hingham Institution For Savings | | | 27 | | | | 6,780 | |
| | Hope Bancorp Inc. | | | 2,304 | | | | 29,123 | |
| | Houlihan Lokey Inc. | | | 1,251 | | | | 94,300 | |
| | Invesco Mortgage Capital Inc. | | | 576 | | | | 6,394 | |
| | Investors Title Co. | | | 27 | | | | 3,807 | |
| | Jackson Financial Inc., A | | | 882 | | | | 24,476 | |
| | Kinsale Capital Group Inc. | | | 450 | | | | 114,939 | |
| | Lakeland Bancorp Inc. | | | 1,188 | | | | 19,020 | |
| | Macatawa Bank Corp. | | | 279 | | | | 2,584 | |
| | Manning & Napier Inc. | | | 162 | | | | 1,988 | |
| | Mercury General Corp. | | | 315 | | | | 8,952 | |
| a | | Mr Cooper Group Inc. | | | 810 | | | | 32,805 | |
| | National Western Life Group Inc., A | | | 72 | | | | 12,298 | |
| | Navient Corp. | | | 1,395 | | | | 20,493 | |
| | NBT Bancorp Inc. | | | 1,008 | | | | 38,254 | |
| a | | NerdWallet Inc., A | | | 333 | | | | 2,954 | |
| | Nexpoint Real Estate Finance Inc. | | | 81 | | | | 1,213 | |
| | Northfield Bancorp Inc. | | | 1,207 | | | | 17,272 | |
| | Northwest Bancshares Inc. | | | 2,763 | | | | 37,328 | |
| | OceanFirst Financial Corp. | | | 738 | | | | 13,756 | |
| | Parke Bancorp Inc. | | | 117 | | | | 2,452 | |
| | Peoples Bancorp Inc. | | | 638 | | | | 18,457 | |
| | Peoples Financial Services Corp. | | | 90 | | | | 4,216 | |
| | RLI Corp. | | | 891 | | | | 91,221 | |
| | Safety Insurance Group Inc. | | | 306 | | | | 24,957 | |
| | Silvercrest Asset Management Group Inc., A | | | 108 | | | | 1,766 | |
| | | | | | | | | | |
| | | | | | |
| 84 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Financials (continued) | | | | | | |
| | Southern Missouri Bancorp Inc. | | | 189 | | | $ | 9,645 | |
| | Stewart Information Services Corp. | | | 567 | | | | 24,744 | |
| | Tompkins Financial Corp. | | | 360 | | | | 26,143 | |
| | TPG RE Finance Trust Inc. | | | 1,440 | | | | 10,080 | |
| | TriCo Bancshares | | | 351 | | | | 15,672 | |
| | TrustCo Bank Corp. | | | 432 | | | | 13,573 | |
| | UMB Financial Corp. | | | 801 | | | | 67,516 | |
| | Victory Capital Holdings Inc., A | | | 234 | | | | 5,455 | |
| | West BanCorp Inc. | | | 387 | | | | 8,054 | |
| | Westamerica BanCorp. | | | 567 | | | | 29,648 | |
| a | | World Acceptance Corp. | | | 90 | | | | 8,714 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,471,644 | |
| | | | | | | | | | |
| | | Health Care 9.5% | | | | | | |
| a | | Alkermes PLC | | | 1,989 | | | | 44,414 | |
| a | | AMN Healthcare Services Inc. | | | 1,215 | | | | 128,741 | |
| a | | AtriCure Inc. | | | 999 | | | | 39,061 | |
| | Atrion Corp. | | | 31 | | | | 17,515 | |
| a | | Bioventus Inc., A | | | 513 | | | | 3,591 | |
| a | | Cano Health Inc. | | | 2,079 | | | | 18,025 | |
| a | | Cardiovascular Systems Inc. | | | 882 | | | | 12,225 | |
| a | | Catalyst Pharmaceuticals Inc. | | | 2,340 | | | | 30,022 | |
| a | | Community Health Systems Inc. | | | 3,096 | | | | 6,656 | |
| a | | Computer Programs and Systems Inc. | | | 270 | | | | 7,528 | |
| | CONMED Corp. | | | 648 | | | | 51,950 | |
| a | | Convey Health Solutions Holdings Inc. | | | 279 | | | | 2,932 | |
| a | | Corcept Therapeutics Inc. | | | 2,322 | | | | 59,536 | |
| a | | CorVel Corp. | | | 198 | | | | 27,409 | |
| a | | Cross Country Healthcare Inc. | | | 936 | | | | 26,554 | |
| a | | Eagle Pharmaceuticals Inc. | | | 266 | | | | 7,028 | |
| | Embecta Corp. | | | 837 | | | | 24,097 | |
| a | | Emergent BioSolutions Inc. | | | 972 | | | | 20,402 | |
| a | | Enanta Pharmaceuticals Inc. | | | 414 | | | | 21,474 | |
| a | | Figs Inc., A | | | 1,755 | | | | 14,479 | |
| a | | Fulgent Genetics Inc. | | | 423 | | | | 16,125 | |
| a | | Hanger Inc. | | | 1,107 | | | | 20,723 | |
| a | | Inari Medical Inc. | | | 756 | | | | 54,916 | |
| a | | Innoviva Inc. | | | 1,539 | | | | 17,868 | |
| a | | Intercept Pharmaceuticals Inc. | | | 306 | | | | 4,269 | |
| | iRadimed Corp. | | | 162 | | | | 4,870 | |
| a | | Ironwood Pharmaceuticals Inc. | | | 3,393 | | | | 35,151 | |
| a | | Joint Corp. | | | 333 | | | | 5,231 | |
| | LeMaitre Vascular Inc. | | | 432 | | | | 21,894 | |
| a | | LHC Group Inc. | | | 648 | | | | 106,052 | |
| a | | MEDNAX Inc. | | | 2,025 | | | | 33,433 | |
| a | | Meridian Bioscience Inc. | | | 1,098 | | | | 34,620 | |
| a | | Merit Medical Systems Inc. | | | 1,143 | | | | 64,591 | |
| a | | MiMedx Group Inc. | | | 1,746 | | | | 5,011 | |
| | National HealthCare Corp. | | | 342 | | | | 21,662 | |
| | National Research Corp. | | | 342 | | | | 13,612 | |
| a | | Neogen Corp. | | | 2,466 | | | | 34,450 | |
| a | | NextGen Healthcare Inc. | | | 621 | | | | 10,992 | |
| a | | Organogenesis Holdings Inc. | | | 1,143 | | | | 3,703 | |
| a | | Orthofix Medical Inc. | | | 432 | | | | 8,256 | |
| | Patterson Companies Inc. | | | 2,151 | | | | 51,667 | |
| | Phibro Animal Health Corp., A | | | 594 | | | | 7,894 | |
| a | | Prestige Consumer Healthcare Inc. | | | 1,179 | | | | 58,750 | |
| | SIGA Technologies Inc. | | | 1,089 | | | | 11,217 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 85 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Health Care (continued) | | | | | | |
| | Simulations Plus Inc. | | | 324 | | | $ | 15,727 | |
| a | | Surmodics Inc. | | | 306 | | | | 9,302 | |
| a | | Tactile Systems Technology Inc. | | | 486 | | | | 3,786 | |
| a | | Treace Medical Concepts Inc. | | | 486 | | | | 10,726 | |
| a | | Vanda Pharmaceuticals Inc. | | | 720 | | | | 7,114 | |
| a | | Vir Biotechnology Inc. | | | 873 | | | | 16,831 | |
| | Zynex Inc. | | | 486 | | | | 4,408 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,278,490 | |
| | | | | | | | | | |
| | | Industrials 21.4% | | | | | | |
| | ABM Industries Inc. | | | 1,422 | | | | 54,363 | |
| | ACCO Brands Corp. | | | 2,124 | | | | 10,408 | |
| a | | Air Transport Services Group Inc. | | | 1,224 | | | | 29,486 | |
| | Alamo Group Inc. | | | 198 | | | | 24,209 | |
| | Allied Motion Technologies Inc. | | | 306 | | | | 8,758 | |
| | Applied Industrial Technologies Inc. | | | 981 | | | | 100,827 | |
| a | | Atkore Inc. | | | 792 | | | | 61,625 | |
| a | | Atlas Air Worldwide Holdings Inc. | | | 603 | | | | 57,629 | |
| a | | Atlas Technical Consultants Inc. | | | 252 | | | | 1,676 | |
| | Barrett Business Services Inc. | | | 81 | | | | 6,318 | |
| a | | BlueLinx Holdings Inc. | | | 180 | | | | 11,178 | |
| | Boise Cascade Co. | | | 963 | | | | 57,260 | |
| | Brady Corp., A | | | 1,341 | | | | 55,960 | |
| | Brink’s Co. | | | 594 | | | | 28,773 | |
| a | | Casella Waste Systems Inc., A | | | 1,008 | | | | 77,001 | |
| a | | Cimpress PLC | | | 387 | | | | 9,474 | |
| | Comfort Systems USA Inc. | | | 702 | | | | 68,326 | |
| | CompX International Inc. | | | 40 | | | | 650 | |
| | Costamare Inc. | | | 1,242 | | | | 11,116 | |
| | Covenant Logistics Group Inc. | | | 327 | | | | 9,385 | |
| | CRA International Inc. | | | 153 | | | | 13,577 | |
| | CSW Industrials Inc. | | | 297 | | | | 35,581 | |
| a | | Daseke Inc. | | | 657 | | | | 3,554 | |
| | Deluxe Corp. | | | 1,098 | | | | 18,282 | |
| a | | Distribution Solutions Group Inc. | | | 117 | | | | 3,296 | |
| a | | DXP Enterprises Inc. | | | 315 | | | | 7,459 | |
| | Eagle Bulk Shipping Inc. | | | 180 | | | | 7,772 | |
| | Encore Wire Corp. | | | 243 | | | | 28,076 | |
| | Ennis Inc. | | | 630 | | | | 12,682 | |
| | Exponent Inc. | | | 1,305 | | | | 114,409 | |
| | Forward Air Corp. | | | 657 | | | | 59,301 | |
| a | | Franklin Covey Co. | | | 288 | | | | 13,072 | |
| | Franklin Electric Co. Inc. | | | 1,071 | | | | 87,511 | |
| | Genco Shipping & Trading Ltd. | | | 450 | | | | 5,638 | |
| | Global Industrial Co. | | | 369 | | | | 9,900 | |
| a | | GMS Inc. | | | 981 | | | | 39,250 | |
| | Gorman-Rupp Co. | | | 252 | | | | 5,995 | |
| | Griffon Corp. | | | 891 | | | | 26,302 | |
| | H&E Equipment Services Inc. | | | 684 | | | | 19,385 | |
| | Healthcare Services Group Inc. | | | 1,710 | | | | 20,674 | |
| | Heartland Express Inc. | | | 1,107 | | | | 15,841 | |
| | Heidrick & Struggles International Inc. | | | 603 | | | | 15,672 | |
| a | | Heritage-Crystal Clean Inc. | | | 459 | | | | 13,573 | |
| | Hillenbrand Inc. | | | 1,539 | | | | 56,512 | |
| | HNI Corp. | | | 1,143 | | | | 30,301 | |
| a | | Hudson Technologies Inc. | | | 504 | | | | 3,704 | |
| a | | IBEX Holdings Ltd. | | | 108 | | | | 2,006 | |
| | ICF International Inc. | | | 441 | | | | 48,078 | |
| | | | | | | | | | |
| | | | | | |
| 86 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Industrials (continued) | | | | | | |
| | Insperity Inc. | | | 846 | | | $ | 86,368 | |
| | Interface Inc. | | | 1,206 | | | | 10,842 | |
| | Kadant Inc. | | | 270 | | | | 45,039 | |
| a | | Karat Packaging Inc. | | | 99 | | | | 1,583 | |
| | Kelly Services Inc., A | | | 846 | | | | 11,497 | |
| | Kforce Inc. | | | 612 | | | | 35,894 | |
| | Kimball International Inc., B | | | 963 | | | | 6,057 | |
| | Korn Ferry | | | 1,566 | | | | 73,524 | |
| a | | Legalzoom.com Inc. | | | 1,287 | | | | 11,030 | |
| | Luxfer Holdings PLC | | | 612 | | | | 8,874 | |
| | Marten Transport Ltd. | | | 1,377 | | | | 26,383 | |
| | Matson Inc. | | | 909 | | | | 55,922 | |
| | Matthews International Corp., A | | | 522 | | | | 11,698 | |
| | McGrath RentCorp | | | 549 | | | | 46,039 | |
| | Miller Industries Inc. | | | 252 | | | | 5,365 | |
| | MillerKnoll Inc. | | | 1,818 | | | | 28,361 | |
| | Mueller Industries Inc. | | | 990 | | | | 58,846 | |
| | Mueller Water Products Inc., A | | | 2,970 | | | | 30,502 | |
| | National Presto Industries Inc. | | | 117 | | | | 7,611 | |
| | NL Industries Inc. | | | 207 | | | | 1,600 | |
| a | | NV5 Global Inc. | | | 261 | | | | 32,317 | |
| | Omega Flex Inc. | | | 90 | | | | 8,336 | |
| a | | PAM Transportation Services Inc. | | | 189 | | | | 5,851 | |
| | Pitney Bowes Inc. | | | 1,935 | | | | 4,509 | |
| | Preformed Line Products Co. | | | 72 | | | | 5,123 | |
| a | | Radiant Logistics Inc. | | | 909 | | | | 5,172 | |
| | Resources Connection Inc. | | | 981 | | | | 17,727 | |
| | Rush Enterprises Inc., B | | | 162 | | | | 7,761 | |
| | Rush Enterprises Inc., A | | | 837 | | | | 36,711 | |
| | Safe Bulkers Inc. | | | 765 | | | | 1,890 | |
| a | | Saia Inc. | | | 657 | | | | 124,830 | |
| | Simpson Manufacturing Co. Inc. | | | 1,071 | | | | 83,966 | |
| | Standex International Corp. | | | 261 | | | | 21,311 | |
| | Steelcase Inc., A | | | 2,043 | | | | 13,320 | |
| | Tennant Co. | | | 477 | | | | 26,979 | |
| a | | Titan Machinery Inc. | | | 378 | | | | 10,682 | |
| a | | Transcat Inc. | | | 153 | | | | 11,581 | |
| | Triton International Ltd. | | | 1,413 | | | | 77,333 | |
| a | | TrueBlue Inc. | | | 612 | | | | 11,677 | |
| | UFP Industries Inc. | | | 1,377 | | | | 99,364 | |
| | UniFirst Corp. | | | 315 | | | | 52,992 | |
| | Universal Logistics Holdings Inc. | | | 198 | | | | 6,281 | |
| a | | Vectrus Inc. | | | 234 | | | | 8,284 | |
| a | | Veritiv Corp. | | | 306 | | | | 29,918 | |
| | Watts Water Technologies Inc., A | | | 729 | | | | 91,657 | |
| | Werner Enterprises Inc. | | | 1,953 | | | | 73,433 | |
| | Zurn Water Solutions Corp. | | | 1,899 | | | | 46,525 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 2,880,390 | |
| | | | | | | | | | |
| | | Information Technology 11.8% | | | | | | |
| | A10 Networks Inc. | | | 1,872 | | | | 24,841 | |
| | ADTRAN Holdings Inc. | | | 864 | | | | 16,917 | |
| | American Software Inc., A | | | 711 | | | | 10,893 | |
| a | | Appfolio Inc., A | | | 405 | | | | 42,412 | |
| a | | Aviat Networks Inc. | | | 216 | | | | 5,914 | |
| a | | Avid Technology Inc. | | | 855 | | | | 19,887 | |
| | Badger Meter Inc. | | | 693 | | | | 64,026 | |
| a | | BigCommerce Holdings Inc. | | | 999 | | | | 14,785 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 87 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Information Technology (continued) | | | | | | |
| a | | Blackbaud Inc. | | | 900 | | | $ | 39,654 | |
| a | | Brightcove Inc. | | | 846 | | | | 5,330 | |
| a | | Calix Inc. | | | 1,197 | | | | 73,185 | |
| a | | Cambium Networks Corp. | | | 243 | | | | 4,112 | |
| a | | ChannelAdvisor Corp. | | | 720 | | | | 16,315 | |
| a | | Clearfield Inc. | | | 261 | | | | 27,311 | |
| a | | CommVault Systems Inc. | | | 1,107 | | | | 58,715 | |
| a | | Consensus Cloud Solutions Inc. | | | 405 | | | | 19,157 | |
| | CSG Systems International Inc. | | | 846 | | | | 44,736 | |
| a | | CyberOptics Corp. | | | 81 | | | | 4,356 | |
| a | | eGain Corp. | | | 414 | | | | 3,043 | |
| a | | Enfusion Inc., A | | | 315 | | | | 3,887 | |
| a | | Envestnet Inc. | | | 1,008 | | | | 44,755 | |
| a | | ePlus Inc. | | | 603 | | | | 25,049 | |
| | EVERTEC Inc. | | | 1,269 | | | | 39,783 | |
| a | | ExlService Holdings Inc. | | | 522 | | | | 76,922 | |
| a | | Extreme Networks Inc. | | | 2,223 | | | | 29,055 | |
| a | | FARO Technologies Inc. | | | 315 | | | | 8,644 | |
| | Hackett Group Inc. | | | 648 | | | | 11,483 | |
| | Information Services Group Inc. | | | 387 | | | | 1,842 | |
| a | | Insight Enterprises Inc. | | | 720 | | | | 59,335 | |
| a | | International Money Express Inc. | | | 792 | | | | 18,050 | |
| | Kulicke & Soffa Industries Inc. | | | 1,413 | | | | 54,443 | |
| | Methode Electronics Inc. | | | 810 | | | | 30,092 | |
| a | | Napco Security Technologies Inc. | | | 693 | | | | 20,152 | |
| a | | NETGEAR Inc. | | | 504 | | | | 10,100 | |
| a | | NetScout Systems Inc. | | | 1,350 | | | | 42,282 | |
| a | | Novanta Inc. | | | 882 | | | | 102,003 | |
| a | | OneSpan Inc. | | | 729 | | | | 6,277 | |
| a | | OSI Systems Inc. | | | 351 | | | | 25,293 | |
| | PC Connection Inc. | | | 234 | | | | 10,551 | |
| | Power Integrations Inc. | | | 1,404 | | | | 90,305 | |
| | Progress Software Corp. | | | 1,107 | | | | 47,103 | |
| a | | Qualys Inc. | | | 1,017 | | | | 141,760 | |
| a | | Remitly Global Inc. | | | 1,062 | | | | 11,809 | |
| a | | Rimini Street Inc. | | | 1,170 | | | | 5,452 | |
| a | | SPS Commerce Inc. | | | 909 | | | | 112,925 | |
| a | | Squarespace Inc., A | | | 405 | | | | 8,651 | |
| | Vishay Intertechnology Inc. | | | 2,871 | | | | 51,075 | |
| a | | Vishay Precision Group Inc. | | | 126 | | | | 3,728 | |
| a | | WM Technology Inc. | | | 810 | | | | 1,304 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,589,699 | |
| | | | | | | | | | |
| | | Materials 3.6% | | | | | | |
| | Balchem Corp. | | | 621 | | | | 75,501 | |
| | Commercial Metals Co. | | | 2,358 | | | | 83,662 | |
| | Compass Minerals International Inc. | | | 657 | | | | 25,314 | |
| | Greif Inc., B | | | 144 | | | | 8,755 | |
| | Greif Inc., A | | | 666 | | | | 39,674 | |
| | Innospec Inc. | | | 279 | | | | 23,902 | |
| | Kronos Worldwide Inc. | | | 477 | | | | 4,455 | |
| | Myers Industries Inc. | | | 900 | | | | 14,823 | |
| | Olympic Steel Inc. | | | 180 | | | | 4,106 | |
| | Ramaco Resources Inc. | | | 261 | | | | 2,401 | |
| | Ryerson Holding Corp. | | | 306 | | | | 7,876 | |
| | Schnitzer Steel Industries Inc., A | | | 477 | | | | 13,575 | |
| | Schweitzer-Mauduit International Inc. | | | 720 | | | | 15,898 | |
| | Sensient Technologies Corp. | | | 972 | | | | 67,399 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Materials (continued) | | | | | | |
| | Stepan Co. | | | 441 | | | $ | 41,309 | |
| | SunCoke Energy Inc. | | | 1,584 | | | | 9,203 | |
| | Tredegar Corp. | | | 558 | | | | 5,268 | |
| | Valhi Inc. | | | 27 | | | | 679 | |
| | Warrior Met Coal Inc. | | | 621 | | | | 17,661 | |
| | Worthington Industries Inc. | | | 630 | | | | 24,028 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 485,489 | |
| | | | | | | | | | |
| | | Real Estate 4.5% | | | | | | |
| | American Assets Trust Inc. | | | 1,035 | | | | 26,620 | |
| | Brandywine Realty Trust | | | 3,438 | | | | 23,207 | |
| | Broadstone Net Lease Inc. | | | 3,276 | | | | 50,876 | |
| | CareTrust REIT Inc. | | | 2,025 | | | | 36,673 | |
| | City Office REIT Inc. | | | 522 | | | | 5,204 | |
| | Community Healthcare Trust Inc. | | | 459 | | | | 15,032 | |
| | Corporate Office Properties Trust | | | 2,367 | | | | 54,985 | |
| | Douglas Elliman Inc. | | | 1,890 | | | | 7,749 | |
| | Four Corners Property Trust Inc. | | | 909 | | | | 21,989 | |
| | Franklin Street Properties Corp. | | | 2,511 | | | | 6,604 | |
| a | | GEO Group Inc. | | | 2,466 | | | | 18,988 | |
| | LTC Properties Inc. | | | 495 | | | | 18,538 | |
| | LXP Industrial Trust | | | 6,741 | | | | 61,748 | |
| | Marcus & Millichap Inc. | | | 576 | | | | 18,881 | |
| | Necessity Retail REIT Inc. | | | 2,358 | | | | 13,865 | |
| | Physicians Realty Trust | | | 4,905 | | | | 73,771 | |
| | PotlatchDeltic Corp. | | | 1,323 | | | | 54,296 | |
| | RE/MAX Holdings Inc., A | | | 522 | | | | 9,871 | |
| | RMR Group Inc., A | | | 351 | | | | 8,315 | |
| | Tanger Factory Outlet Centers Inc. | | | 2,277 | | | | 31,149 | |
| | Urstadt Biddle Properties Inc., A | | | 369 | | | | 5,723 | |
| | Washington Real Estate Investment Trust | | | 1,701 | | | | 29,870 | |
| | Whitestone REIT | | | 1,152 | | | | 9,746 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 603,700 | |
| | | | | | | | | | |
| | | Utilities 7.9% | | | | | | |
| | American States Water Co. | | | 972 | | | | 75,767 | |
| | Artesian Resources Corp., A | | | 198 | | | | 9,528 | |
| | Avista Corp. | | | 1,863 | | | | 69,024 | |
| | Black Hills Corp. | | | 1,530 | | | | 103,627 | |
| | Brookfield Infrastructure Corp., A | | | 1,089 | | | | 44,322 | |
| | California Water Service Group | | | 1,359 | | | | 71,606 | |
| | Clearway Energy Inc., A | | | 747 | | | | 21,738 | |
| | Clearway Energy Inc., C | | | 1,737 | | | | 55,323 | |
| | Global Water Resources Inc. | | | 278 | | | | 3,261 | |
| | MGE Energy Inc. | | | 909 | | | | 59,658 | |
| | Northwest Natural Holding Co. | | | 693 | | | | 30,062 | |
| | NorthWestern Corp. | | | 1,233 | | | | 60,762 | |
| | ONE Gas Inc. | | | 621 | | | | 43,712 | |
| | Otter Tail Corp. | | | 819 | | | | 50,385 | |
| | PNM Resources Inc. | | | 2,115 | | | | 96,719 | |
| | SJW Group | | | 612 | | | | 35,251 | |
| | South Jersey Industries Inc. | | | 1,368 | | | | 45,719 | |
| a | | Southwest Gas Holdings Inc. | | | 1,665 | | | | 116,134 | |
| | Spire Inc. | | | 594 | | | | 37,024 | |
| | Unitil Corp. | | | 369 | | | | 17,140 | |
| | Via Renewables Inc. | | | 324 | | | | 2,239 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 89 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Utilities (continued) | | | | | | |
| | York Water Co. | | | 297 | | | $ | 11,414 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,060,415 | |
| | | | | | | | | | |
| | Total Common Stocks (Cost $14,907,237) | | | | | | | 13,472,445 | |
| | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $14,907,237) | | | | | | | 13,472,445 | |
| | | | | | | | | | |
| | | Short-Term Investments 0.2% | | | | | | |
| | Investments from Cash Collateral Received for Loaned Securities 0.2% | | | | | | | | |
| | | Money Market Funds 0.2% | | | | | | |
| c,d | | Institutional Fiduciary Trust Portfolio, 2.45% | | $ | 20,560 | | | | 20,560 | |
| | | | | | | | | | |
| | Total Short-Term Investments (Cost $20,560) | | | | | | | 20,560 | |
| | | | | | | | | | |
| | Total Investments (Cost $14,927,797) 100.3% | | | | | | | 13,493,005 | |
| | Other Assets, less Liabilities (0.3)% | | | | | | | (35,143 | ) |
| | | | | | | | | | |
| | Net Assets 100.0% | | | | | | $ | 13,457,862 | |
| | | | | | | | | | |
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2022. See Note 1(d).
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
See Abbreviations on page 110.
| | | | | | | | | | |
| | | | | | |
| 90 | | | | | | | | Semiannual 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
September 30, 2022 (unaudited)
| | | | | | | | | | | | |
| | | |
| | | Franklin
Emerging Market
Core Dividend
Tilt Index ETF | | | Franklin
International
Core Dividend
Tilt Index ETF | | | Franklin
U.S. Core
Dividend
Tilt Index ETF | |
Assets: | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 15,608,816 | | | $ | 34,163,045 | | | $ | 46,849,813 | |
Value – Unaffiliated issuers | | $ | 12,352,391 | | | $ | 31,110,179 | | | $ | 41,186,653 | |
Cash | | | — | | | | — | | | | 40,223 | |
Foreign currency, at value (cost $81,908, $83,597 and $2,879, respectively) | | | 80,099 | | | | 83,102 | | | | 2,875 | |
Receivables: | | | | | | | | | | | | |
Dividends | | | 83,033 | | | | 143,497 | | | | 92,474 | |
Investment securities sold | | | 1,827 | | | | — | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | |
Futures contracts | | | 3,893 | | | | 29,056 | | | | 6,000 | |
| | | | |
Total assets | | | 12,521,243 | | | | 31,365,834 | | | | 41,328,225 | |
| | | | |
Liabilities: | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | |
Management fees | | | 2,132 | | | | 1,960 | | | | 2,214 | |
Variation margin on futures contracts | | | 315 | | | | 3,043 | | | | 1,558 | |
Funds advanced by custodian | | | 75,498 | | | | 17,607 | | | | — | |
Deferred tax | | | 15,991 | | | | — | | | | — | |
| | | | |
Total liabilities | | | 93,936 | | | | 22,610 | | | | 3,772 | |
| | | | |
Net assets, at value | | $ | 12,427,307 | | | $ | 31,343,224 | | | $ | 41,324,453 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 46,176,534 | | | $ | 34,912,266 | | | $ | 46,687,723 | |
Total distributable earnings (loss) | | | (33,749,227 | ) | | | (3,569,042 | ) | | | (5,363,270 | ) |
| | | | |
Net assets, at value | | $ | 12,427,307 | | | $ | 31,343,224 | | | $ | 41,324,453 | |
| | | | |
Shares outstanding | | | 600,000 | | | | 1,400,000 | | | | 1,450,000 | |
| | | | |
Net asset value per share | | $ | 20.71 | | | $ | 22.39 | | | $ | 28.50 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 91 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
| | | | | | | | | | | | |
| | | |
| | | Franklin
U.S. Large Cap
Multifactor
Index ETF | | | Franklin
U.S. Mid Cap
Multifactor
Index ETF | | | Franklin
U.S. Small Cap
Multifactor
Index ETF | |
Assets: | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 950,184,166 | | | $ | 72,198,299 | | | $ | 14,907,237 | |
Cost – Non-controlled affiliates (Note 3c) | | | — | | | | 23,000 | | | | 20,560 | |
Value – Unaffiliated issuers+ | | $ | 861,797,955 | | | $ | 65,984,021 | | | $ | 13,472,445 | |
Value – Non-controlled affiliates (Note 3c) | | | — | | | | 23,000 | | | | 20,560 | |
Cash | | | 625,160 | | | | — | | | | 9,136 | |
Receivables: | | | | | | | | | | | | |
Capital shares sold | | | 1,854,244 | | | | — | | | | — | |
Dividends | | | 1,084,157 | | | | 84,111 | | | | 13,114 | |
Investment securities sold | | | 978,803 | | | | — | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | |
Futures contracts | | | 60,000 | | | | — | | | | — | |
| | | | |
Total assets | | | 866,400,319 | | | | 66,091,132 | | | | 13,515,255 | |
| | | | |
Liabilities: | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | |
Investment securities purchased | | | 2,966,035 | | | | 491,195 | | | | 32,701 | |
Management fees | | | 113,568 | | | | 17,754 | | | | 4,132 | |
Variation margin on futures contracts | | | 15,844 | | | | — | | | | — | |
Funds advanced by custodian | | | — | | | | 56,583 | | | | — | |
Payable upon return of securities loaned | | | — | | | | 23,000 | | | | 20,560 | |
| | | | |
Total liabilities | | | 3,095,447 | | | | 588,532 | | | | 57,393 | |
| | | | |
Net assets, at value | | $ | 863,304,872 | | | $ | 65,502,600 | | | $ | 13,457,862 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 1,012,075,004 | | | $ | 71,450,377 | | | $ | 16,676,552 | |
Total distributable earnings (loss) | | | (148,770,132 | ) | | | (5,947,777 | ) | | | (3,218,690 | ) |
| | | | |
Net assets, at value | | $ | 863,304,872 | | | $ | 65,502,600 | | | $ | 13,457,862 | |
| | | | |
Shares outstanding | | | 23,600,000 | | | | 1,750,000 | | | | 450,000 | |
| | | | |
Net asset value per share | | | 36.58 | | | | 37.43 | | | | 29.91 | |
| | | | |
+Includes securities loaned | | | — | | | | 22,264 | | | | 20,151 | |
| | | | | | | | | | |
| | | | | | |
| 92 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Emerging Market
Core Dividend
Tilt Index ETF | | | Franklin
International
Core Dividend Tilt
Index ETF | | | Franklin
U.S. Core Dividend
Tilt Index ETF | | | Franklin
U.S. Large Cap
Multifactor
Index ETF | |
Investment income: | | | | | | | | | | | | | | | | |
Dividends: (net of foreign taxes)a | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | $ | 639,320 | | | $ | 528,431 | | | $ | 541,243 | | | $ | 10,648,222 | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | — | | | | 138 | | | | 70 | | | | 1,903 | |
Interest from securities loaned (Note 1d): | | | | | | | | | | | | | | | | |
Unaffiliated issuers (net of fees and rebates) | | | — | | | | — | | | | 7 | | | | 203 | |
| | | | |
Total investment income | | | 639,320 | | | | 528,569 | | | | 541,320 | | | | 10,650,328 | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
Management fees (Note 3a) | | | 27,578 | | | | 29,237 | | | | 53,731 | | | | 727,020 | |
Other | | | 55 | | | | — | | | | 54 | | | | — | |
| | | | |
Total expenses | | | 27,633 | | | | 29,237 | | | | 53,785 | | | | 727,020 | |
Expenses waived/paid by affiliates (Note 3c) | | | (1 | ) | | | — | | | | — | | | | (161 | ) |
| | | | |
Net expenses | | | 27,632 | | | | 29,237 | | | | 53,785 | | | | 726,859 | |
| | | | |
Net investment income | | | 611,688 | | | | 499,332 | | | | 487,535 | | | | 9,923,469 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (686,245 | ) | | | (1,240,416 | ) | | | 292,277 | | | | (34,008,522 | ) |
In-kind redemptions | | | — | | | | — | | | | 594,999 | | | | 25,292,624 | |
Foreign currency transactions | | | (13,202 | ) | | | (17,934 | ) | | | (20,188 | ) | | | — | |
Forward exchange contracts | | | — | | | | 1,681,625 | | | | — | | | | — | |
Futures contracts | | | (13,452 | ) | | | (3,714 | ) | | | (20,209 | ) | | | (221,299 | ) |
| | | | |
Net realized gain (loss) | | | (712,899 | ) | | | 419,561 | | | | 846,879 | | | | (8,937,197 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (3,926,545 | ) | | | (5,028,365 | ) | | | (10,182,095 | ) | | | (179,000,776 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | (5,137 | ) | | | (3,412 | ) | | | (3,065 | ) | | | — | |
Futures contracts | | | (12,630 | ) | | | (7,989 | ) | | | (20,514 | ) | | | (157,353 | ) |
Forward exchange contracts | | | — | | | | (252,393 | ) | | | — | | | | — | |
Change in deferred taxes on unrealized appreciation | | | 66,146 | | | | — | | | | — | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (3,878,166 | ) | | | (5,292,159 | ) | | | (10,205,674 | ) | | | (179,158,129 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (4,591,065 | ) | | | (4,872,598 | ) | | | (9,358,795 | ) | | | (188,095,326 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (3,979,377 | ) | | $ | (4,373,266 | ) | | $ | (8,871,260 | ) | | $ | (178,171,857 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 77,233 | | | $ | 39,016 | | | $ | 24,173 | | | $ | — | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
| | | | | | | | |
| | |
| | | Franklin
U.S. Mid Cap
Multifactor
Index ETF | | | Franklin
U.S. Small Cap
Multifactor
Index ETF | |
Investment income: | | | | | | | | |
Dividends: (net of foreign taxes)a | | | | | | | | |
Unaffiliated issuers | | $ | 623,456 | | | $ | 146,737 | |
Interest: | | | | | | | | |
Unaffiliated issuers | | | 54 | | | | 19 | |
Interest from securities loaned (Note 1d): | | | | | | | | |
Unaffiliated issuers (net of fees and rebates) | | | 40 | | | | 731 | |
Non-Controlled affiliates (Note 3c) | | | 75 | | | | 16 | |
| | | | |
Total investment income | | | 623,625 | | | | 147,503 | |
| | | | |
Expenses: | | | | | | | | |
Management fees (Note 3a) | | | 95,071 | | | | 26,294 | |
| | | | |
Total expenses | | | 95,071 | | | | 26,294 | |
Expenses waived/paid by affiliates (Note 3c) | | | (54 | ) | | | (93 | ) |
| | | | |
Net expenses | | | 95,017 | | | | 26,201 | |
| | | | |
Net investment income | | | 528,608 | | | | 121,302 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | |
Investments: | | | | | | | | |
Unaffiliated issuers | | | (1,009,426 | ) | | | (228,712 | ) |
In-kind redemptions | | | 1,898,367 | | | | — | |
Futures contracts | | | 536 | | | | (888 | ) |
| | | | |
Net realized gain (loss) | | | 889,477 | | | | (229,600 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | |
Investments: | | | | | | | | |
Unaffiliated issuers | | | (13,667,893 | ) | | | (2,614,674 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (13,667,893 | ) | | | (2,614,674 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (12,778,416 | ) | | | (2,844,274 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (12,249,808 | ) | | $ | (2,722,972 | ) |
| | | | |
| | | | | | | | |
aForeign taxes withheld on dividends | | $ | — | | | $ | 58 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin Emerging Market Core
Dividend Tilt Index ETF | | | Franklin International Core
Dividend Tilt Index ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 611,688 | | | $ | 1,014,437 | | | $ | 499,332 | | | $ | 582,345 | |
Net realized gain (loss) | | | (712,899 | ) | | | 1,714,886 | | | | 419,561 | | | | 1,193,763 | |
Net change in unrealized appreciation (depreciation) | | | (3,878,166 | ) | | | (3,586,587 | ) | | | (5,292,159 | ) | | | (117,448 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (3,979,377 | ) | | | (857,264 | ) | | | (4,373,266 | ) | | | 1,658,660 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (592,824 | ) | | | (972,933 | ) | | | (1,264,669 | ) | | | (478,088 | ) |
| | | | |
Capital share transactions: (Note 2) | | | — | | | | (5,797,086 | ) | | | 19,788,861 | | | | 2,752,200 | |
| | | | |
Net increase (decrease) in net assets | | | (4,572,201 | ) | | | (7,627,283 | ) | | | 14,150,926 | | | | 3,932,772 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 16,999,508 | | | | 24,626,791 | | | | 17,192,298 | | | | 13,259,526 | |
| | | | |
End of period | | $ | 12,427,307 | | | $ | 16,999,508 | | | $ | 31,343,224 | | | $ | 17,192,298 | |
| | | | |
| | | | | | | | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 95 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin U.S. Core Dividend
Tilt Index ETF | | | Franklin U.S. Large Cap Multifactor
Index ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 487,535 | | | $ | 821,951 | | | $ | 9,923,469 | | | $ | 20,074,191 | |
Net realized gain (loss) | | | 846,879 | | | | 1,429,154 | | | | (8,937,197 | ) | | | 253,820,136 | |
Net change in unrealized appreciation (depreciation) | | | (10,205,674 | ) | | | 1,240,892 | | | | (179,158,129 | ) | | | (111,334,022 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (8,871,260 | ) | | | 3,491,997 | | | | (178,171,857 | ) | | | 162,560,305 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (641,156 | ) | | | (803,985 | ) | | | (9,509,273 | ) | | | (21,142,944 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 19,986,168 | | | | 1,530,803 | | | | 84,248,614 | | | | (528,086,490 | ) |
| | | | |
Net increase (decrease) in net assets | | | 10,473,752 | | | | 4,218,815 | | | | (103,432,516 | ) | | | (386,669,129 | ) |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 30,850,701 | | | | 26,631,886 | | | | 966,737,388 | | | | 1,353,406,517 | |
| | | | |
End of period | | $ | 41,324,453 | | | $ | 30,850,701 | | | $ | 863,304,872 | | | $ | 966,737,388 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin U.S. Mid Cap Multifactor
Index ETF | | | Franklin U.S. Small Cap Multifactor
Index ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 528,608 | | | $ | 606,903 | | | $ | 121,302 | | | $ | 179,992 | |
Net realized gain (loss) | | | 889,477 | | | | 4,303,133 | | | | (229,600 | ) | | | 1,212,551 | |
Net change in unrealized appreciation (depreciation) | | | (13,667,893 | ) | | | (533,996 | ) | | | (2,614,674 | ) | | | (1,328,181 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (12,249,808 | ) | | | 4,376,040 | | | | (2,722,972 | ) | | | 64,362 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (468,303 | ) | | | (586,728 | ) | | | (92,056 | ) | | | (184,173 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 15,365,531 | | | | 22,306,734 | | | | — | | | | 1,779,654 | |
| | | | |
Net increase (decrease) in net assets | | | 2,647,420 | | | | 26,096,046 | | | | (2,815,028 | ) | | | 1,659,843 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 62,855,180 | | | | 36,759,134 | | | | 16,272,890 | | | | 14,613,047 | |
| | | | |
End of period | | $ | 65,502,600 | | | $ | 62,855,180 | | | $ | 13,457,862 | | | $ | 16,272,890 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
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 Fund corresponding underlying index.
Effective 08/01/2022, the following name changes occurred:
Old name
| * | Franklin LibertyQ U.S. Small Cap Equity ETF |
| * | Franklin LibertyQ U.S. Mid Cap Equity ETF |
| * | Franklin LibertyQ U.S. Equity ETF |
| * | Franklin LibertyQ International Equity Hedged ETF |
| * | Franklin LibertyQ Emerging Markets ETF |
| * | Franklin LibertyQ Global Dividend ETF |
New name
| * | Franklin U.S. Small Cap Multifactor Index ETF |
| * | Franklin U.S. Mid Cap Multifactor Index ETF |
| * | Franklin U.S. Large Cap Multifactor Index ETF |
| * | Franklin International Core Dividend Tilt Index ETF |
| * | Franklin Emerging Market Core Dividend Tilt Index ETF |
| * | Franklin U.S. Core Dividend Tilt Index ETF |
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Fund’s Board of
Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 2022. At September 30, 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 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
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 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.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 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 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.
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 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.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
At September 30, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Franklin Emerging Market Core Dividend Tilt Index ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | — | | | $ | 12,197 | |
Shares redeemed | | | — | | | | — | | | | | | | | (200,000 | ) | | | (5,809,283 | ) |
| | | | |
Net increase (decrease) | | | — | | | $ | — | | | | | | | | (200,000 | ) | | $ | (5,797,086 | ) |
| | | | |
| |
| | | Franklin International Core Dividend Tilt Index ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 800,000 | | | $ | 19,788,861 | | | | | | | | 100,000 | | | $ | 2,752,200 | |
| | | | |
Net increase (decrease) | | | 800,000 | | | $ | 19,788,861 | | | | | | | | 100,000 | | | $ | 2,752,200 | |
| | | | |
| |
| | | Franklin U.S. Core Dividend Tilt Index ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 650,000 | | | $ | 21,638,732 | | | | | | | | 100,000 | | | $ | 3,403,231 | |
Shares redeemed | | | (50,000 | ) | | | (1,652,564 | ) | | | | | | | (50,000 | ) | | | (1,872,428 | ) |
| | | | |
Net increase (decrease) | | | 600,000 | | | $ | 19,986,168 | | | | | | | | 50,000 | | | $ | 1,530,803 | |
| | | | |
| |
| | | Franklin U.S. Large Cap Multifactor Index ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 5,850,000 | | | $ | 238,493,958 | | | | | | | | 7,250,000 | | | $ | 315,466,656 | |
Shares redeemed | | | (3,800,000 | ) | | | (154,245,344 | ) | | | | | | | (19,500,000 | ) | | | (843,553,146 | ) |
| | | | |
Net increase (decrease) | | | 2,050,000 | | | $ | 84,248,614 | | | | | | | | (12,250,000 | ) | | $ | (528,086,490 | ) |
| | | | |
| |
| | | Franklin U.S. Mid Cap Multifactor Index ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 550,000 | | | $ | 23,320,813 | | | | | | | | 800,000 | | | $ | 35,769,669 | |
Shares redeemed | | | (200,000 | ) | | | (7,955,282 | ) | | | | | | | (300,000 | ) | | | (13,462,935 | ) |
| | | | |
Net increase (decrease) | | | 350,000 | | | $ | 15,365,531 | | | | | | | | 500,000 | | | $ | 22,306,734 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Franklin U.S. Small Cap Multifactor Index ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 150,000 | | | $ | 5,610,619 | |
Shares redeemed | | | — | | | | — | | | | | | | | (100,000 | ) | | | (3,830,965 | ) |
| | | | |
Net increase (decrease) | | | — | | | $ | — | | | | | | | | 50,000 | | | $ | 1,779,654 | |
| | | | |
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 Templeton 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 | | |
| | |
| | | For the period August 1, 2022
to September 30, 2022 | | For the period April 1, 2022 to July 31, 2022 |
Franklin Emerging Market Core Dividend Tilt Index ETF | | 0.19% | | 0.45% |
Franklin International Core Dividend Tilt Index ETF | | 0.09% | | 0.40% |
Franklin U.S. Core Dividend Tilt Index ETF | | 0.06% | | 0.45% |
Franklin U.S. Large Cap Multifactor Index ETF | | 0.15% | | 0.15% |
Franklin U.S. Mid Cap Multifactor Index ETF | | 0.30% | | 0.30% |
Franklin U.S. Small Cap Multifactor Index ETF | | 0.35% | | 0.35% |
For the six months ended September 30, 2022, each Fund’s annualized effective investment management fee rate based on average daily net assets was as follows:
| | |
| |
| | | Annualized Fee Rate |
Franklin Emerging Market Core Dividend Tilt Index ETF | | 0.19% |
Franklin International Core Dividend Tilt Index ETF | | 0.09% |
Franklin U.S. Core Dividend Tilt Index ETF | | 0.06% |
Franklin U.S. Large Cap Multifactor Index ETF | | 0.15% |
Franklin U.S. Mid Cap Multifactor Index ETF | | 0.30% |
Franklin U.S. Small Cap Multifactor Index ETF | | 0.35% |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 period ended September 30, 2022, investments in affiliated management investment companies were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | Value at
Beginning
of Period | | | Purchases | | | Sales | | | Realized
Gain (Loss) | | | Net Change in
Unrealized
Appreciation (Depreciation) | | | Value at
End of
Period | | | Number
of Shares
Held at
End
of Period | | | Investment Income | |
| | | | | | |
| Franklin U.S. Mid Cap Multifactor Index ETF | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | | | | | | | | Income from
Securities loaned | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 10,850 | | | $ | 1,354,473 | | | $ | (1,342,323 | ) | | $ | — | | | $ | — | | | $ | 23,000 | | | | 23,000 | | | $ | 75 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Franklin U.S. Small Cap Multifactor Index ETF | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | | | | | | | | Income from
Securities loaned | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 113,498 | | | $ | 424,380 | | | $ | (517,318 | ) | | $ | — | | | $ | — | | | $ | 20,560 | | | | 20,560 | | | $ | 16 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
d. Other Affiliated Transactions
At September 30, 2022, the shares of Franklin U.S. Large Cap Multifactor Index ETF were owned by the following entities:
| | | | | | | | |
| | |
| Funds | | Shares | | | Percentage of
Outstanding Sharesa | |
| | |
| Franklin U.S. Large Cap Multifactor Index ETF | | | | | | | | |
Franklin Moderate Allocation Fund | | | 2,316,917 | | | | 9.8% | |
Franklin Growth Allocation Fund | | | 2,873,526 | | | | 12.2% | |
Franklin 529 Portfolios | | | 4,811,642 | | | | 20.4% | |
| | | | |
| | | 10,002,085 | | | | 42.4% | |
| | | | |
aInvestment activities of significant shareholders could have a material impact on the Funds.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 Emerging
Market Core
Dividend Tilt
Index ETF | | | Franklin
International
Core Dividend Tilt
Index ETF | | | Franklin U.S.
Core Dividend Tilt
Index ETF | | | Franklin U.S. Large
Cap Multifactor
Index ETF | |
| Capital loss carryforwards not subject to expiration: | | | | | | | | | | | | | | | | |
Long term | | $ | 12,605,720 | | | $ | 268,225 | | | $ | 417,975 | | | $ | 12,219,026 | |
Short term | | | 16,928,227 | | | | 26,833 | | | | 99,040 | | | | 40,847,511 | |
| | | | |
Total capital loss carryforwards | | $ | 29,533,947 | | | $ | 295,058 | | | $ | 517,015 | | | $ | 53,066,537 | |
| | | | |
| | | | |
| | | Franklin U.S. Mid
Cap Multifactor
Index ETF | | | Franklin U.S.
Small Cap
Multifactor
Index ETF | | | | | | | |
| Capital loss carryforwards not subject to expiration: | | | | | | | | | | | | | | | | |
Long term | | $ | 315,556 | | | $ | 956,591 | | | | | | | | | |
Short term | | | 384,287 | | | | 605,954 | | | | | | | | | |
| | | | | | | | | | | | |
Total capital loss carryforwards | | $ | 699,843 | | | $ | 1,562,545 | | | | | | | | | |
| | | | | | | | | | | | |
At September 30, 2022, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin Emerging
Market Core
Dividend Tilt
Index ETF | | | Franklin
International
Core Dividend Tilt
Index ETF | | | Franklin U.S.
Core Dividend Tilt
Index ETF | | | Franklin U.S. Large
Cap Multifactor
Index ETF | |
Cost of investments | | $ | 15,608,816 | | | $ | 34,163,045 | | | $ | 46,849,813 | | | $ | 950,184,166 | |
| | | | |
Unrealized appreciation | | $ | 515,736 | | | $ | 553,669 | | | $ | 424,414 | | | $ | 25,836,636 | |
Unrealized depreciation | | | (3,772,161 | ) | | | (3,606,535 | ) | | | (6,087,574 | ) | | | (114,222,847 | ) |
| | | | |
Net unrealized appreciation (depreciation) | | $ | (3,256,425 | ) | | $ | (3,052,866 | ) | | $ | (5,663,160 | ) | | $ | (88,386,211 | ) |
| | | | |
| | | | |
| | | Franklin U.S. Mid
Cap Multifactor
Index ETF | | | Franklin U.S.
Small Cap
Multifactor
Index ETF | | | | | | | |
Cost of investments | | $ | 72,221,299 | | | $ | 14,927,797 | | | | | | | | | |
| | | | | | | | | | | | |
Unrealized appreciation | | $ | 1,670,193 | | | $ | 1,215,250 | | | | | | | | | |
Unrealized depreciation | | | (7,884,471 | ) | | | (2,650,042 | ) | | | | | | | | |
| | | | | | | | | | | | |
Net unrealized appreciation (depreciation) | | $ | (6,214,278 | ) | | $ | (1,434,792 | ) | | | | | | | | |
| | | | | | | | | | | | |
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.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin Emerging
Market Core
Dividend Tilt
Index ETF | | | Franklin
International
Core Dividend Tilt
Index ETF | | | Franklin U.S.
Core Dividend Tilt
Index ETF | | | Franklin U.S. Large
Cap Multifactor
Index ETF | |
Purchases | | $ | 12,258,647 | | | $ | 21,499,564 | | | $ | 40,944,528 | | | $ | 269,715,651 | |
Sales | | $ | 12,274,668 | | | $ | 20,570,186 | | | $ | 39,783,651 | | | $ | 268,312,676 | |
| | | | |
| | | Franklin U.S. Mid
Cap Multifactor
Index ETF | | | Franklin U.S.
Small Cap
Multifactor Index
ETF | | | | | | | |
Purchases | | $ | 10,736,433 | | | $ | 3,028,222 | | | | | | | | | |
Sales | | $ | 9,877,089 | | | $ | 2,955,607 | | | | | | | | | |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin Emerging
Market Core
Dividend Tilt
Index ETF | | | Franklin
International
Core Dividend Tilt
Index ETF | | | Franklin U.S.
Core Dividend Tilt
Index ETF | | | Franklin U.S. Large
Cap Multifactor
Index ETF | |
Cost of Securities Received | | $ | — | | | $ | 18,957,209 | | | $ | 20,397,845 | | | $ | 236,962,654 | |
Value of Securities Delivereda | | $ | — | | | $ | — | | | $ | 1,678,685 | | | $ | 153,434,712 | |
| | | | |
| | | Franklin U.S. Mid
Cap Multifactor
Index ETF | | | Franklin U.S.
Small Cap
Multifactor
Index ETF | | | | | | | |
Cost of Securities Received | | $ | 23,263,208 | | | $ | — | | | | | | | | | |
Value of Securities Delivereda | | $ | 7,940,987 | | | $ | — | | | | | | | | | |
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 September 30, 2022, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
| | | | | | | | |
| | |
| | | Franklin U.S. Mid
Cap Multifactor
Index ETF | | | Franklin U.S.
Small Cap
Multifactor
Index ETF | |
| Securities lending transactionsa: | | | | | | |
Equity Investmentsb | | $ | 23,000 | | | $ | 20,560 | |
| | | | |
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.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 Funds’ 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 Funds’ 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.
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 September 30, 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 Emerging Market Core
Dividend Tilt Index ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 9,794 | a |
| | | | | | | | | | | | |
| | | | |
Franklin International Core
Dividend Tilt Index ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 921 | a |
| | | | | | | | | | | | |
| | | | |
Franklin U.S. Core Dividend Tilt
Index ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 10,481 | a |
| | | | | | | | | | | | |
| | | | |
Franklin U.S. Large Cap
Multifactor Index ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 86,762 | a |
| | | | | | | | | | | | |
aThis amount reflects the cumulative appreciation (depreciation) of future contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at year end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
| | | | | | | | | | |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
For the period ended September 30, 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 Emerging Market Core
Dividend Tilt Index ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (13,452 | ) | | Futures contracts | | $ | (12,630 | ) |
| | | | | | | | | | | | |
| | | | |
Franklin International Core
Dividend Tilt Index ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Foreign exchange contracts | | Forward exchange contracts | | $ | 1,681,625 | | | Forward exchange contracts | | $ | (252,393 | ) |
| | | | |
Equity contracts | | Futures contracts | | | (3,714 | ) | | Futures contracts | | | (7,989 | ) |
| | | | | | | | | | | | |
Totals | | | | $ | 1,677,911 | | | | | $ | (260,382 | ) |
| | | | | | | | | | | | |
| | | | |
Franklin U.S. Core Dividend Tilt
Index ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (20,209 | ) | | Futures contracts | | $ | (20,514 | ) |
| | | | | | | | | | | | |
| | | | |
Franklin U.S. Large Cap
Multifactor Index ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (221,299 | ) | | Futures contracts | | $ | (157,353 | ) |
| | | | | | | | | | | | |
| | | | |
Franklin U.S. Mid Cap Multifactor
Index ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | 536 | | | Futures contracts | | $ | — | |
| | | | | | | | | | | | |
| | | | |
Franklin U.S. Small Cap
Multifactor Index ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (888 | ) | | Futures contracts | | $ | — | |
| | | | | | | | | | | | |
For the period ended September 30, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Emerging Market
Core Dividend
Tilt Index ETF | | | Franklin
International
Core Dividend Tilt
Index ETF | | | Franklin U.S. Core
Dividend
Tilt Index ETF | | | Franklin
U.S. Large Cap
Multifactor
Index ETF | |
Futures contracts | | $ | 150,737 | | | $ | 139,168 | | | $ | 140,895 | | | $ | 1,173,220 | |
Forward exchange contracts | | $ | — | | | $ | 53,805,889 | | | $ | — | | | $ | — | |
| | | | | | | | | | |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 2022, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin Emerging Market Core Dividend Tilt Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 12,352,391 | | | $ | — | | | $ | —c | | | $ | 12,352,391 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 9,794 | | | $ | — | | | $ | — | | | $ | 9,794 | |
| | | | |
| | | | |
| Franklin International Core Dividend Tilt Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 31,110,179 | | | $ | — | | | $ | — | | | $ | 31,110,179 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 921 | | | $ | — | | | $ | — | | | $ | 921 | |
| | | | |
| | | | |
| Franklin U.S. Core Dividend Tilt Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 41,186,653 | | | $ | — | | | $ | —c | | | $ | 41,186,653 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 10,481 | | | $ | — | | | $ | — | | | $ | 10,481 | |
| | | | |
| | | | |
| Franklin U.S. Large Cap Multifactor Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 861,797,955 | | | $ | — | | | $ | — | | | $ | 861,797,955 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 86,762 | | | $ | — | | | $ | — | | | $ | 86,762 | |
| | | | |
| | | | |
| Franklin U.S. Mid Cap Multifactor Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 65,984,021 | | | $ | — | | | $ | — | | | $ | 65,984,021 | |
Short-Term Investments | | | 23,000 | | | | — | | | | — | | | | 23,000 | |
| | | | |
Total Investments in Securities | | $ | 66,007,021 | | | $ | — | | | $ | — | | | $ | 66,007,021 | |
| | | | |
| | | | | | | | | | |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin U.S. Small Cap Multifactor Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 13,472,445 | | | $ | — | | | $ | — | | | $ | 13,472,445 | |
Short-Term Investments | | | 20,560 | | | | — | | | | — | | | | 20,560 | |
| | | | |
Total Investments in Securities | | $ | 13,493,005 | | | $ | — | | | $ | — | | | $ | 13,493,005 | |
| | | | |
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at September 30, 2022.
10. 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.
Abbreviations
| | |
| Selected Portfolio |
| ADR | | American Depositary Receipt |
| GDR | | Global Depositary Receipt |
| NVDR | | Non-Voting Depositary Receipt |
| REIT | | Real Estate Investment Trust |
| | | | | | | | | | |
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Shareholder Information
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Emerging Market Core Dividend Tilt Index ETF
(formerly Franklin LibertyQ Emerging Markets ETF)
Franklin U.S. Core Dividend Tilt Index ETF
(formerly Franklin LibertyQ Global Dividend ETF)
Franklin International Core Dividend Tilt Index ETF (formerly Franklin LibertyQ International Equity Hedged ETF)
Franklin U.S. Large Cap Multifactor Index ETF (formerly Franklin LibertyQ U.S. Equity ETF)
Franklin U.S. Mid Cap Multifactor Index ETF (formerly Franklin LibertyQ U.S. Mid Cap Equity ETF)
Franklin U.S. Small Cap Multifactor Index ETF (formerly Franklin LibertyQ U.S. Small Cap Equity ETF)
(each a Fund)
At a meeting held on May 25, 2022 (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 the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the 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.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a virtual contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract
renewal matters and, subsequently, requested additional information from management that the Independent Trustees reviewed and considered at the Meeting. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of each Fund, as well as each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such 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 provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board acknowledged the ongoing integration of the Legg Mason family of funds into the Franklin Templeton (FT) family of funds, and developing strategies to address areas of heightened concern in the registered fund industry, including various regulatory initiatives and recent geopolitical concerns.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent,
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and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to being a global leader in stewardship and sustainability and the recent addition of a senior executive focused on environmental, social and governance and climate control initiatives.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for various time periods ended February 28, 2022. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with management about the performance of the Funds to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding management’s strategy behind the overall product line up, the sources of asset growth, the nature of management’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted management’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin Emerging Market Core Dividend Tilt Index ETF and Franklin International Core Dividend Tilt Index ETF (The information and data included below for these two Funds is with respect to the Funds’ names, investment goals and strategies prior to the August 1, 2022 Fund Repositioning (as defined below)) – The Performance Universe for the Franklin Emerging Market Core Dividend Tilt Index ETF included the Fund and all retail and institutional emerging markets funds
and exchange-traded funds. The Performance Universe for the Franklin International Core Dividend Tilt Index ETF included the Fund and all retail and institutional international multi-cap growth funds and exchange-traded funds. The Funds commenced operations on June 1, 2016, and thus have been in operation for less than 10 years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians and in the first quintile (best) of their respective Performance Universes, but for the three- and five-year periods were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board also noted that for the one-year period ended February 28, 2022, the Franklin International Core Dividend Tilt Index ETF’s tracking error was within the tolerance anticipated for the Fund, but the Franklin Emerging Market Core Dividend Tilt Index ETF’s tracking error exceeded the tolerance anticipated for the Fund by 21.7 basis points due, in part, to fees and capital gain tax accrual from holding Indian equities. The Board further considered and approved for each Fund management’s proposal to change the Fund’s name, ticker, underlying index, investment universe, investment goal and investment strategies and make related changes, effective August 1, 2022 (Fund Repositioning). The Board noted management’s representation that each Fund would be repositioned as a dividend tilt/yield enhanced index-based ETF with the Franklin Emerging Market Core Dividend Tilt Index ETF investing in emerging market stocks and the Franklin International Core Dividend Tilt Index ETF investing in developed market (ex-North America) stocks. The Board concluded that the Funds’ performance was satisfactory.
Franklin U.S. Core Dividend Tilt Index ETF (The information and data included below for the Fund is with respect to the Fund’s name, investment goal and strategies prior to the August 1, 2022 Fund Repositioning – The Performance Universe for the Fund included the Fund and all retail and institutional global equity income funds and exchange-traded funds. The Fund commenced operations on June 1, 2016, and thus has been in operation for less than 10 years. The Board noted that the Fund’s annualized total return for the one-, three- and five-year periods was above the median of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 28, 2022, the Fund’s tracking error was within the tolerance anticipated
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for the Fund. The Board further considered and approved implementing the Fund Repositioning for the Fund, noting management’s representation that the Fund would be repositioned as a dividend tilt/yield enhanced index-based ETF investing in large- and mid-capitalization US stocks. The Board concluded that the Fund’s performance was satisfactory.
Franklin U.S. Large Cap Multifactor Index ETF and Franklin U.S. Mid Cap Multifactor Index ETF – The Performance Universe for the Franklin U.S. Large Cap Multifactor Index ETF included the Fund and all retail and institutional multi-cap core funds and exchange-traded funds. The Performance Universe for the Franklin U.S. Mid Cap Multifactor Index ETF included the Fund and all retail and institutional mid-cap growth funds and exchange-traded funds. The Funds commenced operations on April 26, 2017, and thus have been in operation for less than five years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes, but for the three-year period were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board noted that for the one-year period ended February 28, 2022, the Funds’ tracking errors were within the tolerance anticipated for the Funds. The Board concluded that the Funds’ performance was satisfactory.
Franklin U.S. Small Cap Multifactor Index ETF – The Performance Universe for the Fund included the Fund and all retail and institutional small-cap core funds and exchange-traded funds. The Fund commenced operations on April 26, 2017, and thus has been in operation for less than five years. The Board noted that the Fund’s annualized total return for the one- and three-year periods was below the median of its Performance Universe. The Board discussed the Fund’s performance with management and management explained that the quality and low volatility factors have heavily detracted from the Fund’s returns. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board also noted that for the one-year period ended February 28, 2022, the Fund’s tracking error was within the tolerance anticipated for the Fund. The Board further noted that, although below the median of its Performance Universe, the Fund’s annualized total return for the one- and three-year periods was positive, exceeding 10.00% in the three-year period.
Based on the foregoing, the Board concluded that the Fund’s performance was acceptable.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio, noting that each Fund pays a Unified Fee (as defined below). The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual or semi-annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Emerging Market Core Dividend Tilt Index ETF and Franklin International Core Dividend Tilt Index ETF – The Expense Group for the Franklin Emerging Market Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and ten other emerging markets funds. The Expense Group for the Franklin International Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and six other international multi-cap growth funds. The Board noted that the Management Rates and actual total expense ratios for the Funds were equal to the medians of their respective Expense Groups. The Board further noted that the Funds have a unified management fee (Unified Fee) and that pursuant to the Unified Fee arrangement the Manager reimburses each Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of each Fund, except for (i) the Fund’s Unified Fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses, (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
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may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (Unified Fee Arrangement). The Board also considered and approved management’s proposed reduction in the Franklin Emerging Market Core Dividend Tilt Index ETF’s Management Rate from 0.45% to 0.19% and proposed reduction in the Franklin International Core Dividend Tilt Index ETF’s Management Rate from 0.40% to 0.09% in connection with the Fund Repositioning. The Board concluded that the Management Rates charged to Funds are reasonable.
Franklin U.S. Core Dividend Tilt Index ETF, Franklin U.S. Large Cap Multifactor Index ETF and Franklin U.S. Mid Cap Multifactor Index ETF – The Expense Group for the Franklin U.S. Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and six other global equity income funds. The Expense Group for the Franklin U.S. Large Cap Multifactor Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and 13 other multi-cap core funds. The Expense Group for the Franklin U.S. Mid Cap Multifactor Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and five other mid-cap growth funds. The Board noted that the Management Rates and actual total expense ratios for Funds were below the medians of their respective Expense Groups. The Board further noted that the Funds have a Unified Fee and the terms of the Unified Fee Arrangement. The Board further considered and approved management’s proposed reduction in the Franklin U.S. Core Dividend Tilt Index ETF’s Management Rate from 0.45% to 0.06% in connection with the Fund Repositioning. The Board concluded that the Management Rates charged to the Funds are reasonable.
Franklin U.S. Small Cap Multifactor Index ETF – The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund and 13 other small-cap core funds. The Board noted that the Management Rate for the Fund was below the median of its Expense Group, and that the actual total expense ratio for the Fund was equal to the median of its Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the
overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2021, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures but, over the long run, is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual
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requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board also considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that, as of December 31, 2021, each Fund (except for the Franklin U.S. Large Cap Multifactor Index ETF) had net assets below $58 million. The Board also noted management’s representation that, while the Franklin U.S. Large Cap Multifactor Index ETF had net assets of approximately $1 billion as of December 31, 2021, none of the Funds experienced a profit for the fiscal year ended September 30, 2021. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
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 the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program –In-Kind ETFs
Franklin International Core Dividend Tilt Index ETF
Franklin U.S. Large Cap Multifactor Index ETF
Franklin U.S. Mid Cap Multifactor Index ETF
Franklin U.S. Small Cap Multifactor Index ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the
Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Liquidity Risk Management Program –Non-In-Kind ETFs
Franklin Emerging Market Core Dividend Tilt Index ETF
Franklin U.S. Core Dividend Tilt Index ETF
Each Fund has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP for the Franklin Templeton and Legg Mason Funds is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for Franklin Templeton and Legg Mason products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable
stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
Each Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
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.
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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.
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 | | Semiannual Report Franklin Templeton ETF Trust | | |
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| | 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 Trust Company 1 Heritage Drive Mail Stop OHD0100 North Quincy, MA 02171 |
| © 2022 Franklin Templeton Investments. All rights reserved. | | | | ETF S 11/22 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2022
|
Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
Franklin High Yield Corporate ETF Formerly, Franklin Liberty High Yield Corporate ETF |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF Formerly, Franklin Liberty International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
Formerly Franklin Liberty Investment Grade Corporate ETF |
Franklin Municipal Green Bond ETF |
|
Franklin Senior Loan ETF Formerly Franklin Liberty Senior Loan ETF |
Franklin Systematic Style Premia ETF Formerly Franklin Liberty Systematic Style Premia ETF |
Franklin U.S. Core Bond ETF Formerly Franklin Liberty U.S. Core Bond ETF |
Franklin U.S. Low Volatility ETF Formerly Franklin Liberty U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF Formerly Franklin Liberty U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF Formerly Franklin Liberty Ultra Short Bond ETF |
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| Not FDIC Insured | | | | | May Lose Value | | | | | No Bank Guarantee |
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools.
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SEMIANNUAL REPORT
Franklin Disruptive Commerce ETF
This semiannual report for Franklin Disruptive Commerce ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -33.97% based on market price and -33.90% 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 -20.42% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index, posted a -20.20% total return for the six months ended September 30, 2022.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices, particularly as the period progressed. Although
consumer spending continued to rise, deteriorating financial conditions negatively impacted consumer sentiment, which improved slightly at the end of the period after falling in June 2022 to the lowest level in over 60 years.
Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
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 90.
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FRANKLIN DISRUPTIVE COMMERCE ETF
| | | | |
| Porfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Internet & Direct Marketing Retail | | | 24.7% | |
| IT Services | | | 18.3% | |
| Software | | | 9.2% | |
| Trading Companies & Distributors | | | 8.3% | |
| Hotels, Restaurants & Leisure | | | 6.1% | |
| Food & Staples Retailing | | | 5.3% | |
| Road & Rail | | | 4.8% | |
| Interactive Media & Services | | | 3.7% | |
| Professional Services | | | 3.6% | |
| Commercial Services & Supplies | | | 3.3% | |
| Equity Real Estate Investment Trusts (REITs) | | | 2.8% | |
| Entertainment | | | 2.3% | |
| Containers & Packaging | | | 2.2% | |
| Other | | | 3.2% | |
| Other Net Assets | | | 2.2% | |
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Amazon.com Inc.
Internet & Direct Marketing Retail | | | 10.0% | |
Costco Wholesale Corp.
Hypermarkets & Super Centers | | | 5.3% | |
Fastenal Co.
Trading Companies & Distributors | | | 4.3% | |
Adyen NV
Data Processing & Outsourced Services | | | 4.0% | |
W.W. Grainger Inc.
Trading Companies & Distributors | | | 4.0% | |
Mastercard Inc.
Data Processing & Outsourced Services | | | 3.7% | |
Uber Technologies Inc.
Trucking | | | 3.7% | |
Copart Inc.
Diversified Support Services | | | 3.3% | |
ZoomInfo Technologies Inc.
Interactive Media & Services | | | 3.2% | |
CoStar Group Inc.
Research & Consulting Services | | | 3.1% | |
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 period under review, the portfolio held exposures to nine different equity sectors, all of which produced negative absolute returns. The bulk of the overall decline occurred in the consumer discretionary, information technology (IT), communication services and industrials sectors, which on average comprised about 87% of total net assets. Widespread declines were evident in the consumer discretionary sector, where e-commerce names such as tech giant Amazon.com (focused on e-commerce, cloud computing, online advertising, digital streaming and artificial intelligence), online fashion retailer Revolve Group, food delivery specialist DoorDash and MercadoLibre (Latin America’s largest online marketplace) were standout detractors. Investments in the hotels, restaurants and leisure industry also suffered significant double-digit percentage losses including Airbnb (vacation rental and short-term homestays broker) and Booking Holdings (online travel and related services). Elsewhere in the portfolio, select entertainment industry companies Sea Limited and ROBLOX shed more than half of their equity value. Interactive media and services also fared poorly as all related holdings posted double-digit declines including ZoomInfo Technologies, which provides marketing software and data solutions.
Within IT, all positions in the IT services industry sold off, as did all software industry holdings. Among the top detractors in IT services were Shopify, an e-commerce platform for online stores and retail point-of-sale systems; Dutch e-payment platform provider Adyen; credit card giants Mastercard and Visa; Dlocal (cross-border payments connecting global merchants to emerging markets); and fintech-focused conglomerate Block (formerly Square). In the software space, Bill.com Holdings (cloud-based back-office software) and Unity Software (video game development platform provider) were the worst of nine individual detractors.
Across the entire portfolio, there were only four holdings that aided absolute returns, and their combined contribution was
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FRANKLIN DISRUPTIVE COMMERCE ETF
so small that they had almost no impact on overall performance. The only notable contributor among them was CoStar Group, a leading provider of online real estate marketplaces, information and analytics in the commercial and residential property markets.
Thank you for your participation in Franklin Disruptive Commerce ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Lead Portfolio Manager
Kelly Rogal, CFA
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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.
CFA® is a trademark owned by CFA Institute.
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FRANKLIN DISRUPTIVE COMMERCE ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
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| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -33.90% | | | | -33.97% | | | | -33.90% | | | | -33.97% | |
1-Year | | | -58.25% | | | | -58.21% | | | | -58.25% | | | | -58.21% | |
Since Inception (2/25/20) | | | -17.50% | | | | -17.50% | | | | -7.14% | | | | -7.14% | |
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 Annual Operating Expenses5
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 funds. In addition, if transactional costs were included, your total costs would have been higher.
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| | | | Actual
(actual return after expenses) | | | Hypothetical
(5% annual return before expenses) | | | | |
| | | | | |
Beginning
Account
Value 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 661.00 | | | $ | 2.08 | | | $ | 1,022.56 | | | $ | 2.54 | | | | 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 183/365 to reflect the one-half year period.
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Franklin Dynamic Municipal Bond ETF
This semiannual report for Franklin Dynamic Municipal Bond ETF covers the period ended September 30, 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.1The 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 unrated or short-term rated securities of comparable quality), 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 six-month period, the Fund posted cumulative total returns of -7.10% based on market price and -6.86% based on net asset value (NAV). In comparison, the Bloomberg Municipal 1-15 Year Index, which is a subset of the Bloomberg Municipal Bond Index, posted a -4.09% 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 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.
Municipal Bond Market Overview
During the six months ending September 30, 2022, multi-decade high inflation persisted throughout much of the period as a strong U.S. job market and ample consumer savings
pushed demand beyond the ability of businesses to increase supply. In response, the U.S. Federal Reserve (Fed) continued to raise short-term interest rates at a rapid pace, leading U.S. Treasury (UST) yields to rise sharply.
Recessionary concerns grew as the market lowered its confidence in the Fed’s ability to engineer a soft landing that would bring inflation down without causing a severe economic contraction.
Following one of the worst starts to a new year in 2022, the municipal bond (muni) market continued to perform poorly. High levels of fixed income market volatility, a general risk-off shift in sentiment, and poor performance pushed year-to-date outflows from muni retail vehicles ever higher, leading market technical conditions to further deteriorate. So far this year, net issuance has remained light, lagging well behind historic norms. Fundamentals remained strong, however, with many issuers reporting surpluses for 2022 as federal government transfers bolstered revenues.
For the six-month period, U.S. fixed income sectors performed better relative to equities, as measured by the Standard & Poor’s 500 Index, which posted a -20.20% total return for the period.2 Investment-grade munis, as measured by the Bloomberg Municipal Bond Index, posted a -6.30% total return, and USTs, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return.2 Investment-grade corporate bonds, as measured by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% total return.2
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 93.
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FRANKLIN DYNAMIC MUNICIPAL BOND ETF
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Investments | |
Special Tax | | | 26.61% | |
Industrial Development Revenue and Pollution Control | | | 17.53% | |
Health Care | | | 10.78% | |
Education | | | 8.46% | |
Transportation | | | 7.79% | |
Lease | | | 7.64% | |
Local | | | 6.91% | |
State | | | 6.25% | |
Housing | | | 3.29% | |
Other | | | 2.36% | |
Utilities | | | 2.24% | |
Refunded | | | 0.39% | |
Cash | | | (0.23)% | |
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 invest with a long-term time horizon. This means we generally hold securities in the Fund’s portfolio for income purposes, 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, we 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
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 September 30, 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 DYNAMIC MUNICIPAL BOND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -6.86% | | | | -7.10% | | | | -6.86% | | | | -7.10% | |
1-Year | | | -12.48% | | | | -12.74% | | | | -12.48% | | | | -12.74% | |
5-Year | | | +3.00% | | | | +2.40% | | | | +0.59% | | | | +0.47% | |
Since Inception (8/31/17) | | | +2.55% | | | | +2.31% | | | | +0.50% | | | | +0.45% | |
| | | | | | | | | | | | | | | | |
| | |
| | | 30-Day Standardized Yield6 | | | Taxable Equivalent 30-Day
Standardized Yield7 | |
| Distribution Rate5 | | (with fee waiver) | | | (without fee waiver) | | | (with fee waiver) | | | (without fee waiver) | |
3.51% | | | 3.81% | | | | 3.39% | | | | 6.44% | | | | 5.73% | |
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 11 for Performance Summary footnotes.
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FRANKLIN DYNAMIC MUNICIPAL BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment Income |
$0.322419 |
Total Annual Operating Expenses8
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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. Gross expenses are the Fund’s total annual operating expenses and are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns. Net expenses reflect contractual fee waivers, expense caps and/or reimbursements, which cannot be terminated prior to 7/31/23 without Board consent.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 931.40 | | | $ | 1.45 | | | $ | 1,023.56 | | | $ | 1.52 | | | | 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 183/365 to reflect the one-half year period.
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Franklin Exponential Data ETF
This semiannual report for Franklin Exponential Data ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -30.78% based on market price and -30.68% 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 -20.42% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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, posted a -20.20% total return for the six months ended September 30, 2022.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices, particularly as the period progressed. Although consumer spending continued to rise, deteriorating financial
conditions negatively impacted consumer sentiment, which improved slightly at the end of the period after falling in June 2022 to the lowest level in over 60 years.
Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
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 106.
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FRANKLIN EXPONENTIAL DATA ETF
| | | | |
| Porfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Software | | | 49.0% | |
| IT Services | | | 15.7% | |
| Equity Real Estate Investment Trusts (REITs) | | | 11.7% | |
| Interactive Media & Services | | | 8.2% | |
| Capital Markets | | | 6.3% | |
| Wireless Telecommunication Services | | | 3.3% | |
| Communications Equipment | | | 2.1% | |
| Electronic Equipment, Instruments & Components | | | 2.0% | |
| Other | | | 1.6% | |
| Short-Term Investments & Other Net Assets | | | 0.1% | |
Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Microsoft Corp.
Information Technology | | | 6.2% | |
Datadog Inc., A
Information Technology | | | 5.2% | |
Alphabet Inc., A
Communication Services | | | 5.0% | |
Snowflake Inc., A
Information Technology | | | 4.9% | |
MongoDB Inc.
Information Technology | | | 4.8% | |
Crowdstrike Holdings Inc., A
Information Technology | | | 4.1% | |
Cloudflare Inc., A
Information Technology | | | 4.1% | |
Palo Alto Networks Inc.
Information Technology | | | 4.0% | |
Equinix Inc.
Real Estate | | | 4.0% | |
SBA Communications Corp.
Real Estate | | | 3.9% | |
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 six-month period under review, widespread declines occurred across nearly all sector and industry allocations, and they were most acutely felt in the software and information technology services industries. All related holdings sold off, including key detractors such as MongoDB, a documentation database tool that helps queries work flexibly; cloud-based network performance and security specialist Cloudflare; and Datadog, which provides a data analytics and observability services to cloud-scale operations and applications.
Among communication services sector stocks, Google parent company Alphabet, and ZoomInfo Technologies, which provides marketing software and data solutions, sustained significant losses in the interactive media and services industry. To a lesser extent, the Fund also posted double-digit percentage declines in four smaller sector allocations: real estate (anchored by Crown Castle International, a real estate investment trust for shared communications infrastructure), financials (where financial information and analytics provider S&P Global was the worst of four detractors), health care (featuring a sharp selloff in glucose monitoring system maker DexCom), and industrials (where consumer credit reporting agency TransUnion was the sole investment).
Turning to contributors, only three individual stocks added to absolute returns, and their combined impact was nearly inconsequential given the magnitude of declines elsewhere in the portfolio. These minor outliers to the upside were wireless communication services provider T-Mobile US, electronics test and measurement equipment and software maker Keysight Technologies, and online gaming and game creation platform ROBLOX (bought and sold during the period).
Thank you for your participation in Franklin Exponential Data ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Lead Portfolio Manager
Kelly Rogal, CFA
Portfolio Manager
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FRANKLIN EXPONENTIAL DATA ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 EXPONENTIAL DATA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -30.68% | | | | -30.78% | | | | -30.68% | | | | -30.78% | |
1-Year | | | -41.86% | | | | -41.91% | | | | -41.86% | | | | -41.91% | |
Since Inception (1/12/21) | | | -36.84% | | | | -36.84% | | | | -23.50% | | | | -23.50% | |
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 17 for Performance Summary footnotes.
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FRANKLIN EXPONENTIAL DATA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period 4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period 4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 693.20 | | | $ | 2.08 | | | $ | 1,022.61 | | | $ | 2.48 | | | | 0.49 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin Genomic Advancements ETF
This semiannual report for Franklin Genomic Advancements ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -19.66% based on market price and -19.78% 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 -20.42% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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, posted a -20.20% total return for the six months ended September 30, 2022.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices, particularly as the period progressed. Although consumer spending continued to rise, deteriorating financial
conditions negatively impacted consumer sentiment, which improved slightly at the end of the period after falling in June 2022 to the lowest level in over 60 years.
Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
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 108.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
| | | | |
| Porfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Life Sciences Tools & Services | | | 43.3% | |
| Biotechnology | | | 33.0% | |
| Pharmaceuticals | | | 6.8% | |
| Health Care Providers & Services | | | 5.1% | |
| Health Care Equipment & Supplies | | | 3.6% | |
| Chemicals | | | 3.5% | |
| Other | | | 3.7% | |
| Other Net Assets | | | 1.0% | |
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Repligen Corp.
Life Sciences Tools & Services | | | 6.3% | |
Danaher Corp.
Health Care Equipment | | | 6.0% | |
Thermo Fisher Scientific Inc.
Life Sciences Tools & Services | | | 6.0% | |
Sartorius AG, 0.35%
Health Care Equipment | | | 3.6% | |
Medpace Holdings Inc.
Life Sciences Tools & Services | | | 3.4% | |
Vertex Pharmaceuticals Inc.
Biotechnology | | | 3.4% | |
Regeneron Pharmaceuticals Inc.
Biotechnology | | | 3.3% | |
Samsung Biologics Co. Ltd.
Life Sciences Tools & Services | | | 3.1% | |
Guardant Health Inc.
Health Care Services | | | 3.0% | |
Corteva Inc.
Fertilizers & Agricultural Chemicals | | | 3.0% | |
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 six-month period under review, all of the Fund’s core areas of investment—life sciences tools and services, biotechnology and pharmaceuticals—experienced nearly across-the-board absolute declines under bear market conditions. Some of our larger positions in the life sciences tools and services industry had a disproportionately negative impact on returns including Lonza Group, a contract manufacturer for the pharmaceuticals industry; Avantor, a chemicals and materials company that supplies the life sciences, advanced technologies and applied materials industries; Thermo Fisher Scientific, which makes analytical laboratory instruments and bioprocessing tools; and Charles River Laboratories International, which specializes in outsourced preclinical research for the biopharma industry. Within the biotechnology industry, our sizable positions in mRNA vaccine developer Moderna, and Intellia Therapeutics, which develops therapeutics using a CRISPR gene editing system, were at the top of an extensive list of detractors, while Catalent (global provider of outsourced drug development and drug manufacturing) and biopharma-ceutical giant AstraZeneca were the standout detractors in the pharmaceuticals industry.
In the information technology sector, shares of semiconductor chipmaker NVIDIA lost more than half of their value, and we eventually liquidated this holding before the end of September. To a lesser extent, returns were also negative across most of our smaller industry allocations including health care-focused real estate investments trusts, where Alexandria Real Estate Equities was the sole position; health care services; health care technology; fertilizers and agricultural chemicals; and health care equipment (not held at period-end). When combined, these holdings comprised about 11% of total net assets at the end of September.
Turning to contributors, only a few individual stocks were spared during the prolonged selloff that characterized most of the April–September period. Among the outliers to the upside were Vertex Pharmaceuticals, which develops and markets drugs for cystic fibrosis and gene-editing drugs for blood diseases, and Eli Lilly, a multinational pharma. Avid Biosciences, a pure biologics contract development and manufacturing organization, and a handful of other stocks were also net contributors, but their combined positive impact was nearly insignificant given the magnitude of the declines across the rest of the portfolio.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
Thank you for your participation in Franklin Genomic Advancements ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA Lead Portfolio Manager
Kelly Rogal, CFA Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 GENOMIC ADVANCEMENTS ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -19.78% | | | | -19.66% | | | | -19.78% | | | | -19.66% | |
1-Year | | | -43.08% | | | | -43.17% | | | | -43.08% | | | | -43.17% | |
Since Inception (2/25/20) | | | +19.16% | | | | +19.08% | | | | +6.98% | | | | +6.95% | |
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 23 for Performance Summary footnotes.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 23 |
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 802.20 | | | $ | 2.26 | | | $ | 1,022.56 | | | $ | 2.54 | | | | 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 183/365 to reflect the one-half year period.
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Franklin High Yield Corporate ETF
Formerly, Franklin Liberty High Yield Corporate ETF
This semiannual report for Franklin High Yield Corporate ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -10.43% based on market price and -10.27% 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 -10.59% cumulative total return for the same period.1You 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -9.22% total return for the six months ended September 30, 2022.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.1 The 10- year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over adecade.1
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% total return.1
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Corporate Bonds & Notes | | | 89.0% | |
| Senior Floating Rate Interests | | | 4.2% | |
| Short-Term Investments & Other Net Assets | | | 6.8% | |
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 112.
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FRANKLIN HIGH YIELD CORPORATE ETF
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Energy | | | 17.8% | |
| Media & Entertainment | | | 12.5% | |
| Materials | | | 11.0% | |
| Commercial & Professional Services | | | 6.7% | |
| Diversified Financials | | | 5.7% | |
| Utilities | | | 5.6% | |
| Consumer Services | | | 4.2% | |
| Automobiles & Components | | | 3.5% | |
| Health Care Equipment & Services | | | 3.3% | |
| Capital Goods | | | 3.2% | |
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.
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry | | % of Total
Net Assets | |
| Federal Home Loan Bank Discount Notes, 10/03/22 | | | 5.5% | |
TransDigm Inc., 144A, 6.25%, 3/15/26
Capital Goods | | | 1.2% | |
| Vistra Operations Co. LLC, 144A, 5.50%, 9/01/26 Utilities | | | 1.1% | |
Harbour Energy PLC, 144A, 5.50%, 10/15/26
Energy | | | 1.1% | |
InterGen NV, 144A, 7.00%, 6/30/23
Utilities | | | 1.1% | |
CSC Holdings LLC, 144A, 7.50%, 4/01/28
Media & Entertainment | | | 1.1% | |
United Rentals North America Inc., 5.50%, 5/15/27
Commercial Services | | | 1.1% | |
American Airlines Inc/AAdvantage Loyalty IP Ltd., 144A, 5.50%, 4/20/26
Airlines | | | 1.1% | |
| Banijay Entertainment SASU, 144A, 5.375%, 3/01/25 Media & Entertainment | | | 1.0% | |
DaVita Inc., 144A, 4.625%, 6/01/30
Health Care Equipment & Services | | | 1.0% | |
Manager’s Discussion
Since the beginning of 2022, escalating geopolitical risks around the Russia-Ukraine war, combined with fears that the Fed’s aggressive interest-rate stance could push the economy into a recession, have resulted in persistent volatility. As spreads widened and U.S. Treasury yields increased, the high yield (HY) asset class experienced negative returns. Despite the fundamental challenges, it is worth noting that HY credit fundamentals are entering this turbulent period from a position of strength, with healthy net leverage and robust interest coverage as readily accessible capital markets in the past several years enabled most issuers to build up liquidity reserves. With the Fed actively seeking to slow the economy to combat inflation, we continue to be cautious of issuers or industries that are facing secular declines or heightened competitive pressures, as well as companies with minimal cash flow generation relative to their debt obligations.
Based on benchmark index data, HY spreads generally widened during the six-month period under review. Most segments of the HY market posted negative absolute returns for the performance period under review. CCC rated bonds returned -14.18%, compared to returns of -11.19% and -9.40% for B and BB rated segments, respectively. From an industry standpoint, energy stood out as a key performer, followed by metals/minerals.
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FRANKLIN HIGH YIELD CORPORATE ETF
The Fund’s yield-curve positioning contributed to performance during the six-month period under review. Conversely, the Fund’s ratings quality hindered results.
The Fund’s industry allocation contributed to relative performance for the period, led by overweight positions in the energy and utility industries and underweight positions in the health care segment. Conversely, underweighted positions in the food and beverage, aerospace and defense, and restaurant industries hindered 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 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 September 30, 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 HIGH YIELD CORPORATE ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -10.27% | | | | -10.43% | | | | -10.27% | | | | -10.43% | |
1-Year | | | -13.92% | | | | -14.27% | | | | -13.92% | | | | -14.27% | |
3-Year | | | -1.00% | | | | -1.83% | | | | -0.33% | | | | -0.61% | |
Since Inception (5/30/18) | | | +10.70% | | | | +10.23% | | | | +2.37% | | | | +2.27% | |
| | | | | | |
| Distribution Rate5 | | 30-Day
Standardized Yield6 | |
8.03% | | | | | 7.54% | |
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 29 for Performance Summary footnotes.
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FRANKLIN HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.729443 |
Total Annual Operating Expenses7
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. 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 invasionof 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN 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 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 897.30 | | | $ | 1.90 | | | $ | 1,023.06 | | | $ | 2.03 | | | | 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 183/365 to reflect the one-half year period.
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Franklin Intelligent Machines ETF
This semiannual report for Franklin Intelligent Machines ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -26.88% based on market price and -26.95% 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 -20.42% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s 500 Index, posted a -20.20% total return for the six months ended September 30, 2022.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices, particularly as the period progressed. Although consumer spending continued to rise, deteriorating financial conditions negatively impacted consumer sentiment, which
improved slightly at the end of the period after falling in June 2022 to the lowest level in over 60 years.
Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
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 119.
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FRANKLIN INTELLIGENT MACHINES ETF
| | | | |
| Porfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Semiconductors & Semiconductor Equipment | | | 32.8% | |
Software | | | 23.9% | |
Health Care Equipment & Supplies | | | 10.5% | |
Electronic Equipment, Instruments & Components | | | 8.8% | |
Automobiles | | | 7.7% | |
Computers & Peripherals | | | 5.0% | |
Construction & Engineering | | | 3.1% | |
Industrial Conglomerates | | | 2.2% | |
Aerospace & Defense | | | 2.1% | |
Other | | | 3.9% | |
Other Net Assets | | | 0.0% | |
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry | | % of Total
Net Assets | |
Tesla Inc. Automobile Manufacturers | | | 7.7% | |
Apple Inc. Technology Hardware, Storage & Peripherals | | | 5.0% | |
Cadence Design Systems Inc. Application Software | | | 4.3% | |
Synopsys Inc. Application Software | | | 4.3% | |
NVIDIA Corp. Semiconductors | | | 4.1% | |
Intuitive Surgical Inc. Health Care Equipment | | | 3.9% | |
ASML Holding NV Semiconductor Equipment | | | 3.9% | |
Enphase Energy Inc. Semiconductor Equipment | | | 3.8% | |
Descartes Systems Group Inc. Application Software | | | 3.1% | |
Keyence Corp. Electronic Equipment & Instruments | | | 3.0% | |
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 six-month period under review, the Fund was invested in 16 different industries, all of which produced negative absolute returns. The largest industry-level detractors were semiconductor and semiconductor equipment companies such as NVIDIA, ASML Holding, Taiwan Semiconductor Manufacturing, Entegris, Applied Materials and SiTime, all of which posted steep, double-digit percentage declines. Elsewhere in the information technology (IT) sector, all software industry holdings traded lower including key detractors Dassault Systèmes (3D product design, simulation and manufacturing software) and Atlassian (collaborative and quality-control software for software developers). The Fund’s smaller IT-related industry allocations also experienced across-the-board declines in every stock position, including standout detractors Keyence (electronics test and measurement equipment/software) and Zebra Technologies (mobile computing specialist focused on barcode printers and barcode scanners) in the electronic equipment, instruments and components industry; and Apple in the technology hardware, storage and peripherals industry.
Health care holdings collectively posted the largest overall decline among the Fund’s sector allocations as all related investments traded lower. Health care equipment and supplies companies were a notable area of weakness as Intuitive Surgical (robotic surgery systems), DexCom (next-generation glucose monitoring systems), IDEXX Laboratories (advanced diagnostic products and services for the veterinary and livestock markets) fared poorly along with six other, lesser industry detractors.
Elsewhere in the portfolio, electric vehicle (EV) manufacturer Tesla was a major detractor in the consumer discretionary sector, while Axon Enterprise, which designs and manufactures non-lethal weapons primarily for law enforcement, was the worst of 10 detractors in the industrials sector.
Turning to contributors, only four individual stocks added to absolute returns, and their combined impact was small given the magnitude of declines elsewhere in the portfolio. The most notable outlier to the upside was Enphase Energy,
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FRANKLIN INTELLIGENT MACHINES ETF
which has seen robust demand for its residential solar micro-inverters. To a much lesser extent, incremental contributions were seen in electronic design automation software specialist Cadence Design Systems; Valmont Industries, which manufactures irrigation equipment, windmill support structures, and utility poles; and Keysight Technologies, which makes electronics testing and measurement equipment.
Thank you for your continued participation in Franklin Intelligent Machines ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Lead Portfolio Manager
Kelly Rogal, CFA
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 INTELLIGENT MACHINES ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -26.95% | | | | -26.88% | | | | -26.95% | | | | -26.88% | |
1-Year | | | -30.09% | | | | -30.32% | | | | -30.09% | | | | -30.32% | |
Since Inception (2/25/20) | | | +35.53% | | | | +35.17% | | | | +12.42% | | | | +12.30% | |
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 35 for Performance Summary footnotes.
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FRANKLIN INTELLIGENT MACHINES ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses Paid During
Period 4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses Paid During
Period 4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 730.50 | | | $ | 2.17 | | | $ | 1,022.56 | | | $ | 2.54 | | | | 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 183/365 to reflect the one-half year period.
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Franklin International Aggregate Bond ETF
Formerly, Franklin Liberty International Aggregate Bond ETF
This semiannual report for Franklin International Aggregate Bond ETF covers the period ended September 30, 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.
| | | | |
| Geographic Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Europe | | | 41.0% | |
Asia | | | 27.0% | |
North America | | | 7.9% | |
Supranationals | | | 2.3% | |
Australia & New Zealand | | | 2.2% | |
Middle East & Africa | | | 0.9% | |
Latin America & Caribbean | | | 0.1% | |
Short-Term Investments & Other Net Assets | | | 18.6% | |
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -3.99% based on market price and -3.71% 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 -6.13% cumulative total return. 1You can find more of the Fund’s performance data in the Performance Summary beginning on page 40.
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 six-month review period.
After rising steadily in the first quarter of 2022, U.S. inflation maintained its upward trend over the second quarter. Concerns over rising price levels prompted the U.S. Federal Reserve (Fed) to raise its base rate by 50 basis points (bps) in early May, stoking expectations of aggressive rate tightening to come. With U.S. inflation showing no signs of slowing, reaching 8.6% (year-on-year) in May due to the rapidly increasing cost of housing, energy and food, the central bank then raised rates again in June, this time by an unexpected 75 bps, the largest increase since 1994. Overall, U.S. economic data released in the second quarter was lackluster; U.S. gross domestic product (GDP) for the first quarter of 2022 was revised down slightly. Consumer spending waned and sentiment fell significantly. Industrial production and surveys of business sentiment also finished the second quarter lower.
In July, a further acceleration in U.S. inflation persuaded the Fed to raise rates by a further 75 bps. The combination of rising prices and higher interest rates affected the broader U.S. economy; consumer sentiment remained depressed and industrial production for June was down. Business sentiment also turned negative, while the housing market continued to cool. On the contrary, the U.S. job market showed signs of strength in June. In August, investors remained concerned that, despite the slowdown in economic growth, the Fed would continue hiking interest rates. A subsequent hawkish Jackson Hole address from Fed Chair Jerome Powell confirmed this position. Surprisingly, inflation fell slightly in July, helping to precipitate an improvement in U.S. consumer sentiment reading. Labor market figures were also notably robust. However, weak data from China, and discouraging news on energy prices and supplies, with the consequent impact on Europe, accompanied a deterioration in investor sentiment. In September, with core inflation rising by 6.3% (year-on-year) in August, up from 5.9% in July, the Fed raised the federal funds rate by another 75 bps. It also updated its 2023 economic projections, revising growth down to 1.2%, and unemployment and core inflation up to 4.4% and 3.1%, respectively.
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 122 .
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FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
Against this backdrop, benchmark 10-year U.S. Treasury yields increased in April, although they fell a little in May. Having peaked close to 3.5% in mid-June, in the wake of the inflation data and subsequent Fed hike, they ended the second quarter below 3% as concerns grew about a potential recession, and then declined in July by more than 35 bps, despite the hike in the U.S. federal funds rate. Following hawkish comments from Fed policymakers, yields then rebounded sharply in August and September, with two-and five-year U.S. Treasury yields moving above 4% by the end of the period under review.
In Europe, data released in April underlined that while the European Central Bank (ECB) would ultimately be forced to raise rates, it would have to balance slowing growth against rising prices. Indeed, the energy crisis saw eurozone inflation reach 8.1% year-on-year in May. This increased pressure on the ECB to increase the cost of borrowing, although the central bank revised its forecast for 2022 eurozone growth down from 4.2% to 2.9%. The ECB bolstered its increasingly hawkish positioning in June by committing to raise interest rates by 25 bps at its July meeting, followed by a gradual and sustained increase in rates as appropriate. The move was prompted by surging energy prices, which saw eurozone inflation reach 8.6% (year-on-year) in June.
In fact, with inflation rising to 8.9% (year-on-year) in July, the ECB raised rates by 50 bps during the month, while also unveiling its new tools designed to ensure the effective transmission of monetary policy to all member states via sovereign debt purchases. Purchasing managers’ index data showed that the eurozone economy contracted in July, with both output and new orders falling for the first time since early 2021. Meanwhile, the ECB Survey of Professional Forecasters, released in July, raised inflation projections to 3.6% for 2023, but revised eurozone growth down to 1.5%. Eurozone inflation then reached 9.1% (year-on-year) in August. Although economic growth continued to slow in the region, the inflation data strengthened the case for the ECB to raise rates further at its next meeting. Indeed, in September, an increasingly hawkish central bank hiked its base rate by 75 bps. At the same time, economic growth for 2023 was also revised down to 0.9%, emphasizing the difficult path the ECB must tread on monetary policy.
In European fixed income markets, given the hawkish rhetoric from the ECB, benchmark 10-year German Bund yields were up sharply over the second quarter of 2022, reflecting the increased possibility of policy tightening. Nevertheless, in July, benchmark 10-year German Bund yields fell sharply, losing more than 50 bps over the month. However, benchmark European government bond yields rose significantly in August and September, with German five-and 10-year Bund yields moving above 2% by the end of the third quarter.
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Foreign Government and Agency Securities | | | 76.6% | |
Corporate Bonds & Notes | | | 4.8% | |
Short-Term Investments & Other Net Assets | | | 18.6% | |
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 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
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FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
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
The Fund’s duration and yield-curve positioning helped relative results, mostly due to duration stances on eurozone, U.K. and Japanese bonds. However, duration positioning in Chinese bonds hindered relative performance.
The Fund’s local market allocation further contributed to relative returns, namely an overweight exposure to the outperforming U.S. market and an underweight position in the underperforming U.K. market. Nonetheless, an underweight allocation to China’s market, which bettered the benchmark, weighed on relative results.
The Fund’s sector allocation contributed to relative performance, while security selection had a small negative impact on relative returns. In government bonds, an overweight exposure to German Bunds and positioning in Italian sovereign debt bolstered relative results. In the corporate space, an underweight exposure to investment-grade financial bonds added relative value, although this was countered to some degree by the harmful bearing of selection in this area. Selection in investment-grade industrial issues also aided relative results. In contrast, selection in hard-currency emerging market debt hurt relative performance.
The Fund’s currency positioning also added to relative results, largely owing to underweight allocations to the euro and British pound, both of which depreciated against the U.S. dollar. Nevertheless, an overweight exposure to the Canadian dollar, also down versus its U.S. counterpart, subtracted relative value.
In terms of derivative use, currency forwards are used in the portfolio 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. For the period under review, derivatives use added 1286 bps to the Fund’s performance, as the U.S. dollar rose strongly against most other major currencies.
Thank you for your participation in Franklin International Aggregate Bond ETF. We look forward to serving your future investment needs.
John Beck
Co-Lead Portfolio Manager
Sonal Desai, Ph.D.
Co-Lead Portfolio Manager
David Zahn, CFA
Patrick Klein, Ph.D.
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 INTERNATIONAL AGGREGATE BOND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -3.71% | | | | -3.99% | | | | -3.71% | | | | -3.99% | |
1-Year | | | -7.38% | | | | -7.38% | | | | -7.38% | | | | -7.38% | |
3-Year | | | -7.13% | | | | -7.28% | | | | -2.43% | | | | -2.49% | |
Since Inception (5/30/18) | | | -2.46% | | | | -2.44% | | | | -0.57% | | | | -0.57% | |
| | | | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
0.59% | | | | | 1.60% | |
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 41 for Performance Summary footnotes. | | |
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FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.402361 |
Total Annual Operating Expenses7
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 41 |
FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 962.90 | | | $ | 1.23 | | | $ | 1,023.82 | | | $ | 1.27 | | | | 0.25 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin Investment Grade Corporate ETF
Formerly, Franklin Liberty Investment Grade Corporate ETF
This semiannual report for Franklin Investment Grade Corporate ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -12.33% based on market price and 12.32% based on net asset value (NAV).1 In comparison, the Bloomberg U.S. Corporate Investment Grade Bond Index, which measures the performance of the investment grade, fixed-rate, taxable corporate bond market, posted a -11.95% 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 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -9.22% total return for the six months ended September 30, 2022.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The
Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.1 The 10-year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over a decade.1
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Bond Index, posted a -11.95% 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 127.
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FRANKLIN INVESTMENT GRADE CORPORATE ETF
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 23.7% | |
Electric Utilities | | | 7.3% | |
Diversified Financial Services | | | 4.1% | |
Health Care Providers & Services | | | 3.7% | |
Oil, Gas & Consumable Fuels | | | 3.3% | |
Food | | | 3.2% | |
Electric | | | 2.9% | |
Household Products | | | 2.9% | |
Capital Markets | | | 2.8% | |
Pharmaceuticals | | | 2.3% | |
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.
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
| Issue/Issuer | | % of Total
Net Assets | |
Verizon Communications Inc., senior bond,
3.40%, 3/22/41 | | | 1.7% | |
Bank of America Corp., sub. bond, 4.183%, 11/25/27 | | | 1.5% | |
Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 4.50%, 10/20/25 | | | 1.4% | |
Wells Fargo & Co., 4.808% to 7/25/27, FRN thereafter, 7/25/28 | | | 1.4% | |
Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24 | | | 1.3% | |
BPCE SA, senior note, 144A, 5.70%, 10/22/23 | | | 1.3% | |
National Australia Bank Ltd., sub. note, 144A,
2.332%, 8/21/30 | | | 1.2% | |
Essex Portfolio LP, senior bond, 2.65%, 3/15/32 | | | 1.2% | |
T-Mobile USA Inc., 2.875%, 2/15/31 | | | 1.2% | |
The Procter & Gamble Co., senior bond,
3.00%, 3/25/30 | | | 1.2% | |
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. 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 six months under review, because of the combination of much higher U.S. Treasury yields and wider corporate bond credit spreads.
The Fund performed slightly worse than its benchmark for the six months under review. The Fund’s overweight allocation to BBB-rated bonds and its underweight allocation to A-rated bonds detracted from performance during this risk off period in markets. Security selection also detracted from results, led by companies within the energy, communications and banking sectors.
Duration and yield curve positioning were strong contributors to relative performance. On average over the six months, we maintained a duration slightly lower than the benchmark, especially in bonds with shorter maturities given our view that the yield curve would invert due to tighter central bank policy.
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FRANKLIN INVESTMENT GRADE CORPORATE ETF
Overall industry allocation contributed to results. Our underweight allocation to bonds in the communication sector helped performance, as did our overweight in the electric utility sector. However, an underweight in technology and capital goods companies detracted from performance.
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 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 September 30, 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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| franklintempleton.com | | Semiannual Report | | | | | | | | 45 |
FRANKLIN INVESTMENT GRADE CORPORATE ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -12.32% | | | | -12.33% | | | | -12.32% | | | | -12.33% | |
1-Year | | | -19.01% | | | | -18.81% | | | | -19.01% | | | | -18.81% | |
5-Year | | | -1.57% | | | | -1.86% | | | | -0.31% | | | | -0.38% | |
Since Inception (10/3/16) | | | +0.28% | | | | +0.22% | | | | +0.05% | | | | +0.04% | |
| | | | | | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
4.27% | | | | | | | 5.05% | |
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 47 for Performance Summary footnotes.
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FRANKLIN INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.409714 |
Total Annual Operating Expenses7
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 47 |
FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses Paid During
Period 4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 876.80 | | | $ | 1.65 | | | $ | 1,023.31 | | | $ | 1.78 | | | | 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 183/365 to reflect the one-half year period.
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Franklin Municipal Green Bond ETF
Formerly, Franklin Liberty Federal Tax-Free Bond ETF
This semiannual report for Franklin Municipal Green Bond ETF covers the period ended September 30, 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 In addition, the Fund invests at least 80% of its net assets in municipal green bonds. Municipal “green bonds” are bonds that promote environmental sustainability. The Fund buys predominately municipal 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 six-month period, the Fund posted cumulative total returns of -9.38% based on market price and -9.22% based on 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 -6.30% 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 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.
Municipal Bond Market Overview
During the six months ending September 30, 2022, multi-decade high inflation persisted throughout much of the period as a strong U.S. job market and ample consumer savings pushed demand beyond the ability of businesses to increase supply. In response, the U.S. Federal Reserve (Fed) continued to raise short-term interest rates at a rapid pace, leading U.S. Treasury (UST) yields to rise sharply.
Recessionary concerns grew as the market lowered its confidence in the Fed’s ability to engineer a soft landing that would bring inflation down without causing a severe economic contraction.
Following one of the worst starts to a new year in 2022, the municipal bond (muni) market continued to perform poorly. High levels of fixed income market volatility, a general risk-off shift in sentiment, and poor performance pushed year-to-date outflows from muni retail vehicles ever higher, leading market technical conditions to further deteriorate. So far this year, net issuance has remained light, lagging well behind historic norms. Fundamentals remained strong, however, with many issuers reporting surpluses for 2022 as federal government transfers bolstered revenues.
For the six-month period, U.S. fixed income sectors performed better relative to equities, as measured by the Standard & Poor’s 500 Index, which posted a -20.20% total return for the period.2 Investment-grade munis, as measured by the Bloomberg Municipal Bond Index, posted a -6.30% total return, and USTs, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return.2 Investment-grade corporate bonds, as measured by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% 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 invest with a long-term time horizon. This means we generally hold securities in the Fund’s portfolio for income purposes, although we may sell a security at any time if we believe it could help the Fund meet its goal. With a focus on income, individual securities are considered for purchase or sale based on various factors and considerations, including credit profile, risk, structure, pricing, portfolio impact, duration management, restructuring, opportunistic trading and tax loss harvesting opportunities. The Fund is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index.
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 135.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 49 |
FRANKLIN MUNICIPAL GREEN BOND ETF
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Investments | |
Utilities | | | 18.21% | |
Lease | | | 12.29% | |
Special Tax | | | 12.12% | |
Transportation | | | 10.10% | |
Industrial Development Revenue and
Pollution Control | | | 9.49% | |
Health Care | | | 9.37% | |
Education | | | 8.39% | |
Local | | | 7.29% | |
Housing | | | 5.86% | |
Other | | | 5.46% | |
State | | | 0.70% | |
Cash | | | 0.54% | |
Refunded | | | 0.16% | |
Manager’s Discussion
During the six-month 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 Municipal Green Bond ETF. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 MUNICIPAL GREEN BOND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -9.22% | | | | -9.38% | | | | -9.22% | | | | -9.38% | |
1-Year | | | -15.37% | | | | -15.55% | | | | -15.37% | | | | -15.55% | |
5-Year | | | +0.75% | | | | +0.40% | | | | +0.15% | | | | +0.08% | |
Since Inception (8/31/17) | | | +0.23% | | | | +0.09% | | | | +0.05% | | | | +0.02% | |
| | | | | | | | | | | | | | | | |
| | |
| | | 30-Day Standardized Yield6 | | | Taxable Equivalent 30-Day
Standardized Yield7 | |
| Distribution Rate5 | | (with fee waiver) | | | (without fee waiver) | | | (with fee waiver) | | | (without fee waiver) | |
3.22% | | | 3.56% | | | | 3.18% | | | | 6.01% | | | | 5.37% | |
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 52 for Performance Summary footnotes.
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FRANKLIN MUNICIPAL GREEN BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.315965 |
Total Annual Operating Expenses8
| | | | |
| |
| With Fee Waiver | | Without Fee Waiver | |
0.30% | | | 0.66% | |
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. Some sectors might be more likely to issue green bonds, and events or factors impacting these sectors may have a greater effect on, and may more adversely affect, the Fund than they would a fund that does not invest in issuers with a common purpose. In addition, green bonds selected by the investment manager may not result in direct environmental benefits. Green bonds may not result in direct environmental benefits and the issuer may not use proceeds as intended or to appropriate new or additional projects. The managers’ environmental social and governance (ESG) investment strategies may limit the types and number of investment opportunities available and, as a result, may underperform strategies that are not subject to such criteria. ESG factors or criteria are subjective and qualitative, and the analysis by the manager may not always accurately assess ESG practices of a security or issuer, or reflect the opinions of other investors or advisors. 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. To the extent such a change impacts sectors more likely to issue green bonds, it may have a greater adverse effect on the Fund because the Fund focuses investments in green bonds. 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. Gross expenses are the Fund’s total annual operating expenses and are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns. Net expenses reflect contractual fee waivers, expense caps and/or reimbursements, which cannot be terminated prior to 7/31/23 without Board consent.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN MUNICIPAL GREEN 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 907.80 | | | $ | 1.43 | | | $ | 1,023.56 | | | $ | 1.52 | | | | 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 183/365 to reflect the one-half year period.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 53 |
Franklin Senior Loan ETF
Formerly, Franklin Liberty Senior Loan ETF
This semiannual report for Franklin Senior Loan ETF covers the period ended September 30, 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 normally 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 six-month period, the Fund posted cumulative total returns of -4.49% based on market price and -4.07% 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 -4.08% 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 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -9.22% total return for the six months ended September 30, 2022.2 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.2 The 10-year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over a decade.2
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% total return.2
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Senior Floating Rate Interests | | | 88.1% | |
| Corporate Bonds & Notes | | | 3.0% | |
| Asset-Backed Securities | | | 0.9% | |
| Short-Term Investments & Other Net Assets | | | 8.0% | |
1. Source: FactSet.
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.
2. Source: Morningstar.
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 143.
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FRANKLIN SENIOR LOAN ETF
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Software | | | 14.7% | |
| Media | | | 7.9% | |
| Commercial Services & Supplies | | | 7.1% | |
| Health Care Providers & Services | | | 6.6% | |
| Airlines | | | 4.3% | |
| Chemicals | | | 3.7% | |
| IT Services | | | 3.5% | |
| Pharmaceuticals | | | 3.4% | |
| Diversified Financial Services | | | 2.5% | |
| Insurance | | | 2.3% | |
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
The loan market experienced meaningful price declines during the six-month period as the U.S. Federal Reserve (Fed) signaled its commitment to tackling inflation with aggressive tightening. While loan prices had previously benefited from expectations of a gradual rising rate environment, the new pace of rate hikes was expected to slow economic growth and potentially affect the debt servicing ability of certain issuers. Technical conditions, which had been supportive of loan prices in the prior period, turned negative as loan retail
vehicles experienced outflows. Additionally, primary market activity was subdued amid weaker demand. Sentiment concerning fundamental conditions also worsened, as credit rating downgrades outpaced upgrades.
During the period, the Fund performed in line with its primary benchmark, the Morningstar LSTA U.S. Leveraged Loan 100 Index. Amid greater dispersion in loan prices based on credit quality, the Fund’s underweight in upper tier loans (BB-rated) detracted from performance, but its underweight and selection in lower tier loans contributed to performance. Upper tier loans in the index returned -0.79%, middle tier loans (B-rated) returned -4.10%, and lower-tier loans returned -53.31%. As of September 30, 2022, the Fund had approximately 15% of its loan portfolio in the upper tier and 72% in the middle tier, compared to the index, which had 34% in the upper tier and 65% in the middle tier. The Fund maintained an overweight weighting in lower tier loans for most of the period but ended the period at 0.9% (compared to the benchmark weighting of 0.7%), as lower rated constituents fell out of the index. The Fund’s loan selection among lower rated loans positively contributed to relative performance as it did not have exposure to larger benchmark names that experienced meaningful declines.
The top individual contributors to Fund performance included issuers that continued to see rebounds from pandemic-related declines, in addition to issuers that were perceived to be more insulated from a potential economic slowdown due to higher rates. American Airlines (a global airline operator) traded higher from discounted levels due to a continued recovery in travel volumes, which raised expectations that the company would be able to reduce debt. The top detractors from performance primarily included issuers that had traded lower due to operational challenges or the expectation that rising rates would negatively impact interest coverage. Goto Group (a provider of workplace communication software) was the top detractor after reporting continued revenue declines for a core segment and a weak outlook for the rest of the year. The second lien term loans of Asurion (a provider of wireless handset insurance services) also declined amid weaker demand for lower rated loans during the period.
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FRANKLIN SENIOR LOAN ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Federal Home Loan Bank Discount Notes, 10/3/2022 | | | 7.3% | |
Verscend Holding Corp., FRN thereafter,
7.115%, 8/27/2025 IT Services | | | 1.6% | |
Greeneden U.S. Holdings II LLC, FRN thereafter, 7.115%, 12/1/2027 Technology Hardware, Storage & Peripherals | | | 1.5% | |
Navicure Inc., FRN thereafter, 7.115%, 10/22/2026
Software | | | 1.4% | |
eResearchTechnology Inc., FRN thereafter,
7.615%, 2/4/2027
Pharmaceuticals | | | 1.4% | |
Peraton Corp., FRN thereafter, 6.865%, 2/1/2028
Aerospace & Defense | | | 1.3% | |
Gainwell Acquisition Corp., FRN thereafter,
7.674%, 10/1/2027 Health Care Providers & Services | | | 1.3% | |
Hyland Software Inc., FRN thereafter,
6.615%, 7/1/2024 Software | | | 1.2% | |
Deerfield Dakota Holding LLC, FRN thereafter, 6.797%, 4/9/2027 IT Services | | | 1.3% | |
Polaris Newco LLC, FRN thereafter, 7.674%, 6/2/2028 Software | | | 1.2% | |
Thank you for your participation in Franklin Senior Loan ETF. We look forward to serving your future investment needs.
Reema Agarwal, CFA
Co-Lead Portfolio Manager
Justin Ma, CFA
Co-Lead Portfolio Manager
Margaret Chiu, CFA
Portfolio Manger
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 SENIOR LOAN ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -4.07% | | | | -4.49% | | | | -4.07% | | | | -4.49% | |
1-Year | | | -3.66% | | | | -4.39% | | | | -3.66% | | | | -4.39% | |
3-Year | | | +3.25% | | | | +2.25% | | | | +1.07% | | | | +0.75% | |
Since Inception (5/30/18) | | | +8.57% | | | | +7.98% | | | | +1.91% | | | | +1.79% | |
| | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
6.37% | | | 5.55% | |
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.
See page 58 for Performance Summary footnotes.
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FRANKLIN SENIOR LOAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.576117 |
Total Annual Operating Expenses7
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 959.30 | | | $ | 2.26 | | | $ | 1,022.76 | | | $ | 2.33 | | | | 0.46 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin Systematic Style Premia ETF
Formerly, Franklin Liberty Systematic Style Premia ETF
This semiannual report for Franklin Systematic Style Premia ETF covers the period ended September 30, 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 six-month the Fund posted cumulative total returns of +1.13% based on market price and +1.13% 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 +0.57% 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 63.
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 -9.22% total return for the six months ended September 30, 2022.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.1 The 10-year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over a decade.1
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% total return.1
| | | | |
| Portfolio Composition | |
|
| 9/30/22 | |
| |
| | | % of Total Net Assets | |
Common Stocks | | | 50.9% | |
Preferred Stock | | | 0.1% | |
Other Net Assets | | | 49.0% | |
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 152.
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FRANKLIN SYSTEMATIC STYLE PREMIA ETF
| | | | |
| Top 10 Sectors/Industries | |
|
| 9/30/22 | |
| |
| | | % of Total
Net Assets | |
Software | | | 3.6% | |
Semiconductors & Semiconductor Equipment | | | 3.5% | |
Oil, Gas & Consumable Fuels | | | 3.3% | |
Biotechnology | | | 3.3% | |
Insurance | | | 2.5% | |
Specialty Retail | | | 2.5% | |
Interactive Media & Services | | | 2.5% | |
IT Services | | | 2.0% | |
Capital Markets | | | 1.9% | |
Hotels, Restaurants & Leisure | | | 1.8% | |
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.
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.
| | | | |
| Top 10 Long Positions | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Microsoft Corp.
Software, United States | | | 1.6% | |
Alphabet Inc., C
Interactive Media & Services, United States | | | 1.1% | |
Meta Platforms Inc., A
Interactive Media & Services, United States | | | 0.9% | |
McDonald’s Corp.
Hotels, Restaurants & Leisure, United States | | | 0.8% | |
Texas Instruments Inc.
Semiconductors & Semiconductor Equipment,
United States | | | 0.8% | |
The Home Depot Inc.
Specialty Retail, United States | | | 0.8% | |
Lowe’s Cos Inc.
Specialty Retail, United States | | | 0.8% | |
Broadcom Inc.
Semiconductors & Semiconductor Equipment,
United States | | | 0.8% | |
AbbVie Inc.
Biotechnology, United States | | | 0.7% | |
Cigna Corp.
Health Care Providers & Services, United States | | | 0.7% | |
Manager’s Discussion
During the six months ended September 30, 2022, the Fund’s foreign currency macro strategy, a net long U.S.
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FRANKLIN SYSTEMATIC STYLE PREMIA ETF
dollar position against foreign currencies—which accounted for more than one-third of the Fund’s weighting, on average, during the period—and short government fixed income futures positioning drove positive performance. The long/short single equities strategy also bolstered absolute returns during a period of significant drawdown for equity markets, as contribution from short positioning outweighed detraction from long positioning. In contrast, commodities strategies weighed on returns.
The foreign currency macro strategy had positive results during the period. Value, carry and momentum factors all performed well. Short positioning in the Israeli shekel was a key contributor, owing to our foreign currency carry and value factors. Long positioning in the South African rand partially offset the asset class’s gains.
The Fund’s fixed income positioning also contributed significantly. Our fixed income macro strategies had a positive impact, as short positions in U.S. Treasuries, Gilts and Canadian government bonds, together with long positions in German bunds, contributed more to performance than the detraction from long positions in French, Italian and Australian bonds.
In our long/short single stock equities component, the momentum and quality factors bolstered performance. Our portfolio was long lower volatility stocks and short higher volatility stocks, which also aided performance. In capital terms, the portfolio was net long, and this detracted from performance as well.
Our real estate holdings also detracted, with broad-based losses across the bulk of the portfolio as interest and mortgage rates rose.
The macro equity index futures strategy weighed on performance, as long positions in Canadian, Australian and Japanese indexes (combining value, carry and momentum factors) detracted. Shorts in Mexico, India, the United States and Sweden partially offset the losses.
Commodities strategies detracted from returns, as oil prices fell sharply, and commodities prices broadly declined. Our trend-following strategy was a significant detractor, while our value, carry, and momentum factors were relatively stable.
| | | | |
| Top 10 Short Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Value of
Underlying
Entity | |
Netflix Inc,
Media & Entertainment, United States | | | 1.5% | |
PayPal Holdings Inc.
Software & Services, United States | | | 1.4% | |
Toyota Motor Corp.
Automobiles & Components, Japan | | | 1.4% | |
Zoetis Inc.
Pharmaceuticals, Biotechnology & Life Sciences, United States | | | 1.4% | |
AIA Group Ltd.
Insurance, Hong Kong | | | 1.4% | |
Enbridge Inc.
Energy, Canada | | | 1.4% | |
Medtronic PLC
Health Care Equipment & Services, United States | | | 1.4% | |
Tesla Inc.
Automobiles & Components, United States | | | 1.3% | |
Target Corp.
Retailing, United States | | | 1.3% | |
Intuitive Surgical Inc.
Health Care Equipment & Services, United States | | | 1.3% | |
Thank you for your participation in Franklin 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 September 30, 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 SYSTEMATIC STYLE PREMIA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on market price4 | | | Based on
NAV3 | | | Based on market price4 | |
6-Month | | | +1.13% | | | | +1.13% | | | | +1.13% | | | | +1.13% | |
1-Year | | | +5.59% | | | | +5.15% | | | | +5.59% | | | | +5.15% | |
Since Inception (12/18/19) | | | -5.82% | | | | -6.15% | | | | -2.13% | | | | -2.25% | |
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 SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
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. Certain derivatives have the potential for unlimited loss. 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN 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 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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period 4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period 4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 1,011.30 | | | $ | 3.28 | | | $ | 1,021.81 | | | $ | 3.29 | | | | 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 183/365 to reflect the one-half year period.
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Franklin U.S. Core Bond ETF
Formerly, Franklin Liberty U.S. Core Bond ETF
This semiannual report for Franklin U.S. Core Bond ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -9.34% based on market price and -9.38% 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 -9.22% total return.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 -9.22% total return for the six months ended September 30, 2022.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.1 The 10-year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over a decade.1
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% 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 168.
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FRANKLIN U.S. CORE BOND ETF
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
U.S. Government & Agency Securities | | | 45.1% | |
Mortgage-Backed Securities | | | 23.9% | |
Corporate Bonds & Notes | | | 21.6% | |
Asset-Backed Securities | | | 3.0% | |
Municipal Bonds | | | 3.0% | |
Foreign Government and Agency Securities | | | 1.6% | |
Short-Term Investments & Other Net Assets | | | 1.8% | |
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.
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
U.S. Treasury Note, 2.125%, 2/29/24 | | | 6.8% | |
U.S. Treasury Note, 0.375%, 11/30/25 | | | 5.6% | |
U.S. Treasury Note, 1.25%, 12/31/26 | | | 5.0% | |
U.S. Treasury Note, 0.375%, 1/31/26 | | | 3.8% | |
U.S. Treasury Note, 0.50%, 3/31/25 | | | 3.3% | |
U.S. Treasury Note, 3.25%, 6/30/27 | | | 2.1% | |
U.S. Treasury Bond, 2.00%, 11/15/41 | | | 2.0% | |
U.S. Treasury Note, 2.125%, 3/31/24 | | | 1.9% | |
U.S. Treasury Bond, 1.375%, 8/15/50 | | | 1.7% | |
U.S. Treasury Note, 0.25%, 6/30/25 | | | 1.5% | |
Manager’s Discussion
During the six-month period under review, the Fund posted a gross return of -9.38% based on net asset value, underperforming the Bloomberg U.S. Aggregate Bond Index return of -9.22%. Duration positioning was the main positive contributor to returns relative to the benchmark. Throughout the performance period, we maintained a duration less than that of the benchmark. The dramatic rise in U.S. Treasury (UST) yields has resulted in our underweight positions contributing to relative performance (especially the 5-year and 10-year portion of the curve).
Sector allocations weighed modestly on relative performance over the period, led by overweight holdings of sovereign emerging market (EM) securities, municipal bonds (munis), and commercial mortgage-backed securities (CMBS). Conversely, underweight exposure to agency mortgage-backed securities (MBS) benefited relative results. Allocations to corporate credit bonds, asset-backed securities and agency notes had neutral effects on performance.
Security selection detracted from relative results, led by selection in investment-grade corporate bonds, municipal bonds, CMBS and sovereign developed securities.
Conversely, selection in agency MBS and sovereign EM securities contributed to relative performance.
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FRANKLIN U.S. CORE BOND ETF
David Yuen retired effective September 30, 2022, and his responsibilities have been allocated to others in the portfolio management team.
Thank you for your participation in Franklin U.S. Core Bond ETF. We look forward to serving your future investment needs.
David Yuen, CFA, FRM Patrick Klein, Ph.D. Tina Chou
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 September 30, 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 U.S. CORE BOND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -9.38% | | | | -9.34% | | | | -9.38% | | | | -9.34% | |
1-Year | | | -15.16% | | | | -15.13% | | | | -15.16% | | | | -15.13% | |
3-Year | | | -9.78% | | | | -9.89% | | | | -3.37% | | | | -3.41% | |
Since Inception (9/17/19) | | | -9.12% | | | | -9.12% | | | | -3.10% | | | | -3.10% | |
| | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
2.91% | | | 3.79% | |
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 70 for Performance Summary footnotes.
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FRANKLIN U.S. CORE BOND ETF
PERFORMANCE SUMMARY
|
| Distributions (4/1/22–9/30/22) |
|
Net Investment Income |
$0.279757 |
|
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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 906.20 | | | $ | 0.67 | | | $ | 1,024.37 | | | $ | 0.71 | | | | 0.14 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin U.S. Low Volatility ETF
Formerly, Franklin Liberty U.S. Low Volatility ETF
This semiannual report for Franklin U.S. Low Volatility ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -14.73% based on market price and -14.61% based on 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 -20.51% 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 75.
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, posted a -20.20% total return for the six months ended September 30, 2022.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices, particularly as the period progressed. Although consumer spending continued to rise, deteriorating financial conditions negatively impacted consumer sentiment, which improved slightly at the end of the period after falling in June 2022 to the lowest level in over 60 years.
Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions,
strong consumer demand, and volatile energy prices drove
inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
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.
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.; or (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.
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 U.S. LOW VOLATILITY ETF
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Information Technology | | | 24.4% | |
Health Care | | | 14.5% | |
Consumer Discretionary | | | 12.0% | |
Financials | | | 11.2% | |
Industrials | | | 10.0% | |
Communication Services | | | 7.0% | |
Consumer Staples | | | 6.4% | |
Energy | | | 4.6% | |
Real Estate | | | 3.2% | |
Utilities | | | 3.0% | |
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry | | % of Total
Net Assets | |
Exxon Mobil Corp. Energy | | | 1.6% | |
DTE Midstream LLC Energy | | | 1.5% | |
Chevron Corp. Energy | | | 1.5% | |
Black Knight Inc. Information Technology | | | 1.5% | |
Synopsys Inc. Information Technology | | | 1.4% | |
Bristol-Myers Squibb Co. Health Care | | | 1.4% | |
Automatic Data Processing Inc. Information Technology | | | 1.4% | |
Microsoft Corp. Information Technology | | | 1.4% | |
Keysight Technologies Inc. Information Technology | | | 1.4% | |
Merck & Co. Inc. Health Care | | | 1.4% | |
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. We 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 generated negative absolute returns but outperformed its benchmark, the Russell 1000® Index, for the six-month period ended September 30, 2022. Stock selection in the information technology (IT) sector was the most significant contributor to relative performance during the period. Overweight positions relative to the benchmark index in Black Knight and Keysight Technologies, along with a lack of exposure to select IT benchmark holdings, drove the sector’s relative outperformance. Black Knight, which provides software, data and analytics solutions for the mortgage and finance industries, announced in May its planned acquisition by Intercontinental Exchange, while Keysight Technologies, an electronic measurement company, logged double-digit growth in orders and revenue in its recent quarter.
Alphabet, from the consumer discretionary sector, was another contributor to relative performance. The parent company of Google recently fell short of estimates for quarterly earnings and revenue growth, citing currency fluctuations and growing economic uncertainties behind the disappointing figures. The Fund’s relative underweight in Alphabet supported relative returns as a result. Stock selection in consumer discretionary also helped relative performance.
In the communication services sector, overweight positions in media companies Liberty Broadband and Charter Communications detracted. Shares of Liberty Broadband, a communication business provider and holding company, and cable and broadband internet service provider Charter Communications, both declined on concerns of slowing subscriber growth trends amid competition and economic headwinds. Liberty’s main asset is Charter Communications. Meanwhile, stock selection in the energy sector also weighed on performance, though the Fund’s overweight to the top-performing sector limited the detraction.
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FRANKLIN U.S. LOW VOLATILITY ETF
Thank you for your participation in Franklin U.S. Low
Volatility ETF. We look forward to serving your future investment needs.
Todd Brighton, CFA
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 U.S. LOW VOLATILITY ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on NAV3 | | | Based on market price4 | | | Based on NAV3 | | | Based on market price4 | |
6-Month | | | -14.61% | | | | -14.73% | | | | -14.61% | | | | -14.73% | |
1-Year | | | -9.55% | | | | -9.58% | | | | -9.55% | | | | -9.58% | |
5-Year | | | +59.35% | | | | +59.89% | | | | +9.77% | | | | +9.84% | |
Since Inception (9/20/16) | | | +83.60% | | | | +83.64% | | | | +10.61% | | | | +10.61% | |
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 76 for Performance Summary footnotes.
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FRANKLIN U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.392342 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 853.90 | | | $ | 1.35 | | | $ | 1,023.62 | | | $ | 1.47 | | | | 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 183/365 to reflect the one-half year period.
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Franklin U.S. Treasury Bond ETF
Formerly, Franklin Liberty U.S. Treasury Bond ETF
This semiannual report for Franklin U.S. Treasury Bond ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -7.22% based on market price and -7.22% 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 -7.96% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 80.
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 -9.22% total return for the six months ended September 30, 2022.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation
remained elevated amid robust job growth and low unem-
ployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.1 The 10-year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over a decade.1
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% total return.1
| | | | |
| Portfolio Composition | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
U.S. Government & Agency Securities | | | 91.7% | |
Short-Term Investments & Other Net Assets | | | 8.3% | |
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 agencies, or instrumentalities, including government spon-
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 181.
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FRANKLIN U.S. TREASURY BOND ETF
sored 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 six-month period, yield-curve positioning was the primary contributor to outperformance relative to the benchmark, led mainly by the underweight duration on the five- and 10-year parts of curve as yields rose. Over the performance period, yields for Treasuries with maturities less than five years rose more than yields for Treasuries with maturities greater than five years. Underweights on the two-and 30-year parts of the curve also contributed positively to performance relative to the benchmark. Conversely, the Fund was positioned with more duration than the benchmark on the 20-year part of the curve, and this was a modest detractor to relative performance. Our non-benchmark allocation to U.S. Treasury Inflation-Protected Securities (TIPS) detracted from performance relative to the benchmark. Our allocation to agency fixed-rate mortgage-backed securities (MBS) had a largely neutral effect on results.
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
U.S. Treasury Note, 2.375%, 2/29/24 | | | 11.6% | |
U.S. Treasury Bond, 2.375%, 2/15/42 | | | 5.2% | |
U.S. Treasury Bond, 2.00%, 8/15/51 | | | 5.0% | |
U.S. Treasury Note, 1.25%, 4/30/28 | | | 4.3% | |
U.S. Treasury Bond, 3.00%, 5/15/42 | | | 4.1% | |
U.S. Treasury Note, 0.375%, 1/31/26 | | | 3.8% | |
U.S. Treasury Note, 1.50%, 11/30/24 | | | 3.8% | |
U.S. Treasury Note, 1.375%, 12/31/28 | | | 3.8% | |
U.S. Treasury Note, 0.25%, 7/31/25 | | | 3.8% | |
U.S. Treasury Note, 2.125%, 11/30/24 | | | 3.4% | |
Thank you for your participation in Franklin 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 September 30, 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 U.S. TREASURY BOND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -7.22% | | | | -7.22% | | | | -7.22% | | | | -7.22% | |
1-Year | | | -11.90% | | | | -11.83% | | | | -11.90% | | | | -11.83% | |
Since Inception (6/9/20) | | | -13.34% | | | | -13.34% | | | | -6.01% | | | | -6.01% | |
| | | | | | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
2.36% | | | | | | | 3.62% | |
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.
See page 81 for Performance Summary footnotes.
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FRANKLIN U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.233977 |
Total Annual Operating Expenses7
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 927.60 | | | $ | 0.39 | | | $ | 1,024.67 | | | $ | 0.41 | | | | 0.08 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin Ultra Short Bond ETF
Formerly, Franklin Liberty Ultra Short Bond ETF
This semiannual report for Franklin Ultra Short Bond ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of +0.01% based on market price and -0.08% 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 +0.57% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -9.22% total return for the six months ended September 30, 2022.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine, adding to the uncertainty surrounding the course of the global economy. The yield curve continued to narrow, inverting in the second half of the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The
Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. In order to achieve its goal of 2% long-run inflation, the Fed stated it anticipates making additional increases to the federal funds target rate. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -7.96% total return for the six-month period.1 The 10-year UST yield (which moves inversely to price) grew amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Index, posted a -9.14% total return for the period as mortgage rates rose to the highest level in over a decade.1
Corporate bond prices also declined, constrained by inflation, rising interest rates and concerns about the impact of elevated interest rates on corporate borrowing costs and the wider economy. Corporate yield spreads, a measure of the difference in yields between corporate bonds and similarly-dated USTs, rose, reflecting investors’ increased risk-aversion preferences. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Bond Index, posted a -10.41% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Bond Index, posted a -11.95% 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 183.
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FRANKLIN ULTRA SHORT BOND ETF
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 32.6% | |
Auto Manufacturers | | | 8.0% | |
Miscellaneous Manufacturing | | | 6.1% | |
Internet | | | 4.1% | |
Pipelines | | | 4.1% | |
Transportation | | | 4.1% | |
Aerospace & Defense | | | 4.0% | |
Healthcare-Products | | | 3.9% | |
Insurance | | | 3.9% | |
Pharmaceuticals | | | 2.0% | |
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
| Issue/Issuer | | % of Total
Net Assets | |
| Westpac Banking Corp., 3.78% to 5/28/19, FRN thereafter, 2/26/24 | | | 4.1% | |
| eBay Inc., senior note, 3.676% to , 1/30/23 | | | 4.1% | |
| Citibank Credit Card Issuance Trust, Series 2017-A5, A5, 3.672% to , 4/22/26 | | | 4.1% | |
| Discover Card Execution Note Trust, Series 2017-A5, A5, 3.418% to , 12/15/26 | | | 4.1% | |
| Goldman Sachs Group Inc., senior unsecured note, 3.23% to 11/17/22, FRN thereafter, 11/17/23 | | | 4.1% | |
| Hyundai Capital America, 144A, 2.375%, 2/10/23 | | | 4.1% | |
| Penske Truck Leasing Co. LP / PTL Finance Corp., senior note, 144A, 2.70%, 3/14/23 | | | 4.1% | |
| Boeing Co., 1.167%, 2/04/23 | | | 4.0% | |
| Toronto-Dominion Bank, Sr. Unsecured, MTN, 4.285%, 9/13/24 | | | 4.0% | |
| Parker-Hannifin Corp., Sr. Unsecured, 3.65%, 6/15/24 | | | 4.0% | |
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 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 six-month period ended September 30, 2022. Short-term investment-grade (IG) corporate spreads widened modestly during the period under review, underperforming similar maturity Treasuries. In addition, the short end of the Treasury yield curve steepened with two-year yields up 1.82% while 3-month Treasury bill rates rose 2.75%.
The Fund’s longer duration positioning compared to its benchmark, the ICE BofA U.S. 3-month Treasury Bill Index, was the primary detractor from 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 contributed to returns. Our allocations to banking, energy and industrials aided results, while our positioning in media, technology and asset-backed securities (ABS) detracted from performance. Positive contributors from individual positions included Hyundai Capital America, Parker-Hannifin and AmerisourceBergen, while detractors included General Motors Financial, General Electric and Toronto-Dominion Bank.
While the Fund has the ability to invest in derivative securities, it held no derivatives during the period under review.
David Yuen retired effective September 30, 2022, and his responsibilities have been allocated to others in the portfolio management team.
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FRANKLIN ULTRA SHORT BOND ETF
Thank you for your participation in Franklin 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 September 30, 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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| franklintempleton.com | | Semiannual Report | | | | | | | | 85 |
FRANKLIN ULTRA SHORT BOND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -0.08% | | | | +0.01% | | | | -0.08% | | | | +0.01% | |
1-Year | | | -1.13% | | | | -1.09% | | | | -1.13% | | | | -1.09% | |
Since Inception (7/14/20) | | | +0.04% | | | | +0.08% | | | | +0.02% | | | | +0.04% | |
| | | | | | | | |
| Distribution Rate5 | | 30-Day Standardized Yield6 | |
1.96% | | | | | | | 3.28% | |
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 87 for Performance Summary footnotes.
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FRANKLIN ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.141357 |
Total Annual Operating Expenses7
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 asset 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 a 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 wider 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 in 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. The manager’s portfolio selection strategy is not solely based on ESG considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused companies. Integrating ESG considerations into the investment process is not a guarantee that better performance will be achieved. 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 total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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 September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 87 |
FRANKLIN 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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During Period
4/1/22–9/30/221 | | | Net Annualized Expense Ratio | |
| | $1,000.00 | | | $ | 999.20 | | | $ | 0.65 | | | $ | 1,024.42 | | | $ | 0.66 | | | | 0.13 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Disruptive Commerce ETF
| | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020a | |
| | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | |
| | | | |
Net asset value, beginning of period | | $ | 30.97 | | | $ | 49.21 | | | $ | 21.32 | | | $ | 25.00 | |
| | | | |
| | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | |
| | | | |
Net investment income (loss)c | | | 0.01 | | | | (0.19 | ) | | | (0.21 | ) | | | (0.01 | ) |
| | | | |
Net realized and unrealized gains (losses) | | | (10.51 | ) | | | (17.73 | ) | | | 28.10 | | | | (3.67 | ) |
| | | | |
| | | | |
Total from investment operations | | | (10.50 | ) | | | (17.92 | ) | | | 27.89 | | | | (3.68 | ) |
| | | | |
| | | | |
Net realized gains | | | — | | | | (0.32 | ) | | | — | | | | — | |
| | | | |
| | | | |
Net asset value, end of period | | $ | 20.47 | | | $ | 30.97 | | | $ | 49.21 | | | $ | 21.32 | |
| | | | |
| | | | |
Total returnd | | | (33.90)% | | | | (36.59)% | | | | 130.82% | | | | (14.72)% | |
| | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | |
| | | | |
Expenses before waiver and payments by affiliates | | | 0.50% | | | | 0.62% | | | | 0.87% | | | | 12.59% | |
| | | | |
Expenses net of waiver and payments by affiliates | | | 0.50% | | | | 0.50% | | | | 0.50% | | | | 0.50% | |
| | | | |
Net investment income (loss) | | | 0.05% | | | | (0.40)% | | | | (0.44)% | | | | (0.32)% | |
| | | | |
| Supplemental data | | | | | | | | | | | | | | | | |
| | | | |
Net assets, end of period (000’s) | | | $8,187 | | | | $18,584 | | | | $41,827 | | | | $2,132 | |
| | | | |
Portfolio turnover ratef | | | 32.66%g | | | | 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: | | | 32.31% | | | | 89.79% | | | | 45.81% | | | | 0.94% | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 89 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Disruptive Commerce ETF
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks 97.8% | | | | | | | | | |
| | | Air Freight & Logistics 1.4% | | | | | | | | | |
| | United Parcel Service Inc., B | | | United States | | | | 483 | | | $ | 78,024 | |
| a | | XPO Logistics Inc. | | | United States | | | | 897 | | | | 39,934 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 117,958 | |
| | | | | | | | | | | | | | |
| | | Commercial Services & Supplies 3.3% | | | | | | | | | |
| a | | Copart Inc. | | | United States | | | | 2,508 | | | | 266,851 | |
| | | | | | | | | | | | | | |
| | | Containers & Packaging 2.2% | | | | | | | | | |
| | Graphic Packaging Holding Co. | | | United States | | | | 1,018 | | | | 20,095 | |
| | Packaging Corp. of America | | | United States | | | | 1,391 | | | | 156,196 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 176,291 | |
| | | | | | | | | | | | | | |
| | | Entertainment 2.3% | | | | | | | | | |
| a | | Netflix Inc. | | | United States | | | | 186 | | | | 43,792 | |
| a | | ROBLOX Corp., A | | | United States | | | | 1,025 | | | | 36,736 | |
| a | | Sea Ltd., ADR | | | Taiwan | | | | 1,902 | | | | 106,607 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 187,135 | |
| | | | | | | | | | | | | | |
| | | Equity Real Estate Investment Trusts (REITs) 2.8% | | | | | | | | | |
| | Prologis Inc. | | | United States | | | | 2,276 | | | | 231,242 | |
| | | | | | | | | | | | | | |
| | | Food & Staples Retailing 5.3% | | | | | | | | | |
| | Costco Wholesale Corp. | | | United States | | | | 910 | | | | 429,766 | |
| | | | | | | | | | | | | | |
| | | Food Products 0.3% | | | | | | | | | |
| a | | Freshpet Inc. | | | United States | | | | 556 | | | | 27,850 | |
| | | | | | | | | | | | | | |
| | | Hotels, Restaurants & Leisure 6.1% | | | | | | | | | |
| a | | Airbnb Inc., A | | | United States | | | | 2,217 | | | | 232,874 | |
| a | | Booking Holdings Inc. | | | United States | | | | 141 | | | | 231,692 | |
| a | | Vacasa Inc., A | | | United States | | | | 11,395 | | | | 34,983 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 499,549 | |
| | | | | | | | | | | | | | |
| | | Interactive Media & Services 3.7% | | | | | | | | | |
| | Shutterstock Inc. | | | United States | | | | 847 | | | | 42,494 | |
| a | | ZoomInfo Technologies Inc., A | | | United States | | | | 6,271 | | | | 261,250 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 303,744 | |
| | | | | | | | | | | | | | |
| | | Internet & Direct Marketing Retail 24.7% | | | | | | | | | |
| a | | Amazon.com Inc. | | | United States | | | | 7,218 | | | | 815,634 | |
| a | | Chewy Inc., A | | | United States | | | | 1,302 | | | | 39,997 | |
| a | | DoorDash Inc., A | | | United States | | | | 4,342 | | | | 214,712 | |
| | eBay Inc. | | | United States | | | | 2,480 | | | | 91,289 | |
| a | | Etsy Inc. | | | United States | | | | 2,534 | | | | 253,729 | |
| a | | Expedia Group Inc. | | | United States | | | | 420 | | | | 39,350 | |
| a | | Global-e Online Ltd. | | | Israel | | | | 2,725 | | | | 72,921 | |
| | JD.com Inc., ADR | | | China | | | | 1,621 | | | | 81,536 | |
| a | | Liquidity Services Inc. | | | United States | | | | 2,893 | | | | 47,040 | |
| a | | MercadoLibre Inc. | | | Brazil | | | | 288 | | | | 238,401 | |
| a | | Pinduoduo Inc., ADR | | | China | | | | 1,333 | | | | 83,419 | |
| a | | Revolve Group Inc. | | | United States | | | | 914 | | | | 19,825 | |
| | Zozo Inc. | | | Japan | | | | 1,042 | | | | 20,834 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,018,687 | |
| | | | | | | | | | | | | | |
| | | IT Services 18.3% | | | | | | | | | |
| a | | Adyen NV, ADR | | | Netherlands | | | | 26,101 | | | | 326,785 | |
| a | | Block Inc. | | | United States | | | | 677 | | | | 37,228 | |
| a | | Dlocal Ltd. | | | Uruguay | | | | 3,591 | | | | 73,687 | |
| a | | International Money Express Inc. | | | United States | | | | 1,594 | | | | 36,327 | |
| | Jack Henry & Associates Inc. | | | United States | | | | 953 | | | | 173,703 | |
| | | | | | | | | | |
| | | | | | |
| 90 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Disruptive Commerce ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | IT Services (continued) | | | | | | | | | |
| | Mastercard Inc., A | | | United States | | | | 1,065 | | | $ | 302,822 | |
| a | | PayPal Holdings Inc. | | | United States | | | | 478 | | | | 41,141 | |
| a | | Shopify Inc., A | | | Canada | | | | 8,355 | | | | 225,084 | |
| a | | Toast Inc., A | | | United States | | | | 2,236 | | | | 37,386 | |
| | Visa Inc., A | | | United States | | | | 1,390 | | | | 246,934 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,501,097 | |
| | | | | | | | | | | | | | |
| | | Professional Services 3.6% | | | | | | | | | |
| a | | CoStar Group Inc. | | | United States | | | | 3,698 | | | | 257,566 | |
| | TransUnion | | | United States | | | | 654 | | | | 38,906 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 296,472 | |
| | | | | | | | | | | | | | |
| | | Road & Rail 4.8% | | | | | | | | | |
| | Old Dominion Freight Line Inc. | | | United States | | | | 355 | | | | 88,313 | |
| a | | Uber Technologies Inc. | | | United States | | | | 11,407 | | | | 302,286 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 390,599 | |
| | | | | | | | | | | | | | |
| | | Software 9.2% | | | | | | | | | |
| a | | Bill.com Holdings Inc. | | | United States | | | | 1,704 | | | | 225,558 | |
| a | | Coupa Software Inc. | | | United States | | | | 660 | | | | 38,808 | |
| a | | Descartes Systems Group Inc. | | | Canada | | | | 2,673 | | | | 169,816 | |
| a | | Lightspeed Commerce Inc. | | | Canada | | | | 1,218 | | | | 21,549 | |
| a | | Manhattan Associates Inc. | | | United States | | | | 1,310 | | | | 174,269 | |
| a | | Sprout Social Inc., A | | | United States | | | | 743 | | | | 45,085 | |
| a | | Unity Software Inc. | | | United States | | | | 2,460 | | | | 78,376 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 753,461 | |
| | | | | | | | | | | | | | |
| | | Specialty Retail 1.5% | | | | | | | | | |
| a | | Petco Health & Wellness Co. Inc. | | | United States | | | | 3,086 | | | | 34,440 | |
| | Tractor Supply Co. | | | United States | | | | 486 | | | | 90,337 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 124,777 | |
| | | | | | | | | | | | | | |
| | | Trading Companies & Distributors 8.3% | | | | | | | | | |
| | Fastenal Co. | | | United States | | | | 7,699 | | | | 354,462 | |
| | W.W. Grainger Inc. | | | United States | | | | 667 | | | | 326,290 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 680,752 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $11,578,381) | | | | | | | | | | | 8,006,231 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $11,578,381) 97.8% | | | | | | | | | | | 8,006,231 | |
| | Other Assets, less Liabilities 2.2% | | | | | | | | | | | 180,588 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 8,186,819 | |
| | | | | | | | | | | | | | |
aNon-income producing.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 91 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Dynamic Municipal Bond ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 24.81 | | | $ | 26.32 | | | $ | 24.72 | | | $ | 24.97 | | | $ | 24.40 | | | $ | 25.00 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.32 | | | | 0.61 | | | | 0.59 | | | | 0.58 | | | | 0.63 | | | | 0.22 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (2.01 | ) | | | (1.56 | ) | | | 1.59 | | | | (0.17 | ) | | | 0.57 | | | | (0.60 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (1.69 | ) | | | (0.95 | ) | | | 2.18 | | | | 0.41 | | | | 1.20 | | | | (0.38 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.32 | ) | | | (0.56 | ) | | | (0.58 | ) | | | (0.66 | ) | | | (0.63 | ) | | | (0.22 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 22.80 | | | $ | 24.81 | | | $ | 26.32 | | | $ | 24.72 | | | $ | 24.97 | | | $ | 24.40 | |
| | | | |
| | | | | | |
Total returnd | | | (6.86)% | | | | (3.70)% | | | | 8.84% | | | | 1.61% | | | | 4.99% | | | | (1.53)% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.72% | | | | 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% | | | | 0.30% | |
| | | | | | |
Net investment income | | | 2.72% | | | | 2.32% | | | | 2.29% | | | | 2.29% | | | | 2.57% | | | | 1.55% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $88,934 | | | | $76,908 | | | | $42,112 | | | | $12,362 | | | | $7,490 | | | | $7,319 | |
| | | | | | |
Portfolio turnover ratef | | | 25.85%g | | | | 27.62% | g | | | 14.05% | g | | | 35.28% | g | | | 35.63% | | | | 17.49% | |
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: | | | 25.85% | | | | 27.62% | | | | 14.05% | | | | 35.28% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 92 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Dynamic Municipal Bond ETF
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds 100.9% | | | | | | |
| | | Alabama 5.7% | | | | | | |
| | Black Belt Energy Gas District,
Gas Project Revenue Bond, Project No. 7-S, Series 2021C-1, VRDN, 4.00%, 10/01/52 | | | 500,000 | | | $ | 487,192 | |
| | Gas Project, Series 2022E, VRDN, 5.00%, 5/01/53 | | | 1,000,000 | | | | 1,029,518 | |
| | Project No.4, Series 2019A-1, VRDN, 4.00%, 12/01/49 | | | 1,000,000 | | | | 990,943 | |
| | Refunding, VRDN, 4.00%, 6/01/51 | | | 1,000,000 | | | | 962,430 | |
| | Series 2022D-1, VRDN, 4.00%, 7/01/52 | | | 500,000 | | | | 495,499 | |
| | County of Mobile, Gomesa Projects, 4.00%, 11/01/45 | | | 100,000 | | | | 73,876 | |
| | Homewood Educational Building Authority, Samford University, Refunding, Series 2019A,
4.00%, 12/01/33 | | | 100,000 | | | | 94,263 | |
| | Southeast Energy Authority,
Cooperative District, Series 2021A, VRDN, 4.00%, 11/01/51 | | | 500,000 | | | | 475,266 | |
| | Cooperative District, Series 2022B-1, VRDN, 5.00%, 5/01/53 | | | 500,000 | | | | 500,612 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 5,109,599 | |
| | | | | | | | | | |
| | | Alaska 0.3% | | | | | | |
| | Alaska Industrial Development & Export Authority, Greater Fairbanks Community Hospital Foundation Obligated Group, Refunding, 4.00%, 4/01/32 | | | 100,000 | | | | 98,013 | |
| | Borough of Matanuska-Susitna, State of Alaska Department of Administration, Refunding,
4.00%, 9/01/30 | | | 150,000 | | | | 151,560 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 249,573 | |
| | | | | | | | | | |
| | | Arizona 1.6% | | | | | | |
| | Arizona Industrial Development Authority, 4.00%, 7/01/29 | | | 250,000 | | | | 239,928 | |
| | City of Phoenix Civic Improvement Corp., Wastewater Revenue, Series 2018A, 5.00%, 7/01/25 | | | 100,000 | | | | 104,660 | |
| | Glendale Industrial Development Authority, 4.00%, 5/15/31 | | | 160,000 | | | | 144,416 | |
| | Industrial Development Authority of the City of Phoenix, Downtown Phoenix Student Housing II LLC, 5.00%, 7/01/31 | | | 100,000 | | | | 99,782 | |
| | La Paz County Industrial Development Authority,
5.00%, 2/15/28 | | | 100,000 | | | | 101,253 | |
| | 5.00%, 2/15/31 | | | 100,000 | | | | 99,089 | |
| | Maricopa County Union High School District No 210-Phoenix, Series 2020C, 5.00%, 7/01/31 | | | 170,000 | | | | 186,461 | |
| | Sierra Vista Industrial Development Authority, Georgetown Community Development Authority,
9.00%, 10/01/37 | | | 250,000 | | | | 235,839 | |
| | Tempe Industrial Development Authority, Tempe Life Care Village Obligated Group, Refunding,
4.00%, 12/01/31 | | | 200,000 | | | | 175,727 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,387,155 | |
| | | | | | | | | | |
| | | Arkansas 0.2% | | | | | | |
| | Arkansas Development Finance Authority,
Baptist Health Obligated Group, 4.00%, 12/01/34 | | | 100,000 | | | | 92,939 | |
| | Baptist Memorial Health Care Obligated Group, Refunding, 5.00%, 9/01/32 | | | 100,000 | | | | 101,892 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 194,831 | |
| | | | | | | | | | |
| | | California 10.8% | | | | | | |
| | California Community College Financing Authority, NCCD-Napa Valley Properties LLC, Series 2022A, 4.25%, 7/01/32 | | | 500,000 | | | | 464,743 | |
| | California Municipal Finance Authority,
AMT, Sereis 2018A, 3.50%, 12/31/35 | | | 100,000 | | | | 84,329 | |
| | Biola University, Inc., Refunding, 5.00%, 10/01/29 | | | 100,000 | | | | 104,135 | |
| | Caritas Corp., Refunding Series 2021B, 3.00%, 8/15/31 | | | 185,000 | | | | 158,884 | |
| | Series 2020B, 4.00%, 9/01/30 | | | 50,000 | | | | 47,825 | |
| | Series 2021A, 4.00%, 9/01/30 | | | 205,000 | | | | 196,085 | |
| | Series 2021C, 4.00%, 9/01/31 | | | 295,000 | | | | 279,015 | |
| a | | California Pollution Control Financing Authority, CalPlant I LLC, AMT, 7.50%, 7/01/32 | | | 250,000 | | | | 150,000 | |
| | California School Finance Authority,
Classical Academy Obligated Group, Series 2020A, 3.00%, 10/01/30 | | | 215,000 | | | | 188,284 | |
| | John Adams Academies Obligated Group, Series 2022A, 4.50%, 7/01/32 | | | 250,000 | | | | 233,289 | |
| | Summit Public Schools Obligated Group, 5.00%, 6/01/27 | | | 100,000 | | | | 101,485 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 93 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | California (continued) | | | | | | |
| | California Statewide Communities Development Authority,
California Baptist University, Refunding, Series 2017A, 3.00%, 11/01/22 | | | 50,000 | | | $ | 49,972 | |
| | Community Facilities District No 2015, 4.00%, 9/01/29 | | | 110,000 | | | | 106,602 | |
| | Community Facilities District No 2015-01, 5.00%, 9/01/27 | | | 65,000 | | | | 66,948 | |
| | Community Facilities District No 2016-02, 4.00%, 9/01/30 | | | 130,000 | | | | 124,181 | |
| | Community Facilities District No 2018, 4.00%, 9/01/30 | | | 150,000 | | | | 142,999 | |
| | Improvement Area No. 1, 4.00%, 9/01/31 | | | 200,000 | | | | 184,509 | |
| | Southern California Edison Co, Refunding, 1.75%, 9/01/29 | | | 1,500,000 | | | | 1,248,218 | |
| | Special Assessment, 4.00%, 9/02/28 | | | 250,000 | | | | 240,995 | |
| | Special Assessment, 4.00%, 9/02/31 | | | 100,000 | | | | 93,471 | |
| | Special Assessment, Series 2020B, 4.00%, 9/02/30 | | | 125,000 | | | | 117,504 | |
| | Special Assessment, Series 2021A, 4.00%, 9/02/31 | | | 150,000 | | | | 137,460 | |
| | Chino Community Facilities District, 4.00%, 9/01/30 | | | 150,000 | | | | 143,245 | |
| | Chula Vista Community Facilities District, 4.00%, 9/01/31 | | | 100,000 | | | | 92,960 | |
| | City of Calimesa, Community Facilities District No 2018-1, 4.00%, 9/01/33 | | | 150,000 | | | | 139,599 | |
| | City of Fontana, Community Facilities District No 85, 4.00%, 9/01/30 | | | 150,000 | | | | 143,764 | |
| | City of Gardena, 2.066%, 4/01/26 | | | 1,000,000 | | | | 918,397 | |
| | City of Ontario, Community Facilities District No 45, 4.00%, 9/01/31 | | | 150,000 | | | | 139,440 | |
| | City of Rancho Cordova, Community Facilities District No 2014-1, 5.00%, 9/01/31 | | | 205,000 | | | | 211,948 | |
| | City of Sacramento, Greenbriar Community Facilities District No 2018-03, 4.00%, 9/01/31 | | | 200,000 | | | | 190,280 | |
| | Corona-Norco Unified School District, Corona-Norco Unified School District Community Facilities District No 17-1, 4.00%, 9/01/34 | | | 105,000 | | | | 94,354 | |
| | County of Orange, Village of Esencia, No 2017-1, Series 2018A, 5.00%, 8/15/28 | | | 100,000 | | | | 105,476 | |
| | CSCDA Community Improvement Authority, Jefferson Anaheim Social Bonds, 2.875%, 8/01/41 | | | 155,000 | | | | 123,872 | |
| | Elsinore Valley Municipal Water District, Community Facilities District No 2020, Series 2021A,
4.00%, 9/01/27 | | | 100,000 | | | | 95,760 | |
| | Irvine Unified School District, Series 2020A, 5.00%, 9/01/32 | | | 250,000 | | | | 259,410 | |
| | Jurupa Community Services District, 4.00%, 9/01/28 | | | 145,000 | | | | 141,679 | |
| | Marina Redevelopment Agency Successor Agency, Series 2020A, 4.00%, 9/01/32 | | | 135,000 | | | | 124,321 | |
| | Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/25 | | | 100,000 | | | | 102,932 | |
| | Poway Unified School District, 5.00%, 9/01/32 | | | 250,000 | | | | 265,404 | |
| | River Islands Public Financing Authority,
Community Facilities District No 2003-, 5.00%, 9/01/32 | | | 500,000 | | | | 466,572 | |
| | Series 2021A-2, 4.00%, 9/01/30 | | | 200,000 | | | | 190,284 | |
| | Riverside Unified School District, 4.00%, 9/01/30 | | | 245,000 | | | | 230,383 | |
| | Romoland School District, Series 2020A, 4.00%, 9/01/33 | | | 140,000 | | | | 127,882 | |
| | Sierra View Local Health Care District, Tulare County, Refunding, 5.00%, 7/01/30 | | | 100,000 | | | | 104,798 | |
| | Sulphur Springs Union School District, Community Facilities District No 2014-1, 5.00%, 9/01/31 | | | 135,000 | | | | 139,077 | |
| | Three Rivers Levee Improvement Authority, Refunding, 4.00%, 9/01/31 | | | 100,000 | | | | 94,581 | |
| | Transbay Joint Powers Authority, Redevelopment Project Green Bond Subordinate Tax,
2.40%, 10/01/49 | | | 500,000 | | | | 464,307 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 9,631,658 | |
| | | | | | | | | | |
| | | Colorado 1.8% | | | | | | |
| | City & County of Denver CO, Refunding, Series 2008A1, VRDN, 2.95%, 12/01/29 | | | 450,000 | | | | 450,000 | |
| | Colorado Educational & Cultural Facilities Authority, Golden View Classical Academy, Refunding, 4.00%, 1/01/32 | | | 200,000 | | | | 183,344 | |
| | Colorado Health Facilities Authority,
Boulder Community Health Obligated Group, Refunding, 5.00%, 10/01/32 | | | 150,000 | | | | 154,940 | |
| | Christian Living Neighborhoods Obligated Group, Refunding, 4.00%, 1/01/29 | | | 100,000 | | | | 91,218 | |
| | Series 2019A-1, 5.00%, 8/01/33 | | | 160,000 | | | | 161,748 | |
| | Regional Transportation District,
Refunding, 5.00%, 1/15/32 | | | 250,000 | | | | 255,855 | |
| | Sales Tax Revenue, Refunding, Series 2013A, 5.00%, 11/01/27 | | | 100,000 | | | | 108,340 | |
| | Southglenn Metropolitan District, Refunding, 5.00%, 12/01/30 | | | 100,000 | | | | 96,856 | |
| | Southlands Metropolitan District No 1, Refunding, Series 2017A-1, 3.50%, 12/01/27 | | | 100,000 | | | | 91,123 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,593,424 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 94 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Connecticut 1.7% | | | | | | |
| | Connecticut Housing Finance Authority, Refunding, Series 2016A-1, 2.875%, 11/15/30 | | | 135,000 | | | $ | 122,922 | |
| | Connecticut State Health & Educational Facilities Authority,
Series 2017I-1, 5.00%, 7/01/29 | | | 135,000 | | | | 141,822 | |
| | Series 2020A, 5.00%, 1/01/30 | | | 150,000 | | | | 150,507 | |
| | State of Connecticut, Social Bond, Sereis 2021B, 3.00%, 6/01/32 | | | 1,050,000 | | | | 939,489 | |
| | Steel Point Infrastructure Improvement District, Steelpointe Harbor Project, 4.00%, 4/01/31 | | | 200,000 | | | | 183,937 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,538,677 | |
| | | | | | | | | | |
| | | Delaware 0.1% | | | | | | |
| | County of Kent, CHF-Dover LLC, 5.00%, 7/01/29 | | | 100,000 | | | | 97,481 | |
| | | | | | | | | | |
| | | District of Columbia 0.2% | | | | | | |
| | District of Columbia, 5.50%, 2/28/35 | | | 200,000 | | | | 205,463 | |
| | | | | | | | | | |
| | | Florida 14.7% | | | | | | |
| | Abbott Square Community Development District, Special Assessment, Series 2022, 5.00%, 6/15/32 | | | 200,000 | | | | 195,925 | |
| | Artisan Lakes East Community Development District, Special Assessment, Series 2021-2,
2.30%, 5/01/26 | | | 195,000 | | | | 173,685 | |
| | Astonia Community Development District, Assessment Area One Project, Special Assessment,
3.375%, 5/01/30 | | | 145,000 | | | | 126,005 | |
| | Avalon Groves Community Development District, Assessment Area 3, Special Assessment,
2.375%, 5/01/26 | | | 120,000 | | | | 107,691 | |
| | Avalon Park West Community Development District, Special Assessment, Refunding, 3.25%, 5/01/30 | | | 100,000 | | | | 85,612 | |
| | Avenir Community Development District, Assessment Area 2, Special Assessment, Series 2021A, 2.75%, 5/01/31 | | | 90,000 | | | | 76,413 | |
| | Babcock Ranch Community Independent Special District,
Assessment Area 2C, Special Assessment, 3.00%, 5/01/30 | | | 50,000 | | | | 42,491 | |
| | Assessment Area 3B, Special Assessment, 3.00%, 5/01/30 | | | 145,000 | | | | 123,223 | |
| | Bannon Lakes Community Development District, Special Assessment, 3.00%, 5/01/31 | | | 200,000 | | | | 165,652 | |
| | Belmond Reserve Community Development District, Special Assessment, Series 2020,
3.25%, 5/01/30 | | | 100,000 | | | | 85,620 | |
| | Berry Bay Community Development District, Assessment Area 1, Special Assessment,
3.125%, 5/01/31 | | | 100,000 | | | | 83,165 | |
| | Black Creek Community Development District, 5.125%, 6/15/32 | | | 100,000 | | | | 97,385 | |
| | Capital Projects Finance Authority, University Project, Series 2020A-1, 5.00%, 10/01/32 | | | 105,000 | | | | 103,540 | |
| | Capital Trust Agency, Inc.,
3.00%, 7/01/31 | | | 125,000 | | | | 100,733 | |
| | Educational Growth Fund LLC, 3.375%, 7/01/31 | | | 100,000 | | | | 84,469 | |
| | Liza Jackson Preparatory School, Inc., 4.00%, 8/01/30 | | | 100,000 | | | | 95,905 | |
| | Lutz Preparatory School, Inc., Refunding, 4.00%, 6/01/31 | | | 200,000 | | | | 191,845 | |
| | WFCS Holdings II LLC, Series 2021A, 3.30%, 1/01/31 | | | 300,000 | | | | 252,800 | |
| | Celebration Community Development District, Assessment Area One Project, Special Assessment, 2.25%, 5/01/26 | | | 105,000 | | | | 93,459 | |
| | Coddington Community Development District, Special Assessment, 5.00%, 5/01/32 | | | 275,000 | | | | 274,162 | |
| | Coral Keys Homes Community Development District, Special Assessment, 3.125%, 5/01/30 | | | 165,000 | | | | 140,930 | |
| | Cordoba Ranch Community Development District, Special Assessment, Refunding, 3.00%, 5/01/31 | | | 100,000 | | | | 82,631 | |
| | Cordova Palms Community Development District,
Assessment Area 1, Special Assessment, 4.80%, 5/01/27 | | | 135,000 | | | | 133,523 | |
| | Special Assessment, 2.80%, 5/01/31 | | | 100,000 | | | | 81,323 | |
| | County of Osceola, Refunding, Series 2020A-2, zero cpn., 10/01/32 | | | 150,000 | | | | 89,217 | |
| | Crestview II Community Development District, Special Assessment, Refunding, 4.00%, 5/01/31 | | | 126,000 | | | | 118,538 | |
| | Cypress Bluff Community Development District, Special Assessment, Series 2020A, 3.125%, 5/01/30 | | | 60,000 | | | | 51,280 | |
| | Cypress Park Estates Community Development District, Special Assessment, Series 2022,
4.375%, 5/01/27 | | | 150,000 | | | | 146,173 | |
| | DW Bayview Community Development District, Special Assessment, 3.00%, 5/01/32 | | | 100,000 | | | | 82,153 | |
| | East Bonita Beach Road Community Development District, Special Assessment, 3.00%, 5/01/32 | | | 100,000 | | | | 81,137 | |
| | Edgewater East Community Development District, Special Assessment, 3.10%, 5/01/31 | | | 100,000 | | | | 83,610 | |
| | Enbrook Community Development District, Special Assessment, 3.00%, 5/01/30 | | | 100,000 | | | | 84,599 | |
| | Entrada Community Development District, Special Assessment, 2.125%, 5/01/26 | | | 100,000 | | | | 89,269 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Florida (continued) | | | | | | |
| | Epperson North Community Development District, Assessment Area 2, Special Assessment,
3.00%, 5/01/31 | | | 85,000 | | | $ | 69,754 | |
| | Florida Development Finance Corp.,
Brightline Trains Florida LLC, AMT, VRDN, 6.375%, 1/01/49 | | | 175,000 | | | | 160,168 | |
| | Brightline Trains Florida LLC, Refunding, VRDN, 7.25%, 7/01/57 | | | 250,000 | | | | 244,079 | |
| | Glenridge on Palmer Ranch Obligated Group, Refunding, 5.00%, 6/01/31 | | | 200,000 | | | | 185,609 | |
| | Mayflower Retirement Community, Refunding, 4.00%, 6/01/31 | | | 100,000 | | | | 87,503 | |
| | Shands Jacksonville Medical Center Obligated Group, Refunding, 5.00%, 2/01/38 | | | 1,400,000 | | | | 1,322,131 | |
| | Forest Lake Community Development District, Assessment Area 1 Project, Special Assessment,
3.25%, 5/01/30 | | | 145,000 | | | | 129,352 | |
| | Grand Oaks Community Development District, Special Assessment, 4.00%, 5/01/30 | | | 150,000 | | | | 141,538 | |
| | Hammock Reserve Community Development District, Assessment Area One Project, Special Assessment, 3.25%, 5/01/30 | | | 100,000 | | | | 86,160 | |
| | Herons Glen Recreation District, Special Assessment, Refunding, 3.00%, 5/01/32 | | | 100,000 | | | | 89,843 | |
| | Hills of Minneola Community Development District,
South Parcel Assessment Area, Special Assessment, 2.375%, 5/01/26 | | | 75,000 | | | | 66,920 | |
| | South Parcel Assessment Area, Special Assessment, 3.50%, 5/01/31 | | | 100,000 | | | | 86,643 | |
| | Holly Hill Road East Community Development District, Assessment Area 3 Project, Special Assessment, 4.00%, 11/01/25 | | | 85,000 | | | | 83,658 | |
| | Indigo Community Development District, 2021 Assessment Area, Phase A1, Special Assessment, 2.70%, 5/01/31 | | | 100,000 | | | | 80,563 | |
| | Kindred Community Development District II,
Special Assessment, 2.20%, 5/01/26 | | | 70,000 | | | | 62,603 | |
| | Special Assessment, 3.00%, 5/01/30 | | | 155,000 | | | | 132,282 | |
| | Kingman Gate Community Development District,
Special Assessment, 2.50%, 6/15/26 | | | 85,000 | | | | 76,737 | |
| | Special Assessment, 3.125%, 6/15/30 | | | 110,000 | | | | 94,973 | |
| | Lakes of Sarasota Community Development District,
Special Assessment, Series 2021A-1, 3.40%, 5/01/31 | | | 135,000 | | | | 118,356 | |
| | Special Assessment, Series 2021B-1, 3.00%, 5/01/26 | | | 115,000 | | | | 107,767 | |
| | Lakewood Ranch Stewardship District,
Northeast Sector Project, Special Assessment, Refunding, 3.20%, 5/01/30 | | | 100,000 | | | | 85,717 | |
| | Special Assessment, 3.125%, 5/01/30 | | | 60,000 | | | | 51,179 | |
| | Special Assessment, 3.20%, 5/01/30 | | | 175,000 | | | | 150,377 | |
| | Star Farms at Lakewood Ranch Proj-Phase 1/2, Special Assessment, 2.70%, 5/01/31 | | | 100,000 | | | | 83,743 | |
| | Laurel Road Community Development District, Special Assessment, Series 2021A-1, 2.60%, 5/01/26 | | | 100,000 | | | | 91,370 | |
| | Lawson Dunes Community Development District, Special Assessment, 4.375%, 5/01/27 | | | 200,000 | | | | 194,977 | |
| | Magnolia Park Community Development District, Special Assessment, Refunding, 4.00%, 5/01/31 | | | 47,000 | | | | 44,223 | |
| | Meadow View at Twin Creeks Community Development District, Phase 4, Special Assessment,
3.00%, 5/01/31 | | | 75,000 | | | | 61,572 | |
| | Miami Health Facilities Authority, Miami Jewish Health Systems Obligated Group, Refunding,
5.00%, 7/01/28 | | | 150,000 | | | | 141,400 | |
| | Mirada Community Development District, Assessment Area Four, Special Assessment,
3.25%, 5/01/32 | | | 200,000 | | | | 164,423 | |
| | Mirada II Community Development District, Special Assessment, 3.125%, 5/01/31 | | | 100,000 | | | | 82,774 | |
| | North AR-1 Pasco Community Development District, Assessment Area Two, Special Assessment, | | | | | | | | |
| | Series 2021A, 3.25%, 5/01/31 | | | 100,000 | | | | 82,606 | |
| | North Powerline Road Community Development District, Special Assessment, 4.75%, 5/01/27 | | | 280,000 | | | | 273,805 | |
| | Old Hickory Community Development District, Special Assessment, 3.00%, 6/15/30 | | | 100,000 | | | | 86,320 | |
| b | | Orange County Health Facilities Authority, Presbyterian Retirement Communities, Inc. Obligated Group, Refunding, Series 2023A, 5.00%, 8/01/32 | | | 500,000 | | | | 491,424 | |
| | Palm Beach County Health Facilities Authority, Jupiter Medical Center Obligated Group,
5.00%, 11/01/32 | | | 100,000 | | | | 101,898 | |
| | Palm Coast Park Community Development District, 4.15%, 5/01/27 | | | 200,000 | | | | 196,278 | |
| | Parkview at Long Lake Ranch Community Development District, Special Assessment, 3.125%, 5/01/30 | | | 100,000 | | | | 85,282 | |
| | Parrish Plantation Community Development District, Special Assessment, 3.125%, 5/01/31 | | | 100,000 | | | | 85,788 | |
| | Pine Ridge Plantation Community Development District, Subordinate Lien, Special Assessment, Refunding, Series 2020A-2, 3.30%, 5/01/30 | | | 150,000 | | | | 128,924 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Florida (continued) | | | | | | |
| | Preserve at South Branch Community Development District, Special Assessment, Series 2021,
3.00%, 5/01/31 | | | 100,000 | | | $ | 83,421 | |
| | Reunion East Community Development District, Special Assessment, 2.85%, 5/01/31 | | | 100,000 | | | | 83,948 | |
| | River Hall Community Development District,
Assessment Area 3, Special Assessment, Series 2020A, 3.25%, 5/01/31 | | | 100,000 | | | | 84,800 | |
| | Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/24 | | | 30,000 | | | | 29,182 | |
| | Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/25 | | | 40,000 | | | | 37,993 | |
| | Rivers Edge II Community Development District, Special Assessment,, 3.00%, 5/01/31 | | | 100,000 | | | | 81,985 | |
| | Rivers Edge III Community Development District, Special Assessment,, 2.40%, 5/01/26 | | | 100,000 | | | | 89,675 | |
| | Saddle Creek Preserve of Polk County Community Development District, Special Assessment,
3.00%, 6/15/30 | | | 80,000 | | | | 67,753 | |
| | Sanctuary Cove Community Development District, Special Assessment, 2.125%, 5/01/26 | | | 135,000 | | | | 119,371 | |
| | Sandmine Road Community Development District,
Assessment Area One, Special Assessment, 3.125%, 5/01/30 | | | 100,000 | | | | 85,429 | |
| | Assessment Area Two, Special Assessment, 2.30%, 11/01/26 | | | 50,000 | | | | 44,063 | |
| | Sandridge Community Development District, Special Assessment, Series 2021A1, 2.875%, 5/01/26 | | | 120,000 | | | | 109,489 | |
| | Sarasota National Community Development District, Special Assessment, Refunding, 3.50%, 5/01/31 | | | 100,000 | | | | 87,809 | |
| | Sawyers Landing Community Development District, Special Assessment, 3.75%, 5/01/31 | | | 150,000 | | | | 132,690 | |
| | Shingle Creek at Bronson Community Development District, Special Assessment, 3.10%, 6/15/31 | | | 100,000 | | | | 84,031 | |
| | Six Mile Creek Community Development District, Assessment Area 2, Phase 3, Special Assessment, 3.10%, 5/01/31 | | | 75,000 | | | | 61,652 | |
| | Stillwater Community Development District, 2021 Project, Special Assessment, 3.00%, 6/15/31 | | | 100,000 | | | | 82,778 | |
| | Summer Woods Community Development District, Assessment Area Three Project, Special Assessment, 3.15%, 5/01/31 | | | 75,000 | | | | 61,830 | |
| | Sunbridge Stewardship District, Special Assessment, 4.50%, 5/01/27 | | | 235,000 | | | | 233,746 | |
| | Tamarindo Community Development District, Special Assessment, 3.00%, 5/01/31 | | | 100,000 | | | | 82,855 | |
| | Timber Creek Southwest Community Development District, Special Assessment, Series 2020,
3.00%, 6/15/30 | | | 150,000 | | | | 126,970 | |
| | Tohoqua Community Development District,
Special Assessment, 2.50%, 5/01/26 | | | 140,000 | | | | 126,234 | |
| | Special Assessment, 2.875%, 5/01/31 | | | 100,000 | | | | 81,858 | |
| | Tradition Community Development District No 9, Special Assessment, 2.70%, 5/01/31 | | | 100,000 | | | | 80,486 | |
| | Trevesta Community Development District, Special Assessment, 3.25%, 5/01/30 | | | 100,000 | | | | 85,392 | |
| | V-Dana Community Development District,
Assessment Area One, Special Assessment, 3.50%, 5/01/31 | | | 150,000 | | | | 129,333 | |
| | Assessment Area One-2021 Project, Special Assessment, Series 2021P, 3.125%, 5/01/31 | | | 100,000 | | | | 83,449 | |
| | Veranda Community Development District II, Special Assessment, Refunding, 3.10%, 5/01/31 | | | 100,000 | | | | 83,373 | |
| | Viera Stewardship District, Village 2, Special Assessment, Series 2021, 2.80%, 5/01/31 | | | 130,000 | | | | 105,822 | |
| | Village Community Development District No 13, Limited Offering, Special Assessment,
3.00%, 5/01/29 | | | 100,000 | | | | 89,688 | |
| | West Villages Improvement District, Unit of Development No 7, Special Assessment,
3.125%, 5/01/31 | | | 100,000 | | | | 84,287 | |
| | Windward Community Development District, Special Assessment, Series 2020A-1, 3.65%, 5/01/30 | | | 100,000 | | | | 87,831 | |
| | Wiregrass II Community Development District, Assessment Area Two, Special Assessment,
4.50%, 5/01/27 | | | 225,000 | | | | 219,455 | |
| | | | | | | | | | |
| | | | | | | | | 13,063,560 | |
| | | | | | | | | | |
| | | Georgia 3.9% | | | | | | |
| | Development Authority of Rockdale County, AHPC Terraces at Fieldstone LLC, Series 2021B-S,
4.50%, 12/01/36 | | | 100,000 | | | | 76,711 | |
| | George L Smith II Congress Center Authority, Signia Hotel Management LLC,, 3.625%, 1/01/31 | | | 350,000 | | | | 295,823 | |
| | Main Street Natural Gas, Inc.,
Gas Supply Revenue, , Sereis 2022C, VRDN, 4.00%, 8/01/52 | | | 1,500,000 | | | | 1,412,015 | |
| | Series 2019A, 5.00%, 5/15/29 | | | 100,000 | | | | 102,990 | |
| | Series 2022A, VRDN, 4.00%, 9/01/52 | | | 500,000 | | | | 469,513 | |
| | Series 2022B, 5.00%, 12/01/52 | | | 1,000,000 | | | | 999,722 | |
| | Municipal Electric Authority of Georgia, Refunding, Series 2019A, 5.00%, 1/01/33 | | | 100,000 | | | | 103,397 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 3,460,171 | |
| | | | | | | | | | |
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 97 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Guam 0.1% | | | | | | |
| | Guam Government Waterworks Authority, Refunding, 5.00%, 7/01/30 | | | 125,000 | | | $ | 128,954 | |
| | | | | | | | | | |
| | | Illinois 14.9% | | | | | | |
| | Chicago Board of Education,
Series A, 5.00%, 12/01/30 | | | 500,000 | | | | 506,550 | |
| | Series B, 5.00%, 12/01/30 | | | 435,000 | | | | 436,976 | |
| | Series B, 5.00%, 12/01/31 | | | 250,000 | | | | 249,620 | |
| | Chicago Park District,
Refunding, Series 2018B, 5.00%, 1/01/29 | | | 770,000 | | | | 796,175 | |
| | Refunding, Series 2020F-2, 5.00%, 1/01/31 | | | 100,000 | | | | 104,402 | |
| | City of Berwyn, Refunding Series 2022B, 4.00%, 12/01/41 | | | 1,000,000 | | | | 904,431 | |
| | City of Chicago, | | | | | | | | |
| | Refunding, Series 2021A, 5.00%, 1/01/33 | | | 640,000 | | | | 637,636 | |
| | zero cpn., 1/01/31 | | | 875,000 | | | | 592,094 | |
| | Illinois Finance Authority,
2018 Blue Island LLC, 4.25%, 12/01/28 | | | 100,000 | | | | 1 | |
| | Lifespace Communities, Inc. Obligated Group, Refunding, Series 2015A, 5.00%, 5/15/24 | | | 245,000 | | | | 245,853 | |
| | Refunding, 4.00%, 10/01/31 | | | 180,000 | | | | 162,593 | |
| | Refunding, Monthly, VRDN, 3.272%, 11/01/34 | | | 400,000 | | | | 395,711 | |
| | Metropolitan Pier & Exposition Authority,
McCormick Place Expansion, Refunding, 3.00%, 6/15/25 | | | 1,000,000 | | | | 966,617 | |
| | McCormick Project, Refunding, zero cpn., 6/15/28 | | | 100,000 | | | | 77,380 | |
| | McCormick Project, zero cpn., 12/15/32 | | | 85,000 | | | | 51,431 | |
| | Railsplitter Tobacco Settlement Authority, 5.00%, 6/01/27 | | | 100,000 | | | | 103,987 | |
| | Southwestern Illinois Development Authority, Madison County Community Unit School District No
7 Edwardsville, Refunding, zero cpn., 12/01/24 | | | 245,000 | | | | 224,600 | |
| | State of Illinois,
3.50%, 6/01/31 | | | 745,000 | | | | 682,135 | |
| | 5.50%, 1/01/30 | | | 670,000 | | | | 707,000 | |
| | 5.50%, 5/01/30 | | | 175,000 | | | | 184,847 | |
| | Refunding, Series 2016B, 5.00%, 10/01/31 | | | 475,000 | | | | 481,862 | |
| | Series 2017C, 5.00%, 11/01/29 | | | 200,000 | | | | 203,713 | |
| | Series 2020B, 5.00%, 10/01/31 | | | 150,000 | | | | 152,766 | |
| | Series 2021B, 3.00%, 12/01/41 | | | 500,000 | | | | 356,076 | |
| | Series B, 5.00%, 3/01/26 | | | 1,000,000 | | | | 1,017,650 | |
| | State of Illinois Sales Tax Revenue,
5.00%, 6/15/30 | | | 695,000 | | | | 736,402 | |
| | Series A, 4.00%, 6/15/27 | | | 1,485,000 | | | | 1,497,600 | |
| | Series D, 4.00%, 6/15/30 | | | 625,000 | | | | 617,569 | |
| | Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 | | | 125,000 | | | | 103,917 | |
| | Village of Villa Park, Garden Station Redevelopment Area, 12/31/38 | | | 100,000 | | | | 68,342 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 13,265,936 | |
| | | | | | | | | | |
| | | Indiana 0.7% | | | | | | |
| | City of Goshen, Green Oaks of Goshen LLC, 4.75%, 8/01/24 | | | 130,000 | | | | 122,951 | |
| | City of Jeffersonville, Vivera Senior Living of Columbus LLC, Series 2020A, 4.75%, 11/01/30 | | | 100,000 | | | | 86,461 | |
| | Indiana Finance Authority,
Ohio Valley Electric Corp., Series 2012C, 3.00%, 11/01/30 | | | 150,000 | | | | 132,620 | |
| | University of Evansville, 7.00%, 9/01/32 | | | 180,000 | | | | 165,494 | |
| | Indiana Housing & Community Development Authority, Vita of Marion LLC, Series 2021A,
5.00%, 4/01/31 | | | 100,000 | | | | 85,066 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 592,592 | |
| | | | | | | | | | |
| | | Iowa 0.7% | | | | | | |
| | Iowa Tobacco Settlement Authority, Refunding, Series 2021B-1, 4.00%, 6/01/49 | | | 710,000 | | | | 628,949 | |
| | | | | | | | | | |
| | | Kansas 0.2% | | | | | | |
| | City of Manhattan, Meadowlark Hills Retirement Community Obligated Group, Refunding
Series 2021A, 4.00%, 6/01/28 | | | 170,000 | | | | 158,833 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Kentucky 0.8% | | | | | | |
| | County of Owen, Refunding, VRDN, 2.45%, 6/01/39 | | | 100,000 | | | $ | 85,227 | |
| | Kentucky Public Energy Authority, Kentucky Public Energy Authority, , Series 2022A2, Daily,
VRDN, 3.183%, 8/01/52 | | | 625,000 | | | | 562,977 | |
| | Louisville/Jefferson County Metropolitan Government, Refunding, 4.00%, 5/01/29 | | | 100,000 | | | | 92,408 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 740,612 | |
| | | | | | | | | | |
| | | Louisiana 0.8% | | | | | | |
| | Lakeshore Villages Master Community Development District, 5.00%, 6/01/32 | | | 245,000 | | | | 240,752 | |
| | Louisiana Local Government Environmental Facilities & Community Development Authority,
3.90%, 11/01/44 | | | 190,000 | | | | 139,656 | |
| | 5.00%, 7/01/29 | | | 100,000 | | | | 92,576 | |
| | Patriot Services Group Obligated Group, 5.25%, 10/01/32 | | | 145,000 | | | | 122,359 | |
| | Port New Orleans Board of Commissioners, AMT, Series 2020E, 5.00%, 4/01/34 | | | 100,000 | | | | 100,695 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 696,038 | |
| | | | | | | | | | |
| | | Maryland 0.6% | | | | | | |
| | City of Baltimore, Harbor Point Special Taxing District, Refunding, 3.25%, 6/01/31 | | | 100,000 | | | | 84,836 | |
| | County of Frederick, Oakdale-Lake Linganore Development District, 3.25%, 7/01/29 | | | 140,000 | | | | 124,318 | |
| | Maryland Economic Development Corp., Ports America Chesapeake LLC, Refunding, Series 2017A, 5.00%, 6/01/27 | | | 100,000 | | | | 104,595 | |
| | Maryland Health & Higher Educational Facilities Authority,
Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 | | | 145,000 | | | | 139,984 | |
| | Refunding, 5.00%, 6/01/30 | | | 100,000 | | | | 103,135 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 556,868 | |
| | | | | | | | | | |
| | | Massachusetts 0.6% | | | | | | |
| | | |
| | Massachusetts Development Finance Agency, | | | | | | | | |
| | Foxborough Regional Charter School, Refunding, 5.00%, 7/01/27 | | | 100,000 | | | | 100,885 | |
| | Salem Community Corp. Obligated Group, Refunding, 5.00%, 1/01/28 | | | 200,000 | | | | 195,927 | |
| | Wellforce Obligated Group, Refunding, Series 2020C, 5.00%, 10/01/30 | | | 200,000 | | | | 215,014 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 511,826 | |
| | | | | | | | | | |
| | | Michigan 1.3% | | | | | | |
| | Grand Rapids Economic Development Corp., Refunding, 4.00%, 11/01/27 | | | 100,000 | | | | 92,387 | |
| | Green Lake Township Economic Development Corp., Interlochen Center for the Arts, VRDN,
2.95%, 6/01/34 | | | 500,000 | | | | 500,000 | |
| | Kalamazoo Economic Development Corp., Refunding, 5.00%, 8/15/31 | | | 110,000 | | | | 102,946 | |
| | Michigan Finance Authority,
Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/27 | | | 190,000 | | | | 182,356 | |
| | Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/32 | | | 285,000 | | | | 256,880 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,134,569 | |
| | | | | | | | | | |
| | | Minnesota 1.1% | | | | | | |
| | City of Eagan, Series 2018A, 4.00%, 2/01/26 | | | 100,000 | | | | 102,471 | |
| | County of Mille Lacs, Series 2018A, 3.00%, 2/01/24 | | | 135,000 | | | | 134,149 | |
| | Duluth Economic Development Authority, Refunding, 4.00%, 7/01/31 | | | 125,000 | | | | 116,564 | |
| | Housing & Redevelopment Authority of The City of St Paul Minnesota, Episcopal Homes Obligated Group, Refunding, 4.00%, 11/01/33 | | | 135,000 | | | | 112,698 | |
| | Minnesota Higher Education Facilities Authority, University of St Thomas/Minneapolis, Series 2022B, 5.00%, 10/01/30 | | | 250,000 | | | | 268,235 | |
| | Northern Municipal Power Agency, Refunding, 5.00%, 1/01/36 | | | 100,000 | | | | 104,774 | |
| | St Louis Park Independent School District No 283, Series 2018A, 5.00%, 2/01/25 | | | 100,000 | | | | 104,062 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 942,953 | |
| | | | | | | | | | |
| | | Mississippi 0.4% | | | | | | |
| | Mississippi Development Bank, Magnolia Regional Health Center, Refunding, 5.00%, 10/01/31 | | | 150,000 | | | | 153,284 | |
| | Mississippi Home Corp., | | | | | | | | |
| | Patriot Services Group Obligated Group, Series 2021D-8, 3.50%, 6/01/33 | | | 100,000 | | | | 78,776 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Mississippi (continued) | | | | | | |
| | Patriot Services Group Pascagoula Portfolio II Obligated Group, Series 2021A, 3.65%, 6/01/33 | | | 100,000 | | | $ | 79,943 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 312,003 | |
| | | | | | | | | | |
| | | Missouri 1.4% | | | | | | |
| | Cape Girardeau County Industrial Development Authority, SoutheastHEALTH Obligated Group, 5.00%, 3/01/29 | | | 130,000 | | | | 132,413 | |
| | City of Maryland Heights, Westport Plaza Redevelopment, 3.625%, 11/01/31 | | | 80,000 | | | | 70,495 | |
| | Missouri Development Finance Board, City of Independence, Refunding, 5.00%, 3/01/30 | | | 930,000 | | | | 943,320 | |
| | St Louis County Industrial Development Authority, Refunding, 5.00%, 9/01/27 | | | 100,000 | | | | 97,786 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,244,014 | |
| | | | | | | | | | |
| | | Montana 0.1% | | | | | | |
| | Cascade County High School District A Great Falls, 5.00%, 7/01/25 | | | 100,000 | | | | 104,232 | |
| | | | | | | | | | |
| | | Nebraska 1.1% | | | | | | |
| | Central Plains Energy Project, Series 2022-1, VRDN, 5.00%, 5/01/53 | | | 1,000,000 | | | | 1,001,529 | |
| | | | | | | | | | |
| | | Nevada 1.0% | | | | | | |
| | City of Carson City, Carson Tahoe Regional Healthcare Obligated Group, 5.00%, 9/01/28 | | | 140,000 | | | | 144,512 | |
| | City of Las Vegas,
Special Assessment, 2.50%, 6/01/29 | | | 200,000 | | | | 167,713 | |
| | Special Assessment, 4.00%, 12/01/22 | | | 95,000 | | | | 94,970 | |
| | Special Improvement District No 611, Special Assessment, 3.50%, 6/01/31 | | | 160,000 | | | | 139,311 | |
| | Tahoe-Douglas Visitors Authority, 5.00%, 7/01/31 | | | 250,000 | | | | 252,203 | |
| | Washoe County School District, Series 2017C, 5.00%, 10/01/26 | | | 100,000 | | | | 106,151 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 904,860 | |
| | | | | | | | | | |
| | | 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 | | | | 107,622 | |
| | | | | | | | | | |
| | | New Jersey 5.5% | | | | | | |
| | Camden County Improvement Authority, Camden Prep High School Project, 5.00%, 7/15/32 | | | 250,000 | | | | 248,019 | |
| | New Jersey Economic Development Authority,
5.00%, 6/15/31 | | | 200,000 | | | | 208,199 | |
| | 5.00%, 7/01/32 | | | 100,000 | | | | 94,314 | |
| | AMT, Refunding, VRDN, 2.20%, 10/01/39 | | | 100,000 | | | | 85,170 | |
| | United Airlines, Inc., 5.25%, 9/15/29 | | | 250,000 | | | | 247,701 | |
| | New Jersey Educational Facilities Authority, Seton Hall University, Series 2016C, 5.00%, 7/01/29 .. | | | 240,000 | | | | 246,792 | |
| | New Jersey Transportation Trust Fund Authority,
Refunding, 5.00%, 12/15/28 | | | 100,000 | | | | 104,278 | |
| | Refunding, Series 2021A, 5.00%, 6/15/28 | | | 265,000 | | | | 275,733 | |
| | Refunding, Series 2021A, 5.00%, 6/15/31 | | | 1,840,000 | | | | 1,919,229 | |
| | Transportation Program Bonds, Sereis 2022BB, 5.00%, 6/15/34 | | | 1,000,000 | | | | 1,016,911 | |
| | Pinelands Regional School District, 3.00%, 8/01/27 | | | 100,000 | | | | 94,822 | |
| | State of New Jersey, Series 2020A, 4.00%, 6/01/31 | | | 180,000 | | | | 181,530 | |
| | Tobacco Settlement Financing Corp., Refunding, Series 2018A, 5.00%, 6/01/30 | | | 190,000 | | | | 196,137 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 4,918,835 | |
| | | | | | | | | | |
| | | New York 4.7% | | | | | | |
| | Genesee County Funding Corp., Rochester Regional Health Obligated Group, 5.00%, 12/01/29 | | | 200,000 | | | | 209,356 | |
| | Metropolitan Transportation Authority,
Green Bond, Series 2017C-1, 5.00%, 11/15/28 | | | 1,255,000 | | | | 1,293,472 | |
| | Green Bond, Series 2017C-1, 5.00%, 11/15/30 | | | 1,140,000 | | | | 1,169,559 | |
| | New York State Dormitory Authority, St Joseph’s College, 5.00%, 7/01/30 | | | 65,000 | | | | 67,338 | |
| | New York Transportation Development Corp.,
2.25%, 8/01/26 | | | 120,000 | | | | 110,740 | |
| | 3.00%, 8/01/31 | | | 210,000 | | | | 183,952 | |
| | AMT, 5.25%, 8/01/31 | | | 90,000 | | | | 90,055 | |
| | AMT, Refunding, 5.00%, 12/01/30 | | | 100,000 | | | | 102,011 | |
| | Delta Air Lines, Inc., AMT, 4.00%, 10/01/30 | | | 225,000 | | | | 211,315 | |
| | | | | | | | | | |
| | | | | | |
| 100 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | New York (continued) | | | | | | |
| | Laguardia Gateway Partners LLCTerm B, AMT, 5.00%, 7/01/30 | | | 100,000 | | | $ | 101,215 | |
| | Refunding, 5.00%, 12/01/30 | | | 150,000 | | | | 156,528 | |
| | Port Authority of New York & New Jersey, Series 230TH, 3.00%, 12/01/31 | | | 500,000 | | | | 446,629 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 4,142,170 | |
| | | | | | | | | | |
| | | North Carolina 0.1% | | | | | | |
| | North Carolina Medical Care Commission, United Methodist Retirement Homes, Inc. Obligated Group, 5.00%, 10/01/27 | | | 100,000 | | | | 104,636 | |
| | | | | | | | | | |
| | | North Dakota 0.1% | | | | | | |
| | County of Grand Forks, Red River Biorefinery LLC, AMT, 6.625%, 12/15/31 | | | 125,000 | | | | 74,403 | |
| | | | | | | | | | |
| | | Ohio 2.5% | | | | | | |
| | Akron Bath Copley Joint Township Hospital District, Summa Health System Obligated Group, Refunding, 4.00%, 11/15/33 | | | 150,000 | | | | 133,716 | |
| | Buckeye Tobacco Settlement Financing Authority, Refunding, Series 2020A-2, Class 1, 5.00%, 6/01/28 | | | 175,000 | | | | 182,330 | |
| | County of Cuyahoga OH, Eliza Jennings Obligated Group, Refunding, 5.00%, 5/15/32 | | | 600,000 | | | | 582,149 | |
| | County of Franklin, | | | | | | | | |
| | Nationwide Children’s Hospital, Inc., 5.00%, 11/01/28 | | | 100,000 | | | | 106,839 | |
| | Ohio Living Obligated Group, Refunding, 4.00%, 7/01/33 | | | 200,000 | | | | 182,446 | |
| | Trinity Health Corp Obligated Group, Series 2019A, 5.00%, 12/01/31 | | | 100,000 | | | | 106,886 | |
| | Wesley Communities Obligated Group, Refunding, 5.00%, 11/15/30 | | | 100,000 | | | | 96,187 | |
| | County of Hamilton, UC Health Obligated Group, 5.00%, 9/15/33 | | | 100,000 | | | | 102,894 | |
| | Franklin County Convention Facilities Authority, 5.00%, 12/01/30 | | | 100,000 | | | | 102,168 | |
| | Ohio Air Quality Development Authority, AMT, 3.75%, 1/15/28 | | | 100,000 | | | | 99,724 | |
| | Ohio Higher Educational Facility Commission, Cleveland Institute of Music/The, 5.00%, 12/01/32 . | | | 300,000 | | | | 297,493 | |
| | State of Ohio, Refunding, 5.00%, 11/15/33 | | | 200,000 | | | | 203,634 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 2,196,466 | |
| | | | | | | | | | |
| | | Oregon 1.1% | | | | | | |
| | Medford Hospital Facilities Authority, Asante Health System Obligated Group, Series 2020A, 5.00%, 8/15/33 | | | 200,000 | | | | 207,063 | |
| | Oregon State Facilities Authority, PeaceHealth Obligated Group, Series 2018B, 2.75%, 8/01/34 | | | 400,000 | | | | 400,000 | |
| | Union County Hospital Facility Authority, Grande Ronde Hospital Inc Obligated Group, 5.00%, 7/01/31 | | | 340,000 | | | | 346,220 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 953,283 | |
| | | | | | | | | | |
| | | Pennsylvania 1.6% | | | | | | |
| | Allegheny County Higher Education Building Authority, Robert Morris University, 5.00%, 10/15/26 | | | 100,000 | | | | 100,664 | |
| | Allentown Neighborhood Improvement Zone Development Authority, 5.00%, 5/01/28 | | | 100,000 | | | | 100,161 | |
| | Bucks County Industrial Development Authority, Grand View Hospital/Sellersville PA Obligated Group, 5.00%, 7/01/32 | | | 150,000 | | | | 147,823 | |
| | Franklin County Industrial Development Authority, Refunding, 5.00%, 12/01/28 | | | 100,000 | | | | 95,302 | |
| | Luzerne County Industrial Development Authority, Pennsylvania-American Water Co., AMT, Refunding, VRDN, 2.45%, 12/01/39 | | | 100,000 | | | | 86,512 | |
| | Pennsylvania Economic Development Financing Authority, UPMC Obligated Group, Series 2017A, 3.375%, 11/15/33 | | | 125,000 | | | | 110,931 | |
| | Philadelphia Authority for Industrial Development,
MaST Community Charter School II, 5.00%, 8/01/30 | | | 150,000 | | | | 151,407 | |
| | Philadelphia Electrical & Technology Charter High School, 4.00%, 6/01/31 | | | 100,000 | | | | 92,438 | |
| | Redevelopment Authority of the City of Philadelphia, Social Bond, Series 2021A, 2.799%, 9/01/33 | | | 500,000 | | | | 409,575 | |
| | Westmoreland County Industrial Development Authority, Excela Health Obligated Group, Refunding, Series 2020A, 5.00%, 7/01/30 | | | 100,000 | | | | 104,262 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 1,399,075 | |
| | | | | | | | | | |
| | | Puerto Rico 2.8% | | | | | | |
| | Commonwealth of Puerto Rico,
Series 2021A, zero cpn., 7/01/24 | | | 3,219 | | | | 2,960 | |
| | Series 2021A, zero cpn., 7/01/33 | | | 12,391 | | | | 6,851 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 101 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Puerto Rico (continued) | | | | | | |
| | Series 2021A1, 4.00%, 7/01/33 | | | 359,628 | | | $ | 317,060 | |
| | Series 2021A1, 4.00%, 7/01/35 | | | 8,654 | | | | 7,419 | |
| | Series 2021A1, 4.00%, 7/01/37 | | | 7,428 | | | | 6,115 | |
| | Series 2021A1, 4.00%, 7/01/41 | | | 10,099 | | | | 7,911 | |
| | Series 2021A1, 4.00%, 7/01/46 | | | 110,503 | | | | 83,053 | |
| | Series 2021A1, 5.25%, 7/01/23 | | | 105,373 | | | | 105,868 | |
| | Series 2021A1, 5.375%, 7/01/25 | | | 10,723 | | | | 10,835 | |
| | Series 2021A1, 5.625%, 7/01/27 | | | 10,626 | | | | 10,860 | |
| | Series 2021A1, 5.625%, 7/01/29 | | | 10,454 | | | | 10,710 | |
| | Series 2021A1, 5.75%, 7/01/31 | | | 10,154 | | | | 10,373 | |
| | VRDN, 11/01/43 | | | 48,075 | | | | 24,098 | |
| | GDB Debt Recovery Authority of Puerto Rico, 7.50%, 8/20/40 | | | 335,671 | | | | 295,390 | |
| | Puerto Rico Electric Power Authority,
Refunding, Series 2007VV, 5.25%, 7/01/27 | | | 170,000 | | | | 171,573 | |
| | Refunding, Series 2007VV, 5.25%, 7/01/32 | | | 175,000 | | | | 172,314 | |
| | Puerto Rico Highway & Transportation Authority,
Refunding, Series 2007CC, 5.25%, 7/01/32 | | | 200,000 | | | | 198,031 | |
| | Refunding, Series 2007CC, 5.50%, 7/01/29 | | | 250,000 | | | | 254,606 | |
| | Series 2007CC, 5.50%, 7/01/28 | | | 155,000 | | | | 158,356 | |
| | Puerto Rico Sales Tax Financing Corp., Sales Tax Revenue, Series 2018A-1, zero cpn., 7/01/31 | | | 1,043,000 | | | | 664,524 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 2,518,907 | |
| | | | | | | | | | |
| | | South Carolina 0.6% | | | | | | |
| | County of Richland, Village at Sandhill Improvement District, Special Assessment, Refunding, 3.00%, 11/01/26 | | | 100,000 | | | | 89,193 | |
| | Patriots Energy Group, Refunding, 4.00%, 6/01/33 | | | 100,000 | | | | 94,441 | |
| | South Carolina Jobs-Economic Development Authority, | | | | | | | | |
| | AHPC Vista Towers 2021 LLC, 3.65%, 12/01/36 | | | 100,000 | | | | 75,487 | |
| | Columbia Portfolio Obligated Group, 6/01/37 | | | 315,000 | | | | 194,255 | |
| | Orchard Pk and Willowbrook Apartment, 3.65%, 12/01/36 | | | 100,000 | | | | 75,564 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 528,940 | |
| | | | | | | | | | |
| | | Tennessee 0.8% | | | | | | |
| | City of Lawrenceburg, Refunding, 2.50%, 6/01/27 | | | 100,000 | | | | 94,804 | |
| | Cleveland Housing Authority, | | | | | | | | |
| | Cleveland Forward Phase One LLC, 6.25%, 4/01/41 | | | 300,000 | | | | 277,767 | |
| | Cleveland Forward Phase Two LLC, 6.25%, 4/01/41 | | | 100,000 | | | | 92,589 | |
| | Metropolitan Government of Nashville & Davidson County, Refunding, 4.00%, 7/01/29 | | | 100,000 | | | | 103,075 | |
| | Metropolitan Nashville Airport Authority, Subordinate, AMT, Series 2019B, 5.00%, 7/01/30 | | | 100,000 | | | | 104,731 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 672,966 | |
| | | | | | | | | | |
| | | Texas 8.0% | | | | | | |
| | Arlington Higher Education Finance Corp., Riverwalk Education Foundation, Inc., 4.00%, 8/15/33 | | | 100,000 | | | | 97,733 | |
| | City of Cedar Park, Refunding, 5.00%, 2/15/24 | | | 100,000 | | | | 102,439 | |
| | City of Celina,
Celina Hills Public Improvement District, Special Assessment, 4.375%, 9/01/27 | | | 100,000 | | | | 96,274 | |
| | Edgewood Creek Public Improvement District, Special Assessment, 3.75%, 9/01/31 | | | 180,000 | | | | 150,545 | |
| | Special Assessment, 3.625%, 9/01/30 | | | 125,000 | | | | 108,701 | |
| | Special Assessment, Refunding, 4.00%, 9/01/30 | | | 190,000 | | | | 189,020 | |
| | Sutton Fields II Public Improvement District, Special Assessment, 2.875%, 9/01/27 | | | 100,000 | | | | 87,024 | |
| | The Parks at Wilson Creek Public Improvement District, Special Assessment, 3.25%, 9/01/31 . | | | 110,000 | | | | 94,644 | |
| | Wells North Public Improvement District, Special Assessment, 3.25%, 9/01/30 | | | 180,000 | | | | 153,458 | |
| | City of Crandall, Special Assessment, 4.75%, 9/15/31 | | | 100,000 | | | | 89,606 | |
| | City of Fate,
Monterra Public Improvement District, Special Assessment, 2.75%, 8/15/26 | | | 97,000 | | | | 86,843 | |
| | Williamsburg East Public Improvement District, Special Assessment, 3.375%, 8/15/30 | | | 145,000 | | | | 123,528 | |
| | City of Garland, Refunding, 5.00%, 2/15/27 | | | 100,000 | | | | 106,743 | |
| | | | | | | | | | |
| | | | | | |
| 102 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Texas (continued) | | | | | | |
| | City of Horseshoe Bay, Escondido Public Improvement District, Special Assessment, Refunding, 3.00%, 10/01/30 | | | 140,000 | | | $ | 117,315 | |
| | City of Kyle,
Creeks Public Improvement District, Special Assessment, 2.75%, 9/01/26 | | | 100,000 | | | | 87,760 | |
| | Kyle 57 Public Improvement District, Series 2022, 4.75%, 9/01/32 | | | 133,000 | | | | 127,115 | |
| | Plum Creek North Public Improvement District, Special Assessment, 4.375%, 9/01/32 | | | 215,000 | | | | 198,952 | |
| | City of Lago Vista,
Special Assessment, Refunding, 3.125%, 9/01/30 | | | 130,000 | | | | 114,157 | |
| | Tessera on Lake Travis Public Improvement District, Special Assessment, Refunding, 5.00%, 9/01/30 | | | 140,000 | | | | 129,528 | |
| | City of Leander, Oak Creek Public Improvement District, Special Assessment, Refunding, 3.25%, 9/01/32 | | | 100,000 | | | | 84,410 | |
| | City of Liberty Hill, Summerlyn West Public Improvement District, Special Assessment, 3.125%, 9/01/30 | | | 75,000 | | | | 63,112 | |
| | City of Mclendon-Chisholm, Sonoma Public Improvement District, Special Assessment, 5.375%, 9/15/32 | | | 155,000 | | | | 150,981 | |
| | City of Oak Point, Special Assessment, 3.25%, 9/01/30 | | | 155,000 | | | | 133,349 | |
| | City of Pilot Point,
Creekview Public Improvement District, Special Assessment, Series 2022, 5.25%, 9/15/32 | | | 150,000 | | | | 146,505 | |
| | Creekview Public Improvement District, Special Assessment, Series 2022, 5.75%, 9/15/32 | | | 145,000 | | | | 141,356 | |
| | City of Princeton,
Special Assessment, 3.25%, 9/01/30 | | | 100,000 | | | | 86,160 | |
| | Winchester Public Improvement District, Special Assessment, 2.875%, 9/01/31 | | | 100,000 | | | | 81,774 | |
| | City of Royse City, Creekshaw Public Improvement District, Special Assessment, 3.125%, 9/15/25 | | | 150,000 | | | | 140,674 | |
| | City of Tomball, Raburn Reserve Public Improvement District, Special Assessment, 3.375%, 9/15/30 | | | 100,000 | | | | 87,882 | |
| | County of Hays, La Cima Public Improvement District, Special Assessment, 3.25%, 9/15/30 | | | 150,000 | | | | 126,218 | |
| | County of Medina, Woodlands Public Improvement District IA#1 Project, Special Assessment, 3.50%, 9/01/26 | | | 100,000 | | | | 89,025 | |
| | Ector County Hospital District, Refunding, 5.00%, 9/15/31 | | | 100,000 | | | | 101,731 | |
| | Hidalgo County Regional Mobility Authority, Senior Lien, Series 2022A, 5.00%, 12/01/33 | | | 350,000 | | | | 354,930 | |
| | New Hope Cultural Education Facilities Finance Corp.,
5.00%, 4/01/29 | | | 100,000 | | | | 107,052 | |
| | 5.00%, 4/01/31 | | | 30,000 | | | | 31,586 | |
| | CHF-Collegiate Housing College Station I LLC, 5.00%, 4/01/29 | | | 100,000 | | | | 97,994 | |
| | Refunding, 4.00%, 1/01/29 | | | 100,000 | | | | 87,378 | |
| | North Parkway Municipal Management District No 1,
Legacy Hills Public Improvement District, Special Assessment, 3.625%, 9/15/31 | | | 50,000 | | | | 43,125 | |
| | Special Assessment, 4.25%, 9/15/31 | | | 152,000 | | | | 141,873 | |
| | Port Freeport,
5.00%, 6/01/32 | | | 855,000 | | | | 891,808 | |
| | AMT, Series 2019A, 5.00%, 6/01/31 | | | 100,000 | | | | 104,747 | |
| | Texas Municipal Gas Acquisition & Supply Corp. III, Refunding, 5.00%, 12/15/30 | | | 1,400,000 | | | | 1,441,419 | |
| | Viridian Municipal Management District,
Special Assessment, 2.875%, 12/01/30 | | | 100,000 | | | | 81,975 | |
| | Viridian Public Improvement District, Special Assessment, 2.375%, 12/01/25 | | | 53,000 | | | | 48,171 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 7,126,620 | |
| | | | | | | | | | |
| | | U. S. Virgin Islands 0.3% | | | | | | |
| | Matching Fund Special Purpose Securitization Corp., United States Virgin Islands Federal Excise Tax, Refunding, Series 2022A, 5.00%, 10/01/30 | | | 250,000 | | | | 255,717 | |
| | | | | | | | | | |
| | | Utah 1.0% | | | | | | |
| | City of Provo, Refunding, 4.00%, 1/01/23 | | | 100,000 | | | | 100,246 | |
| | Military Installation Development Authority, Series 2021A-2, 4.00%, 6/01/36 | | | 250,000 | | | | 204,346 | |
| | Utah Charter School Finance Authority, Wallace Stegner Academy, Series 2022A, 5.25%, 6/15/32 | | | 230,000 | | | | 224,187 | |
| | Utah Infrastructure Agency, 5.00%, 10/15/32 | | | 250,000 | | | | 245,030 | |
| | Utah State Building Ownership Authority, Master Lease Program, 2.50%, 5/15/27 | | | 100,000 | | | | 95,328 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 869,137 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 103 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Dynamic Municipal Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Vermont 0.1% | | | | | | |
| | Vermont Public Power Supply Authority, Refunding, Series 2017A, 5.00%, 7/01/28 | | | 100,000 | | | $ | 105,012 | |
| | | | | | | | | | |
| | | Virginia 1.0% | | | | | | |
| | Peninsula Town Center Community Development Authority, Special Assessment, Refunding, 4.50%, 9/01/28 | | | 100,000 | | | | 92,813 | |
| | Virginia Small Business Financing Authority,
Elizabeth River Crossings OpCo LLC, AMT, Refunding, 4.00%, 7/01/32 | | | 750,000 | | | | 707,017 | |
| | National Senior Campuses, Inc.Obligated Group, Refunding, 5.00%, 1/01/33 | | | 100,000 | | | | 103,887 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 903,717 | |
| | | | | | | | | | |
| | | Washington 1.0% | | | | | | |
| | City of Seattle, Refunding, 4.00%, 7/01/28 | | | 100,000 | | | | 103,389 | |
| | Skagit County Public Hospital District No 1, Refunding, 5.00%, 12/01/29 | | | 100,000 | | | | 102,501 | |
| | Spokane County School District No 356 Central Valley, 5.00%, 12/01/26 | | | 100,000 | | | | 106,858 | |
| | University of Washington, Series 2016A, 5.00%, 12/01/26 | | | 100,000 | | | | 106,698 | |
| | Washington Health Care Facilities Authority, 3.00%, 12/01/34 | | | 125,000 | | | | 102,383 | |
| | Washington State Housing Finance Commission,
eliseo Obligated Group, Series 2021A, 4.00%, 1/01/31 | | | 100,000 | | | | 89,883 | |
| | Madison at Rivers Edge Apartments LLC, 3.65%, 1/01/37 | | | 100,000 | | | | 75,474 | |
| | Presbyterian Retirement Communities Northwest Obligated Group, Series 2019A, 5.00%, 1/01/34 | | | 100,000 | | | | 90,078 | |
| | Spokane United Methodist Homes Obligated Group, 5.00%, 1/01/32 | | | 100,000 | | | | 89,306 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 866,570 | |
| | | | | | | | | | |
| | | West Virginia 0.3% | | | | | | |
| | West Virginia Economic Development Authority, Appalachian Power Co., VRDN, 3.75%, 12/01/42 | | | 250,000 | | | | 242,917 | |
| | | | | | | | | | |
| | | Wisconsin 2.5% | | | | | | |
| | City of Brookfield, Refunding, 3.00%, 12/01/25 | | | 115,000 | | | | 113,364 | |
| | Public Finance Authority,
Coral Academy of Science Reno, 5.375%, 6/01/37 | | | 335,000 | | | | 315,680 | |
| | Duke Energy Progress LLC, Refunding, VRDN, 3.30%, 10/01/46 | | | 500,000 | | | | 489,713 | |
| | Friends Homes Obligated Group, Refunding, 4.00%, 9/01/29 | | | 100,000 | | | | 93,493 | |
| | Ocean Academy Charter School, 4.00%, 10/15/31 | | | 100,000 | | | | 87,611 | |
| | Refunding, 4.00%, 3/01/27 | | | 55,000 | | | | 52,240 | |
| | Refunding, 4.00%, 7/01/31 | | | 100,000 | | | | 86,171 | |
| | Refunding, 5.00%, 10/01/24 | | | 100,000 | | | | 99,943 | |
| | Refunding, 5.00%, 10/01/29 | | | 100,000 | | | | 98,050 | |
| | Refunding, 5.00%, 1/01/30 | | | 250,000 | | | | 261,742 | |
| | Signature Preparatory, 5.00%, 6/15/31 | | | 120,000 | | | | 113,662 | |
| | VRDN, 3.50%, 12/01/50 | | | 100,000 | | | | 77,680 | |
| | Wisconsin Center District, Series 2020C, zero cpn., 12/15/30 | | | 365,000 | | | | 257,899 | |
| | Wisconsin Health & Educational Facilities Authority, St John’s Communities, Inc. Obligated Group, Series 2018A, 4.00%, 9/15/27 | | | 100,000 | | | | 100,613 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 2,247,861 | |
| | | | | | | | | | |
| | Total Investments (Cost $99,729,625) 100.9% | | | | | | | 89,691,214 | |
| | Other Assets, less Liabilities (0.9)% | | | | | | | (757,342 | ) |
| | | | | | | | | | |
| | Net Assets 100.0% | | | | | | $ | 88,933,872 | |
| | | | | | | | | | |
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSee Note 10 regarding defaulted securities.
bSecurity purchased on a when-issued basis. See Note 1(d).
See Abbreviations on page 223.
| | | | | | | | | | |
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| 104 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Exponential Data ETF
| | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021a | |
| | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | |
| | | |
Net asset value, beginning of period | | $ | 22.78 | | | $ | 23.34 | | | $ | 25.00 | |
| | | | |
| | | |
| Income from investment operationsb: | | | | | | | | | | | | |
| | | |
Net investment income (loss)c | | | (0.01 | ) | | | (0.05 | ) | | | (— | )d |
| | | |
Net realized and unrealized gains (losses) | | | (6.98 | ) | | | (0.51 | ) | | | (1.66 | ) |
| | | | |
| | | |
Total from investment operations | | | (6.99 | ) | | | (0.56 | ) | | | (1.66 | ) |
| | | | |
| | | |
Net asset value, end of period | | $ | 15.79 | | | $ | 22.78 | | | $ | 23.34 | |
| | | | |
| | | |
Total returne | | | (30.68)% | | | | (2.40)% | | | | (6.64)% | |
| | | |
| Ratios to average net assetsf | | | | | | | | | | | | |
| | | |
Expenses before waiver and payments by affiliates | | | 0.50% | | | | 1.73% | | | | 5.95% | |
| | | |
Expenses net of waiver and payments by affiliates | | | 0.49% | | | | 0.38% | | | | 0.25% | |
| | | |
Net investment income (loss) | | | (0.15)% | | | | (0.20)% | | | | (0.07)% | |
| | | |
| Supplemental data | | | | | | | | | | | | |
| | | |
Net assets, end of period (000’s) | | | $2,368 | | | | $3,417 | | | | $2,334 | |
| | | |
Portfolio turnover rateg | | | 19.10% | h | | | 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: | | | 19.10% | | | | 49.72% | | | | 23.20% | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 105 |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2022 (unaudited)
Franklin Exponential Data ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Common Stocks 99.9% | | | | | | | | | |
| | | Capital Markets 6.3% | | | | | | | | | |
| | FactSet Research Systems Inc. | | | United States | | | | 114 | | | $ | 45,613 | |
| | Moody’s Corp. | | | United States | | | | 50 | | | | 12,156 | |
| | MSCI Inc. | | | United States | | | | 112 | | | | 47,240 | |
| | S&P Global Inc. | | | United States | | | | 147 | | | | 44,886 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 149,895 | |
| | | | | | | | | | | | | | |
| | | Communications Equipment 2.1% | | | | | | | | | |
| a | | Arista Networks Inc. | | | United States | | | | 445 | | | | 50,236 | |
| | | | | | | | | | | | | | |
| | | Electronic Equipment, Instruments & Components 2.0% | | | | | | | | | |
| a | | Keysight Technologies Inc. | | | United States | | | | 309 | | | | 48,624 | |
| | | | | | | | | | | | | | |
| | | Equity Real Estate Investment Trusts (REITs) 11.7% | | | | | | | | | |
| | Crown Castle Inc. | | | United States | | | | 624 | | | | 90,199 | |
| | Equinix Inc. | | | United States | | | | 164 | | | | 93,290 | |
| | SBA Communications Corp. | | | United States | | | | 325 | | | | 92,511 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 276,000 | |
| | | | | | | | | | | | | | |
| | | Health Care Equipment & Supplies 1.1% | | | | | | | | | |
| a | | Dexcom Inc. | | | United States | | | | 316 | | | | 25,451 | |
| | | | | | | | | | | | | | |
| | | Interactive Media & Services 8.2% | | | | | | | | | |
| a | | Alphabet Inc., A | | | United States | | | | 1,247 | | | | 119,276 | |
| a | | ZoomInfo Technologies Inc., A | | | United States | | | | 1,814 | | | | 75,571 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 194,847 | |
| | | | | | | | | | | | | | |
| | | IT Services 15.7% | | | | | | | | | |
| | Accenture PLC, A | | | United States | | | | 187 | | | | 48,115 | |
| a | | Endava PLC | | | United Kingdom | | | | 158 | | | | 12,740 | |
| a | | EPAM Systems Inc. | | | United States | | | | 31 | | | | 11,228 | |
| a | | Gartner Inc. | | | United States | | | | 170 | | | | 47,037 | |
| a | | Globant SA | | | United States | | | | 59 | | | | 11,038 | |
| a | | MongoDB Inc. | | | United States | | | | 572 | | | | 113,576 | |
| a | | Snowflake Inc., A | | | United States | | | | 688 | | | | 116,932 | |
| a | | Thoughtworks Holding Inc. | | | United States | | | | 996 | | | | 10,448 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 371,114 | |
| | | | | | | | | | | | | | |
| | | Professional Services 0.5% | | | | | | | | | |
| | TransUnion | | | United States | | | | 189 | | | | 11,244 | |
| | | | | | | | | | | | | | |
| | | Software 49.0% | | | | | | | | | |
| a | | Cloudflare Inc., A | | | United States | | | | 1,746 | | | | 96,571 | |
| a | | Confluent Inc., A | | | United States | | | | 998 | | | | 23,723 | |
| a | | Crowdstrike Holdings Inc., A | | | United States | | | | 589 | | | | 97,073 | |
| a | | Datadog Inc., A | | | United States | | | | 1,399 | | | | 124,203 | |
| a | | Fair Isaac Corp. | | | United States | | | | 110 | | | | 45,321 | |
| a | | Fortinet Inc. | | | United States | | | | 1,016 | | | | 49,916 | |
| a | | Gitlab Inc., A | | | United States | | | | 1,322 | | | | 67,713 | |
| a | | HubSpot Inc. | | | United States | | | | 86 | | | | 23,230 | |
| | Microsoft Corp. | | | United States | | | | 628 | | | | 146,261 | |
| a | | Monday.com Ltd. | | | United States | | | | 379 | | | | 42,956 | |
| a | | Palo Alto Networks Inc. | | | United States | | | | 580 | | | | 94,998 | |
| a | | Qualtrics International Inc. | | | United States | | | | 1,139 | | | | 11,595 | |
| a | | Salesforce Inc. | | | United States | | | | 168 | | | | 24,165 | |
| a | | SentinelOne Inc., A | | | United States | | | | 1,927 | | | | 49,254 | |
| a | | ServiceNow Inc. | | | United States | | | | 239 | | | | 90,249 | |
| a | | Sprinklr Inc. | | | United States | | | | 1,235 | | | | 11,387 | |
| a | | Sprout Social Inc., A | | | United States | | | | 215 | | | | 13,046 | |
| a | | Trade Desk Inc., A | | | United States | | | | 820 | | | | 48,995 | |
| | Trend Micro Inc. | | | Japan | | | | 909 | | | | 49,110 | |
| | | | | | | | | | |
| | | | | | |
| 106 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Exponential Data ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Software (continued) | | | | | | | | | |
| a | | Zscaler Inc. | | | United States | | | | 302 | | | $ | 49,640 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,159,406 | |
| | | | | | | | | | | | | | |
| | | Wireless Telecommunication Services 3.3% | | | | | | | | | |
| a | | T-Mobile US Inc. | | | United States | | | | 578 | | | | 77,550 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $2,856,409) | | | | | | | | | | | 2,364,367 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $2,856,409) | | | | | | | | | | | 2,364,367 | |
| | | | | | | | | | | | | | |
| | | Short-Term Investments 0.1% | | | | | | | | | |
| | | Money Market Funds 0.1% | | | | | | | | | |
| b,c | | Institutional Fiduciary Trust Portfolio, 2.45% | | | United States | | | | 2,910 | | | | 2,910 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $2,859,319) 100.0% | | | | | | | | | | | 2,367,277 | |
| | | | | | | | | | | | | | |
| | Other Assets, less Liabilities 0.0%† | | | | | | | | | | | 957 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 2,368,234 | |
| | | | | | | | | | | | | | |
†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.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 107 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Genomic Advancements ETF
| | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020a | |
| | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | |
| | | | |
Net asset value, beginning of period | | $ | 37.00 | | | $ | 43.26 | | | $ | 22.58 | | | $ | 25.00 | |
| | | | |
| | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | |
| | | | |
Net investment income (loss)c | | | (0.02 | ) | | | (0.15 | ) | | | (0.18 | ) | | | (0.01 | ) |
| | | | |
Net realized and unrealized gains (losses) | | | (7.30 | ) | | | (5.99 | ) | | | 20.92 | | | | (2.41 | ) |
| | | | |
| | | | |
Total from investment operations | | | (7.32 | ) | | | (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 period | | $ | 29.68 | | | $ | 37.00 | | | $ | 43.26 | | | $ | 22.58 | |
| | | | |
| | | | |
Total returnd | | | (19.78)% | | | | (14.26)% | | | | 91.81% | | | | (9.68)% | |
| | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | |
| | | | |
Expenses before waiver and payments by affiliates | | | 0.50% | | | | 0.66% | | | | 1.84% | | | | 12.22% | |
| | | | |
Expenses net of waiver and payments by affiliates | | | 0.50% | | | | 0.50% | | | | 0.50% | | | | 0.50% | |
| | | | |
Net investment income (loss) | | | (0.11)% | | | | (0.32)% | | | | (0.45)% | | | | (0.37)% | |
| | | | |
| Supplemental data | | | | | | | | | | | | | | | | |
| | | | |
Net assets, end of period (000’s) | | | $10,389 | | | | $14,799 | | | | $15,140 | | | | $2,258 | |
| | | | |
Portfolio turnover ratef | | | 27.04% | g | | | 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: | | | 27.04% | | | | 59.54% | | | | 44.75% | | | | 2.20% | |
| | | | | | | | | | |
| | | | | | |
| 108 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statement of Investments, September 30, 2021 (unaudited)
Franklin Genomic Advancements ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Common Stocks 95.4% | | | | | | | | | |
| | | Biotechnology 33.0% | | | | | | | | | |
| a | | Alnylam Pharmaceuticals Inc. | | | United States | | | | 1,098 | | | $ | 219,776 | |
| a | | Avid Bioservices Inc. | | | United States | | | | 12,366 | | | | 236,438 | |
| a | | Bavarian Nordic A/S | | | Denmark | | | | 1,775 | | | | 52,081 | |
| a | | Beam Therapeutics Inc. | | | United States | | | | 2,006 | | | | 95,566 | |
| | BioNTech SE | | | Germany | | | | 1,603 | | | | 216,213 | |
| a | | CRISPR Therapeutics AG | | | Switzerland | | | | 1,599 | | | | 104,495 | |
| a | | Dynavax Technologies Corp. | | | United States | | | | 7,840 | | | | 81,849 | |
| a | | Editas Medicine Inc. | | | United States | | | | 7,820 | | | | 95,717 | |
| a | | Fate Therapeutics Inc. | | | United States | | | | 2,221 | | | | 49,773 | |
| a | | Intellia Therapeutics Inc. | | | United States | | | | 5,314 | | | | 297,371 | |
| a | | Ionis Pharmaceuticals Inc. | | | United States | | | | 3,621 | | | | 160,157 | |
| a | | IVERIC bio Inc. | | | United States | | | | 3,135 | | | | 56,242 | |
| a | | Krystal Biotech Inc. | | | United States | | | | 2,418 | | | | 168,534 | |
| a | | Ligand Pharmaceuticals Inc. | | | United States | | | | 633 | | | | 54,508 | |
| a | | Moderna Inc. | | | United States | | | | 2,463 | | | | 291,250 | |
| a | | PTC Therapeutics Inc. | | | United States | | | | 3,224 | | | | 161,845 | |
| a | | Regeneron Pharmaceuticals Inc. | | | United States | | | | 492 | | | | 338,924 | |
| a | | Sarepta Therapeutics Inc. | | | United States | | | | 2,139 | | | | 236,445 | |
| a | | Taysha Gene Therapies Inc. | | | United States | | | | 176 | | | | 340 | |
| a | | Twist Bioscience Corp. | | | United States | | | | 1,449 | | | | 51,063 | |
| a | | Veracyte Inc. | | | United States | | | | 801 | | | | 13,296 | |
| a | | Vertex Pharmaceuticals Inc. | | | United States | | | | 1,201 | | | | 347,737 | |
| a | | Verve Therapeutics Inc. | | | United States | | | | 2,820 | | | | 96,867 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,426,487 | |
| | | | | | | | | | | | | | |
| | | Chemicals 3.5% | | | | | | | | | |
| | Corteva Inc. | | | United States | | | | 5,360 | | | | 306,324 | |
| | FMC Corp. | | | United States | | | | 511 | | | | 54,013 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 360,337 | |
| | | | | | | | | | | | | | |
| | | Equity Real Estate Investment Trusts (REITs) 0.5% | | | | | | | | | |
| | Alexandria Real Estate Equities Inc. | | | United States | | | | 373 | | | | 52,291 | |
| | | | | | | | | | | | | | |
| | | Health Care Providers & Services 5.1% | | | | | | | | | |
| a | | Fulgent Genetics Inc. | | | United States | | | | 657 | | | | 25,045 | |
| a | | Guardant Health Inc. | | | United States | | | | 5,752 | | | | 309,630 | |
| | Laboratory Corp. of America Holdings | | | United States | | | | 508 | | | | 104,043 | |
| a | | Privia Health Group Inc. | | | United States | | | | 2,687 | | | | 91,519 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 530,237 | |
| | | | | | | | | | | | | | |
| | | Health Care Technology 1.9% | | | | | | | | | |
| a | | Doximity Inc. | | | United States | | | | 1,719 | | | | 51,948 | |
| a | | Schrodinger Inc. | | | United States | | | | 3,978 | | | | 99,371 | |
| | Simulations Plus Inc. | | | United States | | | | 1,004 | | | | 48,734 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 200,053 | |
| | | | | | | | | | | | | | |
| | | Life Sciences Tools & Services 43.3% | | | | | | | | | |
| | Agilent Technologies Inc. | | | United States | | | | 1,704 | | | | 207,121 | |
| a | | Avantor Inc. | | | United States | | | | 1,209 | | | | 23,696 | |
| a | | Bio-Rad Laboratories Inc., A | | | United States | | | | 239 | | | | 99,696 | |
| | Bio-Techne Corp. | | | United States | | | | 365 | | | | 103,660 | |
| | Bruker Corp. | | | United States | | | | 4,171 | | | | 221,313 | |
| a | | Charles River Laboratories International Inc. | | | United States | | | | 1,111 | | | | 218,645 | |
| | Danaher Corp. | | | United States | | | | 2,427 | | | | 626,870 | |
| a | | Evotec SE | | | Germany | | | | 5,328 | | | | 93,717 | |
| a | | ICON PLC | | | Ireland | | | | 548 | | | | 100,711 | |
| a | | Illumina Inc. | | | United States | | | | 288 | | | | 54,947 | |
| a | | IQVIA Holdings Inc. | | | United States | | | | 543 | | | | 98,359 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 109 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Genomic Advancements ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Life Sciences Tools & Services (continued) | | | | | | | | | |
| | Lonza Group AG | | | Switzerland | | | | 436 | | | $ | 215,420 | |
| a | | Medpace Holdings Inc. | | | United States | | | | 2,262 | | | | 355,519 | |
| a | | Olink Holding AB | | | Sweden | | | | 560 | | | | 6,798 | |
| a | | Oxford Nanopore Technologies PLC | | | United Kingdom | | | | 33,333 | | | | 95,443 | |
| | PerkinElmer Inc. | | | United States | | | | 1,402 | | | | 168,703 | |
| a | | QIAGEN NV | | | Netherlands | | | | 5,038 | | | | 207,969 | |
| a | | Repligen Corp. | | | United States | | | | 3,498 | | | | 654,511 | |
| a,b | | ,Samsung Biologics Co. Ltd., 144A | | | South Korea | | | | 570 | | | | 321,514 | |
| | Thermo Fisher Scientific Inc. | | | United States | | | | 1,224 | | | | 620,801 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,495,413 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 6.8% | | | | | | | | | |
| | AstraZeneca PLC | | | United Kingdom | | | | 3,866 | | | | 212,011 | |
| | Bristol-Myers Squibb Co. | | | United States | | | | 1,610 | | | | 114,455 | |
| a | | Catalent Inc. | | | United States | | | | 3,694 | | | | 267,298 | |
| | Eli Lilly & Co. | | | United States | | | | 366 | | | | 118,346 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 712,110 | |
| | | | | | | | | | | | | | |
| | | Semiconductors & Semiconductor Equipment 0.2% | | | | | | | | | |
| | Brooks Automation Inc. | | | United States | | | | 544 | | | | 23,316 | |
| | | | | | | | | | | | | | |
| | | Software 1.1% | | | | | | | | | |
| a | | Cadence Design Systems Inc. | | | United States | | | | 682 | | | | 111,459 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $13,276,878) | | | | | | | | | | | 9,911,703 | |
| | | | | | | | | | | | | | |
| | | Preferred Stock 3.6% | | | | | | | | | |
| | | Health Care Equipment & Supplies 3.6% | | | | | | | | | |
| c | | Sartorius AG, 0.35%, pfd. | | | Germany | | | | 1,055 | | | | 369,074 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $642,905) | | | | | | | | | | | 369,074 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $13,919,783) 99.0% | | | | | | | | | | | 10,280,777 | |
| | Other Assets, less Liabilities 1.0% | | | | | | | | | | | 108,226 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 10,389,003 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $321,514, representing 3.1% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| 110 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin High Yield Corporate ETFa
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019b | |
| | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, beginning of period | | $ | 24.76 | | | $ | 26.16 | | | $ | 22.67 | | | $ | 25.45 | | | $ | 25.00 | |
| | | | |
| | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment incomed | | | 0.60 | | | | 1.20 | | | | 1.23 | | | | 1.33 | | | | 1.21 | |
| | | | | |
Net realized and unrealized gains (losses) | | | (3.10 | ) | | | (1.34 | ) | | | 3.73 | | | | (2.51 | ) | | | 0.49 | |
| | | | |
| | | | | |
Total from investment operations | | | (2.50 | ) | | | (0.14 | ) | | | 4.96 | | | | (1.18 | ) | | | 1.70 | |
| | | | |
| | | | | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment income | | | (0.73 | ) | | | (1.18 | ) | | | (1.47 | ) | | | (1.56 | ) | | | (1.23 | ) |
| | | | | |
Net realized gains | | | — | | | | (0.08 | ) | | | — | | | | (0.04 | ) | | | (0.02 | ) |
| | | | |
| | | | | |
Total Distributions | | | (0.73 | ) | | | (1.26 | ) | | | (1.47 | ) | | | (1.60 | ) | | | (1.25 | ) |
| | | | |
| | | | | |
Net asset value, end of period | | $ | 21.53 | | | $ | 24.76 | | | $ | 26.16 | | | $ | 22.67 | | | $ | 25.45 | |
| | | | |
| | | | | |
Total returne | | | (10.27)% | | | | (0.69)% | | | | 22.28% | | | | (5.12)% | | | | 7.07% | |
| | | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Expenses before waiver and payments by affiliates | | | 0.40% | | | | 0.47% | | | | 0.64% | | | | 0.86% | | | | 1.54% | |
| | | | | |
Expenses net of waiver and payments by affiliates | | | 0.40% | | | | 0.40% | | | | 0.40% | | | | 0.40% | | | | 0.40% | |
| | | | | |
Net investment income | | | 5.21% | | | | 4.62% | | | | 4.84% | | | | 5.29% | | | | 5.80% | |
| | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net assets, end of period (000’s) | | | $187,281 | | | | $334,286 | | | | $346,586 | | | | $130,362 | | | | $10,181 | |
| | | | | |
Portfolio turnover rateg | | | 3.41% | h | | | 43.83% | h | | | 53.18% | h | | | 129.98% | h | | | 23.57% | |
aEffective August 1, 2022, Formerly, Franklin Liberty High Yield Corporate ETF was renamed Franklin High Yield Corporate ETF.
bFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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: | | | 3.41% | | | | 43.83% | | | | 53.18% | | | | 129.98% | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 111 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin High Yield Corporate ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes 89.0% | | | | | | | | | |
| | | Airlines 1.9% | | | | | | | | | |
| a | | American Airlines Inc/AAdvantage Loyalty IP Ltd., senior secured note,
144A, 5.50%, 4/20/26 | | | United States | | | | 2,100,000 | | | $ | 1,975,753 | |
| a | | United Airlines Inc., 144A, 4.375%, 4/15/26 | | | United States | | | | 1,700,000 | | | | 1,520,208 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,495,961 | |
| | | | | | | | | | | | | | |
| | | Automobiles & Components 3.5% | | | | | | | | | |
| | Dana Inc., senior note5.625%, 6/15/28 | | | United States | | | | 1,700,000 | | | | 1,406,233 | |
| a | | Dornoch Debt Merger Sub Inc., 144A, 6.625%, 10/15/29 | | | United States | | | | 1,400,000 | | | | 1,011,225 | |
| | Goodyear Tire & Rubber Co.,
5.00%, 7/15/29 | | | United States | | | | 800,000 | | | | 654,500 | |
| | senior bond4.875%, 3/15/27 | | | United States | | | | 1,000,000 | | | | 886,460 | |
| a | | Jaguar Land Rover Automotive PLC, 144A, 5.50%, 7/15/29 | | | United Kingdom | | | | 2,400,000 | | | | 1,675,224 | |
| a | | Real Hero Merger Sub 2 Inc., senior note, 144A, 6.25%, 2/01/29 | | | United States | | | | 1,300,000 | | | | 940,485 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 6,574,127 | |
| | | | | | | | | | | | | | |
| | | Capital Goods 3.2% | | | | | | | | | |
| a | | ATS Automation Tooling Systems Inc., 144A, 144A, 4.125%, 12/15/28 | | | Canada | | | | 900,000 | | | | 748,422 | |
| a | | Cornerstone Building Brands Inc., senior note, 144A, 6.125%, 1/15/29 | | | United States | | | | 1,400,000 | | | | 783,922 | |
| a | | Standard Industries Inc., 144A, 4.75%, 1/15/28 | | | United States | | | | 200,000 | | | | 169,451 | |
| a | | Stericycle Inc., Senior note, 144A, 3.875%, 1/15/29 | | | United States | | | | 1,000,000 | | | | 829,200 | |
| a | | TransDigm Inc., senior secured note, 144A, 6.25%, 3/15/26 | | | United States | | | | 2,300,000 | | | | 2,234,887 | |
| a | | Vertiv Group Corp., 144A, 4.125%, 11/15/28 | | | United States | | | | 1,500,000 | | | | 1,209,772 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,975,654 | |
| | | | | | | | | | | | | | |
| | | Commercial & Professional Services 6.7% | | | | | | | | | |
| a | | Ahern Rentals Inc., secured note, senior lien, 144A, 7.375%, 5/15/23 | | | United States | | | | 900,000 | | | | 610,783 | |
| a | | APX Group Inc., 144A, 5.75%, 7/15/29 | | | United States | | | | 1,100,000 | | | | 872,014 | |
| a | | Gartner Inc., 144A, 3.625%, 6/15/29 | | | United States | | | | 500,000 | | | | 417,328 | |
| | Grand Canyon University, unsecured note, 5.125%, 10/01/28 | | | United States | | | | 1,700,000 | | | | 1,542,291 | |
| a | | H&E Equipment Services Inc., senior note, 144A, 3.875%, 12/15/28 | | | United States | | | | 1,900,000 | | | | 1,495,499 | |
| a | | Herc Holdings Inc., senior note, 144A, 5.50%, 7/15/27 | | | United States | | | | 1,800,000 | | | | 1,623,627 | |
| a | | MPH Acquisition Holdings LLC, 144A, 5.75%, 11/01/28 | | | United States | | | | 1,800,000 | | | | 1,355,418 | |
| a | | NESCO Holdings II Inc., secured note, 144A, 5.50%, 4/15/29 | | | United States | | | | 600,000 | | | | 500,862 | |
| a | | Nielsen Finance LLC / Nielsen Finance Co., 144A, 4.50%, 7/15/29 | | | United States | | | | 1,800,000 | | | | 1,796,580 | |
| a | | Prime Security Services Borrower LLC / Prime Finance Inc., senior secured note, first lien, 144A, 3.375%, 8/31/27 | | | United States | | | | 1,300,000 | | | | 1,094,977 | |
| a | | PROG Holdings Inc., 144A, 6.00%, 11/15/29 | | | United States | | | | 800,000 | | | | 641,040 | |
| a | | ZipRecruiter Inc., 144A, 5.00%, 1/15/30 | | | United States | | | | 800,000 | | | | 647,560 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 12,597,979 | |
| | | | | | | | | | | | | | |
| | | Commercial Services 1.1% | | | | | | | | | |
| | United Rentals North America Inc.5.50%, 5/15/27 | | | United States | | | | 2,100,000 | | | | 2,033,850 | |
| | | | | | | | | | | | | | |
| | | Construction Materials 0.3% | | | | | | | | | |
| a | | Camelot Return Merger Sub Inc., 144A, 8.75%, 8/01/28 | | | United States | | | | 700,000 | | | | 577,893 | |
| | | | | | | | | | | | | | |
| | | Consumer Durables & Apparel 1.0% | | | | | | | | | |
| a | | Ashton Woods USA LLC / Ashton Woods Finance Co., 144A, 4.625%, 4/01/30 | | | United States | | | | 1,200,000 | | | | 861,774 | |
| a | | Kontoor Brands Inc., 144A, 4.125%, 11/15/29 | | | United States | | | | 1,200,000 | | | | 957,935 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,819,709 | |
| | | | | | | | | | | | | | |
| | | Consumer Services 4.1% | | | | | | | | | |
| a,b,c | | 24 Hour Fitness Worldwide Inc., senior note, 144A, 8.00%, 6/01/22 | | | United States | | | | 800,000 | | | | 240 | |
| | Carnival Corp., | | | | | | | | | | | | |
| a | | 144A, 7.625%, 3/01/26 | | | United States | | | | 800,000 | | | | 609,212 | |
| a | | senior note144A, 5.75%, 3/01/27 | | | United States | | | | 1,900,000 | | | | 1,335,272 | |
| a | | NCL Corp. Ltd., 144A, 5.875%, 3/15/26 | | | United States | | | | 1,300,000 | | | | 990,990 | |
| a | | Royal Caribbean Cruises Ltd., 144A, 5.50%, 8/31/26 | | | United States | | | | 1,700,000 | | | | 1,302,676 | |
| a | | Station Casinos LLC, 144A, 4.50%, 2/15/28 | | | United States | | | | 1,400,000 | | | | 1,151,195 | |
| a | | Studio City Finance Ltd., senior note, 144A, 5.00%, 1/15/29 | | | United States | | | | 2,200,000 | | | | 980,745 | |
| | | | | | | | | | |
| | | | | | |
| 112 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin High Yield Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Consumer Services (continued) | | | | | | | | | |
| a | | Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp., senior bond, 144A, 5.50%, 3/01/25 | | | United States | | | | 1,500,000 | | | $ | 1,406,520 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 7,776,850 | |
| | | | | | | | | | | | | | |
| | | Diversified Financials 5.7% | | | | | | | | | |
| a | | Apollo Commercial Real Estate Finance Inc., 144A, 4.625%, 6/15/29 | | | United States | | | | 1,000,000 | | | | 755,300 | |
| a | | Global Net Lease Inc./Global Net Lease Operating Partnership LP, senior note, 144A, 3.75%, 12/15/27 | | | United States | | | | 1,300,000 | | | | 1,015,800 | |
| a | | Jane Street Group / JSG Finance Inc., 144A, 4.50%, 11/15/29 | | | United States | | | | 600,000 | | | | 516,843 | |
| a | | Jefferson Capital Holdings LLC, 144A, 6.00%, 8/15/26 | | | United States | | | | 1,400,000 | | | | 1,173,697 | |
| a | | Ladder Capital Finance Holdings LLLP / Ladder Capital Finance Corp., 144A, 4.75%, 6/15/29 | | | United States | | | | 1,300,000 | | | | 975,390 | |
| a | | Necessity Retail REIT Inc. / American Finance Operating Partner LP, 144A, 4.50%, 9/30/28 | | | United States | | | | 1,600,000 | | | | 1,195,920 | |
| a | | Oxford Finance LLC / Oxford Finance Co-Issuer II Inc., 144A, 6.375%, 2/01/27 | | | United States | | | | 1,500,000 | | | | 1,406,543 | |
| a | | PRA Group Inc., 144A, 5.00%, 10/01/29 | | | United States | | | | 1,500,000 | | | | 1,218,326 | |
| a | | VICI Properties LP / VICI Note Co. Inc., 144A, 3.875%, 2/15/29 | | | United States | | | | 1,500,000 | | | | 1,261,507 | |
| a | | XHR LP, 144A, 4.875%, 6/01/29 | | | United States | | | | 1,400,000 | | | | 1,157,128 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,676,454 | |
| | | | | | | | | | | | | | |
| | | Energy 17.8% | | | | | | | | | |
| a | | Antero Resources Corp., 144A, 7.625%, 2/01/29 | | | United States | | | | 601,000 | | | | 601,195 | |
| a | | Atlantica Sustainable Infrastructure PLC, 144A, 4.125%, 6/15/28 | | | Spain | | | | 1,400,000 | | | | 1,182,741 | |
| a | | Calumet Specialty Products Partners LP / Calumet Finance Corp., 144A, 8.125%, 1/15/27 | | | United States | | | | 700,000 | | | | 646,408 | |
| | Cheniere Energy Inc.4.625%, 10/15/28 | | | United States | | | | 1,700,000 | | | | 1,563,464 | |
| | Cheniere Energy Partners LP, 4.00%, 3/01/31 | | | United States | | | | 700,000 | | | | 588,343 | |
| | senior note4.50%, 10/01/29 | | | United States | | | | 1,500,000 | | | | 1,324,043 | |
| a | | Chesapeake Energy Corp., 144A, 6.75%, 4/15/29 | | | United States | | | | 1,900,000 | | | | 1,825,377 | |
| | Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp., senior note5.75%, 4/01/25 | | | United States | | | | 600,000 | | | | 570,108 | |
| | a senior note144A, 8.00%, 4/01/29 | | | United States | | | | 1,200,000 | | | | 1,157,496 | |
| a | | CrownRock LP / CrownRock Finance Inc., 144A, 5.00%, 5/01/29 | | | United States | | | | 1,000,000 | | | | 884,848 | |
| a | | CSI Compressco LP / CSI Compressco Finance Inc., senior secured note, first lien, 144A, 7.50%, 4/01/25 | | | United States | | | | 1,000,000 | | | | 873,555 | |
| a | | DT Midstream Inc., 144A, 4.125%, 6/15/29 | | | United States | | | | 1,500,000 | | | | 1,270,748 | |
| | EnLink Midstream Partners LP, senior note4.15%, 6/01/25 | | | United States | | | | 1,900,000 | | | | 1,767,741 | |
| a | | EQM Midstream Partners LP, 144A, 7.50%, 6/01/27 | | | United States | | | | 1,600,000 | | | | 1,527,632 | |
| a | | Harbour Energy PLC, 144A, 5.50%, 10/15/26 | | | United Kingdom | | | | 2,300,000 | | | | 2,063,606 | |
| a | | Hilcorp Energy I LP / Hilcorp Finance Co., senior bond144A, 6.00%, 2/01/31 | | | United States | | | | 400,000 | | | | 348,055 | |
| a | | senior note144A, 5.75%, 2/01/29 | | | United States | | | | 1,700,000 | | | | 1,489,719 | |
| a | | Kinetik Holdings LP, 144A, 5.875%, 6/15/30 | | | United States | | | | 1,500,000 | | | | 1,376,646 | |
| a | | Martin Midstream Partners LP / Martin Midstream Finance Corp., senior note, second lien, 144A, 11.50%, 2/28/25 | | | United States | | | | 1,886,248 | | | | 1,844,005 | |
| a | | Nabors Industries Inc., 144A, 7.375%, 5/15/27 | | | United States | | | | 1,000,000 | | | | 925,000 | |
| a | | Nabors Industries Ltd., senior note, 144A, 7.25%, 1/15/26 | | | United States | | | | 600,000 | | | | 523,232 | |
| | Occidental Petroleum Corp., | | | | | | | | | | | | |
| | senior bond6.45%, 9/15/36 | | | United States | | | | 700,000 | | | | 701,722 | |
| | senior note 5.55%, 3/15/26 | | | United States | | | | 1,400,000 | | | | 1,403,416 | |
| | senior bond 8.875%, 7/15/30 | | | United States | | | | 1,500,000 | | | | 1,673,355 | |
| a | | SunCoke Energy Inc., 144A, 4.875%, 6/30/29 | | | United States | | | | 1,000,000 | | | | 773,305 | |
| | Sunoco LP / Sunoco Finance Corp., senior note6.00%, 4/15/27 | | | United States | | | | 1,500,000 | | | | 1,432,522 | |
| | Venture Global Calcasieu Pass LLC, | | | | | | | | | | | | |
| a | | 144A, 4.125%, 8/15/31 | | | United States | | | | 800,000 | | | | 665,296 | |
| a | | 144A, 3.875%, 8/15/29 | | | United States | | | | 900,000 | | | | 773,838 | |
| a | | Weatherford International Ltd., 144A, 8.625%, 4/30/30 | | | United States | | | | 400,000 | | | | 349,260 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin High Yield Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Energy (continued) | | | | | | | | | |
| a | | 144A, 6.50%, 9/15/28 | | | United States | | | | 1,300,000 | | | $ | 1,171,820 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 33,298,496 | |
| | | | | | | | | | | | | | |
| | | Food 0.6% | | | | | | | | | |
| a | | Lamb Weston Holdings Inc., 144A, 4.125%, 1/31/30 | | | United States | | | | 1,400,000 | | | | 1,187,081 | |
| | | | | | | | | | | | | | |
| | | Food, Beverage & Tobacco 0.2% | | | | | | | | | |
| a | | Primo Water Holdings Inc., 144A, 4.375%, 4/30/29 | | | Canada | | | | 400,000 | | | | 325,956 | |
| | | | | | | | | | | | | | |
| | | Health Care Equipment & Services 3.3% | | | | | | | | | |
| | Centene Corp., senior note4.25%, 12/15/27 | | | United States | | | | 2,000,000 | | | | 1,833,650 | |
| a | | CHS/Community Health Systems Inc., senior secured note144A, 6.00%, 1/15/29 | | | United States | | | | 900,000 | | | | 663,522 | |
| a | | secured note144A, 6.875%, 4/15/29 | | | United States | | | | 1,400,000 | | | | 679,339 | |
| a | | DaVita Inc., 144A, 4.625%, 6/01/30 | | | United States | | | | 2,400,000 | | | | 1,862,892 | |
| a | | Tenet Healthcare Corp., 144A, 6.125%, 6/15/30 | | | United States | | | | 1,300,000 | | | | 1,194,213 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 6,233,616 | |
| | | | | | | | | | | | | | |
| | | Healthcare-Products 0.8% | | | | | | | | | |
| a | | Garden Spinco Corp., 144A, 8.625%, 7/20/30 | | | United States | | | | 1,500,000 | | | | 1,552,973 | |
| | | | | | | | | | | | | | |
| | | Household & Personal Products 1.1% | | | | | | | | | |
| a | | Spectrum Brands Inc., senior bond, 144A, 5.50%, 7/15/30 | | | United States | | | | 800,000 | | | | 627,402 | |
| a | | VM Consolidated Inc., senior note, 144A, 5.50%, 4/15/29 | | | United States | | | | 1,600,000 | | | | 1,378,702 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,006,104 | |
| | | | | | | | | | | | | | |
| | | Internet 0.4% | | | | | | | | | |
| a | | Match Group Holdings II LLC, 144A, 4.625%, 6/01/28 | | | United States | | | | 800,000 | | | | 700,700 | |
| | | | | | | | | | | | | | |
| | | Lodging 0.7% | | | | | | | | | |
| | Las Vegas Sands Corp.3.50%, 8/18/26 | | | United States | | | | 1,400,000 | | | | 1,226,492 | |
| | | | | | | | | | | | | | |
| | | Materials 10.0% | | | | | | | | | |
| a | | Advanced Drainage Systems Inc., 144A, 6.375%, 6/15/30 | | | United States | | | | 1,400,000 | | | | 1,359,722 | |
| a | | Arcosa Inc., 144A, 4.375%, 4/15/29 | | | United States | | | | 1,400,000 | | | | 1,192,177 | |
| a | | Ardagh Packaging Finance PLC / Ardagh Holdings USA Inc., senior note144A, 5.25%, 8/15/27 | | | Luxembourg | | | | 200,000 | | | | 125,573 | |
| a | | senior secured note, first lien144A, 5.25%, 4/30/25 | | | Luxembourg | | | | 1,700,000 | | | | 1,592,594 | |
| a | | ASP Unifrax Holdings Inc., 144A, 5.25%, 9/30/28 | | | United States | | | | 400,000 | | | | 308,098 | |
| a | | Consolidated Energy Finance SA, 144A, 5.625%, 10/15/28 | | | Luxembourg | | | | 400,000 | | | | 321,772 | |
| a | | Constellium SE, 144A, 3.75%, 4/15/29 | | | France | | | | 1,700,000 | | | | 1,243,348 | |
| a | | CVR Partners LP / CVR Nitrogen Finance Corp., 144A, 6.125%, 6/15/28 | | | United States | | | | 1,000,000 | | | | 872,151 | |
| a | | Eco Material Technologies Inc., Sr. Secured, 144A, 7.875%, 1/31/27 | | | United States | | | | 1,300,000 | | | | 1,153,677 | |
| a | | Gates Global LLC / Gates Corp., senior note, 144A, 6.25%, 1/15/26 | | | United States | | | | 1,500,000 | | | | 1,381,822 | |
| a | | Glatfelter Corp., 144A, 4.75%, 11/15/29 | | | United States | | | | 900,000 | | | | 519,282 | |
| a | | GPD Companies Inc., senior secured note, 144A, 10.125%, 4/01/26 | | | United States | | | | 550,000 | | | | 501,923 | |
| a | | Ingevity Corp., senior note, 144A, 3.875%, 11/01/28 | | | United States | | | | 900,000 | | | | 745,326 | |
| | Mauser Packaging Solutions Holding Co.,
a senior note144A, 7.25%, 4/15/25 | | | United States | | | | 500,000 | | | | 440,543 | |
| | a senior note144A, 8.50%, 4/15/24 | | | United States | | | | 1,400,000 | | | | 1,337,000 | |
| a | | Novelis Corp., senior bond, 144A, 4.75%, 1/30/30 | | | United States | | | | 1,400,000 | | | | 1,151,542 | |
| a | | OI European Group B.V., 144A, 4.75%, 2/15/30 | | | United States | | | | 1,000,000 | | | | 797,365 | |
| a | | Owens-Brockway Glass Container Inc., senior note, 144A,
5.875%, 8/15/23 . | | | United States | | | | 322,000 | | | | 318,297 | |
| a | | Pactiv Evergreen Group Issuer Inc/Pactiv Evergreen Group Issuer LLC, senior secured note, 144A, 4.00%, 10/15/27 | | | United States | | | | 1,400,000 | | | | 1,176,556 | |
| a | | Roller Bearing Co. of America Inc., 144A, 4.375%, 10/15/29 | | | United States | | | | 800,000 | | | | 675,792 | |
| a | | Trivium Packaging Finance B.V., senior secured note, 144A, 5.50%, 8/15/26 . | | | Netherlands | | | | 1,600,000 | | | | 1,433,103 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 18,647,663 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 114 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin High Yield Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Media & Entertainment 11.6% | | | | | | | | | |
| a | | Banijay Entertainment SASU, senior note, 144A, 5.375%, 3/01/25 | | | France | | | | 2,000,000 | | | $ | 1,884,200 | |
| | CCO Holdings LLC / CCO Holdings Capital Corp., | | | | | | | | | | | | |
| | a senior bond144A, 5.375%, 6/01/29 | | | United States | | | | 1,300,000 | | | | 1,140,750 | |
| a | | senior bond144A, 4.50%, 8/15/30 | | | United States | | | | 1,700,000 | | | | 1,348,619 | |
| a | | Clear Channel International B.V., senior secured note, first lien, 144A, 6.625%, 8/01/25 | | | United States | | | | 600,000 | | | | 558,233 | |
| a | | Clear Channel Outdoor Holdings Inc., 144A, 7.50%, 6/01/29 | | | United States | | | | 700,000 | | | | 508,610 | |
| a | | Cogent Communications Group Inc., 144A, 3.50%, 5/01/26 | | | United States | | | | 1,900,000 | | | | 1,676,195 | |
| a | | CSC Holdings LLC, senior note, 144A, 7.50%, 4/01/28 | | | United States | | | | 2,500,000 | | | | 2,043,200 | |
| | Diamond Sports Group LLC / Diamond Sports Finance Co., | | | | | | | | | | | | |
| | a senior note144A, 6.625%, 8/15/27 | | | United States | | | | 900,000 | | | | 66,375 | |
| | a secured note144A, 5.375%, 8/15/26 | | | United States | | | | 900,000 | | | | 180,270 | |
| a | | Directv Financing LLC / Directv Financing Co-Obligor Inc., 144A, 5.875%, 8/15/27 | | | United States | | | | 1,700,000 | | | | 1,469,437 | |
| a | | DISH DBS Corp., 144A, 5.75%, 12/01/28 | | | United States | | | | 2,200,000 | | | | 1,666,753 | |
| a | | Everi Holdings Inc., 144A, 5.00%, 7/15/29 | | | United States | | | | 1,000,000 | | | | 821,814 | |
| a | | Motion Bondco DAC, 144A, 6.625%, 11/15/27 | | | United Kingdom | | | | 300,000 | | | | 254,459 | |
| | Netflix Inc., senior unsecured6.375%, 5/15/29 | | | United States | | | | 600,000 | | | | 597,056 | |
| | senior unsecured note5.875%, 11/15/28 | | | United States | | | | 1,000,000 | | | | 978,280 | |
| | senior bond5.75%, 3/01/24 | | | United States | | | | 1,000,000 | | | | 1,016,350 | |
| a | | Northwest Fiber LLC / Northwest Fiber Finance Sub Inc., senior note, 144A, 6.00%, 2/15/28 | | | United States | | | | 800,000 | | | | 621,682 | |
| a | | Sinclair Television Group Inc., senior bond, 144A, 5.50%, 3/01/30 | | | United States | | | | 600,000 | | | | 432,537 | |
| a | | Sirius XM Radio Inc., 144A, 4.00%, 7/15/28 | | | United States | | | | 1,800,000 | | | | 1,534,842 | |
| a | | Univision Communications Inc., senior note, 144A, 6.625%, 6/01/27 | | | United States | | | | 1,900,000 | | | | 1,797,300 | |
| a | | Virgin Media Secured Finance PLC, senior secured bond, 144A, 4.50%, 8/15/30 | | | United Kingdom | | | | 1,400,000 | | | | 1,095,109 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 21,692,071 | |
| | | | | | | | | | | | | | |
| | | Mining 0.7% | | | | | | | | | |
| a | | Alcoa Nederland Holding B.V., 144A, 5.50%, 12/15/27 | | | United States | | | | 1,500,000 | | | | 1,402,133 | |
| | | | | | | | | | | | | | |
| | | Oil & Gas 0.9% | | | | | | | | | |
| | PBF Holding Co. LLC / PBF Finance Corp.7.25%, 6/15/25 | | | United States | | | | 1,700,000 | | | | 1,626,407 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 0.4% | | | | | | | | | |
| | 1375209 BC Ltd., 144A, 9.00%, 1/30/28 | | | Canada | | | | 261,835 | | | | 261,180 | |
| | Bausch Health Cos. Inc., 144A, 14.00%, 10/15/30 | | | Canada | | | | 92,043 | | | | 50,624 | |
| | 144A, 11.00%, 9/30/28 | | | Canada | | | | 465,120 | | | | 376,747 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 688,551 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals, Biotechnology & Life Sciences 1.1% | | | | | | | | | |
| a | | Bausch Health Companies Inc., 144A, 4.875%, 6/01/28 | | | United States | | | | 1,000,000 | | | | 646,380 | |
| a,b | | Par Pharmaceutical Inc., senior secured note, 144A, 7.50%, 4/01/27 | | | United States | | | | 400,000 | | | | 316,952 | |
| | Teva Pharmaceutical Finance Netherlands III B.V.,
senior bond3.15%, 10/01/26 | | | Israel | | | | 700,000 | | | | 575,291 | |
| | 4.75%, 5/09/27 | | | Israel | | | | 700,000 | | | | 595,392 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,134,015 | |
| | | | | | | | | | | | | | |
| | | Pipelines 0.3% | | | | | | | | | |
| a | | EnLink Midstream LLC, 144A, 6.50%, 9/01/30 | | | United States | | | | 600,000 | | | | 587,304 | |
| | | | | | | | | | | | | | |
| | | Retailing 1.9% | | | | | | | | | |
| a | | Fertitta Entertainment LLC / Fertitta Entertainment Finance Co. Inc., 144A, 6.75%, 1/15/30 | | | United States | | | | 1,100,000 | | | | 838,068 | |
| a | | Gap Inc., 144A, 3.625%, 10/01/29 | | | United States | | | | 600,000 | | | | 390,951 | |
| a | | Lithia Motors Inc., senior note, 144A, 4.625%, 12/15/27 | | | United States | | | | 1,700,000 | | | | 1,479,174 | |
| a | | Macy’s Retail Holdings LLC, | | | | | | | | | | | | |
| | 144A, 6.125%, 3/15/32 | | | United States | | | | 400,000 | | | | 307,134 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 115 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin High Yield Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Retailing (continued) | | | | | | | | | |
| | a 144A, 5.875%, 3/15/30 | | | United States | | | | 600,000 | | | $ | 475,785 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,491,112 | |
| | | | | | | | | | | | | | |
| | | Software & Services 1.2% | | | | | | | | | |
| a | | Gartner Inc., senior note, 144A, 4.50%, 7/01/28 | | | United States | | | | 1,600,000 | | | | 1,432,968 | |
| a | | Rocket Software Inc., senior note, 144A, 6.50%, 2/15/29 | | | United States | | | | 1,200,000 | | | | 890,448 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,323,416 | |
| | | | | | | | | | | | | | |
| | | Technology Hardware & Equipment 0.3% | | | | | | | | | |
| a | | Condor Merger Sub Inc., 144A, 7.375%, 2/15/30 | | | United States | | | | 700,000 | | | | 573,629 | |
| | | | | | | | | | | | | | |
| | | Telecommunication Services 2.0% | | | | | | | | | |
| a | | Altice France Holding SA, senior note, 144A, 10.50%, 5/15/27 | | | Luxembourg | | | | 600,000 | | | | 471,327 | |
| a | | Altice France SA, senior note, first lien, 144A, 8.125%, 2/01/27 | | | France | | | | 1,000,000 | | | | 895,995 | |
| a | | CommScope Technologies LLC, 144A, 5.00%, 3/15/27 | | | United States | | | | 1,400,000 | | | | 1,058,869 | |
| a | | Iliad Holding SASU, 144A, 6.50%, 10/15/26 | | | France | | | | 1,600,000 | | | | 1,401,688 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,827,879 | |
| | | | | | | | | | | | | | |
| | | Transportation 0.6% | | | | | | | | | |
| a | | First Student Bidco Inc. / First Transit Parent Inc., 144A, 4.00%, 7/31/29 | | | United States | | | | 1,300,000 | | | | 1,055,966 | |
| | | | | | | | | | | | | | |
| | | Utilities 5.6% | | | | | | | | | |
| | Calpine Corp., | | | | | | | | | | | | |
| a | | senior note144A, 5.125%, 3/15/28 | | | United States | | | | 600,000 | | | | 516,565 | |
| a | | first lien144A, 4.50%, 2/15/28 | | | United States | | | | 1,200,000 | | | | 1,059,816 | |
| a | | InterGen NV, 144A, 7.00%, 6/30/23 | | | Netherlands | | | | 2,100,000 | | | | 2,044,350 | |
| a | | Leeward Renewable Energy Operations LLC, 144A, 4.25%, 7/01/29 | | | United States | | | | 1,800,000 | | | | 1,452,960 | |
| | Talen Energy Supply LLC, | | | | | | | | | | | | |
| | b senior note6.50%, 6/01/25 | | | United States | | | | 1,000,000 | | | | 804,246 | |
| | a,b senior note144A, 7.625%, 6/01/28 | | | United States | | | | 1,000,000 | | | | 1,033,797 | |
| a | | TTM Technologies Inc., senior note, 144A, 4.00%, 3/01/29 | | | United States | | | | 1,800,000 | | | | 1,453,320 | |
| a | | Vistra Operations Co. LLC, senior note, 144A, 5.50%, 9/01/26 | | | United States | | | | 2,300,000 | | | | 2,136,343 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,501,397 | |
| | | | | | | | | | | | | | |
| | Total Corporate Bonds & Notes (Cost $197,507,944) | | | | | | | | | | | 166,611,438 | |
| | | | | | | | | | | | | | |
| | | Senior Floating Rate Interests 4.2% | | | | | | | | | |
| | | Materials 1.0% | | | | | | | | | |
| | Hexion Holdings Corporation, | | | | | | | | | | | | |
| | d 2022 USD Term Loan, TBD, 7.413%, 3/15/29 | | | United States | | | | 1,097,250 | | | | 941,441 | |
| | d 2022 USD 2nd Lien Term Loan, TBD, 9.834%, 3/02/30 | | | United States | | | | 1,186,047 | | | | 978,488 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,919,929 | |
| | | | | | | | | | | | | | |
| | | Software & Services 1.5% | | | | | | | | | |
| | Athenahealth Inc., | | | | | | | | | | | | |
| d | | 2022 Term Loan B, TBD, 6.576%, 2/15/29 | | | United States | | | | 1,449,989 | | | | 1,302,815 | |
| d | | 2022 Delayed Draw Term Loan, TBD, 3.50%, 2/15/29 | | | United States | | | | 246,377 | | | | 221,370 | |
| d | | McAfee LLC, 2022 USD Term Loan B, TBD, 6.362%, 3/01/29 | | | United States | | | | 1,396,500 | | | | 1,277,546 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,801,731 | |
| | | | | | | | | | | | | | |
| | | Chemicals 0.7% | | | | | | | | | |
| d | | PMHC II Inc., 2022 Term Loan B, TBD, 6.977%, 4/23/29 | | | United States | | | | 1,700,000 | | | | 1,379,660 | |
| | | | | | | | | | | | | | |
| | | Media & Entertainment 1.0% | | | | | | | | | |
| d | | Diamond Sports Group LLC, 2022 First Priority Term Loan, TBD, 10.696%, d5/26/26 | | | United States | | | | 199,317 | | | | 192,341 | |
| d | | Fertitta Entertainment LLC, 2022 Term Loan B, TBD, 7.034%, 1/27/29 | | | United States | | | | 1,691,500 | | | | 1,573,975 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,766,316 | |
| | | | | | | | | | | | | | |
| | Total Floating Rate Loans (Cost $8,872,317) | | | | | | | | | | | 7,867,636 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 116 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin High Yield Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Senior Floating Rate Interests (continued) | | | | | | | | | |
| | | Media & Entertainment (continued) | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $206,380,261) | | | | | | | | | | $ | 174,479,074 | |
| | | | | | | | | | | | | | |
| | Short-Term Investments 5.5% | | | | | | | | | | | | |
| | U.S. Government & Agency Securities (Cost $10,323,509) 5.5% | | | | | | | | | | | | |
| e | | Federal Home Loan Bank Discount Notes, 10/03/22 | | | United States | | | | 10,325,000 | | | | 10,325,000 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $10,323,509) | | | | | | | | | | | 10,325,000 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $216,703,770) 98.7% | | | | | | | | | | | 184,804,074 | |
| | Other Assets, less Liabilities 1.3% | | | | | | | | | | | 2,477,263 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 187,281,337 | |
| | | | | | | | | | | | | | |
*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 September 30, 2022, the value of was $139,121,673, representing 74.3% of net assets.
bSee Note 10 regarding defaulted securities.
cFair valued using significant unobservable inputs. See Note 12 regarding fair value measurements.
dA 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.
eThe security was issued on a discount basis with no stated coupon rate.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 117 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Intelligent Machines ETF
| | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020a | |
Per share operating performance (for a share outstanding throughout the period) | | | | | | | | | | | | | | | | |
| | | | |
Net asset value, beginning of period | | $ | 46.30 | | | $ | 43.24 | | | $ | 20.67 | | | $ | 25.00 | |
| | | | |
| | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | |
| | | | |
Net investment income (loss)c | | | (— | )d | | | (0.10 | ) | | | (0.06 | ) | | | — | |
| | | | |
Net realized and unrealized gains (losses) | | | (12.48 | ) | | | 3.25 | | | | 22.63 | | | | (4.33 | ) |
| | | | |
| | | | |
Total from investment operations | | | (12.48 | ) | | | 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 period | | $ | 33.82 | | | $ | 46.30 | | | $ | 43.24 | | | $ | 20.67 | |
| | | | |
| | | | |
Total returne | | | (26.95)% | | | | 7.27% | | | | 109.21% | | | | (17.32)% | |
| | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | |
| | | | |
Expenses before waiver and payments by affiliates | | | 0.50% | | | | 0.77% | | | | 2.19% | | | | 12.91% | |
| | | | |
Expenses net of waiver and payments by affiliates | | | 0.50% | | | | 0.50% | | | | 0.50% | | | | 0.50% | |
| | | | |
Net investment income (loss) | | | (0.02)% | | | | (0.21)% | | | | (0.17)% | | | | 0.20% | |
| | | | |
| Supplemental data | | | | | | | | | | | | | | | | |
| | | | |
Net assets, end of period (000’s) | | | $6,764 | | | | $11,574 | | | | $10,809 | | | | $2,067 | |
| | | | |
Portfolio turnover rateg | | | 17.85%h | | | | 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: | | | 17.85% | | | | 35.98% | | | | 75.25% | |
| | | | | | | | | | |
| | | | | | |
| 118 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Intelligent Machines ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Common Stocks 100.0% | | | | | | | | | |
| | | Aerospace & Defense 2.1% | | | | | | | | | |
| a | | Axon Enterprise Inc. | | | United States | | | | 1,240 | | | $ | 143,530 | |
| | | | | | | | | | | | | | |
| | | Automobiles 7.7% | | | | | | | | | |
| a | | Tesla Inc. | | | United States | | | | 1,954 | | | | 518,298 | |
| | | | | | | | | | | | | | |
| | | Computers & Peripherals 5.0% | | | | | | | | | |
| | Apple Inc. | | | United States | | | | 2,452 | | | | 338,866 | |
| | | | | | | | | | | | | | |
| | | Construction & Engineering 3.1% | | | | | | | | | |
| | Quanta Services Inc. | | | United States | | | | 1,081 | | | | 137,709 | |
| | Valmont Industries Inc. | | | United States | | | | 271 | | | | 72,796 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 210,505 | |
| | | | | | | | | | | | | | |
| | | Electrical Equipment 1.4% | | | | | | | | | |
| | Eaton Corp. PLC | | | United States | | | | 266 | | | | 35,474 | |
| a | | NuScale Power Corp. | | | United States | | | | 2,612 | | | | 30,508 | |
| a | | Sunrun Inc. | | | United States | | | | 987 | | | | 27,231 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 93,213 | |
| | | | | | | | | | | | | | |
| | | Electronic Equipment, Instruments & Components 8.8% | | | | | | | | | |
| | Amphenol Corp., A | | | United States | | | | 1,017 | | | | 68,099 | |
| | Keyence Corp. | | | Japan | | | | 625 | | | | 206,829 | |
| a | | Keysight Technologies Inc. | | | United States | | | | 671 | | | | 105,589 | |
| | Samsung SDI Co. Ltd. | | | South Korea | | | | 336 | | | | 128,228 | |
| | TE Connectivity Ltd. | | | Switzerland | | | | 300 | | | | 33,108 | |
| a | | Trimble Inc. | | | United States | | | | 375 | | | | 20,351 | |
| a | | Zebra Technologies Corp., A | | | United States | | | | 126 | | | | 33,013 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 595,217 | |
| | | | | | | | | | | | | | |
| | | Health Care Equipment & Supplies 10.5% | | | | | | | | | |
| a | | Dexcom Inc. | | | United States | | | | 1,644 | | | | 132,408 | |
| a | | IDEXX Laboratories Inc. | | | United States | | | | 312 | | | | 101,650 | |
| a | | Insulet Corp. | | | United States | | | | 578 | | | | 132,593 | |
| a | | Intuitive Surgical Inc. | | | United States | | | | 1,428 | | | | 267,664 | |
| | ResMed Inc. | | | United States | | | | 186 | | | | 40,604 | |
| a | | Shockwave Medical Inc. | | | United States | | | | 130 | | | | 36,149 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 711,068 | |
| | | | | | | | | | | | | | |
| | | Health Care Technology 1.5% | | | | | | | | | |
| a | | Inspire Medical Systems Inc. | | | United States | | | | 575 | | | | 101,988 | |
| | | | | | | | | | | | | | |
| | | Household Durables 0.5% | | | | | | | | | |
| | Panasonic Corp. | | | Japan | | | | 4,640 | | | | 32,521 | |
| | | | | | | | | | | | | | |
| | | Industrial Conglomerates 2.2% | | | | | | | | | |
| | Honeywell International Inc. | | | United States | | | | 221 | | | | 36,900 | |
| | Roper Technologies Inc. | | | United States | | | | 200 | | | | 71,928 | |
| | Siemens AG | | | Germany | | | | 366 | | | | 36,286 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 145,114 | |
| | | | | | | | | | | | | | |
| | | Machinery 0.5% | | | | | | | | | |
| a | | Chart Industries Inc. | | | United States | | | | 180 | | | | 33,183 | |
| | | | | | | | | | | | | | |
| | | Semiconductors & Semiconductor Equipment 32.8% | | | | | | | | | |
| | Analog Devices Inc. | | | United States | | | | 996 | | | | 138,783 | |
| | Applied Materials Inc. | | | United States | | | | 1,669 | | | | 136,741 | |
| | ASM International NV | | | Netherlands | | | | 556 | | | | 127,320 | |
| | ASML Holding NV | | | Netherlands | | | | 631 | | | | 262,086 | |
| a | | Enphase Energy Inc. | | | United States | | | | 937 | | | | 259,989 | |
| | Entegris Inc. | | | United States | | | | 1,578 | | | | 131,006 | |
| a | | First Solar Inc. | | | United States | | | | 270 | | | | 35,713 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 119 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Intelligent Machines ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | | |
| | | | | | | | | | | | | | |
| | Common Stocks (continued) | | | | | | | | | | | | |
| | | Semiconductors & Semiconductor Equipment (continued) | | | | | | | | | |
| | Infineon Technologies AG | | | Germany | | | | 3,026 | | | $ | 67,322 | |
| | KLA Corp. | | | United States | | | | 221 | | | | 66,881 | |
| | Lam Research Corp. | | | United States | | | | 173 | | | | 63,318 | |
| | Marvell Technology Inc. | | | United States | | | | 787 | | | | 33,770 | |
| | Microchip Technology Inc. | | | United States | | | | 611 | | | | 37,289 | |
| | NVIDIA Corp. | | | United States | | | | 2,267 | | | | 275,191 | |
| | NXP Semiconductors NV | | | China | | | | 228 | | | | 33,632 | |
| a | | SiTime Corp. | | | United States | | | | 425 | | | | 33,460 | |
| a | | SolarEdge Technologies Inc. | | | United States | | | | 236 | | | | 54,625 | |
| | Taiwan Semiconductor Manufacturing Co. Ltd. | | | Taiwan | | | | 2,837 | | | | 194,505 | |
| | Teradyne Inc. | | | United States | | | | 1,804 | | | | 135,571 | |
| | Texas Instruments Inc. | | | United States | | | | 447 | | | | 69,187 | |
| a | | Wolfspeed Inc. | | | United States | | | | 623 | | | | 64,393 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,220,782 | |
| | | | | | | | | | | | | | |
| | | Software 23.9% | | | | | | | | | |
| a | | Altair Engineering Inc. | | | United States | | | | 1,559 | | | | 68,939 | |
| a | | ANSYS Inc. | | | United States | | | | 615 | | | | 136,345 | |
| a | | Asana Inc. | | | United States | | | | 1,514 | | | | 33,656 | |
| a | | Atlassian Corp. PLC | | | United States | | | | 308 | | | | 64,862 | |
| a | | Autodesk Inc. | | | United States | | | | 757 | | | | 141,408 | |
| | Bentley Systems Inc., B | | | United States | | | | 1,074 | | | | 32,854 | |
| a | | Cadence Design Systems Inc. | | | United States | | | | 1,803 | | | | 294,664 | |
| | Constellation Software Inc. | | | Canada | | | | 100 | | | | 139,885 | |
| | Dassault Systemes SE | | | France | | | | 2,037 | | | | 71,311 | |
| a | | Descartes Systems Group Inc. | | | Canada | | | | 3,307 | | | | 211,096 | |
| a | | PTC Inc. | | | United States | | | | 1,291 | | | | 135,039 | |
| a | | Synopsys Inc. | | | United States | | | | 943 | | | | 288,096 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 1,618,155 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $7,706,465) | | | | | | | | | | | 6,762,440 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $7,706,465) 100.0% | | | | | | | | | | | 6,762,440 | |
| | Other Assets, less Liabilities 0.0%† | | | | | | | | | | | 1,936 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 6,764,376 | |
| | | | | | | | | | | | | | |
†Rounds to less than 0.1% of net assets.
aNon-income producing.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| 120 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin International Aggregate Bond ETFa
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019b | |
| | | | | |
Per share operating performance (for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, beginning of period | | $ | 23.65 | | | $ | 25.02 | | | $ | 24.95 | | | $ | 24.56 | | | $ | 25.00 | |
| | | | |
| | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment income (loss)d | | | 0.08 | | | | 0.05 | | | | (0.01 | ) | | | 0.22 | | | | 0.39 | |
| | | | | |
Net realized and unrealized gains (losses) | | | (0.95 | ) | | | (0.87 | ) | | | 0.19 | | | | 0.78 | | | | (0.40 | ) |
| | | | |
| | | | | |
Total from investment operations | | | (0.87 | ) | | | (0.82 | ) | | | 0.18 | | | | 1.00 | | | | (0.01 | ) |
| | | | |
| |
| Less distributions from: | | | | |
| | | | | |
Net investment income | | | (0.40 | ) | | | (0.42 | ) | | | (0.11 | ) | | | (0.09 | ) | | | (0.43 | ) |
| | | | | |
Net realized gains | | | — | | | | (0.13 | ) | | | — | | | | (0.52 | ) | | | — | |
| | | | |
| | | | | |
Total Distributions | | | (0.40 | ) | | | (0.55 | ) | | | (0.11 | ) | | | (0.61 | ) | | | (0.43 | ) |
| | | | |
| | | | | |
Net asset value, end of period | | $ | 22.38 | | | $ | 23.65 | | | $ | 25.02 | | | $ | 24.95 | | | $ | 24.56 | |
| | | | |
| | | | | |
Total returne | | | (3.71)% | | | | (3.35)% | | | | 0.72% | | | | 4.05% | | | | 0.00% | |
| | | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Expenses before waiver and payments by affiliates | | | 0.25% | | | | 0.39% | | | | 0.58% | | | | 3.23% | | | | 2.32% | |
| | | | | |
Expenses net of waiver and payments by affiliates | | | 0.25% | | | | 0.25% | | | | 0.25% | | | | 0.28% | | | | 0.35% | |
| | | | | |
Net investment income (loss) | | | 0.68% | | | | 0.21% | | | | (0.03)% | | | | 0.87% | | | | 1.91% | |
| | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net assets, end of period (000’s) | | | $189,085 | | | | $193,968 | | | | $181,405 | | | | $4,989 | | | | $4,912 | |
| | | | | |
Portfolio turnover rateg | | | 6.77% | h | | | 24.12%h | | | | 72.21% | h | | | 66.78% | h | | | 50.32% | |
aEffective August 1, 2022, Formerly, Franklin Liberty International Aggregate Bond ETF was renamed Franklin International Aggregate Bond ETF.
bFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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: | | | 6.77 | % | | | 24.12 | % | | | 72.21 | % | | | 66.78 | % | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 121 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin International Aggregate Bond ETF
| | | | | | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Foreign Government and Agency Securities 76.6% | | | | | | | | | |
| | | Australia 2.2% | | | | | | | | | |
| a | | Government of Australia, senior bond, 149, Reg S, 2.25%, 5/21/28 | | | 1,900,000 | | | | AUD | | | $ | 1,125,619 | |
| a | | New South Wales Treasury Corp., senior bond, Reg S, 3.00%, 5/20/27 | | | 1,200,000 | | | | AUD | | | | 732,432 | |
| a,b | | Queensland Treasury Corp., senior bond, 144A, Reg S, 3.25%, 8/21/29 | | | 1,200,000 | | | | AUD | | | | 723,279 | |
| a | | Western Australian Treasury Corp., senior note, 26, Reg S, 3.00%, 10/21/26 | | | 2,500,000 | | | | AUD | | | | 1,537,851 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,119,181 | |
| | | | | | | | | | | | | | |
| | | Austria 1.1% | | | | | | | | | |
| | Government of Austria, | | | | | | | | | | | | |
| | a,b 144A, Reg S, 1.20%, 10/20/25 | | | 1,200,000 | | | | EUR | | | | 1,144,849 | |
| | a,b senior bond, 144A, Reg S, 1.50%, 2/20/47 | | | 1,200,000 | | | | EUR | | | | 889,842 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,034,691 | |
| | | | | | | | | | | | | | |
| | | Belgium 2.5% | | | | | | | | | |
| a,b | | Government of Belgium, unsecured bond, 144A, Reg S, 1.00%, 6/22/31 | | | 5,500,000 | | | | EUR | | | | 4,742,688 | |
| | | | | | | | | | | | | | |
| | | Canada 5.3% | | | | | | | | | |
| | Government of Canada, | | | | | | | | | | | | |
| | 1.25%, 3/01/25 | | | 5,000,000 | | | | CAD | | | | 3,415,174 | |
| | 1.25%, 6/01/30 | | | 750,000 | | | | CAD | | | | 471,436 | |
| | 5.00%, 6/01/37 | | | 2,300,000 | | | | CAD | | | | 1,999,610 | |
| | senior bond, 2.00%, 9/01/23 | | | 5,000,000 | | | | CAD | | | | 3,555,869 | |
| | senior bond, 2.00%, 12/01/51 | | | 1,100,000 | | | | CAD | | | | 628,545 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,070,634 | |
| | | | | | | | | | | | | | |
| | | China 9.3% | | | | | | | | | |
| | Agricultural Development Bank of China, Series 2008, Unsecured 3.45%, 9/23/25 | | | 13,000,000 | | | | CNY | | | | 1,873,499 | |
| | China Development Bank,
senior note, 2003, 3.23%, 1/10/25 | | | 24,000,000 | | | | CNY | | | | 3,429,551 | |
| | senior note, 2004, 3.43%, 1/14/27 | | | 25,000,000 | | | | CNY | | | | 3,608,068 | |
| | China Government Bond,
3.03%, 3/11/26 | | | 25,000,000 | | | | CNY | | | | 3,580,661 | |
| | 2.85%, 6/04/27 | | | 25,000,000 | | | | CNY | | | | 3,549,942 | |
| | Export-Import Bank of China, Series 2003, Unsecured 2.17%, 4/07/23 | | | 11,000,000 | | | | CNY | | | | 1,542,804 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 17,584,525 | |
| | | | | | | | | | | | | | |
| | | Cyprus 0.9% | | | | | | | | | |
| a | | Government of Cyprus, Reg S, 1.50%, 4/16/27 | | | 1,900,000 | | | | EUR | | | | 1,734,179 | |
| | | | | | | | | | | | | | |
| | | France 2.8% | | | | | | | | | |
| | French Republic Government Bond OAT,
a Reg S, 1.00%, 11/25/25 | | | 3,200,000 | | | | EUR | | | | 3,036,493 | |
| | a Reg S, 0.01%, 11/25/29 | | | 2,800,000 | | | | EUR | | | | 2,311,963 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,348,456 | |
| | | | | | | | | | | | | | |
| | | Germany 13.6% | | | | | | | | | |
| a | | Bundesobligation, senior bond, 180, Reg S, %, 10/18/24 | | | 8,500,000 | | | | EUR | | | | 8,050,415 | |
| | Government of Germany,
a Reg S, 5.50%, 1/04/31 | | | 1,100,000 | | | | EUR | | | | 1,359,874 | |
| | a Reg S, 4.25%, 7/04/39 | | | 1,000,000 | | | | EUR | | | | 1,255,758 | |
| | a senior bond, Reg S, 0.01%, 8/15/26 | | | 14,000,000 | | | | EUR | | | | 12,805,525 | |
| | KFW, Senior note, 2.05%, 2/16/26 | | | 300,000,000 | | | | JPY | | | | 2,205,933 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 25,677,505 | |
| | | | | | | | | | | | | | |
| | | Italy 4.8% | | | | | | | | | |
| | Italy Treasury Bond,
a,b 144A, Reg S, 2.45%, 9/01/50 | | | 2,800,000 | | | | EUR | | | | 1,899,905 | |
| | a senior bond, Reg S, 1.25%, 12/01/26 | | | 3,700,000 | | | | EUR | | | | 3,311,702 | |
| | a senior unsecured bond, Reg S, 0.05%, 1/15/23 | | | 4,000,000 | | | | EUR | | | | 3,909,196 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 9,120,803 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Aggregate Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Foreign Government and Agency Securities (continued) | | | | | | | | | |
| | | Japan 17.7% | | | | | | | | | |
| | Development Bank of Japan Inc., senior bond, 2.30%, 3/19/26 | | | 1,000,000,000 | | | | JPY | | | $ | 7,395,279 | |
| | Government of Japan,
senior bond, 1.50%, 3/20/33 | | | 600,000,000 | | | | JPY | | | | 4,630,876 | |
| | senior bond, 1.00%, 12/20/35 | | | 1,300,000,000 | | | | JPY | | | | 9,449,068 | |
| | Japan Government Five Year Bond, senior bond, 142, 0.10%, 12/20/24 | | | 1,300,000,000 | | | | JPY | | | | 9,012,612 | |
| | Japan Government Thirty Year Bond, senior bond, 0.40%, 12/20/49 | | | 550,000,000 | | | | JPY | | | | 3,006,263 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 33,494,098 | |
| | | | | | | | | | | | | | |
| | | Mexico 0.1% | | | | | | | | | |
| | c Mexican Bonos, senior bond, senior bond, 8.00%, 11/07/47 | | | 3,900,000 | | | | MXN | | | | 163,443 | |
| | | | | | | | | | | | | | |
| | | Netherlands 1.3% | | | | | | | | | |
| a,b | | Government of the Netherlands, 144A, Reg S, 0.50%, 7/15/26 | | | 2,700,000 | | | | EUR | | | | 2,504,633 | |
| | | | | | | | | | | | | | |
| | | Poland 1.4% | | | | | | | | | |
| | Republic of Poland Government Bond, 2.75%, 10/25/29 | | | 17,000,000 | | | | PLN | | | | 2,598,237 | |
| | | | | | | | | | | | | | |
| | | Romania 0.7% | | | | | | | | | |
| a | | Government of Romania, senior bond, Reg S, 2.00%, 1/28/32 | | | 2,100,000 | | | | EUR | | | | 1,271,806 | |
| | | | | | | | | | | | | | |
| | | Spain 5.4% | | | | | | | | | |
| | Government of Spain, | | | | | | | | | | | | |
| | a,b 144A, Reg S, 1.00%, 7/30/42 | | | 4,000,000 | | | | EUR | | | | 2,529,157 | |
| | senior note, 0.01%, 1/31/25 | | | 5,000,000 | | | | EUR | | | | 4,653,694 | |
| | a,b senior unsecured bond, 144A, Reg S, 1.25%, 10/31/30 | | | 3,600,000 | | | | EUR | | | | 3,086,170 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,269,021 | |
| | | | | | | | | | | | | | |
| d | | Supranational 2.3% | | | | | | | | | |
| | Asian Development Bank, senior bond, 339-00-1, 2.35%, 6/21/27 | | | 240,000,000 | | | | JPY | | | | 1,829,544 | |
| a | | European Investment Bank, senior bond, Reg S, 1.90%, 1/26/26 | | | 330,000,000 | | | | JPY | | | | 2,422,323 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,251,867 | |
| | | �� | | | | | | | | | | | |
| | | Sweden 2.0% | | | | | | | | | |
| | Government of Sweden, | | | | | | | | | | | | |
| a,b | | 144A, Reg S, 1.50%, 11/13/23 | | | 22,000,000 | | | | SEK | | | | 1,965,620 | |
| | senior bond, 0.75%, 5/12/28 | | | 22,000,000 | | | | SEK | | | | 1,818,036 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,783,656 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 3.2% | | | | | | | | | |
| | United Kingdom Gilt,
a Reg S, 1.75%, 9/07/37 | | | 1,800,000 | | | | GBP | | | | 1,474,643 | |
| | a Reg S, 3.50%, 7/22/68 | | | 900,000 | | | | GBP | | | | 1,051,221 | |
| a | | United Kingdom Treasury Bond, Reg S, 4.75%, 12/07/30 | | | 3,000,000 | | | | GBP | | | | 3,499,647 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 6,025,511 | |
| | | | | | | | | | | | | | |
| | | Total Foreign Government and Agency Securities
(Cost $189,866,640) | | | | | | | | 144,794,934 | |
| | | | | | | | | | | | | | |
| | | Corporate Bonds & Notes 4.8% | | | | | | | | | |
| | | Denmark 0.1% | |
| a | | Nykredit Realkredit AS, secured bond, Reg S, 1.00%, 10/01/50 | | | 1,048,904 | | | | DKK | | | | 95,318 | |
| | | | | | | | | | | | | | |
| | | France 0.7% | |
| a | | Air Liquide Finance SA, senior note, Reg S, 1.375%, 4/02/30 | | | 500,000 | | | | EUR | | | | 425,133 | |
| a | | Orange SA, senior note, Reg S, 1.375%, 3/20/28 | | | 1,000,000 | | | | EUR | | | | 881,190 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,306,323 | |
| | | | | | | | | | | | | | |
| | | Germany 0.9% | |
| a | | Aroundtown SA, senior note, Reg S, 1.625%, 1/31/28 | | | 1,000,000 | | | | EUR | | | | 769,978 | |
| a | | Deutsche Telekom AG, senior note, Reg S, 0.875%, 3/25/26 | | | 500,000 | | | | EUR | | | | 455,234 | |
| a | | Siemens Financieringsmaatschappij NV, senior note, Reg S, 0.01%, 2/20/26 | | | 500,000 | | | | EUR | | | | 443,079 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,668,291 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 123 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Aggregate Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Romania 0.1% | | | | | | | | | |
| a | | Globalworth Real Estate Investments Ltd., senior note, Reg S, 3.00%, 3/29/25 | | | 300,000 | | | | EUR | | | $ | 257,735 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 0.4% | | | | | | | | | |
| a | | RELX Finance BV, senior note, Reg S, 0.50%, 3/10/28 | | | 1,000,000 | | | | EUR | | | | 828,558 | |
| | | | | | | | | | | | | | |
| | | United States 2.6% | | | | | | | | | |
| | AbbVie Inc., senior note, 1.375%, 5/17/24 | | | 500,000 | | | | EUR | | | | 478,600 | |
| | Air Products and Chemicals Inc., senior note, 0.50%, 5/05/28 | | | 1,000,000 | | | | EUR | | | | 827,747 | |
| | Apple Inc., senior bond, 1.625%, 11/10/26 | | | 500,000 | | | | EUR | | | | 466,959 | |
| | AT&T Inc., senior note, 0.25%, 3/04/26 | | | 1,000,000 | | | | EUR | | | | 878,193 | |
| a | | Schlumberger Finance France SAS, senior note, Reg S, 1.00%, 2/18/26 | | | 500,000 | | | | EUR | | | | 455,849 | |
| | Stryker Corp., senior note, 0.25%, 12/03/24 | | | 1,000,000 | | | | EUR | | | | 918,842 | |
| | The Procter & Gamble, senior note, 0.50%, 10/25/24 | | | 500,000 | | | | EUR | | | | 470,026 | |
| | Verizon Communications Inc., senior note, 0.875%, 4/02/25 | | | 500,000 | | | | EUR | | | | 464,867 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,961,083 | |
| | | | | | | | | | | | | | |
| | Total Corporate Bonds & Notes (Cost $9,524,281) | | | | | | | | | | | 9,117,308 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments ($199,390,921) | | | | | | | | | | | 153,912,242 | |
| | | | | | | | | | | | | | |
| | | Short-Term Investments 9.1% | | | | | | | | | |
| | U.S. Government & Agency Securities (Cost $17,182,518) 9.1% | | | | | | | | | | | | |
| a | | Federal Home Loan Bank Discount Notes, 10/03/22 | | | 17,185,000 | | | | | | | | 17,185,000 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $17,182,518) | | | | | | | | | | | 17,185,000 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $216,573,439) 90.5% | | | | | | | | | | | 171,097,242 | |
| | Other Assets, less Liabilities 9.5% | | | | | | | | | | | 17,987,301 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 189,084,543 | |
| | | | | | | | | | | | | | |
*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 September 30, 2022, the value of was $74,988,864, representing 39.7% 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 September 30, 2022, the value of was $19,486,143, representing 10.3% of net assets.
cPrincipal amount is stated in 100 Mexican Peso Units.
dA supranational organization is an entity formed by two or more central governments through international treaties.
eThe security was issued on a discount basis with no stated coupon rate.
At September 30, 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 | |
Chinese Yuan | | | CITI | | | | Sell | | | | 144,200,000 | | | $ | 21,351,726 | | | | 10/18/22 | | | $ | 1,118,996 | | | $ | — | |
Australian Dollar | | | CITI | | | | Sell | | | | 7,465,000 | | | | 5,174,066 | | | | 11/07/22 | | | | 370,808 | | | | — | |
Canadian Dollar | | | CITI | | | | Sell | | | | 13,120,000 | | | | 10,200,750 | | | | 11/07/22 | | | | 661,782 | | | | — | |
Danish Krone | | | CITI | | | | Sell | | | | 1,141,000 | | | | 157,093 | | | | 11/07/22 | | | | 6,640 | | | | — | |
Euro | | | CITI | | | | Sell | | | | 76,270,000 | | | | 78,294,587 | | | | 11/07/22 | | | | 3,516,258 | | | | — | |
Great British Pound | | | CITI | | | | Sell | | | | 7,845,968 | | | | 9,576,193 | | | | 11/07/22 | | | | 837,146 | | | | — | |
Hungarian Forint | | | CITI | | | | Buy | | | | 22,203,286 | | | | 55,868 | | | | 11/07/22 | | | | — | | | | (4,953 | ) |
Japanese Yen | | | CITI | | | | Sell | | | | 200,000,000 | | | | 1,476,399 | | | | 11/07/22 | | | | 89,884 | | | | — | |
Japanese Yen | | | CITI | | | | Sell | | | | 5,749,000,000 | | | | 43,410,303 | | | | 11/07/22 | | | | 3,554,908 | | | | — | |
Mexican Peso | | | CITI | | | | Sell | | | | 7,600,000 | | | | 361,181 | | | | 11/07/22 | | | | — | | | | (14,219 | ) |
Polish Zloty | | | CITI | | | | Sell | | | | 6,000,000 | | | | 1,284,601 | | | | 11/07/22 | | | | 80,868 | | | | — | |
Polish Zloty | | | CITI | | | | Sell | | | | 8,050,000 | | | | 1,723,953 | | | | 11/07/22 | | | | 108,945 | | | | — | |
South African Rand | | | CITI | | | | Sell | | | | 470,000 | | | | 27,802 | | | | 11/07/22 | | | | 1,885 | | | | — | |
| | | | | | | | | | |
| | | | | | |
| 124 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Aggregate Bond ETF (continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Forward Exchange Contracts (continued) | | | | | | | | | | | | | | | | |
| | | | | | | |
| Currency | | Counterpartya | | | Type | | | Quantity | | | Contract
Amount | | | Settlement
Date | | | Unrealized
Appreciation | | | Unrealized
Depreciation | |
| OTC Forward Exchange Contracts (continued) | |
Swedish Krona | | | CITI | | | | Sell | | | | 10,000,000 | | | $ | 987,918 | | | | 11/07/22 | | | $ | 88,100 | | | $ | — | |
Swedish Krona | | | CITI | | | | Sell | | | | 34,500,000 | | | | 3,385,715 | | | | 11/07/22 | | | | 281,345 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Forward Exchange Contracts | | | $ | 10,717,565 | | | $ | (19,172 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized appreciation (depreciation) | | | | | | | $ | 10,698,393 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
See Note 11 regarding other derivative information.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 125 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Investment Grade Corporate ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $23.71 | | | | $25.47 | | | | $24.22 | | | | $24.09 | | | | $23.97 | | | | $24.21 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.32 | | | | 0.58 | | | | 0.60 | | | | 0.73 | | | | 0.82 | | | | 0.80 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (3.21 | ) | | | (1.63 | ) | | | 1.71 | | | | 0.27 | | | | 0.21 | | | | (0.22 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (2.89 | ) | | | (1.05 | ) | | | 2.31 | | | | 1.00 | | | | 1.03 | | | | 0.58 | |
| | | | |
| | | | | | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | (0.41 | ) | | | (0.66 | ) | | | (0.83 | ) | | | (0.81 | ) | | | (0.91 | ) | | | (0.82 | ) |
| | | | | | |
Net realized gains | | | — | | | | (0.05 | ) | | | (0.23 | ) | | | (0.06 | ) | | | — | | | | — | |
| | | | |
| | | | | | |
Total Distributions | | | (0.41 | ) | | | (0.71 | ) | | | (1.06 | ) | | | (0.87 | ) | | | (0.91 | ) | | | (0.82 | ) |
| | | | |
| | | | | | |
| Net asset value, end of period | | | $20.41 | | | | $23.71 | | | | $25.47 | | | | $24.22 | | | | $24.09 | | | | $23.97 | |
| | | | |
| | | | | | |
Total returnd | | | (12.32)% | | | | (4.30)% | | | | 9.43% | | | | 4.02% | | | | 4.46% | | | | 2.38% | |
|
| Ratios to average net assetse | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.35% | | | | 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% | | | | 0.35% | | | | 0.37% | |
| | | | | | |
Net investment income | | | 2.90% | | | | 2.27% | | | | 2.27% | | | | 2.86% | | | | 3.49% | | | | 3.27% | |
|
| Supplemental data | |
| | | | | | |
Net assets, end of period (000’s) | | | $578,607 | | | | $981,602 | | | | $1,018,639 | | | | $553,338 | | | | $18,065 | | | | $39,554 | |
| | | | | | |
Portfolio turnover ratef | | | 14.93%g | | | | 36.76%g | | | | 53.32%g | | | | 52.17%g | | | | 22.02% | | | | 63.14% | |
aEffective August 1, 2022, Formerly, Franklin Liberty Investment Grade Corporate ETF was renamed Franklin Investment Grade Corporate ETF.
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: | | | 14.93% | | | | 36.76% | | | | 53.32% | | | | 52.17% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 126 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Investment Grade Corporate ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes 94.4% | | | | | | | | | |
| | | Aerospace & Defense 1.8% | | | | | | | | | |
| | Lockheed Martin Corp., | | | | | | | | | | | | |
| | senior note, 4.07%, 12/15/42 | | | United States | | | | 3,300,000 | | | $ | 2,806,997 | |
| | 4.15%, 6/15/53 | | | United States | | | | 3,400,000 | | | | 2,854,025 | |
| | The Boeing Co., | | | | | | | | | | | | |
| | 5.15%, 5/01/30 | | | United States | | | | 2,000,000 | | | | 1,852,445 | |
| | senior unsecured note, 3.65%, 3/01/47 | | | United States | | | | 4,500,000 | | | | 2,856,521 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,369,988 | |
| | | | | | | | | | | | | | |
| | | Agriculture 1.1% | | | | | | | | | |
| | Cargill Inc., | | | | | | | | | | | | |
| | a 144A, 1.70%, 2/02/31 | | | United States | | | | 4,000,000 | | | | 3,062,894 | |
| | a Sr. Unsecured, 144A, 2.125%, 11/10/31 | | | United States | | | | 3,800,000 | | | | 2,975,731 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 6,038,625 | |
| | | | | | | | | | | | | | |
| | | Air Freight & Logistics 0.8% | | | | | | | | | |
| | FedEx Corp., senior bond, 4.75%, 11/15/45 | | | United States | | | | 5,950,000 | | | | 4,811,147 | |
| | | | | | | | | | | | | | |
| | | Airlines 2.2% | | | | | | | | | |
| a | | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 4.50%, 10/20/25 | | | United States | | | | 8,300,000 | | | | 8,061,421 | |
| | United Airlines, senior bond, 3.45%, 1/07/30 | | | United States | | | | 2,618,309 | | | | 2,121,108 | |
| | United Airlines 2020-1 Class B Pass Through Trust, 2020-1 Class B, 4.875%, 7/15/27 | | | United States | | | | 2,534,200 | | | | 2,370,239 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 12,552,768 | |
| | | | | | | | | | | | | | |
| | | Banks 23.7% | | | | | | | | | |
| a | | Banco de Chile, Sr. Unsecured , 144A, 2.99%, 12/09/31 | | | Chile | | | | 1,800,000 | | | | 1,400,156 | |
| | Banco Santander SA, sub. note, 2.749%, 12/03/30 | | | Spain | | | | 5,700,000 | | | | 4,038,042 | |
| | Bancolombia SA, senior note, 3.00%, 1/29/25 | | | Colombia | | | | 5,000,000 | | | | 4,564,914 | |
| | Bank of America Corp., | | | | | | | | | | | | |
| | Sr. Unsecured note, 2.592% to 4/29/30, FRN thereafter, 4/29/31 | | | United States | | | | 3,300,000 | | | | 2,620,414 | |
| | sub. bond, 4.183%, 11/25/27 | | | United States | | | | 9,100,000 | | | | 8,442,973 | |
| | 4.571% to 4/27/32, FRN thereafter, 4/27/33 | | | United States | | | | 5,000,000 | | | | 4,485,150 | |
| a | | BNP Paribas SA, senior note, 144A, 4.705% to 1/10/24, FRN thereafter, 1/10/25 | | | France | | | | 6,600,000 | | | | 6,501,099 | |
| a | | BPCE SA, senior note, 144A, 5.70%, 10/22/23 | | | France | | | | 7,600,000 | | | | 7,518,136 | |
| | Citigroup Inc., | | | | | | | | | | | | |
| | senior bond, 3.668% to 7/24/27, FRN thereafter, 7/24/28 | | | United States | | | | 5,200,000 | | | | 4,687,930 | |
| | 3.057% to 1/25/32, FRN thereafter, 1/25/33 | | | United States | | | | 5,200,000 | | | | 4,100,998 | |
| a | | Credit Agricole SA, subordinated, 144A, 4.375%, 3/17/25 | | | France | | | | 3,800,000 | | | | 3,652,956 | |
| | Deutsche Bank AG, Senior unsecured, 0.898%, 5/28/24 | | | Germany | | | | 3,500,000 | | | | 3,235,283 | |
| | Deutsche Bank AG/New York NY, senior note, 2.129% to 11/24/25, FRN thereafter, 11/24/26 | | | Germany | | | | 3,300,000 | | | | 2,805,190 | |
| | Fifth Third Bancorp, Sr. Unsecured, 4.772% to 7/28/29, FRN thereafter, 7/28/30 | | | United States | | | | 4,135,000 | | | | 3,866,036 | |
| | Goldman Sachs Group Inc., | | | | | | | | | | | | |
| | Sr. Unsecured, 2.64% to 2/24/27, FRN thereafter, 2/24/28 | | | United States | | | | 4,600,000 | | | | 3,996,315 | |
| | Sr. Unsecured, 4.387% to 6/15/26, FRN thereafter, 6/15/27 | | | United States | | | | 1,400,000 | | | | 1,334,634 | |
| | HSBC Holdings PLC, senior note, 1.645% to 4/18/25, FRN thereafter, 4/18/26 | | | United Kingdom | | | | 4,700,000 | | | | 4,183,491 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Investment Grade Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Banks (continued) | | | | | | | | | |
| | JPMorgan Chase & Co., | | | | | | | | | | | | |
| | senior bond, 2.522% to 4/22/30, FRN thereafter, 4/22/31 | | | United States | | | | 5,500,000 | | | $ | 4,354,886 | |
| | sub. bond, 4.25%, 10/01/27 | | | United States | | | | 5,200,000 | | | | 4,880,954 | |
| | 2.963% to 1/25/32, FRN thereafter, 1/25/33 | | | United States | | | | 3,800,000 | | | | 2,991,653 | |
| | Sr. Unsecured, 4.851% to 7/25/27, FRN thereafter, 7/25/28 | | | United States | | | | 4,200,000 | | | | 4,037,092 | |
| | KeyBank NA, 4.15%, 8/08/25 | | | United States | | | | 2,000,000 | | | | 1,940,189 | |
| | Morgan Stanley, 0.791% to 1/22/24, FRN thereafter, 1/22/25 | | | United States | | | | 3,300,000 | | | | 3,093,217 | |
| | 0.731% to 4/05/23, FRN thereafter, 4/05/24 | | | United States | | | | 4,000,000 | | | | 3,904,248 | |
| a | | National Australia Bank Ltd., sub. note, 144A, 2.332%, 8/21/30 | | | Australia | | | | 9,500,000 | | | | 7,086,969 | |
| a | | Standard Chartered PLC, senior note, 144A, 1.456% to 1/14/27, FRN thereafter, 1/14/27 | | | United Kingdom | | | | 4,700,000 | | | | 3,984,198 | |
| | SVB Financial Group, | | | | | | | | | | | | |
| | senior note, 3.125%, 6/05/30 | | | United States | | | | 5,000,000 | | | | 4,034,148 | |
| | 4.25% to 12/31/99, FRN thereafter, 11/15/26 | | | United States | | | | 1,700,000 | | | | 1,254,596 | |
| | The Goldman Sachs Group Inc., 4.125% to 12/31/99, FRN thereafter, 11/10/26 | | | United States | | | | 2,100,000 | | | | 1,672,125 | |
| | The PNC Financial Services Group Inc., 3.40% to 12/31/99, FRN thereafter, 9/15/26 | | | United States | | | | 3,300,000 | | | | 2,470,966 | |
| | Truist Bank, sub. note, 3.30%, 5/15/26 | | | United States | | | | 3,300,000 | | | | 3,064,934 | |
| | Truist Financial Corp., sub. bond, 3.875%, 3/19/29 | | | United States | | | | 5,400,000 | | | | 4,891,599 | |
| a | | UniCredit SpA, 144A, 1.982% to 6/03/27, FRN thereafter, 6/03/27 | | | Italy | | | | 4,200,000 | | | | 3,432,268 | |
| | Wells Fargo & Co., | | | | | | | | | | | | |
| | sub. bond, 4.75%, 12/07/46 | | | United States | | | | 900,000 | | | | 721,942 | |
| | 4.808% to 7/25/27, FRN thereafter, 7/25/28 | | | United States | | | | 8,300,000 | | | | 7,924,496 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 137,174,197 | |
| | | | | | | | | | | | | | |
| | | Beverages 1.9% | | | | | | | | | |
| | Anheuser-Busch Companies LLC/Anheuser-Busch InBev Worldwide Inc., 4.90%, 2/01/46 | | | United States | | | | 3,500,000 | | | | 3,050,017 | |
| | Anheuser-Busch InBev Worldwide Inc., senior bond, 5.80%, 1/23/59 | | | Belgium | | | | 3,500,000 | | | | 3,355,052 | |
| | PepsiCo Inc., 1.625%, 5/01/30 | | | United States | | | | 6,000,000 | | | | 4,818,201 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 11,223,270 | |
| | | | | | | | | | | | | | |
| | | Biotechnology 2.2% | | | | | | | | | |
| | AbbVie Inc., Senior unsecured, 4.25%, 11/21/49 | | | United States | | | | 1,500,000 | | | | 1,206,072 | |
| | Amgen Inc., 4.20%, 3/01/33 | | | United States | | | | 1,650,000 | | | | 1,495,457 | |
| | Bio-Rad Laboratories Inc., 3.30%, 3/15/27 | | | United States | | | | 5,250,000 | | | | 4,772,496 | |
| a | | CSL Finance PLC, 144A, 4.25%, 4/27/32 | | | Australia | | | | 5,400,000 | | | | 4,936,678 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 12,410,703 | |
| | | | | | | | | | | | | | |
| | | Capital Markets 2.8% | | | | | | | | | |
| | Brixmor Operating Partnership LP, senior bond, 4.125%, 5/15/29 | | | United States | | | | 2,400,000 | | | | 2,088,790 | |
| | Credit Suisse Group AG, | | | | | | | | | | | | |
| | a senior bond, 144A, 3.869% to 1/12/28, FRN thereafter, 1/12/29 | | | Switzerland | | | | 2,600,000 | | | | 2,124,364 | |
| | a senior note, 144A, 2.997% to 12/14/22, FRN thereafter, 12/14/23 | | | Switzerland | | | | 4,300,000 | | | | 4,267,131 | |
| | Morgan Stanley, 1.794% to 2/13/31, FRN thereafter, 2/13/32 | | | United States | | | | 5,900,000 | | | | 4,319,085 | |
| | The Goldman Sachs Group Inc., sub. note, 4.25%, 10/21/25 | | | United States | | | | 3,350,000 | | | | 3,236,966 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 16,036,336 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 128 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Investment Grade Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Chemicals 1.6% | | | | | | | | | |
| | Celanese US Holdings LLC, 5.90%, 7/05/24 | | | United States | | | | 4,700,000 | | | $ | 4,638,510 | |
| | DuPont de Nemours Inc., 5.419%, 11/15/48 | | | United States | | | | 5,300,000 | | | | 4,782,176 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 9,420,686 | |
| | | | | | | | | | | | | | |
| | | Diversified Financial Services 4.1% | | | | | | | | | |
| | AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 3.00%, 10/29/28 | | | Ireland | | | | 5,000,000 | | | | 4,014,271 | |
| | Air Lease Corp., 0.80%, 8/18/24 | | | United States | | | | 4,600,000 | | | | 4,193,808 | |
| | American Express Co., 2.25%, 3/04/25 | | | United States | | | | 5,700,000 | | | | 5,348,017 | |
| | Aon PLC, 4.60%, 6/14/44 | | | Ireland | | | | 7,600,000 | | | | 6,396,279 | |
| | Capital One Financial Corp., Sr. Unsecured, 4.985% to 7/24/25, FRN thereafter, 7/24/26 | | | United States | | | | 3,800,000 | | | | 3,717,113 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 23,669,488 | |
| | | | | | | | | | | | | | |
| | | Diversified Telecommunication Services 1.7% | | | | | | | | | |
| | Verizon Communications Inc., senior bond, 3.40%, 3/22/41 | | | United States | | | | 13,700,000 | | | | 10,035,485 | |
| | | | | | | | | | | | | | |
| | | Electric 2.9% | | | | | | | | | |
| | Baltimore Gas and Electric Co., 4.55%, 6/01/52 | | | United States | | | | 2,400,000 | | | | 2,066,751 | |
| | Dominion Energy Inc., | | | | | | | | | | | | |
| | 4.35%, 8/15/32 | | | United States | | | | 1,900,000 | | | | 1,721,217 | |
| | senior unsecured note, Series B, 3.30%, 4/15/41 | | | United States | | | | 2,700,000 | | | | 1,952,791 | |
| | DTE Electric Co., Series B, 3.65%, 3/01/52 | | | United States | | | | 7,500,000 | | | | 5,684,871 | |
| | Public Service Enterprise Group Inc., Sr. Unsecured, 2.45%, 11/15/31 | | | United States | | | | 7,100,000 | | | | 5,536,963 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 16,962,593 | |
| | | | | | | | | | | | | | |
| | | Electric Utilities 7.3% | | | | | | | | | |
| a | | Comision Federal de Electricidad, 144A, 3.348%, 2/09/31 | | | Mexico | | | | 1,100,000 | | | | 789,789 | |
| | Commonwealth Edison Co., first mortgage, Secured, 4.00%, 3/01/48 | | | United States | | | | 2,800,000 | | | | 2,251,685 | |
| | Duke Energy Corp., senior bond, 4.80%, 12/15/45 | | | United States | | | | 3,415,000 | | | | 2,826,273 | |
| | Duke Energy Progress LLC, senior bond, 2.50%, 8/15/50 | | | United States | | | | 4,500,000 | | | | 2,674,108 | |
| a | | EDP Finance BV, senior note, 144A, 1.71%, 1/24/28 | | | Netherlands | | | | 4,200,000 | | | | 3,410,018 | |
| a | | Enel Finance International NV, senior note, 144A, 3.625%, 5/25/27 | | | Italy | | | | 5,300,000 | | | | 4,760,901 | |
| | Exelon Corp., senior bond, 4.05%, 4/15/30 | | | United States | | | | 6,200,000 | | | | 5,626,420 | |
| | Georgia Power Co., | | | | | | | | | | | | |
| | senior bond, 4.75%, 9/01/40 | | | United States | | | | 4,700,000 | | | | 3,963,321 | |
| | senior bond, 4.30%, 3/15/42 | | | United States | | | | 2,445,000 | | | | 1,957,377 | |
| | Public Service Electric and Gas Co., First Mortgage, 3.15%, 1/01/50 | | | United States | | | | 2,150,000 | | | | 1,486,308 | |
| | Virginia Electric and Power Co., senior note, 3.50%, 3/15/27 | | | United States | | | | 5,200,000 | | | | 4,878,718 | |
| a | | Vistra Operations Co. LLC, senior secured note, first lien, 144A, 3.55%, 7/15/24 | | | United States | | | | 8,100,000 | | | | 7,724,309 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 42,349,227 | |
| | | | | | | | | | | | | | |
| | | Electronic Equipment, Instruments & Components 1.1% | | | | | | | | | |
| | Flex Ltd., senior note, 3.75%, 2/01/26 | | | Singapore | | | | 3,800,000 | | | | 3,534,466 | |
| | Teledyne FLIR LLC, Sr. Unsecured note, 2.50%, 8/01/30 | | | United States | | | | 3,700,000 | | | | 2,896,547 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 6,431,013 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 129 |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Investment Grade Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Energy Equipment & Services 1.4% | | | | | | | | | |
| | Baker Hughes a GE Co. LLC/Baker Hughes Co-Obligor Inc., senior bond, 4.08%, 12/15/47 | | | United States | | | | 1,000,000 | | | $ | 743,017 | |
| | Kinder Morgan Inc., 2.00%, 2/15/31 | | | United States | | | | 4,400,000 | | | | 3,280,657 | |
| a | | Schlumberger Holdings Corp., senior bond, 144A, 4.30%, 5/01/29 | | | United States | | | | 4,700,000 | | | | 4,313,558 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 8,337,232 | |
| | | | | | | | | | | | | | |
| | | Entertainment 0.2% | | | | | | | | | |
| a | | Magallanes Inc., 144A, 5.05%, 3/15/42 | | | United States | | | | 1,400,000 | | | | 1,049,994 | |
| | | | | | | | | | | | | | |
| | | Equity Real Estate Investment Trusts (REITs) 2.3% | | | | | | | | | |
| | Essex Portfolio LP, senior bond, 2.65%, 3/15/32 | | | United States | | | | 9,000,000 | | | | 6,993,866 | |
| a | | Global Net Lease Inc./Global Net Lease Operating Partnership LP,senior | | | | | | | | | | | | |
| | note, 144A, 3.75%, 12/15/27 | | | United States | | | | 2,400,000 | | | | 1,875,324 | |
| | Simon Property Group LP, senior note, 3.375%, 12/01/27 | | | United States | | | | 5,000,000 | | | | 4,519,226 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 13,388,416 | |
| | | | | | | | | | | | | | |
| | | Food 3.2% | | | | | | | | | |
| a | | Bimbo Bakeries USA Inc., 144A, 4.00%, 5/17/51 | | | Mexico | | | | 1,600,000 | | | | 1,175,966 | |
| | JBS USA LUX SA/JBS USA Food Co./JBS USA Finance Inc., | | | | | | | | | | | | |
| | a 144A, 3.625%, 1/15/32 | | | United States | | | | 1,800,000 | | | | 1,409,895 | |
| | a 144A, 2.50%, 1/15/27 | | | United States | | | | 3,500,000 | | | | 2,997,470 | |
| | Kraft Heinz Foods Co., 5.00%, 6/04/42 | | | United States | | | | 5,100,000 | | | | 4,441,384 | |
| | Nestle Holdings Inc., | | | | | | | | | | | | |
| | a 144A, 4.70%, 1/15/53 | | | United States | | | | 4,000,000 | | | | 3,741,434 | |
| | a 144A, 4.30%, 10/01/32 | | | United States | | | | 5,000,000 | | | | 4,760,750 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 18,526,899 | |
| | | | | | | | | | | | | | |
| | | Health Care Providers & Services 3.7% | | | | | | | | | |
| | CVS Health Corp., senior bond, 5.30%, 12/05/43 | | | United States | | | | 3,000,000 | | | | 2,713,195 | |
| | Elevance Health Inc., 4.10%, 5/15/32 | | | United States | | | | 6,700,000 | | | | 6,062,705 | |
| | HCA Inc., senior secured bond, first lien, 4.50%, 2/15/27 | | | United States | | | | 5,400,000 | | | | 5,048,574 | |
| | STERIS Irish FinCo UnLtd Co., 3.75%, 3/15/51 | | | Ireland | | | | 3,300,000 | | | | 2,284,608 | |
| | UnitedHealth Group Inc., 3.05%, 5/15/41 | | | United States | | | | 7,600,000 | | | | 5,538,813 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 21,647,895 | |
| | | | | | | | | | | | | | |
| | | Home Builders 0.3% | | | | | | | | | |
| | MDC Holdings Inc., 2.50%, 1/15/31 | | | United States | | | | 2,800,000 | | | | 1,874,358 | |
| | | | | | | | | | | | | | |
| | | Hotels, Restaurants & Leisure 0.5% | | | | | | | | | |
| | Las Vegas Sands Corp., Senior unsecured, 3.90%, 8/08/29 | | | United States | | | | 2,300,000 | | | | 1,904,347 | |
| | Marriott International Inc., senior bond, 3.125%, 6/15/26 | | | United States | | | | 1,000,000 | | | | 923,641 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,827,988 | |
| | | | | | | | | | | | | | |
| | | Household Products 2.9% | | | | | | | | | |
| a | | GSK Consumer Healthcare Capital US LLC, 144A, 3.375%, 3/24/27 | | | United States | | | | 5,800,000 | | | | 5,266,509 | |
| a | | Kimberly-Clark de Mexico SAB de CV, senior bond, 144A, 2.431%, 7/01/31 . | | | Mexico | | | | 5,900,000 | | | | 4,727,051 | |
| | The Procter & Gamble Co., senior bond, 3.00%, 3/25/30 | | | United States | | | | 7,500,000 | | | | 6,727,048 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 16,720,608 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 130 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Investment Grade Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Insurance 2.1% | | | | | | | | | |
| | Aflac Inc., senior bond, 4.75%, 1/15/49 | | | United States | | | | 5,300,000 | | | $ | 4,674,990 | |
| | Berkshire Hathaway Finance Corp., 3.85%, 3/15/52 | | | United States | | | | 1,500,000 | | | | 1,151,538 | |
| | MetLife Inc., junior sub. bond, 6.40%, 12/15/66 | | | United States | | | | 3,000,000 | | | | 2,897,540 | |
| | The Allstate Corp., senior bond, 4.20%, 12/15/46 | | | United States | | | | 4,300,000 | | | | 3,552,175 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 12,276,243 | |
| | | | | | | | | | | | | | |
| | | Interactive Media & Services 0.3% | | | | | | | | | |
| a | | Tencent Holdings Ltd., senior note, 144A, 3.595%, 1/19/28 | | | China | | | | 2,000,000 | | | | 1,791,400 | |
| | | | | | | | | | | | | | |
| | | Internet 1.6% | | | | | | | | | |
| | Amazon.com Inc., 3.95%, 4/13/52 | | | United States | | | | 6,000,000 | | | | 4,935,040 | |
| a | | Meta Platforms Inc., 144A, 4.45%, 8/15/52 | | | United States | | | | 5,000,000 | | | | 4,088,877 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 9,023,917 | |
| | | | | | | | | | | | | | |
| | | Internet & Direct Marketing Retail 0.6% | | | | | | | | | |
| | Alibaba Group Holding Ltd., senior note, 3.40%, 12/06/27 | | | China | | | | 4,000,000 | | | | 3,604,752 | |
| | | | | | | | | | | | | | |
| | | IT Services 0.5% | | | | | | | | | |
| | Apple Inc., 2.80%, 2/08/61 | | | United States | | | | 4,500,000 | | | | 2,815,998 | |
| | | | | | | | | | | | | | |
| | | Lodging 0.8% | | | | | | | | | |
| | Las Vegas Sands Corp., 3.20%, 8/08/24 | | | United States | | | | 4,700,000 | | | | 4,434,070 | |
| | | | | | | | | | | | | | |
| | | Media 1.9% | | | | | | | | | |
| | Charter Communications Operating LLC/Charter Communications Operating | | | | | | | | | |
| | Capital, | | | | | | | | | | | | |
| | senior bond, 2.80%, 4/01/31 | | | United States | | | | 5,600,000 | | | | 4,242,631 | |
| | senior secured note, 3.50%, 3/01/42 | | | United States | | | | 2,600,000 | | | | 1,655,640 | |
| | Comcast Corp., senior bond, 4.95%, 10/15/58 | | | United States | | | | 5,000,000 | | | | 4,312,679 | |
| | Fox Corp., senior bond, 5.476%, 1/25/39 | | | United States | | | | 900,000 | | | | 782,214 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,993,164 | |
| | | | | | | | | | | | | | |
| | | Metals & Mining 0.3% | | | | | | | | | |
| a | | Antofagasta PLC, senior note, 144A, 2.375%, 10/14/30 | | | United Kingdom | | | | 1,900,000 | | | | 1,423,793 | |
| | | | | | | | | | | | | | |
| | | Miscellaneous Manufacturing 0.2% | | | | | | | | | |
| | Parker-Hannifin Corp., 4.25%, 9/15/27 | | | United States | | | | 1,300,000 | | | | 1,240,268 | |
| | | | | | | | | | | | | | |
| | | Multi-Utilities 0.9% | | | | | | | | | |
| | Berkshire Hathaway Energy Co., | | | | | | | | | | | | |
| | senior bond, 3.80%, 7/15/48 | | | United States | | | | 5,800,000 | | | | 4,380,437 | |
| | Sr. Unsecured, 5.15%, 11/15/43 | | | United States | | | | 1,000,000 | | | | 911,930 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 5,292,367 | |
| | | | | | | | | | | | | | |
| | | Oil & Gas 0.6% | | | | | | | | | |
| | Exxon Mobil Corp., 3.452%, 4/15/51 | | | United States | | | | 4,200,000 | | | | 3,136,961 | |
| | | | | | | | | | | | | | |
| | | Oil, Gas & Consumable Fuels 3.3% | | | | | | | | | |
| | Aker BP ASA, | | | | | | | | | | | | |
| | a senior note, 144A, 3.75%, 1/15/30 | | | Norway | | | | 3,500,000 | | | | 2,980,162 | |
| | a senior bond, 144A, 4.00%, 1/15/31 | | | Norway | | | | 2,200,000 | | | | 1,869,997 | |
| | Canadian Natural Resources Ltd., senior bond, 3.85%, 6/01/27 | | | Canada | | | | 4,000,000 | | | | 3,700,326 | |
| | Chevron Corp., senior bond, 3.078%, 5/11/50 | | | United States | | | | 1,000,000 | | | | 710,705 | |
| | Exxon Mobil Corp., senior bond, 3.567%, 3/06/45 | | | United States | | | | 4,200,000 | | | | 3,188,401 | |
| | TransCanada PipeLines Ltd., | | | | | | | | | | | | |
| | senior bond, 4.25%, 5/15/28 | | | Canada | | | | 5,700,000 | | | | 5,286,681 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Investment Grade Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Oil, Gas & Consumable Fuels (continued) | | | | | | | | | |
| | senior note, 6.10%, 6/01/40 | | | Canada | | | | 1,200,000 | | | $ | 1,164,463 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 18,900,735 | |
| | | | | | | | | | | | | | |
| | | Paper & Forest Products 0.5% | | | | | | | | | |
| | Suzano Austria GmbH, senior bond, 3.75%, 1/15/31 | | | Austria | | | | 3,300,000 | | | | 2,590,450 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 2.3% | | | | | | | | | |
| | AbbVie Inc., 4.05%, 11/21/39 | | | United States | | | | 4,300,000 | | | | 3,471,149 | |
| | Bristol-Myers Squibb Co., | | | | | | | | | | | | |
| | senior bond, 4.125%, 6/15/39 | | | United States | | | | 3,500,000 | | | | 3,068,996 | |
| | senior bond, 5.00%, 8/15/45 | | | United States | | | | 2,400,000 | | | | 2,272,663 | |
| | Sr. Unsecured, 3.70%, 3/15/52 | | | United States | | | | 2,300,000 | | | | 1,768,920 | |
| | Takeda Pharmaceutical Co. Ltd., Senior unsecured, 3.175%, 7/09/50 | | | Japan | | | | 4,400,000 | | | | 2,931,671 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 13,513,399 | |
| | | | | | | | | | | | | | |
| | | Pipelines 0.7% | | | | | | | | | |
| | Eastern Gas Transmission & Storage Inc., 3.90%, 11/15/49 | | | United States | | | | 2,600,000 | | | | 1,932,813 | |
| | Energy Transfer LP, | | | | | | | | | | | | |
| | 5.15%, 3/15/45 | | | United States | | | | 1,700,000 | | | | 1,342,222 | |
| | 4.90%, 3/15/35 | | | United States | | | | 1,200,000 | | | | 1,010,553 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 4,285,588 | |
| | | | | | | | | | | | | | |
| | | Real Estate Management & Development 0.4% | | | | | | | | | |
| | ERP Operating LP, senior bond, 4.50%, 7/01/44 | | | United States | | | | 2,500,000 | | | | 2,105,082 | |
| | | | | | | | | | | | | | |
| | | Retail 1.3% | | | | | | | | | |
| | Home Depot Inc.,
3.625%, 4/15/52 | | | United States | | | | 4,050,000 | | | | 3,065,704 | |
| | Sr. Unsecured, 4.95%, 9/15/52 | | | United States | | | | 625,000 | | | | 588,742 | |
| | Nordstrom Inc., 4.375%, 4/01/30 | | | United States | | | | 2,500,000 | | | | 1,834,537 | |
| | Target Corp., 2.95%, 1/15/52 | | | United States | | | | 2,700,000 | | | | 1,823,475 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 7,312,458 | |
| | | | | | | | | | | | | | |
| | | Road & Rail 1.0% | | | | | | | | | |
| | Burlington Northern Santa Fe LLC, Sr. Unsecured, 5.75%, 5/01/40 | | | United States | | | | 5,700,000 | | | | 5,784,836 | |
| | | | | | | | | | | | | | |
| | | Shipbuilding 0.7% | | | | | | | | | |
| | Huntington Ingalls Industries Inc., 0.67%, 8/16/23 | | | United States | | | | 4,300,000 | | | | 4,148,220 | |
| | | | | | | | | | | | | | |
| | | Software 1.3% | | | | | | | | | |
| | Microsoft Corp., senior bond, 2.675%, 6/01/60 | | | United States | | | | 4,600,000 | | | | 2,907,976 | |
| | Salesforce Inc., Sr. Unsecured, 1.95%, 7/15/31 | | | United States | | | | 1,700,000 | | | | 1,341,093 | |
| | ServiceNow Inc., senior bond, 1.40%, 9/01/30 | | | United States | | | | 4,700,000 | | | | 3,467,310 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 7,716,379 | |
| | | | | | | | | | | | | | |
| | | Telecommunications 1.4% | | | | | | | | | |
| | AT&T Inc., 3.50%, 6/01/41 | | | United States | | | | 1,500,000 | | | | 1,083,554 | |
| | T-Mobile USA Inc., 2.875%, 2/15/31 | | | United States | | | | 8,600,000 | | | | 6,941,963 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 8,025,517 | |
| | | | | | | | | | | | | | |
| | | Tobacco 1.1% | | | | | | | | | |
| | Imperial Brands Finance PLC, | | | | | | | | | | | | |
| | a senior note, 144A, 4.25%, 7/21/25 | | | United States | | | | 5,400,000 | | | | 5,183,177 | |
| | a senior bond, 144A, 3.875%, 7/26/29 | | | United States | | | | 1,600,000 | | | | 1,360,833 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 6,544,010 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 132 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Investment Grade Corporate ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Trucking & Leasing 0.3% | | | | | | | | | |
| a | | SMBC Aviation Capital Finance DAC, 144A, 1.90%, 10/15/26 | | | Ireland | | | | 2,000,000 | | | $ | 1,668,619 | |
| | | | | | | | | | | | | | |
| | | Wireless Telecommunication Services 0.6% | | | | | | | | | |
| a | | Sprint Spectrum Co. LLC, senior secured bond, first lien, 144A, 5.152%, 9/20/29 | | | United States | | | | 3,700,000 | | | | 3,623,717 | |
| | | | | | | | | | | | | | |
| | Total Corporate Bonds & Notes (Cost $667,209,137) | | | | | | | | | | | 546,110,859 | |
| | | | | | | | | | | | | | |
| | Discount Note 0.3% | | | | | | | | | | | | |
| | U.S. Treasury Note, 0.125%, 10/15/23 | | | United States | | | | 2,000,000 | | | | 1,915,878 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $669,202,692) | | | | | | | | | | | 548,026,737 | |
| | | | | | | | | | | | | | |
| | | Short-Term Investments 4.2% | | | | | | | | | |
| | U.S. Government & Agency Securities (Cost $24,426,471) 4.2% | | | | | | | | | |
| b | | Federal Home Loan Bank Discount Notes, 10/3/22 | | | United States | | | | 24,430,000 | | | | 24,430,000 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $24,426,471) | | | | | | | | | | | 24,430,000 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $693,629,163) 98.9% | | | | | | | | | | | 572,456,737 | |
| | Other Assets, less Liabilities 1.1% | | | | | | | | | | | 6,150,730 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 578,607,467 | |
| | | | | | | | | | | | | | |
*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 September 30, 2022, the value of was $130,997,544, representing 22.6% of net assets.
bThe security was issued on a discount basis with no stated coupon rate.
At September 30, 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) | |
| Interest rate contracts | | | | | | | | | | | | | | | |
U.S. Treasury 10 Yr. Note | | | Short | | | | 79 | | | $ | 8,852,937 | | | | 12/20/22 | | | $ | 449,204 | |
U.S. Treasury Note 5 Yr. (CBT) | | | Short | | | | 53 | | | | 5,697,914 | | | | 12/30/22 | | | | 201,415 | |
U.S. Treasury Ultra 10 Yr. (CBT) | | | Short | | | | 44 | | | | 5,213,313 | | | | 12/20/22 | | | | 334,752 | |
| | | | | | | | | | | | | | | | | | | | |
Total Futures Contracts | | | $ | 985,371 | |
| | | | | | | | | | | | | | | | | | | | |
*As of period end.
See Note 11 regarding other derivative information.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 133 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Investment Grade Corporate ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018b | |
Per share operating performance (for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 24.99 | | | $ | 26.86 | | | $ | 26.07 | | | $ | 25.20 | | | $ | 24.34 | | | $ | 25.00 | |
| | | | |
| | | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomed | | | 0.27 | | | | 0.36 | | | | 0.40 | | | | 0.46 | | | | 0.67 | | | | 0.30 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (2.55 | ) | | | (1.79 | ) | | | 0.94 | | | | 1.02 | | | | 0.85 | | | | (0.66 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (2.28 | ) | | | (1.43 | ) | | | 1.34 | | | | 1.48 | | | | 1.52 | | | | (0.36 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.32 | ) | | | (0.44 | ) | | | (0.55 | ) | | | (0.61 | ) | | | (0.66 | ) | | | (0.30 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 22.39 | | | $ | 24.99 | | | $ | 26.86 | | | $ | 26.07 | | | $ | 25.20 | | | $ | 24.34 | |
| | | | |
| | | | | | |
Total returne | | | (9.22)% | | | | (5.44)% | | | | 5.16% | | | | 5.92% | | | | 6.38% | | | | (1.45)% | |
| | | | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.78% | | | | 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% | | | | 0.30% | |
| | | | | | |
Net investment income | | | 2.22% | | | | 1.34% | | | | 1.50% | | | | 1.77% | | | | 2.74% | | | | 2.11% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $99,644 | | | | $104,939 | | | | $126,221 | | | | $28,674 | | | | $8,820 | | | | $7,302 | |
| | | | | | |
Portfolio turnover rateg | | | 30.45% | h | | | 48.41% | h | | | 11.86% | h | | | 17.21% | h | | | 21.21% | | | | 5.00% | |
aEffective August 1, 2022, Formerly, Franklin Liberty Federal Tax-Free Bond ETF was renamed Franklin Municipal Green 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: | | | 30.45% | | | | 48.41% | | | | 11.86% | | | 17.21% | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 134 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Municipal Green Bond ETF
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds 98.5% | | | | | | |
| | | Alabama 0.3% | | | | | | |
| | County of Mobile, Gomesa Projects, 4.00%, 11/01/45 | | | 400,000 | | | $ | 295,502 | |
| | | | | | | | | | |
| | | Alaska 0.2% | | | | | | |
| | Borough of Matanuska-Susitna, State of Alaska Department of Administration, Refunding,
4.00%, 9/01/30 | | | 150,000 | | | | 151,560 | |
| | | | | | | | | | |
| | | Arizona 0.9% | | | | | | |
| | Arizona State University, Series B, 5.00%, 7/01/42 | | | 235,000 | | | | 243,022 | |
| | City of Phoenix Civic Improvement Corp., 5.00%, 7/01/44 | | | 300,000 | | | | 316,117 | |
| | Glendale Industrial Development Authority, 4.00%, 5/15/31 | | | 400,000 | | | | 361,041 | |
| | | | | | | | | | |
| | | | | | | | | 920,180 | |
| | | | | | | | | | |
| | | Arkansas 0.1% | | | | | | |
| | Central Arkansas Water, 4.00%, 10/01/33 | | | 100,000 | | | | 101,077 | |
| | | | | | | | | | |
| | | California 28.6% | | | | | | |
| | California Community Choice Financing Authority, | | | | | | | | |
| | Green Bond, Series 2021B-1, VRDN, 4.00%, 2/01/52 | | | 4,000,000 | | | | 3,826,262 | |
| | Green Bond, VRDN, 4.00%, 10/01/52 | | | 3,000,000 | | | | 2,970,411 | |
| | California Housing Finance Agency, Lakeside Drive Senior Housing LP, Series 2019,
2.35%, 12/01/35 | | | 95,587 | | | | 79,311 | |
| | California Infrastructure & Economic Development Bank, | | | | | �� | | | |
| | 5.00%, 8/01/49 | | | 180,000 | | | | 184,290 | |
| | California Science Center Foundation, 4.00%, 5/01/46 | | | 1,230,000 | | | | 1,082,334 | |
| | FRN thereafter, 2.81%, 8/01/47 | | | 3,100,000 | | | | 3,067,084 | |
| | California Municipal Finance Authority, | | | | | | | | |
| | 4.00%, 5/15/39 | | | 3,445,000 | | | | 3,174,532 | |
| | Northbay Healthcare Group Obligated Group, Refunding, 5.00%, 11/01/26 | | | 790,000 | | | | 815,146 | |
| | California State Public Works Board, California Air Resources Board, Series 2022D,
4.00%, 5/01/44 | | | 1,000,000 | | | | 915,379 | |
| | City of Foster City, 4.00%, 8/01/32 | | | 115,000 | | | | 117,296 | |
| | City of Los Angeles, Department of Airports Customer Facility Charge Revenue,
4.058%, 5/15/37 | | | 1,000,000 | | | | 856,653 | |
| | City of San Francisco CA Public Utilities Commission Water Revenue, Series A,
4.00%, 11/01/50 | | | 100,000 | | | | 89,005 | |
| | Clovis Unified School District, Refunding, zero cpn., 8/01/35 | | | 200,000 | | | | 111,621 | |
| | Konocti Unified School District, Series 2004C, zero cpn., 8/01/28 | | | 150,000 | | | | 117,958 | |
| | Los Angeles County Metropolitan Transportation Authority, 4.00%, 6/01/35 | | | 1,800,000 | | | | 1,795,420 | |
| | Los Angeles County Metropolitan Transportation Authority Sales Tax Revenue,
5.00%, 7/01/44 | | | 150,000 | | | | 156,760 | |
| | Peninsula Corridor Joint Powers Board/CA, Series 2022A, 5.00%, 6/01/38 | | | 1,000,000 | | | | 1,086,508 | |
| | Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/37 | | | 100,000 | | | | 101,998 | |
| | Port of Los Angeles, 5.00%, 8/01/25 | | | 95,000 | | | | 98,743 | |
| | Sacramento Municipal Utility District, Electric System Revenue, 5.00%, 8/15/30 | | | 115,000 | | | | 128,684 | |
| | San Diego Association of Governments, Green Bond, 5.00%, 11/15/24 | | | 2,000,000 | | | | 2,033,791 | |
| | San Diego County Regional Airport Authority, Subordinate Bond, AMT, Series 2021B,
4.00%, 7/01/46 | | | 2,000,000 | | | | 1,712,748 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 135 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Municipal Green Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | California (continued) | | | | | | |
| | San Francisco Bay Area Rapid Transit District, | | | | | | | | |
| | 3.00%, 8/01/36 | | | 150,000 | | | $ | 130,107 | |
| | 4.25%, 8/01/52 | | | 1,000,000 | | | | 935,186 | |
| | Santa Cruz County Capital Financing Authority, 4.00%, 6/01/42 | | | 1,500,000 | | | | 1,361,836 | |
| | Southern California Public Power Authority, 4.00%, 7/01/38 | | | 150,000 | | | | 140,765 | |
| | Three Rivers Levee Improvement Authority, | | | | | | | | |
| | 4.00%, 9/01/32 | | | 100,000 | | | | 93,672 | |
| | Community Facilities District No 2006-1, Refunding, 4.00%, 9/01/27 | | | 250,000 | | | | 245,364 | |
| | Refunding, 4.00%, 9/01/29 | | | 250,000 | | | | 243,001 | |
| | Refunding, 4.00%, 9/01/31 | | | 200,000 | | | | 189,162 | |
| | Transbay Joint Powers Authority,
5.00%, 10/01/34 150,000 | | | | | | | 160,368 | |
| | Redevelopment Project Green Bond Subordinate Tax, 2.40%, 10/01/49 | | | 500,000 | | | | 464,307 | |
| | | | | | | | | | |
| | | | | | | | | 28,485,702 | |
| | | | | | | | | | |
| | | Colorado 2.0% | | | | | | |
| | Board of Water Commissioners City & County of Denver, Series A, 5.00%, 9/15/47 | | | 150,000 | | | | 156,026 | |
| | Regional Transportation District, Refunding, 5.00%, 1/15/32 | | | 250,000 | | | | 255,855 | |
| | Sterling Ranch Community Authority Board, Refunding, Series 2020A, 3.375%, 12/01/30 | | | 25,000 | | | | 21,544 | |
| | University of Colorado, | | | | | | | | |
| | 5.00%, 6/01/27 | | | 150,000 | | | | 161,255 | |
| | Refunding, VRDN, 2.00%, 6/01/51 | | | 1,500,000 | | | | 1,427,758 | |
| | | | | | | | | | |
| | | | | | | | | 2,022,438 | |
| | | | | | | | | | |
| | | Connecticut 0.8% | | | | | | |
| | Connecticut State Health & Educational Facilities Authority, 4.00%, 7/01/31 | | | 125,000 | | | | 129,949 | |
| | Hartford County Metropolitan District, Clean Water Project Revenue, Refunding, Series 2021A, 4.00%, 2/01/39 | | | 745,000 | | | | 682,477 | |
| | | | | | | | | | |
| | | | | | | | | 812,426 | |
| | | | | | | | | | |
| | | District of Columbia 3.4% | | | | | | |
| | District of Columbia, 5.50%, 2/28/37 | | | 845,000 | | | | 852,464 | |
| | District of Columbia Water & Sewer Authority, | | | | | | | | |
| | Series A, 5.00%, 10/01/44 | | | 205,000 | | | | 213,716 | |
| | Sub Series 2019A, 4.00%, 10/01/49 | | | 570,000 | | | | 506,258 | |
| | Sub Series 2022B, 5.00%, 10/01/34 | | | 715,000 | | | | 782,472 | |
| | Washington Metropolitan Area Transit Authority Dedicated Revenue, Green Bond, Series 2021A, 4.00%, 7/15/34 | | | 1,000,000 | | | | 999,268 | |
| | | | | | | | | | |
| | | | | | | | | 3,354,178 | |
| | | | | | | | | | |
| | | Florida 1.4% | | | | | | |
| | Babcock Ranch Community Independent Special District, 4.00%, 5/01/40 | | | 840,000 | | | | 717,872 | |
| | City of Tampa, 5.00%, 5/01/36 | | | 135,000 | | | | 143,990 | |
| | County of Palm Beach FL Water & Sewer Revenue, 4.00%, 10/01/31 | | | 100,000 | | | | 102,337 | |
| | | | | | | | | | |
| | | | | | |
| 136 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Municipal Green Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Florida (continued) | | | | | | |
| | Somerset Community Development District, 4.00%, 5/01/32 | | | 415,000 | | | $ | 384,177 | |
| | | | | | | | | | |
| | | | | | | | | 1,348,376 | |
| | | | | | | | | | |
| | | Georgia 1.3% | | | | | | |
| | Cobb County Kennestone Hospital Authority, WellStar Health System Obligated Group, 3.00%, 4/01/37 | | | 910,000 | | | | 715,751 | |
| | Main Street Natural Gas, Inc., | | | | | | | | |
| | Series 2018A, VRDN, 4.00%, 4/01/48 | | | 100,000 | | | | 100,166 | |
| | Series 2018B, Monthly, VRDN, 2.468%, 4/01/48 | | | 425,000 | | | | 421,321 | |
| | Private Colleges & Universities Authority, 5.00%, 9/01/48 | | | 100,000 | | | | 105,305 | |
| | | | | | | | | | |
| | | | | | | | | 1,342,543 | |
| | | | | | | | | | |
| | | Illinois 4.0% | | | | | | |
| | Illinois Finance Authority, | | | | | | | | |
| | 4.00%, 7/01/37 | | | 250,000 | | | | 239,012 | |
| | State of Illinois Water Revolving Fund - Clean Water Program, 4.00%, 7/01/38 | | | 1,340,000 | | | | 1,272,441 | |
| | Metropolitan Water Reclamation District of Greater Chicago, Green Bond, Series 2021B, 5.00%, 12/01/33 | | | 1,685,000 | | | | 1,817,171 | |
| | State of Illinois, | | | | | | | | |
| | 5.50%, 5/01/30 | | | 100,000 | | | | 105,627 | |
| | 5.50%, 5/01/39 | | | 250,000 | | | | 254,636 | |
| | Series 2019B, 4.00%, 11/01/38 | | | 200,000 | | | | 171,221 | |
| | Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 | | | 150,000 | | | | 124,700 | |
| | | | | | | | | | |
| | | | | | | | | 3,984,808 | |
| | | | | | | | | | |
| | | Indiana 2.2% | | | | | | |
| | Indianapolis Local Public Improvement Bond Bank, | | | | | | | | |
| | 5.00%, 1/15/27 | | | 610,000 | | | | 650,423 | |
| | 5.00%, 7/15/27 | | | 450,000 | | | | 482,486 | |
| | Refunding, 5.00%, 1/01/52 | | | 1,000,000 | | | | 1,062,756 | |
| | | | | | | | | | |
| | | | | | | | | 2,195,665 | |
| | | | | | | | | | |
| | | Kentucky 2.0% | | | | | | |
| | Louisville and Jefferson County Metropolitan Sewer District, Green Bond, Refunding , Series 2022A, 4.00%, 5/15/34 | | | 2,000,000 | | | | 1,988,771 | |
| | | | | | | | | | |
| | | Louisiana 2.9% | | | | | | |
| | Louisiana Local Government Environmental Facilities & Community Development Authority, | | | | | | | | |
| | 3.90%, 11/01/44 | | | 500,000 | | | | 367,516 | |
| | 4.50%, 11/01/47 | | | 1,000,000 | | | | 760,182 | |
| | Parish of St Bernard LA, 4.00%, 11/01/45 | | | 1,000,000 | | | | 724,062 | |
| | Terrebonne Levee & Conservation District, Series 2020B, 4.00%, 6/01/39 | | | 1,000,000 | | | | 925,597 | |
| | Terrebonne Levee & Conservation District Sales Tax Revenue, Series B, 4.00%, 6/01/40 | | | 100,000 | | | | 91,158 | |
| | | | | | | | | | |
| | | | | | | | | 2,868,515 | |
| | | | | | | | | | |
| | | Maine 0.4% | | | | | | |
| | City of Portland ME General Airport Revenue, 4.00%, 1/01/35 | | | 245,000 | | | | 225,863 | |
| | Maine Municipal Bond Bank, Series 2017C, 5.00%, 11/01/31 | | | 135,000 | | | | 145,423 | |
| | | | | | | | | | |
| | | | | | | | | 371,286 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 137 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Municipal Green Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Maryland 2.9% | | | | | | |
| | Maryland Community Development Administration, Series 2021C, 0.375%, 7/01/23 | | | 500,000 | | | $ | 488,696 | |
| | Maryland Economic Development Corp., 5.25%, 6/30/47 | | | 2,000,000 | | | | 2,004,793 | |
| | Maryland Health & Higher Educational Facilities Authority, Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 | | | 365,000 | | | | 352,374 | |
| | Washington Suburban Sanitary Commission, 3.00%, 6/01/35 | | | 100,000 | | | | 87,660 | |
| | | | | | | | | | |
| | | | | | | | | 2,933,523 | |
| | | | | | | | | | |
| | | Massachusetts 3.5% | | | | | | |
| | Massachusetts Clean Energy Cooperative Corp., Green Bond, 2.135%, 7/01/29 | | | 1,295,000 | | | | 1,086,695 | |
| | Massachusetts Development Finance Agency, | | | | | | | | |
| | Springfield College, Green Bond, 5.00%, 6/01/26 | | | 420,000 | | | | 431,043 | |
| | Springfield College, Green Bond, 5.00%, 6/01/27 | | | 440,000 | | | | 453,410 | |
| | Massachusetts Housing Finance Agency, | | | | | | | | |
| | Series C-1, 2.65%, 12/01/34 | | | 100,000 | | | | 82,150 | |
| | Sustainability Bond, Series 2021B-1, 2.60%, 12/01/41 | | | 2,000,000 | | | | 1,425,572 | |
| | | | | | | | | | |
| | | | | | | | | 3,478,870 | |
| | | | | | | | | | |
| | | Minnesota 1.7% | | | | | | |
| | City of Center City, Refunding, 4.00%, 11/01/34 | | | 125,000 | | | | 117,996 | |
| | City of Minneapolis MN, 3.00%, 12/01/40 | | | 100,000 | | | | 80,498 | |
| | Minnesota Higher Education Facilities Authority, Series A, 5.00%, 10/01/52 | | | 1,500,000 | | | | 1,509,444 | |
| | | | | | | | | | |
| | | | | | | | | 1,707,938 | |
| | | | | | | | | | |
| | | Mississippi 0.6% | | | | | | |
| | Mississippi Development Bank, County of Jackson Project, 3.625%, 11/01/36 | | | 500,000 | | | | 389,801 | |
| | Mississippi Home Corp., Patriot Services Group Obligated Group, 5.20%, 6/01/36 | | | 280,000 | | | | 226,332 | |
| | | | | | | | | | |
| | | | | | | | | 616,133 | |
| | | | | | | | | | |
| | | Missouri 0.1% | | | | | | |
| | Park Hill School District of Platte County, 3.00%, 3/01/33 | | | 100,000 | | | | 89,359 | |
| | | | | | | | | | |
| | | New Jersey 1.3% | | | | | | |
| | New Jersey Educational Facilities Authority, Series A, 5.00%, 7/01/32 | | | 645,000 | | | | 657,363 | |
| | Newark Board of Education, | | | | | | | | |
| | 5.00%, 7/15/30 | | | 320,000 | | | | 349,994 | |
| | Sustainability Bonds, 5.00%, 7/15/25 | | | 250,000 | | | | 260,583 | |
| | | | | | | | | | |
| | | | | | | | | 1,267,940 | |
| | | | | | | | | | |
| | | New Mexico 0.2% | | | | | | |
| | City of Santa, Wastewater Utility System Revenue, 4.00%, 6/01/35 | | | 100,000 | | | | 101,032 | |
| | City of Santa Fe NM Wastewater Utility System Revenue, 5.00%, 6/01/29 | | | 100,000 | | | | 108,853 | |
| | | | | | | | | | |
| | | | | | | | | 209,885 | |
| | | | | | | | | | |
| | | New York 10.3% | | | | | | |
| | Battery Park City Authority, 5.00%, 11/01/49 | | | 100,000 | | | | 105,802 | |
| | Metropolitan Transportation Authority, | | | | | | | | |
| | Climate Bond Certified, 5.00%, 11/15/32 | | | 500,000 | | | | 502,840 | |
| | Green Bond, Series 2021A-1, 4.00%, 11/15/45 | | | 2,000,000 | | | | 1,660,535 | |
| | Refunding, Series 2017B, 5.00%, 11/15/28 | | | 255,000 | | | | 264,682 | |
| | Series A-1-GROUP 1, 4.00%, 11/15/41 | | | 600,000 | | | | 543,972 | |
| | | | | | | | | | |
| | | | | | |
| 138 | | | | | | | | Semiannual Report | | franklintempleton.com |
SCHEDULE OF INVESTMENTS FRANKLIN
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Municipal Green Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | New York (continued) | | | | | | |
| | Series B, 5.00%, 11/15/24 | | | 150,000 | | | $ | 153,855 | |
| | Series B-2, 4.00%, 11/15/32 | | | 215,000 | | | | 214,755 | |
| | New York Liberty Development Corp, 7 World Trade Center II LLC, Refunding , Sereis 2022A1, 3.00%, 9/15/43 | | | 1,000,000 | | | | 734,362 | |
| | New York Liberty Development Corp., Green Bonds- 4 World Trade, Refunding,
2.50%, 11/15/36 . | | | 2,000,000 | | | | 1,441,580 | |
| | New York Power Authority, 5.00%, 11/15/29 | | | 1,250,000 | | | | 1,386,851 | |
| | New York State Dormitory Authority, | | | | | | | | |
| | 5.00%, 7/01/35 | | | 100,000 | | | | 113,246 | |
| | Refunding, 3.00%, 10/01/33 | | | 100,000 | | | | 86,766 | |
| | New York State Housing Finance Agency, | | | | | | | | |
| | Series N, 2.60%, 11/01/34 | | | 100,000 | | | | 80,186 | |
| | Series P, 2.00%, 5/01/28 | | | 100,000 | | | | 89,762 | |
| | Sustainability Bonds, Series 2022A, VRDN, 2.50%, 11/01/60 | | | 1,500,000 | | | | 1,394,890 | |
| | New York Transportation Development Corp., AMT, Refunding, 5.00%, 12/01/30 | | | 100,000 | | | | 102,011 | |
| | Trust for Cultural Resources of The City of New York, 5.00%, 7/01/31 | | | 520,000 | | | | 566,383 | |
| | Western Nassau County Water Authority, Green Bonds, Series 2021A, 4.00%, 4/01/40 | | | 900,000 | | | | 810,063 | |
| | | | | | | | | | |
| | | | | | | | | 10,252,541 | |
| | | | | | | | | | |
| | | North Carolina 0.1% | | | | | | |
| | University of North Carolina at Charlotte, 4.00%, 10/01/34 | | | 100,000 | | | | 97,939 | |
| | | | | | | | | | |
| | | Ohio 4.6% | | | | | | |
| | American Municipal Power, Inc., | | | | | | | | |
| | 4.00%, 2/15/41 | | | 1,380,000 | | | | 1,208,783 | |
| | 5.00%, 2/15/29 | | | 100,000 | | | | 108,076 | |
| | Ohio State University, 5.00%, 12/01/23 | | | 3,000,000 | | | | 3,065,313 | |
| | State of Ohio, | | | | | | | | |
| | Series A, 4.00%, 3/01/30 | | | 100,000 | | | | 103,914 | |
| | Series B, 4.00%, 3/01/24 | | | 50,000 | | | | 50,623 | |
| | | | | | | | | | |
| | | | | | | | | 4,536,709 | |
| | | | | | | | | | |
| | | Oregon 2.2% | | | | | | |
| | Hospital Facilities Authority of Multnomah County Oregon, Terwilliger Plaza Inc Obligated Group, Refunding, 4.00%, 12/01/51 | | | 500,000 | | | | 374,657 | |
| | Port of Portland OR Airport Revenue,
AMT, Series 2021-27A, 4.00%, 7/01/50 | | | 2,000,000 | | | | 1,678,736 | |
| | Series 2020-27A, 5.00%, 7/01/36 | | | 150,000 | | | | 152,865 | |
| | | | | | | | | | |
| | | | | | | | | 2,206,258 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | Pennsylvania 1.9% | | | | | | |
| | Pennsylvania Economic Development Financing Authority, UPMC Obligated Group, Series 2017A, 3.375%, 11/15/33 | | | 125,000 | | | | 110,932 | |
| | School District of Philadelphia, | | | | | | | | |
| | Green Bond, Series 2019B, 5.00%, 9/01/29 | | | 1,600,000 | | | | 1,687,284 | |
| | Series B, 5.00%, 9/01/31 | | | 100,000 | | | | 105,870 | |
| | | | | | | | | | |
| | | | | | | | | 1,904,086 | |
| | | | | | | | | | |
| | | Puerto Rico 0.8% | | | | | | |
| | Puerto Rico Highway & Transportation Authority, | | | | | | | | |
| | Refunding, Series 2007N, 5.25%, 7/01/36 | | | 200,000 | | | | 195,846 | |
| | Series 2007CC, 5.50%, 7/01/28 | | | 550,000 | | | | 561,908 | |
| | | | | | | | | | |
| | | | | | | | | 757,754 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 139 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Municipal Green Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Rhode Island 0.2% | | | | | | |
| | Rhode Island Housing and Mortgage Finance Corp., 2.75%, 10/01/34 | | | 150,000 | | | $ | 124,935 | |
| | Rhode Island Infrastructure Bank, Series A, 4.00%, 10/01/27 | | | 50,000 | | | | 51,237 | |
| | | | | | | | | | |
| | | | | | | | | 176,172 | |
| | | | | | | | | | |
| | | South Dakota 0.7% | | | | | | |
| | County of Lincoln, Augustana College Association, 4.00%, 8/01/41 | | | 900,000 | | | | 719,834 | |
| | | | | | | | | | |
| | | Tennessee 1.2% | | | | | | |
| | City of Kingsport, Series 2017B, 3.00%, 3/01/35 | | | 130,000 | | | | 110,304 | |
| | Metropolitan Government Nashville & Davidson County Industrial Development Board, Waste | | | | | | | | |
| | Management, Inc. of Tennessee Project, VRDN, 0.58%, 8/01/31 | | | 1,200,000 | | | | 1,121,239 | |
| | | | | | | | | | |
| | | | | | | | | 1,231,543 | |
| | | | | | | | | | |
| | | Texas 1.0% | | | | | | |
| | City of Round Rock, Utility System Revenue, Refunding, 2.75%, 8/01/29 | | | 100,000 | | | | 92,386 | |
| | Harris County Flood Control District, Series 2022A, 4.25%, 10/01/47 | | | 1,000,000 | | | | 953,013 | |
| | | | | | | | | | |
| | | | | | | | | 1,045,399 | |
| | | | | | | | | | |
| | | Utah 5.0% | | | | | | |
| | Central Valley Water Reclamation Facility, Series C, 4.00%, 3/01/47 | | | 1,255,000 | | | | 1,105,752 | |
| | City of Spanish Fork, 5.00%, 9/01/26 | | | 175,000 | | | | 185,230 | |
| | Intermountain Power Agency, Series A, 5.00%, 7/01/43 | | | 3,000,000 | | | | 3,162,163 | |
| | Utah Infrastructure Agency, 4.00%, 10/15/30 | | | 500,000 | | | | 460,066 | |
| | Utah State Building Ownership Authority, Master Lease Program, 2.50%, 5/15/27 | | | 100,000 | | | | 95,328 | |
| | | | | | | | | | |
| | | | | | | | | 5,008,539 | |
| | | | | | | | | | |
| | | Vermont 0.7% | | | | | | |
| | City of Burlington, Electric System Revenue, Series 2022A, 5.00%, 7/01/31 | | | 500,000 | | | | 546,545 | |
| | Vermont Educational & Health Buildings Financing Agency, 5.00%, 12/01/38 | | | 195,000 | | | | 195,073 | |
| | | | | | | | | | |
| | | | | | | | | 741,618 | |
| | | | | | | | | | |
| | | Virginia 2.9% | | | | | | |
| | Charles City County Economic Development Authority, Waste Management, Inc., AMT, 1.45%, 4/01/27 | | | 1,100,000 | | | | 965,745 | |
| | City of Hampton,
4.00%, 9/01/31 | | | 100,000 | | | | 104,038 | |
| | 5.00%, 9/01/27 | | | 50,000 | | | | 54,095 | |
| | Fairfax County Economic Development Authority, County of Fairfax, 4.00%, 10/01/37 | | | 1,630,000 | | | | 1,583,336 | |
| | Northern Virginia Transportation Commission, 5.00%, 6/01/28 | | | 190,000 | | | | 206,930 | |
| | | | | | | | | | |
| | | | | | | | | 2,914,144 | |
| | | | | | | | | | |
| | | Washington 1.4% | | | | | | |
| | Central Puget Sound Regional Transit Authority, | | | | | | | | |
| | Series S-1, 5.00%, 11/01/27 | | | 50,000 | | | | 52,667 | |
| | Series S-1, 5.00%, 11/01/32 | | | 100,000 | | | | 105,334 | |
| | FYI Properties, 5.00%, 6/01/24 | | | 135,000 | | | | 138,569 | |
| | | | | | | | | | |
| | | | | | |
| 140 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Municipal Green Bond ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Principal Amount* | | | Value | |
| | | Municipal Bonds (continued) | | | | | | |
| | | Washington (continued) | | | | | | |
| | Washington Health Care Facilities Authority, 5.00%, 12/01/32 | | | 250,000 | | | $ | 259,557 | |
| | Washington State Housing Finance Commission, Series 2021A-1, 3.50%, 12/20/35 | | | 980,892 | | | | 833,086 | |
| | | | | | | | | | |
| | | | | | | | | 1,389,213 | |
| | | | | | | | | | |
| | | Wisconsin 4.7% | | | | | | |
| | Milwaukee Metropolitan Sewerage District, Series A, 3.00%, 10/01/35 | | | 100,000 | | | | 84,646 | |
| | Public Finance Authority, | | | | | | | | |
| | RED River Valley Alliance LLC, AMT, 4.00%, 3/31/56 | | | 2,500,000 | | | | 1,791,797 | |
| | VRDN, 3.50%, 12/01/50 | | | 200,000 | | | | 155,361 | |
| | University of Wisconsin Hospitals & Clinics, Obligated Group, Green Bond, 4.00%, 4/01/46 | | | 3,000,000 | | | | 2,618,713 | |
| | | | | | | | | | |
| | | | | | | | | 4,650,517 | |
| | | | | | | | | | |
| | Total Investments (Cost $112,966,243) 98.5% | | | | | | | 98,178,941 | |
| | Other Assets, less Liabilities 1.5% | | | | | | | 1,465,269 | |
| | | | | | | | | | |
| | Net Assets 100.0% | | | | | | $ | 99,644,210 | |
| | | | | | | | | | |
*The principal amount is stated in U.S. dollars unless otherwise indicated.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 141 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Senior Loan ETFa
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019b | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, beginning of period | | $ | 24.70 | | | $ | 24.83 | | | $ | 22.85 | | | $ | 24.85 | | | $ | 25.00 | |
| | | | |
| | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment incomed | | | 0.59 | | | | 0.91 | | | | 0.70 | | | | 0.99 | | | | 0.81 | |
| | | | | |
Net realized and unrealized gains (losses) | | | (1.58 | ) | | | (0.23 | ) | | | 1.99 | | | | (1.90 | ) | | | (0.21 | ) |
| | | | |
| | | | | |
Total from investment operations | | | (0.99 | ) | | | 0.68 | | | | 2.69 | | | | (0.91 | ) | | | 0.60 | |
| | | | |
| | | | | |
Less distributions from net investment income | | | (0.58 | ) | | | (0.81 | ) | | | (0.71 | ) | | | (1.09 | ) | | | (0.75 | ) |
| | | | |
| | | | | |
Net asset value, end of period | | $ | 23.13 | | | $ | 24.70 | | | $ | 24.83 | | | $ | 22.85 | | | $ | 24.85 | |
| | | | |
| | | | | |
Total returne | | | (4.07)% | | | | 2.76% | | | | 11.91% | | | | (3.92)% | | | | 2.44% | |
| | | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Expenses before waiver and payments by affiliates | | | 0.46% | | | | 0.58% | | | | 0.92% | | | | 0.97% | | | | 1.00% | |
| | | | | |
Expenses net of waiver and payments by affiliates | | | 0.46% | | | | 0.45% | | | | 0.45% | | | | 0.45% | | | | 0.45% | |
| | | | | |
Net investment income | | | 4.91% | | | | 3.72% | | | | 2.88% | | | | 4.02% | | | | 3.90% | |
| | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net assets, end of period (000’s) | | | $218,625 | | | | $292,722 | | | | $201,101 | | | | $54,833 | | | | $57,165 | |
| | | | | |
Portfolio turnover rateg | | | 18.43%h | | | | 35.67%h | | | | 45.87%h | | | | 51.48%h | | | | 10.62% | |
aEffective August 1, 2022, Formerly, Franklin Liberty Senior Loan ETF was renamed Franklin Senior Loan ETF.
bFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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: | | | 18.43% | | | | 35.67% | | | | 45.87% | | | | 51.48% | | | | | |
| | | | | | | | | | |
| | | | | | |
| 142 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Seenior Loan ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| | Corporate Bonds & Notes 3.0% | | | | | | | | | | | | |
| | | Airlines 0.3% | |
| a | | Air Canada, 144A, 3.875%, 8/15/26 | | | Canada | | | | 400,000 | | | $ | 344,000 | |
| a | | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%, 4.50%, 10/20/25 | | | United States | | | | 250,000 | | | | 242,814 | |
| a | | United Airlines Inc., 144A, 4.375%, 4/15/26 | | | United States | | | | 140,000 | | | | 125,194 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 712,008 | |
| | | | | | | | | | | | | | |
| | | Chemicals 0.3% | |
| a | | ASP Unifrax Holdings Inc., 144A, 5.25%, 9/30/28 | | | United States | | | | 419,400 | | | | 323,041 | |
| a | | SCIH Salt Holdings Inc., 144A, 4.875%, 5/01/28 | | | United States | | | | 500,000 | | | | 413,847 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 736,888 | |
| | | | | | | | | | | | | | |
| | | Commercial Services & Supplies 0.1% | |
| a | | MPH Acquisition Holdings LLC, 144A, 5.50%, 9/01/28 | | | United States | | | | 213,000 | | | | 176,125 | |
| | | | | | | | | | | | | | |
| | | Communications Equipment 0.1% | |
| a | | CommScope Inc., 144A, 4.75%, 9/01/29 | | | United States | | | | 288,500 | | | | 235,863 | |
| | | | | | | | | | | | | | |
| | | Construction Materials 0.1% | |
| a | | Cemex SAB de CV, senior secured note, 144A, 5.20%, 9/17/30 | | | Mexico | | | | 375,000 | | | | 324,383 | |
| | | | | | | | | | | | | | |
| | | Containers & Packaging 0.2% | |
| a | | Pactiv Evergreen Group Issuer Inc/Pactiv Evergreen Group Issuer LLC, senior secured note, 144A, 4.00%, 10/15/27 | | | United States | | | | 400,000 | | | | 336,159 | |
| | | | | | | | | | | | | | |
| | | Diversified Financial Services 0.4% | |
| a | | Altice France SA, 144A, 5.125%, 7/15/29 | | | France | | | | 500,000 | | | | 374,735 | |
| a | | Jane Street Group / JSG Finance Inc., 144A, 4.50%, 11/15/29 | | | United States | | | | 300,000 | | | | 258,421 | |
| a | | Vmed O2 UK Financing I PLC, senior secured bond, 144A, 4.25%, 1/31/31 . | | | United Kingdom | | | | 210,000 | | | | 159,600 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 792,756 | |
| | | | | | | | | | | | | | |
| | | Electric 0.3% | |
| a | | Calpine Corp., first lien, 144A, 4.50%, 2/15/28 | | | United States | | | | 800,000 | | | | 706,544 | |
| | | | | | | | | | | | | | |
| | | Environmental Control 0.1% | |
| a | | GFL Environmental Inc., 144A, 3.50%, 9/01/28 | | | Canada | | | | 200,000 | | | | 169,000 | |
| | | | | | | | | | | | | | |
| | | Media 0.4% | |
| a | | Diamond Sports Group LLC / Diamond Sports Finance Co., secured note, 144A, 5.375%, 8/15/26 | | | United States | | | | 1,210,000 | | | | 242,363 | |
| a | | Directv Financing LLC / Directv Financing Co-Obligor Inc., 144A, 5.875%, 8/15/27 | | | United States | | | | 750,000 | | | | 648,281 | |
| a | | Univision Communications Inc., senior secured note, first lien, 144A, 5.125%, 2/15/25 | | | United States | | | | 44,444 | | | | 42,262 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 932,906 | |
| | | | | | | | | | | | | | |
| | | Oil, Gas & Consumable Fuels 0.1% | |
| | Cheniere Energy Inc., 4.625%, 10/15/28 | | | United States | | | | 150,000 | | | | 137,953 | |
| a | | Weatherford International Ltd., 144A, 6.50%, 9/15/28 | | | United States | | | | 44,600 | | | | 40,202 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 178,155 | |
| | | | | | | | | | | | | | |
| | | Packaging & Containers 0.2% | |
| a | | Ardagh Packaging Finance PLC / Ardagh Holdings USA Inc., 144A, 4.125%, 8/15/26 | | | United States | | | | 500,000 | | | | 416,908 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 0.3% | |
| a,b | | Endo Luxembourg Finance Co. I Sarl / Endo US Inc., 144A, 6.125%,
4/01/29 | | | United States | | | | 925,000 | | | | 731,625 | |
| | | | | | | | | | | | | | |
| | | Specialty Retail 0.1% | |
| a | | Staples Inc., 144A, 7.50%, 4/15/26 | | | United States | | | | 161,000 | | | | 135,410 | |
| | | | | | | | | | | | | | |
| | Total Corporate Bonds & Notes (Cost $8,149,970) | | | | | | | | | | | 6,584,730 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 143 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests 88.1% | |
| | | Aerospace & Defense 2.6% | |
| | Dynasty Acquisition Co. Inc., | | | | | | | | | | | | |
| | FRN thereafter, 2020 Term Loan B1, 6.615%, 4/06/26 | | | United States | | | | 769,377 | | | $ | 712,555 | |
| | FRN thereafter, 2020 CAD Term Loan B2, 6.615%, 4/06/26 | | | United States | | | | 413,643 | | | | 383,094 | |
| | Madison IAQ LLC, FRN thereafter, Term Loan, 6.815%, 6/21/28 | | | United States | | | | 2,025,446 | | | | 1,876,788 | |
| | Peraton Corp., FRN thereafter, Term Loan B, 6.865%, 2/01/28 | | | United States | | | | 2,939,239 | | | | 2,793,379 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,765,816 | |
| | | | | | | | | | | | | | |
| | | Air Freight & Logistics 1.3% | |
| | First Student Bidco Inc., | | | | | | | | | | | | |
| | FRN thereafter, Term Loan C, 6.642%, 7/21/28 | | | United States | | | | 324,319 | | | | 301,060 | |
| | FRN thereafter, Term Loan B, 6.642%, 7/21/28 | | | United States | | | | 872,021 | | | | 809,484 | |
| | Kenan Advantage Group Inc., FRN thereafter, 2021 Term Loan B1, 6.865%, 3/24/26 | | | United States | | | | 1,758,365 | | | | 1,667,159 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,777,703 | |
| | | | | | | | | | | | | | |
| | | Airlines 4.0% | |
| | Air Canada, FRN thereafter, 2021 Term Loan B, 6.421%, 8/11/28 | | | Canada | | | | 1,955,291 | | | | 1,864,340 | |
| | American Airlines Inc., | | | | | | | | | | | | |
| | FRN thereafter, 2018 Term Loan B, 4.83%, 6/27/25 | | | United States | | | | 2,408,046 | | | | 2,341,078 | |
| | FRN thereafter, 2021 Term Loan, 7.46%, 4/20/28 | | | United States | | | | 1,024,129 | | | | 994,942 | |
| | Kestrel Bidco Inc., FRN thereafter, Term Loan B, 5.993%, 12/11/26 | | | Canada | | | | 1,253,084 | | | | 1,110,702 | |
| | United Airlines Inc., FRN thereafter, 2021 Term Loan B, 6.533%, 4/21/28 | | | United States | | | | 2,476,815 | | | | 2,374,474 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 8,685,536 | |
| | | | | | | | | | | | | | |
| | | Auto Components 0.8% | |
| | Clarios Global LP, FRN thereafter, 2021 USD Term Loan B, 6.365%, 4/30/26 | | | United States | | | | 1,755,327 | | | | 1,665,735 | |
| | | | | | | | | | | | | | |
| | | Auto Parts & Equipment 2.3% | |
| | DexKo Global Inc., | | | | | | | | | | | | |
| | FRN thereafter, 6.865%, 10/04/28 | | | United States | | | | 159,600 | | | | 147,181 | |
| | FRN thereafter, 7.424%, 10/04/28 | | | United States | | | | 836,136 | | | | 771,072 | |
| | First Brands Group LLC, FRN thereafter, 2021 Term Loan, 8.369%, 3/30/27 . | | | United States | | | | 2,323,249 | | | | 2,241,354 | |
| | Truck Hero Inc., FRN thereafter, 2021 Term Loan B, 6.615%, 1/31/28 | | | United States | | | | 2,076,918 | | | | 1,822,351 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,981,958 | |
| | | | | | | | | | | | | | |
| | | Automobile Manufacturers 0.8% | |
| | American Trailer World Corp., FRN thereafter, Term Loan B, 6.784%, 3/03/28 | | | United States | | | | 1,884,928 | | | | 1,722,353 | |
| | | | | | | | | | | | | | |
| | | Building Products 1.3% | |
| | Allied Universal Holdco LLC, FRN thereafter, 2021 USD Incremental Term Loan B, 6.784%, 5/12/28 | | | United States | | | | 1,758,136 | | | | 1,550,456 | |
| | Solis IV BV, FRN thereafter, USD Term Loan B1, 6.34%, 2/26/29 | | | Netherlands | | | | 598,500 | | | | 495,558 | |
| | White Cap Buyer LLC, FRN thereafter, Term Loan B, 6.784% to , FRN thereafter, 10/19/27 | | | United States | | | | 976,805 | | | | 916,101 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,962,115 | |
| | | | | | | | | | | | | | |
| | | Capital Markets 1.8% | |
| | Citadel Securities LP, FRN thereafter, 2021 Term Loan B, 5.649%, 2/02/28 | | | United States | | | | 1,428,250 | | | | 1,390,830 | |
| | Edelman Financial Center LLC, FRN thereafter, 2021 Term Loan B, 6.615%, 4/07/28 | | | United States | | | | 1,281,824 | | | | 1,179,817 | |
| | Jane Street Group LLC, FRN thereafter, 2021 Term Loan, 5.865%, 1/26/28 . | | | United States | | | | 1,420,544 | | | | 1,365,348 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,935,995 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 144 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests (continued) | |
| | | Casinos & Gaming 1.9% | |
| | Scientific Games Holdings LP, FRN thereafter, 2022 USD Term Loan B, 5.617%, 4/04/29 | | | United States | | | | 1,483,426 | | | $ | 1,377,731 | |
| | Scientific Games International Inc., FRN thereafter, 2022 USD Term Loan, 5.906%, 4/14/29 | | | United States | | | | 1,312,988 | | | | 1,278,851 | |
| | Twin River Worldwide Holdings Inc., FRN thereafter, 2021 Term Loan B, 5.935%, 10/02/28 | | | United States | | | | 1,784,510 | | | | 1,616,588 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,273,170 | |
| | | | | | | | | | | | | | |
| | | Chemicals 3.4% | | | | | | | | | |
| | Hexion Holdings Corporation, 2022 USD Term Loan, TBD, 7.413%, 3/15/29 . | | | United States | | | | 1,596,000 | | | | 1,369,368 | |
| | INEOS Styrolution US Holding LLC, FRN thereafter, 5.865%, 1/29/26 | | | United States | | | | 1,707,613 | | | | 1,597,335 | |
| | LSF11 A5 Holdco LLC, FRN thereafter, Term Loan, 6.649%, 10/15/28 | | | United States | | | | 1,561,664 | | | | 1,455,276 | |
| | PMHC II Inc., 2022 Term Loan B, TBD, 6.977%, 4/23/29 | | | United States | | | | 1,800,000 | | | | 1,460,817 | |
| | SCIH Salt Holdings Inc., FRN thereafter, 2021 Incremental Term Loan B, 6.806%, 3/16/27 | | | United States | | | | 1,593,116 | | | | 1,483,589 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 7,366,385 | |
| | | | | | | | | | | | | | |
| | | Commercial Services & Supplies 3.8% | | | | | | | | | |
| | Amentum Government Services Holdings LLC, FRN thereafter, 2022 Term Loan, 7.206%, 2/15/29 | | | United States | | | | 2,628,810 | | | | 2,517,085 | |
| | APX Group Inc., FRN thereafter, 2021 Term Loan B, 8.50%, 7/10/28 | | | United States | | | | 990,479 | | | | 939,009 | |
| | KUEHG Corp., FRN thereafter, 2018 Incremental Term Loan, 6.865%, 2/21/25 | | | United States | | | | 1,078,649 | | | | 1,022,020 | |
| | MPH Acquisition Holdings LLC, FRN thereafter, 2021 Term Loan B, 7.32%, 9/01/28 | | | United States | | | | 497,488 | | | | 461,188 | |
| | PECF USS Intermediate Holding III Corporation, FRN thereafter, Term Loan B, 7.365%, 12/15/28 | | | United States | | | | 1,829,124 | | | | 1,566,947 | |
| | Spin Holdco Inc., FRN thereafter, 2021 Term Loan, 7.144%, 3/04/28 | | | United States | | | | 2,163,962 | | | | 1,906,992 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 8,413,241 | |
| | | | | | | | | | | | | | |
| | | Communications Equipment 0.4% | | | | | | | | | |
| | CommScope Inc., FRN thereafter, 2019 Term Loan B, 6.365%, 4/06/26 | | | United States | | | | 969,996 | | | | 898,459 | |
| | | | | | | | | | | | | | |
| | | Computer & Electronics Retail 1.5% | | | | | | | | | |
| | McAfee LLC, 2022 USD Term Loan B, TBD, 6.362%, 3/01/29 | | | United States | | | | 1,750,452 | | | | 1,601,348 | |
| | Vision Solutions Inc., FRN thereafter, 2021 Incremental Term Loan, 6.783%, 4/24/28 | | | United States | | | | 1,889,907 | | | | 1,669,422 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,270,770 | |
| | | | | | | | | | | | | | |
| | | Construction Materials 0.9% | | | | | | | | | |
| | Cornerstone Building Brands Inc., FRN thereafter, 2021 Term Loan B, 6.068%, 4/12/28 | | | United States | | | | 1,381,685 | | | | 1,142,916 | |
| | Quikrete Holdings, Inc., FRN thereafter, 2021 Term Loan B1, 6.115%, 6/11/28 | | | United States | | | | 796,000 | | | | 767,865 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,910,781 | |
| | | | | | | | | | | | | | |
| | | Consumer Finance 0.1% | | | | | | | | | |
| d | | Stars Group Holdings BV (The), 2022 USD Term Loan B, TBD, 6.292%, 9/16/28 | | | Netherlands | | | | 169,492 | | | | 165,731 | |
| | | | | | | | | | | | | | |
| | | Containers & Packaging 2.8% | | | | | | | | | |
| | BWAY Holding Company, FRN thereafter, 2017 Term Loan B, 5.814%, 4/03/24 | | | United States | | | | 1,502,296 | | | | 1,405,593 | |
| | Charter NEX US Inc., FRN thereafter, 2021 Term Loan, 6.556%, 12/01/27 | | | United States | | | | 1,661,104 | | | | 1,580,516 | |
| | Klockner-Pentaplast of America Inc., FRN thereafter, 2021 Term Loan B, 8.259%, 2/12/26 | | | Luxembourg | | | | 1,981,657 | | | | 1,699,271 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 145 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests (continued) | |
| | | Containers & Packaging (continued) | | | | | | | | | |
| | Reynolds Group Holdings Inc., FRN thereafter, 2021 Term Loan B, 6.615%, 9/24/28 | | | United States | | | | 1,489,470 | | | $ | 1,431,984 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 6,117,364 | |
| | | | | | | | | | | | | | |
| | | Diversified Banks 0.7% | | | | | | | | | |
| | AqGen Island Holdings Inc., FRN thereafter, Term Loan, 7.188%, 8/02/28 | | | United States | | | | 1,594,550 | | | | 1,455,027 | |
| | | | | | | | | | | | | | |
| | | Diversified Financial Services 0.9% | | | | | | | | | |
| | Asurion LLC, | | | | | | | | | | | | |
| | FRN thereafter, 2020 Term Loan B8, 6.365% to , FRN thereafter, 12/23/26 | | | United States | | | | 586,570 | | | | 498,954 | |
| | FRN thereafter, 2021 Second Lien Term Loan B4, 8.365%, 1/20/29 | | | United States | | | | 1,697,666 | | | | 1,307,203 | |
| | Citadel Securities LP, 2022 Incremental Term Loan B, 6.149%, 2/02/28 | | | United States | | | | 200,000 | | | | 198,250 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,004,407 | |
| | | | | | | | | | | | | | |
| | | Diversified Telecommunication Services 0.8% | | | | | | | | | |
| | Altice France SA, FRN thereafter, 2018 Term Loan B13, 6.905% to , FRN thereafter, 8/14/26 | | | France | | | | 1,176,571 | | | | 1,070,679 | |
| | Zayo Group Holdings Inc., FRN thereafter, USD Term Loan, 6.115%, 3/09/27 | | | United States | | | | 708,194 | | | | 595,241 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,665,920 | |
| | | | | | | | | | | | | | |
| | | Electronic Equipment & Instruments 0.6% | | | | | | | | | |
| | Magenta Buyer LLC, FRN thereafter, 2021 USD 1st Lien Term Loan, 7.87%, 7/27/28 | | | United States | | | | 1,395,128 | | | | 1,263,986 | |
| | | | | | | | | | | | | | |
| | | Food Products 0.5% | | | | | | | | | |
| | Triton Water Holdings Inc, FRN thereafter, Term Loan, 7.174%, 3/31/28 | | | United States | | | | 1,116,705 | | | | 1,007,670 | |
| | | | | | | | | | | | | | |
| | | Health Care Providers & Services 8.1% | | | | | | | | | |
| | ADMI Corp., | | | | | | | | | | | | |
| | FRN thereafter, 2021 Term Loan B2, 6.49%, 12/23/27 | | | United States | | | | 1,456,624 | | | | 1,289,119 | |
| | FRN thereafter, 2021 Incremental Term Loan B3, 6.865%, 12/23/27 | | | United States | | | | 659,100 | | | | 588,246 | |
| | Charlotte Buyer Inc., FRN thereafter, 1st Lien Term Loan, 7.98% to , SOFR CME + 5.250%, 2/11/28 | | | United States | | | | 376,344 | | | | 353,763 | |
| | CHG Healthcare Services Inc., FRN thereafter, 6.924%, 9/29/28 | | | United States | | | | 1,402,997 | | | | 1,350,819 | |
| | Gainwell Acquisition Corp., FRN thereafter, Term Loan B, 7.674%, 10/01/27 | | | United States | | | | 2,892,718 | | | | 2,763,992 | |
| | ICON Luxembourg SARL, FRN thereafter, LUX Term Loan, 5.938%, 7/03/28 | | | Luxembourg | | | | 1,266,213 | | | | 1,240,496 | |
| | Medical Solutions Holdings Inc., | | | | | | | | | | | | |
| | FRN thereafter, 2021 Delayed Draw Term Loan, 3.50%, 11/01/28 | | | United States | | | | 260,431 | | | | 248,581 | |
| | FRN thereafter, 2021 1st Lien Term Loan, 6.377%, 11/01/28 | | | United States | | | | 1,618,729 | | | | 1,545,077 | |
| | Medline Borrower LP, FRN thereafter, USD Term Loan B, 6.365%, 10/23/28 | | | United States | | | | 1,347,943 | | | | 1,242,002 | |
| | National Mentor Holdings Inc., | | | | | | | | | | | | |
| | FRN thereafter, 2021 Term Loan, 6.87%, 3/02/28 | | | United States | | | | 800,854 | | | | 577,116 | |
| | FRN thereafter, 2021 Term Loan C, 7.424%, 3/02/28 | | | United States | | | | 29,688 | | | | 21,394 | |
| | Phoenix Guarantor Inc., FRN thereafter, 2021 Term Loan B3, 6.615%, 3/05/26 | | | United States | | | | 1,184,867 | | | | 1,128,853 | |
| | PRA Health Sciences Inc., FRN thereafter, US Term Loan, 5.892%, 7/03/28 | | | United States | | | | 315,478 | | | | 309,070 | |
| | Radiology Partners Inc., FRN thereafter, 2018 1st Lien Term Loan B, 7.302%, 7/09/25 | | | United States | | | | 1,124,138 | | | | 952,145 | |
| | Team Health Holdings Inc., FRN thereafter, 1st Lien Term Loan, 5.865%, 2/06/24 | | | United States | | | | 1,308,131 | | | | 1,201,846 | |
| | U.S. Anesthesia Partners Inc., FRN thereafter, 2021 Term Loan, 6.814%, 10/01/28 | | | United States | | | | 1,337,713 | | | | 1,260,320 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests (continued) | |
| | | Health Care Providers & Services (continued) | | | | | | | | | |
| | U.S. Radiology Specialists Inc., FRN thereafter, 2020 Term Loan, 8.924%, 12/15/27 | | | United States | | | | 1,281,644 | | | $ | 1,134,255 | |
| | U.S. Renal Care Inc., FRN thereafter, 2019 Term Loan B, 8.115%, 6/26/26 | | | United States | | | | 819,748 | | | | 595,723 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 17,802,817 | |
| | | | | | | | | | | | | | |
| | | Health Care Services 1.0% | | | | | | | | | |
| | MedAssets Software Intermediate Holdings Inc., FRN thereafter, 2021 Term Loan, 7.115%, 12/18/28 | | | United States | | | | 2,306,881 | | | | 2,128,098 | |
| | | | | | | | | | | | | | |
| | | Home Furnishings 0.4% | | | | | | | | | |
| | AI Aqua Merger Sub Inc., FRN thereafter, 2021 1st Lien Term Loan B, 6.346%, 7/31/28 | | | United States | | | | 922,688 | | | | 859,543 | |
| | | | | | | | | | | | | | |
| | | Hotels Restaurants & Leisure 1.7% | | | | | | | | | |
| | Caesars Resort Collection LLC,
FRN thereafter, 2017 1st Lien Term Loan B, 5.865%, 12/23/24 | | | United States | | | | 892,605 | | | �� | 873,543 | |
| | FRN thereafter, 2020 Term Loan B1, 6.615%, 7/21/25 | | | United States | | | | 636,282 | | | | 628,421 | |
| | Fertitta Entertainment LLC, 2022 Term Loan B, TBD, 7.034%, 1/27/29 | | | United States | | | | 1,056,295 | | | | 982,904 | |
| | Hilton Grand Vacations Borrower LLC, FRN thereafter, 2021 Term Loan B, 6.115%, 8/02/28 | | | United States | | | | 1,361,076 | | | | 1,320,033 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,804,901 | |
| | | | | | | | | | | | | | |
| | | Insurance 2.0% | | | | | | | | | |
| | Acrisure LLC,
FRN thereafter, 2020 Term Loan B, 6.615%, 2/15/27 | | | United States | | | | 1,120,477 | | | | 1,027,567 | |
| | FRN thereafter, 2021 First Lien Term Loan B, 7.365%, 2/15/27 | | | United States | | | | 242,919 | | | | 228,952 | |
| | Alliant Holdings Intermediate LLC, FRN thereafter, 2021 Term Loan B4, 6.493%, 11/06/27 | | | United States | | | | 1,052,528 | | | | 999,901 | |
| | AssuredPartners Inc., FRN thereafter, 2020 Term Loan B, 6.615%, 2/12/27 . | | | United States | | | | 1,459,784 | | | | 1,384,970 | |
| | Asurion LLC, FRN thereafter, 2022 Term Loan B10, 7.134%, 8/19/28 | | | United States | | | | 300,000 | | | | 256,688 | |
| | Sedgwick Claims Management Services Inc., FRN thereafter, 2019 Term
Loan B, 6.865%, 9/03/26 | | | United States | | | | 397,943 | | | | 381,154 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,279,232 | |
| | | | | | | | | | | | | | |
| | | Interactive Media & Services 1.2% | | | | | | | | | |
| | Arches Buyer Inc., FRN thereafter, 2021 Term Loan B, 6.365%, 12/06/27 | | | United States | | | | 1,582,843 | | | | 1,430,004 | |
| | Hunter Holdco 3 Limited, FRN thereafter, USD Term Loan B, 7.924%, 8/19/28 | | | United States | | | | 1,195,153 | | | | 1,132,407 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,562,411 | |
| | | | | | | | | | | | | | |
| | | Internet Services & Infrastructure 0.8% | | | | | | | | | |
| | MH Sub I LLC, | | | | | | | | | | | | |
| | FRN thereafter, 2020 Incremental Term Loan, 6.274%, 9/13/24 | | | United States | | | | 1,324,794 | | | | 1,265,841 | |
| | FRN thereafter, 2017 1st Lien Term Loan, 6.871%, 9/13/24 | | | United States | | | | 490,139 | | | | 468,503 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,734,344 | |
| | | | | | | | | | | | | | |
| | | IT Services 3.8% | | | | | | | | | |
| | Deerfield Dakota Holding LLC, FRN thereafter, 2020 USD Term Loan B, 6.797%, 4/09/27 | | | United States | | | | 2,863,205 | | | | 2,708,119 | |
| | Dun and Bradstreet Corp., FRN thereafter, Term Loan, 6.33%, 2/06/26 | | | United States | | | | 955,380 | | | | 925,883 | |
| | Sedgwick Claims Management Services Inc., FRN thereafter, 2018 Term Loan B, 6.365%, 12/31/25 | | | United States | | | | 1,164,153 | | | | 1,105,462 | |
| | Verscend Holding Corp., FRN thereafter, 2021 Term Loan B, 7.115%, 8/27/25 | | | United States | | | | 3,683,054 | | | | 3,581,770 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 8,321,234 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests (continued) | |
| | | Leisure Equipment & Products 0.8% | | | | | | | | | |
| | Playtika Holding Corp., FRN thereafter, 2021 Term Loan, 5.865%, 3/13/28 | | | United States | | | | 1,094,445 | | | $ | 1,051,104 | |
| | Varsity Brands Inc., FRN thereafter, 2017 Term Loan B, 6.615%, 12/15/24 | | | United States | | | | 794,529 | | | | 743,382 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,794,486 | |
| | | | | | | | | | | | | | |
| | | Machinery 0.7% | | | | | | | | | |
| | Vertical US Newco Inc., FRN thereafter, Term Loan B, 6.871%, 7/30/27 | | | Germany | | | | 1,708,929 | | | | 1,641,999 | |
| | | | | | | | | | | | | | |
| | | Media 7.4% | | | | | | | | | |
| | AMC Entertainment Holdings Inc., FRN thereafter, 2019 Term Loan B, 5.756%, 4/22/26 | | | United States | | | | 246,173 | | | | 193,617 | |
| | Cengage Learning Inc., FRN thereafter, 2021 Term Loan B, 7.814%, 7/14/26 | | | United States | | | | 1,917,642 | | | | 1,741,161 | |
| | Clear Channel Outdoor Holdings Inc., FRN thereafter, Term Loan B, 6.306%, 8/21/26 | | | United States | | | | 2,227,795 | | | | 1,996,662 | |
| | CSC Holdings LLC, FRN thereafter, 2017 Term Loan B1, 5.068%, 7/17/25 | | | United States | | | | 2,378,344 | | | | 2,275,789 | |
| | Diamond Sports Group LLC, | | | | | | | | | | | | |
| | FRN thereafter, 2022 2nd Lien Term Loan, 5.946%, 8/24/26 | | | United States | | | | 927,099 | | | | 185,086 | |
| | d , 2022 First Priority Term Loan, TBD, 10.696%, 5/26/26 | | | United States | | | | 0 | | | | 0 | |
| | Gray Television Inc., FRN thereafter, 2021 Term Loan D, 5.564%, 12/01/28 | | | United States | | | | 1,092,496 | | | | 1,063,720 | |
| | McGraw-Hill Global Education Holdings LLC, FRN thereafter, 2021 Term Loan, 8.315%, 7/28/28 | | | United States | | | | 1,590,144 | | | | 1,470,390 | |
| e | | Nexstar Broadcasting Inc., FRN thereafter, 2019 Term Loan B4, 5.615%, 9/18/26 | | | United States | | | | 982,039 | | | | 970,991 | |
| | Radiate Holdco LLC, FRN thereafter, 2021 Term Loan B, 6.365%, 9/25/26 | | | United States | | | | 2,064,036 | | | | 1,914,403 | |
| | Univision Communications Inc., | | | | | | | | | | | | |
| | FRN thereafter, 2021 First Lien Term Loan B, 6.365%, 3/15/26 | | | United States | | | | 1,657,301 | | | | 1,576,765 | |
| | FRN thereafter, 2022 Term Loan B, 6.365%, 1/31/29 | | | United States | | | | 639,179 | | | | 613,011 | |
| | Virgin Media Bristol LLC, FRN thereafter, 2020 USD Term Loan Q, 6.068%, 1/31/29 | | | United States | | | | 1,670,000 | | | | 1,620,944 | |
| | William Morris Endeavor Entertainment LLC and IMG LLC, FRN thereafter, 2018 1st Lien Term Loan, 5.867% to , FRN thereafter, 5/18/25 | | | United States | | | | 639,670 | | | | 612,084 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 16,234,623 | |
| | | | | | | | | | | | | | |
| | | Office Services & Supplies 1.1% | | | | | | | | | |
| | Prime Security Services Borrower LLC, FRN thereafter, 2021 Term Loan, 5.303%, 9/23/26 | | | United States | | | | 2,437,895 | | | | 2,366,855 | |
| | | | | | | | | | | | | | |
| | | Personal Products 1.5% | | | | | | | | | |
| | Conair Holdings LLC, FRN thereafter, Term Loan B, 7.424%, 5/17/28 | | | United States | | | | 1,655,512 | | | | 1,404,081 | |
| | Sunshine Luxembourg VII SARL, FRN thereafter, 2021 Term Loan B3, 7.424%, 10/01/26 | | | Luxembourg | | | | 2,025,795 | | | | 1,890,188 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,294,269 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 4.3% | | | | | | | | | |
| | Bausch Health Companies Inc., FRN thereafter, 2022 Term Loan B, 8.098%, 2/01/27 | | | Canada | | | | 1,018,215 | | | | 786,495 | |
| | eResearchTechnology Inc., FRN thereafter, 2020 1st Lien Term Loan, 7.615%, 2/04/27 | | | United States | | | | 3,165,976 | | | | 2,961,881 | |
| | Grifols Worldwide Operations USA, Inc., FRN thereafter, USD 2019 Term Loan B, 5.115%, 11/15/27 | | | United States | | | | 800,000 | | | | 761,168 | |
| | Jazz Financing Lux S.a.r.l., FRN thereafter, USD Term Loan, 6.615%, 5/05/28 | | | United States | | | | 1,977,465 | | | | 1,915,135 | |
| | Organon & Co., FRN thereafter, USD Term Loan, 6.188%, 6/02/28 | | | United States | | | | 1,408,272 | | | | 1,380,107 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests (continued) | |
| | | Pharmaceuticals (continued) | | | | | | | | | |
| | Parexel International Corporation, FRN thereafter, 2021 1st Lien Term Loan, 6.365%, 11/15/28 | | | United States | | | | 1,585,581 | | | $ | 1,516,711 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 9,321,497 | |
| | | | | | | | | | | | | | |
| | | Real Estate Management & Development 0.6% | | | | | | | | | |
| | Cushman & Wakefield U.S. Borrower LLC, FRN thereafter, 2020 Term Loan B, 5.865%, 8/21/25 | | | United States | | | | 1,394,030 | | | | 1,335,780 | |
| | | | | | | | | | | | | | |
| | | Retail REITs 1.3% | | | | | | | | | |
| | Great Outdoors Group LLC, FRN thereafter, 2021 Term Loan B1, 6.865%, 3/06/28 | | | United States | | | | 1,969,536 | | | | 1,826,745 | |
| | Petco Health and Wellness Company Inc., FRN thereafter, 2021 Term Loan B, 6.924%, 3/03/28 | | | United States | | | | 795,960 | | | | 753,802 | |
| | Restoration Hardware Inc., FRN thereafter, Term Loan B, 5.615%, 10/20/28 . | | | United States | | | | 409,566 | | | | 364,053 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,944,600 | |
| | | | | | | | | | | | | | |
| | | Semiconductor Equipment 0.3% | | | | | | | | | |
| | MKS Instruments, Inc., FRN thereafter, 2022 USD Term Loan B, 5.868%, 8/17/29 | | | United States | | | | 600,000 | | | | 587,100 | |
| | | | | | | | | | | | | | |
| | | Soft Drinks 0.4% | | | | | | | | | |
| | Naked Juice LLC, FRN thereafter, Term Loan, 6.903%, 1/24/29 | | | United States | | | | 959,201 | | | | 883,530 | |
| | | | | | | | | | | | | | |
| | | Software 13.2% | | | | | | | | | |
| | Athenahealth Inc.,
d , 2022 Delayed Draw Term Loan, TBD, 3.50%, 2/15/29 | | | United States | | | | 449,275 | | | | 403,674 | |
| | d , 2022 Term Loan B, TBD, 6.576%, 2/15/29 | | | United States | | | | 2,644,098 | | | | 2,375,722 | |
| | CDK Global Inc., FRN thereafter, 2022 USD Term Loan B, 6.61%, 7/06/29 | | | United Kingdom | | | | 257,143 | | | | 248,319 | |
| | Cloudera Inc.,
FRN thereafter, 2021 Term Loan, 6.865%, 10/08/28 | | | United States | | | | 1,424,920 | | | | 1,257,492 | |
| | FRN thereafter, 2021 Second Lien Term Loan, 9.115%, 10/08/29 | | | United States | | | | 303,306 | | | | 257,810 | |
| | Cornerstone OnDemand Inc., FRN thereafter, 2021 Term Loan, 6.865%, 10/16/28 | | | United States | | | | 1,100,494 | | | | 929,917 | |
| | DCert Buyer Inc.,
FRN thereafter, 2019 Term Loan B, 6.903%, 10/16/26 | | | United States | | | | 2,672,918 | | | | 2,557,462 | |
| | FRN thereafter, 2021 2nd Lien Term Loan, 9.903%, 2/19/29 | | | United States | | | | 1,000,000 | | | | 937,500 | |
| | Epicor Software Corporation, FRN thereafter, 2020 Term Loan, 6.365%, 7/30/27 | | | United States | | | | 1,703,446 | | | | 1,600,975 | |
| | Finastra USA Inc., FRN thereafter, USD 1st Lien Term Loan, 6.871%, 6/13/24 | | | United States | | | | 1,537,786 | | | | 1,342,487 | |
| | GoTo Group Inc., FRN thereafter, Term Loan B, 7.802%, 8/31/27 | | | United States | | | | 1,872,648 | | | | 1,308,868 | |
| | Hyland Software Inc.,
FRN thereafter, 2018 1st Lien Term Loan, 6.615%, 7/01/24 | | | United States | | | | 2,791,538 | | | | 2,710,416 | |
| | FRN thereafter, 2021 2nd Lien Term Loan, 9.365%, 7/07/25 | | | United States | | | | 30,303 | | | | 29,899 | |
| | Idera Inc., FRN thereafter, 2021 Term Loan, 6.32%, 3/02/28 | | | United States | | | | 1,237,290 | | | | 1,152,740 | |
| | Ivanti Software Inc.,
FRN thereafter, 2021 Add On Term Loan B, 7.144%, 12/01/27 | | | United States | | | | 139,297 | | | | 109,139 | |
| | FRN thereafter, 2021 Term Loan B, 7.332%, 12/01/27 | | | United States | | | | 1,288,027 | | | | 1,009,627 | |
| | Mitchell International Inc., FRN thereafter, 2021 Term Loan B, 6.734%, 10/15/28 | | | United States | | | | 1,585,035 | | | | 1,440,797 | |
| | Navicure Inc., FRN thereafter, 2019 Term Loan B, 7.115%, 10/22/26 | | | United States | | | | 3,183,007 | | | | 3,059,665 | |
| | Polaris Newco LLC, FRN thereafter, USD Term Loan B, 7.674%, 6/02/28 | | | United States | | | | 2,787,803 | | | | 2,579,889 | |
| | Quest Software US Holdings Inc., FRN thereafter, 2022 Term Loan, 6.977%, 2/01/29 | | | United States | | | | 600,000 | | | | 447,000 | |
| | Sovos Compliance LLC,
FRN thereafter, 2021 Delayed Draw Term Loan, 4.15%, 8/11/28 | | | United States | | | | 257,088 | | | | 245,776 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Senior Loan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal Amount* | | | Value | |
| c | | Senior Floating Rate Interests (continued) | |
| | | Software (continued) | | | | | | | | | |
| | FRN thereafter, 2021 Term Loan, 7.615%, 8/11/28 | | | United States | | | | 1,481,824 | | | $ | 1,416,623 | |
| | Ultimate Software Group Inc. (The),
FRN thereafter, 2021 Term Loan, 5.535%, 5/04/26 | | | United States | | | | 659,792 | | | | 629,554 | |
| | FRN thereafter, Term Loan B, 6.865%, 5/04/26 | | | United States | | | | 297,698 | | | | 284,674 | |
| | FRN thereafter, 2021 2nd Lien Term Loan, 7.535%, 5/03/27 | | | United States | | | | 570,096 | | | | 542,068 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 28,878,093 | |
| | | | | | | | | | | | | | |
| | | Specialty Retail 2.2% | | | | | | | | | |
| | Michaels Companies Inc., FRN thereafter, 2021 Term Loan B, 7.924%, 4/15/28 | | | United States | | | | 1,690,351 | | | | 1,369,184 | |
| | PetSmart Inc., FRN thereafter, 2021 Term Loan B, 6.87%, 2/11/28 | | | United States | | | | 1,326,374 | | | | 1,259,783 | |
| | SRS Distribution Inc., | | | | | | | | | | | | |
| | FRN thereafter, 2022 Incremental Term Loan, 6.177%, 6/02/28 | | | United States | | | | 79,148 | | | | 72,954 | |
| | FRN thereafter, 2021 Term Loan B, 6.306%, 6/02/28 | | | United States | | | | 372,824 | | | | 345,096 | |
| | Staples Inc., FRN thereafter, 7 Year Term Loan, 7.782%, 4/16/26 | | | United States | | | | 2,137,260 | | | | 1,884,572 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,931,589 | |
| | | | | | | | | | | | | | |
| | | Technology Hardware, Storage & Peripherals 1.5% | | | | | | | | | |
| | Greeneden U.S. Holdings II LLC, FRN thereafter, 2020 USD Term Loan B4, 7.115%, 12/01/27 | | | United States | | | | 3,354,160 | | | | 3,202,921 | |
| | | | | | | | | | | | | | |
| | | Wireless Telecommunication Services 0.6% | | | | | | | | | |
| | CCI Buyer Inc., FRN thereafter, Term Loan, 7.553%, 12/17/27 | | | United States | | | | 1,487,663 | | | | 1,406,213 | |
| | | | | | | | | | | | | | |
| | | Total Floating Rate Loans (Cost $207,932,029) | | | | | | | | 192,626,257 | |
| | | | | | | | | | | | | | |
| | | Asset-Backed Securities 0.9% | | | | | | | | | |
| a,f | | BlueMountain CLO Ltd., FRN thereafter, C, Series 2018-3A, C, 144A, 4.983%, 10/25/30 | | | United States | | | | 1,000,000 | | | | 933,582 | |
| a,f | | LCM XVIII LP, FRN thereafter, CR, Series 2018-A, CR, 144A, 4.56%, 4/20/31 | | | United States | | | | 1,000,000 | | | | 935,400 | |
| | | | | | | | | | | | | | |
| | Total Asset-Backed Securities (Cost $1,996,875) | | | | | | | | | | | 1,868,982 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments (Cost $218,078,874) | | | | | | | | | | | 201,079,969 | |
| | | | | | | | | | | | | | |
| | Short-Term Investments 7.3% | | | | | | | | | | | | |
| | U.S. Government & Agency Securities
(Cost $16,037,683) 7.3% | | | | | | | | | | | | |
| g | | Federal Home Loan Bank Discount Notes, 10/3/22 | | | United States | | | | 16,040,000 | | | | 16,040,000 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $16,037,683) | | | | | | | | | | | 16,040,000 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $234,116,557) 99.3% | | | | | | | | | | | 217,119,969 | |
| | Other Assets, less Liabilities 0.7% | | | | | | | | | | | 1,505,247 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 218,625,216 | |
| | | | | | | | | | | | | | |
*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 September 30, 2022, the value of was $8,315,759, representing 3.8% of net assets.
bSee Note 10 regarding defaulted securities.
cThe coupon rate shown represents the rate at period end.
dA 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.
eA portion or all of the security purchased on a delayed delivery basis.
fThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
gThe security was issued on a discount basis with no stated coupon rate.
See Abbreviations on page 223.
| | | | | | | | | | |
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| 150 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Consolidated Financial Highlights
Franklin Systematic Style Premia ETFa
| | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020b | |
|
Per share operating performance
(for a share outstanding throughout the period) | |
| | | | |
Net asset value, beginning of period | | | $21.25 | | | | $19.55 | | | | $23.16 | | | | $25.00 | |
| | | | |
| | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | |
| | | | |
Net investment incomed | | | 0.11 | | | | 0.14 | | | | 0.23 | | | | 0.11 | |
| | | | |
Net realized and unrealized gains (losses) | | | 0.13 | | | | 1.82 | | | | (2.25 | ) | | | (1.94 | ) |
| | | | |
| | | | |
Total from investment operations | | | 0.24 | | | | 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 period | | $ | 21.49 | | | $ | 21.25 | | | $ | 19.55 | | | $ | 23.16 | |
| | | | |
| | | | |
Total returne | | | 1.13% | | | | 10.09% | | | | (8.70)% | | | | (7.34)% | |
|
| Ratios to average net assetsf | |
| | | | |
Expenses before waiver and payments by affiliates | | | 0.70% | | | | 0.73% | | | | 1.14% | | | | 1.15% | |
| | | | |
Expenses net of waiver and payments by affiliates | | | 0.65% | | | | 0.63% | | | | 0.65% | | | | 0.65% | |
| | | | |
Net investment income | | | 1.00% | | | | 0.69% | | | | 1.08% | | | | 1.67% | |
|
| Supplemental data | |
| | | | |
Net assets, end of period (000’s) | | | $100,987 | | | | $55,258 | | | | $46,927 | | | | $50,948 | |
| | | | |
Portfolio turnover rateg | | | 91.58% | h | | | 189.89% | h | | | 171.16% | h | | | 60.95% | h |
aEffective August 1, 2022, Formerly, Franklin Liberty Systematic Style Premia ETF was renamed Franklin Systematic Style Premia ETF.
bFor the period December 18, 2019 (commencement of operations) to March 31, 2020.
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: | | | 91.58% | | | | 189.89% | | | | 171.16% | | | | 60.95% | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 151 |
FRANKLIN TEMPLETON ETF TRUST
Consolidated Schedule of Investments, September 30, 2022 (unaudited)
Franklin Systematic Style Premia ETF
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks 50.9% | |
| | | Aerospace & Defense 0.6% | |
| | BAE Systems PLC | | | United Kingdom | | | | 24,349 | | | $ | 214,674 | |
| | General Dynamics Corp. | | | United States | | | | 1,576 | | | | 334,380 | |
| | Thales SA | | | France | | | | 812 | | | | 89,888 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 638,942 | |
| | | | | | | | | | | | | | |
| | | Air Freight & Logistics 0.2% | |
| | C.H. Robinson Worldwide Inc. | | | United States | | | | 997 | | | | 96,021 | |
| | Expeditors International of Washington Inc. | | | United States | | | | 1,086 | | | | 95,905 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 191,926 | |
| | | | | | | | | | | | | | |
| | | Airlines 0.0%† | |
| a | | Singapore Airlines Ltd. | | | Singapore | | | | 10,400 | | | | 36,964 | |
| | | | | | | | | | | | | | |
| | | Automobiles 0.2% | |
| | Stellantis NV | | | United States | | | | 16,856 | | | | 202,647 | |
| | | | | | | | | | | | | | |
| | | Banks 1.2% | |
| | Banco Bilbao Vizcaya Argentaria SA | | | Spain | | | | 51,668 | | | | 233,874 | |
| | Banco Santander SA | | | Spain | | | | 112,919 | | | | 265,214 | |
| | Mitsubishi UFJ Financial Group Inc. | | | Japan | | | | 75,379 | | | | 339,282 | |
| | NatWest Group PLC | | | United Kingdom | | | | 40,419 | | | | 101,926 | |
| | Societe Generale SA | | | France | | | | 6,078 | | | | 121,557 | |
| | Standard Chartered PLC | | | United Kingdom | | | | 19,765 | | | | 125,057 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,186,910 | |
| | | | | | | | | | | | | | |
| | | Beverages 0.1% | |
| | Kirin Holdings Co. Ltd. | | | Japan | | | | 4,200 | | | | 64,620 | |
| | | | | | | | | | | | | | |
| | | Biotechnology 3.3% | |
| | AbbVie Inc. | | | United States | | | | 5,710 | | | | 766,339 | |
| | Amgen Inc. | | | United States | | | | 2,379 | | | | 536,227 | |
| | Gilead Sciences Inc. | | | United States | | | | 9,371 | | | | 578,097 | |
| a | | Moderna Inc. | | | United States | | | | 2,668 | | | | 315,491 | |
| a | | Regeneron Pharmaceuticals Inc. | | | United States | | | | 857 | | | | 590,361 | |
| a | | Vertex Pharmaceuticals Inc. | | | United States | | | | 1,981 | | | | 573,579 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,360,094 | |
| | | | | | | | | | | | | | |
| | | Building Products 0.4% | |
| | AGC Inc. | | | Japan | | | | 1,500 | | | | 46,530 | |
| | Carlisle Companies Inc. | | | United States | | | | 398 | | | | 111,603 | |
| | Compagnie de Saint-Gobain | | | France | | | | 3,859 | | | | 140,066 | |
| | Owens Corning | | | United States | | | | 737 | | | | 57,936 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 356,135 | |
| | | | | | | | | | | | | | |
| | | Capital Markets 1.9% | |
| | 3i Group PLC | | | United Kingdom | | | | 7,623 | | | | 93,009 | |
| | Ameriprise Financial Inc. | | | United States | | | | 848 | | | | 213,654 | |
| | Australian Stock Exchange Ltd. | | | Australia | | | | 1,471 | | | | 67,869 | |
| | Blackstone Inc. | | | United States | | | | 5,240 | | | | 438,588 | |
| | Carlyle Group Inc. | | | United States | | | | 1,533 | | | | 39,613 | |
| | Deutsche Boerse AG | | | Germany | | | | 1,467 | | | | 241,800 | |
| | FactSet Research Systems Inc. | | | United States | | | | 293 | | | | 117,232 | |
| | LPL Financial Holdings Inc. | | | United States | | | | 620 | | | | 135,458 | |
| | Raymond James Financial Inc. | | | United States | | | | 1,494 | | | | 147,637 | |
| | Singapore Exchange Ltd. | | | Singapore | | | | 6,300 | | | | 41,535 | |
| | UBS Group AG | | | Switzerland | | | | 26,695 | | | | 392,593 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,928,988 | |
| | | | | | | | | | | | | | |
| | | Chemicals 1.7% | |
| | Albemarle Corp. | | | United States | | | | 845 | | | | 223,452 | |
| | CF Industries Holdings Inc. | | | United States | | | | 1,692 | | | | 162,855 | |
| | | | | | | | | | |
| | | | | | |
| 152 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | Chemicals (continued) | |
| | Corteva Inc. | | | United States | | | | 5,670 | | | $ | 324,041 | |
| | Dow Inc. | | | United States | | | | 4,893 | | | | 214,949 | |
| | ICL Group Ltd. | | | Israel | | | | 5,635 | | | | 45,624 | |
| | LyondellBasell Industries NV, A | | | United States | | | | 2,012 | | | | 151,463 | |
| | Mosaic Co. | | | United States | | | | 3,022 | | | | 146,053 | |
| | Nitto Denko Corp. | | | Japan | | | | 1,100 | | | | 59,505 | |
| | Nutrien Ltd. | | | Canada | | | | 4,500 | | | | 377,279 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,705,221 | |
| | | | | | | | | | | | | | |
| | | Communications Equipment 0.1% | |
| | Nokia OYJ | | | Finland | | | | 34,154 | | | | 147,905 | |
| | | | | | | | | | | | | | |
| | | Construction & Engineering 0.0%† | |
| | Taisei Corp. | | | Japan | | | | 1,400 | | | | 38,882 | |
| | | | | | | | | | | | | | |
| | | Consumer Finance 0.3% | |
| | Discover Financial Services | | | United States | | | | 2,153 | | | | 195,751 | |
| | Synchrony Financial | | | United States | | | | 3,803 | | | | 107,206 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 302,957 | |
| | | | | | | | | | | | | | |
| | | Containers & Packaging 0.1% | |
| | Packaging Corp. of America | | | United States | | | | 631 | | | | 70,855 | |
| | | | | | | | | | | | | | |
| | | Distributors 0.2% | |
| | Genuine Parts Co. | | | United States | | | | 1,100 | | | | 164,252 | |
| | LKQ Corp. | | | United States | | | | 1,827 | | | | 86,143 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 250,395 | |
| | | | | | | | | | | | | | |
| | | Diversified Financial Services 0.1% | |
| | ORIX Corp. | | | Japan | | | | 9,300 | | | | 130,333 | |
| | | | | | | | | | | | | | |
| | | Diversified Telecommunication Services 0.8% | |
| | Deutsche Telekom AG | | | Germany | | | | 24,855 | | | | 425,916 | |
| | Lumen Technologies Inc. | | | United States | | | | 7,165 | | | | 52,161 | |
| | Nippon Telegraph & Telephone Corp. | | | Japan | | | | 9,500 | | | | 256,361 | |
| | Orange SA | | | France | | | | 13,303 | | | | 120,523 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 854,961 | |
| | | | | | | | | | | | | | |
| | | Electric Utilities 0.5% | |
| | Exelon Corp. | | | United States | | | | 7,585 | | | | 284,134 | |
| | NRG Energy Inc. | | | United States | | | | 1,802 | | | | 68,963 | |
| | Power Assets Holdings Ltd. | | | Hong Kong | | | | 11,000 | | | | 55,211 | |
| | Red Electrica Corp. SA | | | Spain | | | | 3,155 | | | | 48,556 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 456,864 | |
| | | | | | | | | | | | | | |
| | | Electrical Equipment 0.6% | |
| | ABB Ltd. | | | Switzerland | | | | 1,549 | | | | 40,604 | |
| | Emerson Electric Co. | | | United States | | | | 4,465 | | | | 326,927 | |
| | Fuji Electric Co. Ltd. | | | Japan | | | | 1,000 | | | | 36,547 | |
| | Mitsubishi Electric Corp. | | | Japan | | | | 11,600 | | | | 104,544 | |
| | Prysmian SpA | | | Italy | | | | 2,023 | | | | 58,702 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 567,324 | |
| | | | | | | | | | | | | | |
| | | Electronic Equipment, Instruments & Components 0.1% | |
| a | | Arrow Electronics Inc. | | | United States | | | | 456 | | | | 42,039 | |
| | TDK Corp. | | | Japan | | | | 2,900 | | | | 89,257 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 131,296 | |
| | | | | | | | | | | | | | |
| | | Entertainment 0.2% | |
| a | | Liberty Media Corp-Liberty Formula One, C | | | United States | | | | 1,468 | | | | 85,878 | |
| a | | Live Nation Entertainment Inc. | | | United States | | | | 879 | | | | 66,839 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 152,717 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 153 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | Equity Real Estate Investment Trusts (REITs) 1.3% | |
| | Dexus | | | Australia | | | | 8,401 | | | $ | 41,699 | |
| | Extra Space Storage Inc. | | | United States | | | | 1,055 | | | | 182,209 | |
| | Gaming and Leisure Properties Inc. | | | United States | | | | 1,979 | | | | 87,551 | |
| | Goodman Group | | | Australia | | | | 12,788 | | | | 129,744 | |
| | Host Hotels & Resorts Inc. | | | United States | | | | 5,488 | | | | 87,149 | |
| | Iron Mountain Inc. | | | United States | | | | 2,209 | | | | 97,130 | |
| | Medical Properties Trust Inc. | | | United States | | | | 4,469 | | | | 53,002 | |
| | Public Storage | | | United States | | | | 1,228 | | | | 359,571 | |
| | The GPT Group | | | Australia | | | | 14,980 | | | | 36,888 | |
| | Weyerhaeuser Co. | | | United States | | | | 5,644 | | | | 161,193 | |
| | WP Carey Inc. | | | United States | | | | 1,288 | | | | 89,902 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,326,038 | |
| | | | | | | | | | | | | | |
| | | Food & Staples Retailing 1.0% | |
| | Alimentation Couche-Tard Inc. | | | Canada | | | | 7,500 | | | | 303,537 | |
| | Coles Group Ltd. | | | Australia | | | | 10,468 | | | | 110,580 | |
| | Jeronimo Martins SGPS SA | | | Portugal | | | | 2,130 | | | | 39,751 | |
| | Koninklijke Ahold Delhaize NV | | | Netherlands | | | | 7,938 | | | | 203,238 | |
| | Loblaw Companies Ltd. | | | Canada | | | | 1,300 | | | | 103,485 | |
| | The Kroger Co. | | | United States | | | | 5,530 | | | | 241,938 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,002,529 | |
| | | | | | | | | | | | | | |
| | | Food Products 0.8% | |
| | Archer-Daniels-Midland Co. | | | United States | | | | 4,400 | | | | 353,980 | |
| | The Hershey Co. | | | United States | | | | 1,132 | | | | 249,572 | |
| | Tyson Foods Inc., A | | | United States | | | | 1,981 | | | | 130,608 | |
| b,c | | WH Group Ltd., 144A, Reg S | | | Hong Kong | | | | 62,500 | | | | 39,411 | |
| | Yakult Honsha Co. Ltd. | | | Japan | | | | 1,000 | | | | 58,102 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 831,673 | |
| | | | | | | | | | | | | | |
| | | Gas Utilities 0.1% | |
| | UGI Corp. | | | United States | | | | 1,625 | | | | 52,536 | |
| | | | | | | | | | | | | | |
| | | Health Care Equipment & Supplies 0.2% | |
| a | | Hologic Inc. | | | United States | | | | 1,920 | | | | 123,878 | |
| | Sonova Holding AG | | | Switzerland | | | | 430 | | | | 96,114 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 219,992 | |
| | | | | | | | | | | | | | |
| | | Health Care Providers & Services 1.4% | |
| a | | Centene Corp. | | | United States | | | | 4,508 | | | | 350,767 | |
| | Cigna Corp. | | | United States | | | | 2,459 | | | | 682,299 | |
| | McKesson Corp. | | | United States | | | | 1,139 | | | | 387,112 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,420,178 | |
| | | | | | | | | | | | | | |
| | | Health Care Technology 0.2% | |
| a | | Veeva Systems Inc., A | | | United States | | | | 1,028 | | | | 169,497 | |
| | | | | | | | | | | | | | |
| | | Hotels, Restaurants & Leisure 1.8% | |
| | Aramark | | | United States | | | | 1,764 | | | | 55,037 | |
| a | | Booking Holdings Inc. | | | United States | | | | 266 | | | | 437,094 | |
| | Compass Group PLC | | | United Kingdom | | | | 13,729 | | | | 276,629 | |
| | McDonald’s Corp. | | | United States | | | | 3,660 | | | | 844,508 | |
| | Yum! Brands Inc. | | | United States | | | | 1,883 | | | | 200,238 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,813,506 | |
| | | | | | | | | | | | | | |
| | | Independent Power Producers & Energy Traders 0.1% | |
| | Northland Power Inc. | | | Canada | | | | 1,800 | | | | 52,989 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 154 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | Industrial Conglomerates 0.1% | |
| | Jardine Matheson Holdings Ltd. | | | Hong Kong | | | | 1,300 | | | $ | 65,832 | |
| | Keppel Corp. Ltd. | | | Singapore | | | | 11,000 | | | | 53,279 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 119,111 | |
| | | | | | | | | | | | | | |
| | | Insurance 2.5% | |
| | Aflac Inc. | | | United States | | | | 4,716 | | | | 265,039 | |
| | American Financial Group Inc. | | | United States | | | | 555 | | | | 68,226 | |
| | American International Group Inc. | | | United States | | | | 6,004 | | | | 285,070 | |
| a | | Arch Capital Group Ltd. | | | United States | | | | 2,889 | | | | 131,565 | |
| | Chubb Ltd. | | | United States | | | | 3,284 | | | | 597,294 | |
| | Fairfax Financial Holdings Ltd. | | | Canada | | | | 200 | | | | 91,829 | |
| | Fidelity National Financial Inc. | | | United States | | | | 1,816 | | | | 65,739 | |
| | Hartford Financial Services Group Inc. | | | United States | | | | 2,530 | | | | 156,708 | |
| | MetLife Inc. | | | United States | | | | 5,089 | | | | 309,310 | |
| | Principal Financial Group Inc. | | | United States | | | | 1,930 | | | | 139,250 | |
| | Sompo Holdings Inc. | | | Japan | | | | 2,400 | | | | 95,539 | |
| | Tokio Marine Holdings Inc. | | | Japan | | | | 14,400 | | | | 255,180 | |
| | W R Berkley Corp. | | | United States | | | | 1,642 | | | | 106,040 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,566,789 | |
| | | | | | | | | | | | | | |
| | | Interactive Media & Services 2.5% | |
| a | | Alphabet Inc., A | | | United States | | | | 4,870 | | | | 465,816 | |
| a | | Alphabet Inc., C | | | United States | | | | 11,376 | | | | 1,093,802 | |
| b | | Auto Trader Group PLC, 144A | | | United Kingdom | | | | 7,541 | | | | 43,353 | |
| a | | Meta Platforms Inc., A | | | United States | | | | 6,543 | | | | 887,754 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,490,725 | |
| | | | | | | | | | | | | | |
| | | Internet & Direct Marketing Retail 0.2% | |
| | eBay Inc. | | | United States | | | | 4,317 | | | | 158,909 | |
| | | | | | | | | | | | | | |
| | IT Services 2.0% | |
| | Accenture PLC, A | | | United States | | | | 2,278 | | | | 586,129 | |
| | Capgemini SE | | | France | | | | 1,067 | | | | 172,995 | |
| a | | CGI Inc. | | | Canada | | | | 1,700 | | | | 128,658 | |
| | Cognizant Technology Solutions Corp., A | | | United States | | | | 4,007 | | | | 230,162 | |
| | Computershare Ltd. | | | Australia | | | | 4,301 | | | | 68,470 | |
| a | | FleetCor Technologies Inc. | | | United States | | | | 511 | | | | 90,023 | |
| | Fujitsu Ltd. | | | Japan | | | | 1,300 | | | | 141,770 | |
| a | | Gartner Inc. | | | United States | | | | 616 | | | | 170,441 | |
| | Jack Henry & Associates Inc. | | | United States | | | | 547 | | | | 99,702 | |
| | Paychex Inc. | | | United States | | | | 2,519 | | | | 282,657 | |
| | TIS Inc. | | | Japan | | | | 1,800 | | | | 47,691 | |
| | Western Union Co. | | | United States | | | | 2,926 | | | | 39,501 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,058,199 | |
| | | | | | | | | | | | | | |
| | | Leisure Products 0.1% | |
| | Bandai Namco Holdings Inc. | | | Japan | | | | 1,600 | | | | 104,272 | |
| | | | | | | | | | | | | | |
| | | Life Sciences Tools & Services 0.3% | |
| a | | Mettler-Toledo International Inc. | | | United States | | | | 175 | | | | 189,721 | |
| a | | Waters Corp. | | | United States | | | | 412 | | | | 111,046 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 300,767 | |
| | | | | | | | | | | | | | |
| | | Machinery 1.1% | |
| | CNH Industrial NV | | | United Kingdom | | | | 7,910 | | | | 90,121 | |
| | Cummins Inc. | | | United States | | | | 1,093 | | | | 222,436 | |
| | IDEX Corp. | | | United States | | | | 588 | | | | 117,512 | |
| | Komatsu Ltd. | | | Japan | | | | 7,300 | | | | 131,682 | |
| | Mitsubishi Heavy Industries Ltd. | | | Japan | | | | 2,600 | | | | 86,328 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | Machinery (continued) | |
| | Nordson Corp. | | | United States | | | | 391 | | | $ | 82,998 | |
| | PACCAR Inc. | | | United States | | | | 2,678 | | | | 224,122 | |
| | Snap-on Inc. | | | United States | | | | 413 | | | | 83,158 | |
| b | | VAT Group AG, 144A | | | Switzerland | | | | 167 | | | | 34,579 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,072,936 | |
| | | | | | | | | | | | | | |
| | | Marine 0.1% | |
| | AP Moller-Maersk A/S, A | | | Denmark | | | | 24 | | | | 42,625 | |
| | AP Moller-Maersk A/S, B | | | Denmark | | | | 39 | | | | 71,244 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 113,869 | |
| | | | | | | | | | | | | | |
| | | Media 0.1% | |
| | Dentsu Group Inc. | | | Japan | | | | 1,700 | | | | 48,271 | |
| | Publicis Groupe | | | France | | | | 1,727 | | | | 82,732 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 131,003 | |
| | | | | | | | | | | | | | |
| | | Metals & Mining 1.5% | |
| | ArcelorMittal SA | | | Luxembourg | | | | 4,121 | | | | 83,427 | |
| | BHP Group Ltd. | | | Australia | | | | 11,888 | | | | 294,423 | |
| | BlueScope Steel Ltd. | | | Australia | | | | 3,660 | | | | 35,745 | |
| a | | Cleveland-Cliffs Inc. | | | United States | | | | 3,651 | | | | 49,179 | |
| | Glencore PLC | | | Australia | | | | 75,556 | | | | 403,287 | |
| | Nippon Steel Corp. | | | Japan | | | | 6,300 | | | | 87,333 | |
| | Nucor Corp. | | | United States | | | | 2,098 | | | | 224,465 | |
| | Rio Tinto Ltd. | | | Australia | | | | 2,431 | | | | 145,970 | |
| | Steel Dynamics Inc. | | | United States | | | | 1,522 | | | | 107,986 | |
| | Teck Resources Ltd., B | | | Canada | | | | 3,200 | | | | 97,836 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,529,651 | |
| | | | | | | | | | | | | | |
| | | Multiline Retail 0.1% | |
| | Dollarama Inc. | | | Canada | | | | 2,200 | | | | 126,968 | |
| | | | | | | | | | | | | | |
| | | Multi-Utilities 0.8% | |
| | Consolidated Edison Inc. | | | United States | | | | 986 | | | | 84,559 | |
| | Engie SA | | | France | | | | 13,731 | | | | 159,294 | |
| | RWE AG | | | Germany | | | | 5,001 | | | | 185,142 | |
| | Sempra Energy | | | United States | | | | 2,348 | | | | 352,059 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 781,054 | |
| | | | | | | | | | | | | | |
| | | Oil, Gas & Consumable Fuels 3.3% | |
| | APA Corp. | | | United States | | | | 2,507 | | | | 85,714 | |
| | Canadian Natural Resources Ltd. | | | Canada | | | | 800 | | | | 37,437 | |
| | Devon Energy Corp. | | | United States | | | | 4,101 | | | | 246,593 | |
| | Diamondback Energy Inc. | | | United States | | | | 1,025 | | | | 123,472 | |
| | Eni SpA | | | Italy | | | | 19,442 | | | | 207,796 | |
| | EQT Corp. | | | United States | | | | 2,488 | | | | 101,386 | |
| | Equinor ASA | | | Norway | | | | 7,511 | | | | 246,823 | |
| | Imperial Oil Ltd. | | | Canada | | | | 1,800 | | | | 78,351 | |
| | Marathon Oil Corp. | | | United States | | | | 4,697 | | | | 106,058 | |
| | Marathon Petroleum Corp. | | | United States | | | | 4,214 | | | | 418,577 | |
| | OMV AG | | | Austria | | | | 1,012 | | | | 37,049 | |
| | Origin Energy Ltd. | | | Australia | | | | 13,561 | | | | 45,077 | |
| | Repsol SA | | | Spain | | | | 11,509 | | | | 133,099 | |
| | Shell PLC | | | Netherlands | | | | 15,464 | | | | 387,801 | |
| | Suncor Energy Inc. | | | Canada | | | | 11,000 | | | | 311,415 | |
| | TotalEnergies SE | | | France | | | | 9,891 | | | | 467,771 | |
| | Valero Energy Corp. | | | United States | | | | 3,151 | | | | 336,684 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,371,103 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | Paper & Forest Products 0.0%† | |
| | West Fraser Timber Co. Ltd. | | | Canada | | | | 500 | | | $ | 36,363 | |
| | | | | | | | | | | | | | |
| | | Personal Products 0.2% | | | | | | | | | |
| | Beiersdorf AG | | | Germany | | | | 746 | | | | 73,776 | |
| | L’Oreal SA | | | France | | | | 454 | | | | 146,883 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 220,659 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 0.9% | |
| | Bayer AG | | | Germany | | | | 6,576 | | | | 305,456 | |
| | Pfizer Inc. | | | United States | | | | 11,503 | | | | 503,371 | |
| | Roche Holding AG, Bearer | | | Switzerland | | | | 179 | | | | 70,527 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 879,354 | |
| | | | | | | | | | | | | | |
| | | Professional Services 0.6% | |
| | Booz Allen Hamilton Holding Corp. | | | United States | | | | 1,029 | | | | 95,028 | |
| | Randstad NV | | | Netherlands | | | | 919 | | | | 40,135 | |
| | Robert Half International Inc. | | | United States | | | | 852 | | | | 65,178 | |
| | Verisk Analytics Inc. | | | United States | | | | 1,224 | | | | 208,729 | |
| | Wolters Kluwer NV | | | Netherlands | | | | 2,047 | | | | 200,374 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 609,444 | |
| | | | | | | | | | | | | | |
| | | Real Estate Investment Trusts (REITs) 0.3% | |
| | Simon Property Group Inc. | | | United States | | | | 2,522 | | | | 226,350 | |
| | Stockland | | | Australia | | | | 18,549 | | | | 38,998 | |
| | Vicinity Centres | | | Australia | | | | 30,326 | | | | 33,829 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 299,177 | |
| | | | | | | | | | | | | | |
| | | Real Estate Management & Development 0.3% | |
| | CK Asset Holdings Ltd. | | | Hong Kong | | | | 15,500 | | | | 93,199 | |
| | CK Hutchison Holdings Ltd., A | | | United Kingdom | | | | 20,500 | | | | 113,339 | |
| | Sun Hung Kai Properties Ltd. | | | Hong Kong | | | | 11,000 | | | | 121,702 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 328,240 | |
| | | | | | | | | | | | | | |
| | | Road & Rail 1.6% | |
| | AMERCO | | | United States | | | | 76 | | | | 38,701 | |
| | Canadian National Railway Co. | | | Canada | | | | 4,500 | | | | 488,563 | |
| | JB Hunt Transport Services Inc. | | | United States | | | | 651 | | | | 101,829 | |
| | Kintetsu Group Holdings Co. Ltd. | | | Japan | | | | 1,300 | | | | 43,290 | |
| | Knight-Swift Transportation Holdings Inc. | | | United States | | | | 1,209 | | | | 59,156 | |
| | Old Dominion Freight Line Inc. | | | United States | | | | 730 | | | | 181,602 | |
| | TFI International Inc. | | | Canada | | | | 600 | | | | 54,588 | |
| | Union Pacific Corp. | | | United States | | | | 3,448 | | | | 671,739 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,639,468 | |
| | | | | | | | | | | | | | |
| | | Semiconductors & Semiconductor Equipment 3.5% | |
| | Broadcom Inc. | | | United States | | | | 1,766 | | | | 784,122 | |
| | KLA Corp. | | | United States | | | | 1,134 | | | | 343,182 | |
| | Micron Technology Inc. | | | United States | | | | 7,710 | | | | 386,271 | |
| | Monolithic Power Systems Inc. | | | United States | | | | 329 | | | | 119,559 | |
| a | | ON Semiconductor Corp. | | | United States | | | | 3,371 | | | | 210,115 | |
| | QUALCOMM Inc. | | | United States | | | | 5,218 | | | | 589,530 | |
| a | | Renesas Electronics Corp. | | | Japan | | | | 8,900 | | | | 73,908 | |
| | STMicroelectronics NV | | | Switzerland | | | | 5,522 | | | | 174,433 | |
| | Texas Instruments Inc. | | | United States | | | | 5,430 | | | | 840,455 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,521,575 | |
| | | | | | | | | | | | | | |
| | | Software 3.6% | |
| a | | Cadence Design Systems Inc. | | | United States | | | | 2,142 | | | | 350,067 | |
| a | | Dropbox Inc., A | | | United States | | | | 2,242 | | | | 46,454 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | Software (continued) | |
| a | | Fair Isaac Corp. | | | United States | | | | 198 | | | $ | 81,578 | |
| a | | Fortinet Inc. | | | United States | | | | 5,096 | | | | 250,366 | |
| | Intuit Inc. | | | United States | | | | 681 | | | | 263,765 | |
| | Microsoft Corp. | | | United States | | | | 6,868 | | | | 1,599,557 | |
| | NortonLifeLock Inc. | | | United States | | | | 4,511 | | | | 90,852 | |
| a | | Palo Alto Networks Inc. | | | United States | | | | 3,329 | | | | 545,257 | |
| a | | Synopsys Inc. | | | United States | | | | 1,193 | | | | 364,473 | |
| | Trend Micro Inc. | | | Japan | | | | 1,000 | | | | 54,026 | |
| | WiseTech Global Ltd. | | | Australia | | | | 1,148 | | | | 38,382 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,684,777 | |
| | | | | | | | | | | | | | |
| | | Specialty Retail 2.5% | |
| a | | AutoZone Inc. | | | United States | | | | 151 | | | | 323,431 | |
| | Lowe’s Cos Inc. | | | United States | | | | 4,389 | | | | 824,298 | |
| a | | O’Reilly Automotive Inc. | | | United States | | | | 507 | | | | 356,599 | |
| | The Home Depot Inc. | | | United States | | | | 3,011 | | | | 830,855 | |
| a | | Ulta Beauty Inc. | | | United States | | | | 400 | | | | 160,476 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,495,659 | |
| | | | | | | | | | | | | | |
| | | Technology Hardware, Storage & Peripherals 0.3% | |
| | Dell Technologies Inc., C | | | United States | | | | 2,108 | | | | 72,030 | |
| | HP Inc. | | | United States | | | | 8,127 | | | | 202,525 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 274,555 | |
| | | | | | | | | | | | | | |
| | | Textiles, Apparel & Luxury Goods 0.8% | |
| | Burberry Group PLC | | | United Kingdom | | | | 2,921 | | | | 58,954 | |
| | Cie Financiere Richemont SA | | | Switzerland | | | | 2,665 | | | | 255,277 | |
| | Gildan Activewear Inc. | | | Canada | | | | 1,400 | | | | 39,787 | |
| | LVMH Moet Hennessy Louis Vuitton SE | | | France | | | | 636 | | | | 380,314 | |
| | Pandora AS | | | Denmark | | | | 706 | | | | 33,403 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 767,735 | |
| | | | | | | | | | | | | | |
| | | Tobacco 0.4% | |
| | British American Tobacco PLC | | | United Kingdom | | | | 6,697 | | | | 241,208 | |
| | Imperial Brands PLC | | | United Kingdom | | | | 6,869 | | | | 142,239 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 383,447 | |
| | | | | | | | | | | | | | |
| | | Trading Companies & Distributors 1.1% | |
| | ITOCHU Corp. | | | Japan | | | | 2,900 | | | | 70,143 | |
| | Marubeni Corp. | | | Japan | | | | 12,100 | | | | 105,999 | |
| | Mitsubishi Corp. | | | Japan | | | | 9,800 | | | | 268,655 | |
| | Mitsui & Co. Ltd. | | | Japan | | | | 10,500 | | | | 224,080 | |
| | Sumitomo Corp. | | | Japan | | | | 8,600 | | | | 107,095 | |
| a | | United Rentals Inc. | | | United States | | | | 553 | | | | 149,377 | |
| | W.W. Grainger Inc. | | | United States | | | | 305 | | | | 149,203 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,074,552 | |
| | | | | | | | | | | | | | |
| | | Transportation Infrastructure 0.1% | |
| | Atlantia SpA | | | Italy | | | | 3,872 | | | | 85,764 | |
| | | | | | | | | | | | | | |
| | | Water Utilities 0.1% | |
| | Essential Utilities Inc. | | | United States | | | | 1,918 | | | | 79,367 | |
| | | | | | | | | | | | | | |
| | | Wireless Telecommunication Services 0.4% | | | | | | | | | |
| | KDDI Corp. | | | Japan | | | | 12,500 | | | | 366,420 | |
| | Vodafone Group PLC | | | United Kingdom | | | | 54,859 | | | | 61,925 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 428,345 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $54,204,670) | | | | | | | | | | | 51,399,711 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Shares | | | Value | |
| | | Preferred Stock 0.1% | | | | | | | | | |
| | | Automobiles 0.1% | | | | | | | | | |
| | Volkswagen AG, 5.98%, pfd | | | Germany | | | | 458 | | | $ | 56,713 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $58,946) | | | | | | | | | | | 56,713 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $54,263,616) 51.0% | | | | | | | | | | | 51,456,424 | |
| | Other Assets, less Liabilities 49.0% | | | | | | | | | | | 49,530,637 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 100,987,061 | |
| | | | | | | | | | | | | | |
† Rounds to less than 0.1% of net assets.
a Non-income producing.
b Security 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 September 30, 2022, the value of was $117,343, representing 0.1% of net assets.
c Security 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 September 30, 2022, the value of was $39,411, representing 0.0% of net assets.
At September 30, 2022, the Fund had the following total return equity swap contracts outstanding. See Note 1(c).
| | | | | | | | | | | | | | | | | | | | | | | | |
| Swaps | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Description | | Financing Rate | | | Payment Frequency | | | Counterparty | | | Maturity Date | | | Notional Amount (000)s | | | Unrealized
Appreciation (Depreciation) | |
| OTC Swap Contracts Short | | | | | | | | | | | | | | | | | | |
MSFTLSSP | | | 1-month USD LIBOR | | | | At Maturity | | | | MSCS | | | | 10/22/22 | | | | 40,062 | | | | 4,311,435 | |
At September 30, 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 | | | | 4,057,707 | | | $ | 2,744,909 | | | | 12/21/22 | | | $ | — | | | $ | (132,448 | ) |
Brazilian Real | | | MSCO | | | | Buy | | | | 8,306,650 | | | | 1,568,032 | | | | 12/21/22 | | | | — | | | | (59,150 | ) |
Canadian Dollar | | | MSCO | | | | Buy | | | | 2,584,179 | | | | 1,964,259 | | | | 12/21/22 | | | | — | | | | (82,929 | ) |
Czech Koruna | | | MSCO | | | | Buy | | | | 18,474,688 | | | | 746,625 | | | | 12/21/22 | | | | — | | | | (14,677 | ) |
Euro | | | MSCO | | | | Sell | | | | 3,643,987 | | | | 3,666,481 | | | | 12/21/22 | | | | 74,905 | | | | — | |
Great British Pound | | | MSCO | | | | Buy | | | | 636,774 | | | | 735,636 | | | | 12/21/22 | | | | — | | | | (24,010 | ) |
Hungarian Forint | | | MSCO | | | | Sell | | | | 375,505,161 | | | | 905,386 | | | | 12/21/22 | | | | 54,642 | | | | — | |
Israeli Shekel | | | MSCO | | | | Sell | | | | 15,259,485 | | | | 4,485,906 | | | | 12/21/22 | | | | 166,677 | | | | — | |
Japanese Yen | | | MSCO | | | | Sell | | | | 152,304,408 | | | | 1,072,817 | | | | 12/21/22 | | | | 11,235 | | | | — | |
Mexican Peso | | | MSCO | | | | Buy | | | | 62,502,769 | | | | 3,077,245 | | | | 12/21/22 | | | | — | | | | (11,898 | ) |
New Zealand Dollar | | | MSCO | | | | Sell | | | | 7,700,569 | | | | 4,631,738 | | | | 12/21/22 | | | | 273,959 | | | | — | |
Polish Zloty | | | MSCO | | | | Sell | | | | 6,665,500 | | | | 1,396,222 | | | | 12/21/22 | | | | 64,340 | | | | — | |
South Korean Won | | | MSCO | | | | Sell | | | | 2,251,261,469 | | | | 1,618,019 | | | | 12/21/22 | | | | 39,810 | | | | — | |
Swedish Krona | | | MSCO | | | | Sell | | | | 12,941,810 | | | | 1,214,817 | | | | 12/21/22 | | | | 42,876 | | | | — | |
Swiss Franc | | | MSCO | | | | Buy | | | | 2,362,926 | | | | 2,480,161 | | | | 12/21/22 | | | | — | | | | (60,095 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Forward Exchange Contracts | | | $ | 728,444 | | | $ | (385,207 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized appreciation (depreciation) | | | | | | | $ | 343,237 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
At September 30, 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) | |
| Commodity Contracts | | | | | | | | | | | | | | | |
Brent Crude, December | | | Long | | | | 9 | | | $ | 766,260 | | | | 10/31/22 | | | $ | (49,785 | ) |
Brent Crude, February | | | Long | | | | 1 | | | | 81,990 | | | | 12/29/22 | | | | (6,442 | ) |
Cocoa, May | | | Long | | | | 12 | | | | 279,360 | | | | 5/15/23 | | | | (10,566 | ) |
Coffee ‘C’, May | | | Long | | | | 1 | | | | 77,850 | | | | 5/18/23 | | | | (303 | ) |
Copper, May | | | Long | | | | 2 | | | | 169,075 | | | | 5/26/23 | | | | (9,017 | ) |
Corn, December | | | Long | | | | 24 | | | | 813,000 | | | | 12/14/22 | | | | 22,880 | |
Corn, May | | | Long | | | | 5 | | | | 171,125 | | | | 5/12/23 | | | | 16,085 | |
Cotton No. 2, December | | | Long | | | | 7 | | | | 298,690 | | | | 12/07/22 | | | | (26,356 | ) |
Cotton No. 2, May | | | Long | | | | 3 | | | | 123,135 | | | | 5/08/23 | | | | (40,029 | ) |
Gasoline Rbob, January | | | Long | | | | 1 | | | | 93,937 | | | | 12/30/22 | | | | (4,148 | ) |
Gasoline Rbob, November | | | Long | | | | 8 | | | | 796,253 | | | | 10/31/22 | | | | (3,232 | ) |
Gold 100 Ounce, April | | | Long | | | | 2 | | | | 339,640 | | | | 4/26/23 | | | | (12,815 | ) |
Lean Hog, April | | | Long | | | | 7 | | | | 238,840 | | | | 4/17/23 | | | | (25,880 | ) |
Live Cattle, April | | | Long | | | | 9 | | | | 555,480 | | | | 4/28/23 | | | | (15,076 | ) |
Low Sulphur Gasoil, January | | | Long | | | | 1 | | | | 88,725 | | | | 1/12/23 | | | | (877 | ) |
Low Sulphur Gasoil, November | | | Long | | | | 8 | | | | 753,400 | | | | 11/10/22 | | | | 25,687 | |
Natural Gas, November | | | Long | | | | 4 | | | | 270,640 | | | | 10/27/22 | | | | (69,539 | ) |
NY Harbor ULSD, January | | | Long | | | | 1 | | | | 129,087 | | | | 12/30/22 | | | | (2,527 | ) |
NY Harbor ULSD, November | | | Long | | | | 5 | | | | 676,536 | | | | 10/31/22 | | | | 10,127 | |
Silver, May | | | Long | | | | 2 | | | | 192,920 | | | | 5/26/23 | | | | (6,345 | ) |
Soybean Meal, March | | | Long | | | | 4 | | | | 158,880 | | | | 3/14/23 | | | | 3,638 | |
Soybean Oil, December | | | Long | | | | 22 | | | | 812,592 | | | | 12/14/22 | | | | (96,891 | ) |
Soybean Oil, March | | | Long | | | | 4 | | | | 144,288 | | | | 3/14/23 | | | | (32,796 | ) |
Soybean, March | | | Long | | | | 3 | | | | 207,488 | | | | 3/14/23 | | | | (12,996 | ) |
Soybean, November | | | Long | | | | 11 | | | | 750,613 | | | | 11/14/22 | | | | (9,156 | ) |
Sugar No. 11, July | | | Long | | | | 16 | | | | 296,397 | | | | 6/30/23 | | | | (10,889 | ) |
Wheat, May | | | Long | | | | 3 | | | | 140,513 | | | | 5/12/23 | | | | 19,366 | |
WTI Crude, January | | | Long | | | | 1 | | | | 77,750 | | | | 12/20/22 | | | | (6,982 | ) |
WTI Crude, November | | | Long | | | | 9 | | | | 715,410 | | | | 10/20/22 | | | | (56,751 | ) |
Cocoa, December | | | Short | | | | 84 | | | | 1,977,360 | | | | 12/14/22 | | | | 13,751 | |
Coffee ‘C’, December | | | Short | | | | 10 | | | | 830,813 | | | | 12/19/22 | | | | (27,855 | ) |
Copper, December | | | Short | | | | 22 | | | | 1,876,875 | | | | 12/28/22 | | | | 94,022 | |
Gold 100 Ounce, December | | | Short | | | | 11 | | | | 1,839,200 | | | | 12/28/22 | | | | 23,731 | |
Lean Hog, December | | | Short | | | | 36 | | | | 1,097,640 | | | | 12/14/22 | | | | 150,956 | |
Live Cattle, December | | | Short | | | | 11 | | | | 647,020 | | | | 12/30/22 | | | | 16,318 | |
Platinum, January | | | Short | | | | 41 | | | | 1,761,155 | | | | 1/27/23 | | | | 104,541 | |
Silver, December | | | Short | | | | 20 | | | | 1,903,900 | | | | 12/28/22 | | | | 62,777 | |
Soybean Meal, December | | | Short | | | | 12 | | | | 483,600 | | | | 12/14/22 | | | | (16,979 | ) |
Sugar No. 11, March | | | Short | | | | 100 | | | | 1,980,160 | | | | 2/28/23 | | | | 26,325 | |
Wheat, December | | | Short | | | | 23 | | | | 1,059,725 | | | | 12/14/22 | | | | (161,255 | ) |
| Interest rate contracts | | | | | | | | | | | | | | | |
U.S. Treasury 10 Yr. Note | | | Short | | | | 43 | | | | 4,818,687 | | | | 12/20/22 | | | | 112,577 | |
| Index Contracts | | | | | | | | | | | | | | | |
Australian 10 Yr. Bond | | | Long | | | | 19 | | | | 1,430,701 | | | | 12/15/22 | | | | (22,546 | ) |
CAC 40 10 Euro | | | Long | | | | 30 | | | | 1,693,863 | | | | 10/21/22 | | | | (137,123 | ) |
EURO STOXX 50 Index | | | Long | | | | 44 | | | | 1,428,917 | | | | 12/16/22 | | | | (109,642 | ) |
Euro-OAT | | | Long | | | | 37 | | | | 4,788,959 | | | | 12/08/22 | | | | (216,028 | ) |
FTSE/JSE Africa Top40 Index | | | Long | | | | 23 | | | | 739,826 | | | | 12/15/22 | | | | (49,116 | ) |
FTSE/MIB Index | | | Long | | | | 20 | | | | 2,011,123 | | | | 12/16/22 | | | | (180,589 | ) |
Nikkei 225 Mini | | | Long | | | | 25 | | | | 4,480,293 | | | | 12/08/22 | | | | (275,554 | ) |
S&P/TSX 60 Index | | | Long | | | | 37 | | | | 6,010,262 | | | | 12/15/22 | | | | (378,374 | ) |
SPI 200 Index | | | Long | | | | 18 | | | | 1,870,791 | | | | 12/15/22 | | | | (108,484 | ) |
Canada 10 Yr. Bond | | | Short | | | | 42 | | | | 3,777,723 | | | | 12/19/22 | | | | 10,845 | |
DAX Index | | | Short | | | | 3 | | | | 891,530 | | | | 12/16/22 | | | | 69,758 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | | | | | | | |
| Futures Contracts (continued) | | | | | | | | | | | | | | | |
| | | | | |
| Description | | Type | | | Number of
Contracts | | | Notional
Amount* | | | Expiration
Date | | | Value/Unrealized
Appreciation
(Depreciation) | |
| Index Contracts (continued) | | | | | | | | | | | | | | | |
Euro-BTP | | | Short | | | | 4 | | | $ | 438,805 | | | | 12/08/22 | | | $ | 19,862 | |
Euro-Bund | | | Short | | | | 21 | | | | 2,849,106 | | | | 12/08/22 | | | | 93,506 | |
FTSE 100 Index | | | Short | | | | 24 | | | | 1,852,477 | | | | 12/16/22 | | | | 111,167 | |
IBEX 35 Index | | | Short | | | | 48 | | | | 3,462,505 | | | | 10/21/22 | | | | 324,600 | |
Long Gilt, December | | | Short | | | | 36 | | | | 3,874,006 | | | | 12/28/22 | | | | 516,754 | |
Mex Bolsa Index | | | Short | | | | 237 | | | | 5,290,436 | | | | 12/16/22 | | | | 286,848 | |
OMXS30 Index | | | Short | | | | 93 | | | | 1,533,589 | | | | 10/21/22 | | | | 73,295 | |
S&P 500 E-Mini | | | Short | | | | 11 | | | | 1,980,825 | | | | 12/16/22 | | | | 202,734 | |
SGX Nifty 50 | | | Short | | | | 153 | | | | 5,228,928 | | | | 10/27/22 | | | | (13,803 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Futures Contracts | | | $ | 205,404 | |
| | | | | | | | | | | | | | | | | | | | |
*As of period 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 September 30, 2022, expiration date 10/22/22:
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Reference Entity – Short 100.00% | | | | | | | | | |
| | | Automobiles & Components 5.39% | | | | | | | | | |
| | Aptiv PLC | | | United States | | | | (2,150 | ) | | $ | (168,152 | ) |
| | Cie Generale des Etablissements Michelin SCA | | | France | | | | (5,348 | ) | | | (121,313 | ) |
| | Continental AG | | | Germany | | | | (875 | ) | | | (39,388 | ) |
| | Denso Corp. | | | Japan | | | | (3,500 | ) | | | (159,253 | ) |
| | Ferrari NV | | | Italy | | | | (1,034 | ) | | | (194,184 | ) |
| | Lear Corp. | | | United States | | | | (477 | ) | | | (57,092 | ) |
| | Lucid Group Inc., A | | | United States | | | | (3,108 | ) | | | (43,419 | ) |
| | Magna International Inc. | | | Canada | | | | (900 | ) | | | (43,498 | ) |
| | Nissan Motor Co. Ltd. | | | Japan | | | | (18,900 | ) | | | (60,090 | ) |
| | Porsche Automobil Holding SE | | | Germany | | | | (1,211 | ) | | | (68,998 | ) |
| | Tesla Inc. | | | United States | | | | (1,804 | ) | | | (478,511 | ) |
| | Toyota Motor Corp. | | | Japan | | | | (38,300 | ) | | | (496,396 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,930,294 | ) |
| | | | | | | | | | | | | | |
| | | Banks 2.65% | | | | | | | | | |
| | Danske Bank A/S | | | Denmark | | | | (5,191 | ) | | | (64,864 | ) |
| | First Citizens BancShares Inc. | | | United States | | | | (95 | ) | | | (75,122 | ) |
| | First Republic Bank | | | United States | | | | (1,448 | ) | | | (189,036 | ) |
| | Hang Seng Bank Ltd. | | | Hong Kong | | | | (6,200 | ) | | | (94,146 | ) |
| | Huntington Bancshares Inc. | | | United States | | | | (11,451 | ) | | | (150,810 | ) |
| | Skandinaviska Enskilda Banken AB, A | | | Sweden | | | | (11,907 | ) | | | (114,591 | ) |
| | SVB Financial Group | | | United States | | | | (502 | ) | | | (168,562 | ) |
| | Swedbank AB | | | Sweden | | | | (6,766 | ) | | | (89,533 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (946,664 | ) |
| | | | | | | | | | | | | | |
| | | Capital Goods 12.49% | | | | | | | | | |
| | Airbus SE | | | France | | | | (4,769 | ) | | | (415,290 | ) |
| | Alfa Laval AB | | | Sweden | | | | (2,261 | ) | | | (56,721 | ) |
| | Alstom SA | | | France | | | | (2,632 | ) | | | (43,176 | ) |
| | Ashtead Group PLC | | | United Kingdom | | | | (3,606 | ) | | | (164,477 | ) |
| | Assa Abloy AB, B | | | Sweden | | | | (7,941 | ) | | | (150,054 | ) |
| | Atlas Copco AB, A | | | Sweden | | | | (20,324 | ) | | | (191,931 | ) |
| | CAE Inc. | | | Canada | | | | (2,600 | ) | | | (40,891 | ) |
| | Epiroc AB, A | | | Sweden | | | | (5,088 | ) | | | (73,426 | ) |
| | Epiroc AB, B | | | Sweden | | | | (3,007 | ) | | | (38,206 | ) |
| | Generac Holdings Inc. | | | United States | | | | (529 | ) | | | (94,236 | ) |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Reference Entity – Short (continued) | | | | | | | | | |
| | | Capital Goods (continued) | | | | | | | | | |
| | General Electric Co. | | | United States | | | | (7,289 | ) | | $ | (451,262 | ) |
| | HEICO Corp., A | | | United States | | | | (594 | ) | | | (68,084 | ) |
| | Kone Oyj | | | Finland | | | | (2,733 | ) | | | (106,051 | ) |
| | L3Harris Technologies Inc. | | | United States | | | | (1,587 | ) | | | (329,826 | ) |
| | Melrose Industries PLC | | | United Kingdom | | | | (37,591 | ) | | | (42,886 | ) |
| | MTU Aero Engines AG | | | Germany | | | | (427 | ) | | | (64,524 | ) |
| | Nibe Industrier AB | | | Sweden | | | | (12,420 | ) | | | (112,029 | ) |
| | Plug Power Inc. | | | United States | | | | (4,242 | ) | | | (89,252 | ) |
| | Rockwell Automation Inc. | | | United States | | | | (945 | ) | | | (203,279 | ) |
| | Rolls-Royce Holdings PLC | | | United Kingdom | | | | (68,839 | ) | | | (53,476 | ) |
| | Safran SA | | | France | | | | (2,799 | ) | | | (257,779 | ) |
| | Sandvik AB | | | Sweden | | | | (8,823 | ) | | | (121,284 | ) |
| | Schindler Holding AG | | | Switzerland | | | | (332 | ) | | | (52,165 | ) |
| | Siemens Energy AG | | | Germany | | | | (3,475 | ) | | | (38,758 | ) |
| | SKF AB, B | | | Sweden | | | | (2,939 | ) | | | (39,791 | ) |
| | Smiths Group PLC | | | United Kingdom | | | | (3,003 | ) | | | (50,619 | ) |
| | Stanley Black & Decker Inc. | | | United States | | | | (1,205 | ) | | | (90,628 | ) |
| | The Boeing Co. | | | United States | | | | (3,459 | ) | | | (418,816 | ) |
| | TransDigm Group Inc. | | | United States | | | | (419 | ) | | | (219,900 | ) |
| | Vestas Wind Systems A/S | | | Denmark | | | | (8,597 | ) | | | (160,412 | ) |
| | Vinci SA | | | France | | | | (2,817 | ) | | | (229,522 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (4,468,751 | ) |
| | | | | | | | | | | | | | |
| | | Commercial & Professional Services 0.81% | | | | | | | | | |
| | Equifax Inc. | | | United States | | | | (994 | ) | | | (170,402 | ) |
| | Gfl Environmental Inc. | | | Canada | | | | (1,500 | ) | | | (38,459 | ) |
| | Rentokil Initial PLC | | | United Kingdom | | | | (15,463 | ) | | | (82,423 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (291,284 | ) |
| | | | | | | | | | | | | | |
| | | Consumer Durables & Apparel 0.85% | | | | | | | | | |
| | Adidas AG | | | Germany | | | | (1,382 | ) | | | (160,949 | ) |
| | Newell Brands Inc. | | | United States | | | | (3,211 | ) | | | (44,601 | ) |
| | Persimmon PLC | | | United Kingdom | | | | (2,603 | ) | | | (35,958 | ) |
| | Whirlpool Corp. | | | United States | | | | (460 | ) | | | (62,013 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (303,521 | ) |
| | | | | | | | | | | | | | |
| | | Consumer Services 2.51% | | | | | | | | | |
| | Caesars Entertainment Inc. | | | United States | | | | (1,700 | ) | | | (55,114 | ) |
| | Carnival Corp. | | | United States | | | | (7,889 | ) | | | (55,460 | ) |
| | Darden Restaurants Inc. | | | United States | | | | (1,000 | ) | | | (126,320 | ) |
| | Evolution AB | | | Sweden | | | | (1,454 | ) | | | (116,189 | ) |
| | Flutter Entertainment PLC | | | Ireland | | | | (1,336 | ) | | | (147,896 | ) |
| | Las Vegas Sands Corp. | | | United States | | | | (2,771 | ) | | | (103,968 | ) |
| | MGM Resorts International | | | United States | | | | (2,712 | ) | | | (80,601 | ) |
| | Royal Caribbean Cruises Ltd. | | | United States | | | | (1,846 | ) | | | (69,963 | ) |
| | Sands China Ltd. | | | Macau | | | | (19,200 | ) | | | (48,184 | ) |
| | Whitbread PLC | | | United Kingdom | | | | (1,576 | ) | | | (40,499 | ) |
| | Wynn Resorts Ltd. | | | United States | | | | (877 | ) | | | (55,277 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (899,471 | ) |
| | | | | | | | | | | | | | |
| | | Diversified Financials 5.55% | | | | | | | | | |
| | Annaly Capital Management Inc. | | | United States | | | | (3,215 | ) | | | (55,169 | ) |
| | Apollo Global Management Inc. | | | United States | | | | (3,244 | ) | | | (150,846 | ) |
| | Coinebase Global Inc. | | | United States | | | | (975 | ) | | | (60,392 | ) |
| | Credit Suisse Group AG | | | Switzerland | | | | (21,810 | ) | | | (88,104 | ) |
| | EQT AB | | | Sweden | | | | (2,458 | ) | | | (48,529 | ) |
| | Euronext NV | | | Netherlands | | | | (690 | ) | | | (44,005 | ) |
| | Groupe Bruxelles Lambert SA | | | Belgium | | | | (821 | ) | | | (57,813 | ) |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Reference Entity – Short (continued) | | | | | | | | | |
| | | Diversified Financials (continued) | | | | | | | | | |
| | Hong Kong Exchanges & Clearing Ltd. | | | Hong Kong | | | | (9,900 | ) | | $ | (340,009 | ) |
| | Investor AB, B | | | Sweden | | | | (14,932 | ) | | | (220,102 | ) |
| | Japan Exchange Group Inc. | | | Japan | | | | (4,200 | ) | | | (56,655 | ) |
| | M&G PLC | | | United Kingdom | | | | (21,556 | ) | | | (40,077 | ) |
| | MarketAxess Holdings Inc. | | | United States | | | | (312 | ) | | | (70,075 | ) |
| | S&P Global Inc. | | | United States | | | | (1,478 | ) | | | (451,307 | ) |
| | St James’s Place PLC | | | United Kingdom | | | | (4,526 | ) | | | (52,343 | ) |
| | T Rowe Price Group Inc. | | | United States | | | | (1,852 | ) | | | (198,886 | ) |
| | Tradeweb Markets Inc. | | | United States | | | | (880 | ) | | | (50,758 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,985,070 | ) |
| | | | | | | | | | | | | | |
| | | Energy 6.14% | | | | | | | | | |
| | Baker Hughes Co. | | | United States | | | | (7,989 | ) | | | (167,449 | ) |
| | Cameco Corp. | | | Canada | | | | (3,300 | ) | | | (88,573 | ) |
| | Enbridge Inc. | | | Canada | | | | (12,900 | ) | | | (485,188 | ) |
| | Hess Corp. | | | United States | | | | (2,212 | ) | | | (241,086 | ) |
| | Keyera Corp. | | | Canada | | | | (1,700 | ) | | | (35,149 | ) |
| | Kinder Morgan Inc. | | | United States | | | | (16,314 | ) | | | (271,465 | ) |
| | ONEOK Inc. | | | United States | | | | (3,575 | ) | | | (183,183 | ) |
| | Santos Ltd. | | | Australia | | | | (26,643 | ) | | | (121,453 | ) |
| | TC Energy Corp. | | | Canada | | | | (8,000 | ) | | | (328,780 | ) |
| | Williams Cos Inc. | | | United States | | | | (9,642 | ) | | | (276,050 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (2,198,376 | ) |
| | | | | | | | | | | | | | |
| | | Food & Staples Retailing 0.28% | | | | | | | | | |
| | Aeon Co. Ltd. | | | Japan | | | | (5,400 | ) | | | (100,859 | ) |
| | | | | | | | | | | | | | |
| | | Food, Beverage & Tobacco 1.50% | | | | | | | | | |
| | Danone SA | | | France | | | | (5,066 | ) | | | (241,048 | ) |
| | Hormel Foods Corp. | | | United States | | | | (2,441 | ) | | | (110,919 | ) |
| | McCormick & Co Inc. | | | United States | | | | (2,009 | ) | | | (143,181 | ) |
| | Orkla ASA | | | Norway | | | | (5,967 | ) | | | (43,368 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (538,516 | ) |
| | | | | | | | | | | | | | |
| | | Health Care Equipment & Services 6.01% | | | | | | | | | |
| | Baxter International Inc. | | | United States | | | | (4,103 | ) | | | (220,988 | ) |
| | DaVita Inc. | | | United States | | | | (451 | ) | | | (37,329 | ) |
| | DENTSPLY SIRONA Inc. | | | United States | | | | (1,752 | ) | | | (51,071 | ) |
| | Dexcom Inc. | | | United States | | | | (3,167 | ) | | | (260,011 | ) |
| | Fisher & Paykel Healthcare Corp. Ltd. | | | New Zealand | | | | (4,712 | ) | | | (49,309 | ) |
| | Fresenius Medical Care AG & Co. KGaA | | | Germany | | | | (1,620 | ) | | | (46,071 | ) |
| | Fresenius SE & Co. | | | Germany | | | | (3,324 | ) | | | (71,477 | ) |
| | Insulet Corp. | | | United States | | | | (570 | ) | | | (131,773 | ) |
| | Intuitive Surgical Inc. | | | United States | | | | (2,473 | ) | | | (467,545 | ) |
| | Masimo Corp. | | | United States | | | | (430 | ) | | | (61,241 | ) |
| | Medtronic PLC | | | United States | | | | (6,000 | ) | | | (484,500 | ) |
| | Novocure Ltd. | | | United States | | | | (764 | ) | | | (58,049 | ) |
| | Ramsay Health Care Ltd. | | | Australia | | | | (1,686 | ) | | | (62,092 | ) |
| | Sysmex Corp. | | | Japan | | | | (1,300 | ) | | | (69,767 | ) |
| | Teladoc Health Inc. | | | United States | | | | (1,290 | ) | | | (32,701 | ) |
| | Universal Health Services Inc. | | | United States | | | | (533 | ) | | | (47,000 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (2,150,924 | ) |
| | | | | | | | | | | | | | |
| | | Household & Personal Products 1.78% | | | | | | | | | |
| | Clorox Co. | | | United States | | | | (1,008 | ) | | | (129,417 | ) |
| | Essity AB, B | | | Sweden | | | | (4,888 | ) | | | (97,253 | ) |
| | Henkel AG & Co. | | | Germany | | | | (1,430 | ) | | | (85,483 | ) |
| | Kimberly-Clark Corp. | | | United States | | | | (1,892 | ) | | | (212,926 | ) |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 163 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Reference Entity – Short (continued) | | | | | | | | | |
| | | Household & Personal Products (continued) | | | | | | | | | |
| | Shiseido Co. Ltd. | | | Japan | | | | (3,200 | ) | | $ | (111,777 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (636,856 | ) |
| | | | | | | | | | | | | | |
| | | Insurance 3.19% | | | | | | | | | |
| | AIA Group Ltd. | | | Hong Kong | | | | (58,600 | ) | | | (488,588 | ) |
| | Cincinnati Financial Corp. | | | United States | | | | (1,223 | ) | | | (109,544 | ) |
| | Insurance Australia Group Ltd. | | | Australia | | | | (20,273 | ) | | | (59,959 | ) |
| | Lincoln National Corp. | | | United States | | | | (1,314 | ) | | | (57,698 | ) |
| | Markel Corp. | | | United States | | | | (112 | ) | | | (121,433 | ) |
| | Phoenix Group Holdings PLC | | | United Kingdom | | | | (6,196 | ) | | | (36,436 | ) |
| | Prudential PLC | | | Hong Kong | | | | (22,619 | ) | | | (225,681 | ) |
| | T&D Holdings Inc. | | | Japan | | | | (4,500 | ) | | | (42,499 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,141,838 | ) |
| | | | | | | | | | | | | | |
| | | Materials 7.92% | | | | | | | | | |
| | Agnico Eagle Mines Ltd. | | | Canada | | | | (3,700 | ) | | | (152,815 | ) |
| | Air Products and Chemicals Inc. | | | United States | | | | (1,770 | ) | | | (411,932 | ) |
| | Akzo Nobel NV | | | Netherlands | | | | (1,505 | ) | | | (85,985 | ) |
| | Antofagasta PLC | | | United Kingdom | | | | (3,199 | ) | | | (39,835 | ) |
| | Ball Corp. | | | United States | | | | (2,558 | ) | | | (123,602 | ) |
| | Chr. Hansen Holding A/S | | | Denmark | | | | (893 | ) | | | (44,098 | ) |
| | Covestro AG | | | Germany | | | | (1,556 | ) | | | (45,029 | ) |
| | Croda International PLC | | | United Kingdom | | | | (1,153 | ) | | | (82,966 | ) |
| | DuPont de Nemours Inc. | | | United States | | | | (4,080 | ) | | | (205,632 | ) |
| | Ecolab Inc. | | | United States | | | | (2,076 | ) | | | (299,816 | ) |
| | Givaudan SA | | | Switzerland | | | | (78 | ) | | | (237,982 | ) |
| | International Flavors & Fragrances Inc. | | | United States | | | | (2,039 | ) | | | (185,202 | ) |
| | Newcrest Mining Ltd. | | | Australia | | | | (7,347 | ) | | | (79,926 | ) |
| | Northern Star Resources Ltd. | | | Australia | | | | (9,264 | ) | | | (46,638 | ) |
| | PPG Industries Inc. | | | United States | | | | (1,881 | ) | | | (208,208 | ) |
| | Svenska Cellulosa AB SCA | | | Sweden | | | | (4,810 | ) | | | (61,547 | ) |
| | The Sherwin-Williams Co. | | | United States | | | | (2,001 | ) | | | (409,705 | ) |
| | Wheaton Precious Metals Corp. | | | Canada | | | | (3,600 | ) | | | (113,865 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (2,834,783 | ) |
| | | | | | | | | | | | | | |
| | | Media & Entertainment 7.30% | | | | | | | | | |
| | Cable One Inc. | | | United States | | | | (45 | ) | | | (38,387 | ) |
| | Charter Communications Inc. Com Usd.001 Cl A | | | United States | | | | (960 | ) | | | (291,216 | ) |
| | IAC Inc. | | | United States | | | | (646 | ) | | | (35,775 | ) |
| | Informa PLC | | | United Kingdom | | | | (11,370 | ) | | | (65,899 | ) |
| | Liberty Broadband Corp. | | | United States | | | | (1,065 | ) | | | (81,174 | ) |
| | Match Group Inc. | | | United States | | | | (2,155 | ) | | | (102,901 | ) |
| | Netflix Inc, | | | United States | | | | (2,321 | ) | | | (546,456 | ) |
| | News Corp., A | | | United States | | | | (3,153 | ) | | | (47,453 | ) |
| | Paramount Global, B | | | United States | | | | (4,855 | ) | | | (92,002 | ) |
| | Pinterest Inc., A | | | United States | | | | (4,675 | ) | | | (108,927 | ) |
| | ROBLOX Corp. | | | United States | | | | (2,817 | ) | | | (100,961 | ) |
| | Roku Inc. | | | United States | | | | (974 | ) | | | (54,934 | ) |
| | Sea Ltd. ADR | | | Singapore | | | | (2,800 | ) | | | (156,940 | ) |
| | Snap Inc. | | | United States | | | | (9,046 | ) | | | (88,832 | ) |
| | Take-Two Interactive Software Inc. | | | United States | | | | (1,309 | ) | | | (142,131 | ) |
| | The Walt Disney Co. | | | United States | | | | (4,717 | ) | | | (444,955 | ) |
| | Warner Bros Discovery Inc. | | | United States | | | | (18,466 | ) | | | (215,314 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (2,614,257 | ) |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals, Biotechnology & Life Sciences 4.04% | | | | | | | | | |
| | BioMarin Pharmaceutical Inc. | | | United States | | | | (1,559 | ) | | | (132,608 | ) |
| | Catalent Inc. | | | United States | | | | (1,392 | ) | | | (100,725 | ) |
| | | | | | | | | | |
| | | | | | |
| 164 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Reference Entity – Short (continued) | | | | | | | | | |
| | | Pharmaceuticals, Biotechnology & Life Sciences (continued) | | | | | | | | | |
| | Chugai Pharmaceutical Co. Ltd. | | | Japan | | | | (5,600 | ) | | $ | (140,285 | ) |
| | Eisai Co. Ltd. | | | Japan | | | | (2,000 | ) | | | (107,071 | ) |
| | Elanco Animal Health Inc. | | | United States | | | | (3,319 | ) | | | (41,189 | ) |
| | Exact Sciences Corp. | | | United States | | | | (1,406 | ) | | | (45,681 | ) |
| | Illumina Inc. | | | United States | | | | (1,272 | ) | | | (242,685 | ) |
| | Sartorius Stedim Biotech | | | France | | | | (233 | ) | | | (72,381 | ) |
| | UCB SA | | | Belgium | | | | (1,037 | ) | | | (72,251 | ) |
| | Zoetis Inc. | | | United States | | | | (3,300 | ) | | | (489,357 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,444,233 | ) |
| | | | | | | | | | | | | | |
| | | Real Estate 4.30% | | | | | | | | | |
| | Alexandria Real Estate Equities Inc. | | | United States | | | | (1,243 | ) | | | (174,256 | ) |
| | Boston Properties Inc. REIT | | | United States | | | | (1,198 | ) | | | (89,814 | ) |
| | Digital Realty Trust Inc. | | | United States | | | | (2,287 | ) | | | (226,825 | ) |
| | Equinix Inc. | | | United States | | | | (736 | ) | | | (418,666 | ) |
| | ESR Group Ltd. | | | China | | | | (17,000 | ) | | | (42,880 | ) |
| | FirstService Corp. | | | Canada | | | | (300 | ) | | | (35,307 | ) |
| | Healthpeak Properties Inc. | | | United States | | | | (4,386 | ) | | | (100,527 | ) |
| | Nippon Prologis REIT Inc. | | | Japan | | | | (17 | ) | | | (37,172 | ) |
| | SBA Communications Corp. REIT | | | United States | | | | (876 | ) | | | (247,268 | ) |
| | Vonovia SE | | | Germany | | | | (5,741 | ) | | | (124,913 | ) |
| | Zillow Group Inc., C | | | United States | | | | (1,352 | ) | | | (39,492 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,537,120 | ) |
| | | | | | | | | | | | | | |
| | | Retailing 3.40% | | | | | | | | | |
| | Burlington Stores Inc. | | | United States | | | | (528 | ) | | | (59,078 | ) |
| | CarMax Inc. | | | United States | | | | (1,310 | ) | | | (86,486 | ) |
| | Delivery Hero SE | | | South Korea | | | | (1,314 | ) | | | (48,839 | ) |
| | Doordash Inc. | | | United States | | | | (1,538 | ) | | | (76,054 | ) |
| | H & M AB, B | | | Sweden | | | | (5,715 | ) | | | (53,280 | ) |
| | Nitori Holdings Co. Ltd. | | | Japan | | | | (700 | ) | | | (58,952 | ) |
| | Prosus NV | | | China | | | | (6,277 | ) | | | (331,876 | ) |
| | Target Corp. | | | United States | | | | (3,158 | ) | | | (468,615 | ) |
| | Zalando SE | | | Germany | | | | (1,740 | ) | | | (34,484 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,217,664 | ) |
| | | | | | | | | | | | | | |
| | | Semiconductors & Semiconductor Equipment 5.19% | | | | | | | | | |
| | Advanced Micro Devices Inc. | | | United States | | | | (6,487 | ) | | | (416,076 | ) |
| | ASM International NV | | | Netherlands | | | | (395 | ) | | | (90,452 | ) |
| | Lam Research Corp. | | | United States | | | | (1,143 | ) | | | (418,338 | ) |
| | Lasertec Corp. | | | Japan | | | | (700 | ) | | | (71,067 | ) |
| | Marvell Technology Inc. | | | United States | | | | (6,883 | ) | | | (295,350 | ) |
| | NVIDIA Corp. | | | United States | | | | (3,786 | ) | | | (462,649 | ) |
| | SolarEdge Technologies Inc. | | | United States | | | | (448 | ) | | | (103,694 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (1,857,626 | ) |
| | | | | | | | | | | | | | |
| | | Software & Services 11.69% | | | | | | | | | |
| | Adyen NV | | | Netherlands | | | | (189 | ) | | | (241,033 | ) |
| | Amadeus IT Group SA | | | Spain | | | | (3,632 | ) | | | (170,468 | ) |
| | Avalara Inc. | | | United States | | | | (712 | ) | | | (65,362 | ) |
| | Bill.com Holdings Inc. | | | United States | | | | (746 | ) | | | (98,748 | ) |
| | Cloudflare Inc., A | | | United States | | | | (2,037 | ) | | | (112,666 | ) |
| | Coupa Software Inc. | | | United States | | | | (586 | ) | | | (34,457 | ) |
| | DocuSign Inc. | | | United States | | | | (1,595 | ) | | | (85,285 | ) |
| | Fidelity National Information Services Inc. | | | United States | | | | (4,913 | ) | | | (371,275 | ) |
| | Fiserv Inc. | | | United States | | | | (4,905 | ) | | | (465,239 | ) |
| | Guidewire Software Inc. | | | United States | | | | (638 | ) | | | (39,288 | ) |
| | MongoDB Inc. | | | United States | | | | (537 | ) | | | (106,627 | ) |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 165 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Systematic Style Premia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Shares | | | Value | |
| | | Reference Entity – Short (continued) | | | | | | | | | |
| | | Software & Services (continued) | | | | | | | | | |
| | Okta Inc., A | | | United States | | | | (1,231 | ) | | $ | (70,007 | ) |
| | Palantir Technologies Inc. | | | United States | | | | (13,167 | ) | | | (107,048 | ) |
| | PayPal Holdings Inc. | | | United States | | | | (5,622 | ) | | | (498,671 | ) |
| | Shopify Inc., A | | | Canada | | | | (9,300 | ) | | | (248,262 | ) |
| | Snowflake Inc. | | | United States | | | | (1,756 | ) | | | (298,450 | ) |
| | Splunk Inc. | | | United States | | | | (1,224 | ) | | | (92,045 | ) |
| | Square Inc., A | | | United States | | | | (4,190 | ) | | | (230,408 | ) |
| | Twilio Inc., A | | | United States | | | | (1,341 | ) | | | (92,717 | ) |
| | Unity Software Inc. | | | United States | | | | (1,537 | ) | | | (48,969 | ) |
| | Workday Inc., A | | | United States | | | | (1,630 | ) | | | (254,704 | ) |
| | Worldline SA | | | France | | | | (2,025 | ) | | | (80,701 | ) |
| | Xero Ltd. | | | New Zealand | | | | (1,081 | ) | | | (51,091 | ) |
| | Zendesk Inc. | | | United States | | | | (998 | ) | | | (75,948 | ) |
| | Zoom Video Communications Inc., A | | | United States | | | | (1,821 | ) | | | (134,007 | ) |
| | Zscaler Inc. | | | United States | | | | (672 | ) | | | (111,478 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (4,184,954 | ) |
| | | | | | | | | | | | | | |
| | | Technology Hardware & Equipment 1.56% | | | | | | | | | |
| | Cognex Corp. | | | United States | | | | (1,412 | ) | | | (58,527 | ) |
| | Hexagon AB | | | Sweden | | | | (16,057 | ) | | | (151,491 | ) |
| | Logitech International SA | | | Switzerland | | | | (1,411 | ) | | | (65,873 | ) |
| | NetApp Inc. | | | United States | | | | (1,797 | ) | | | (111,144 | ) |
| | Seagate Technology Holdings PLC | | | United States | | | | (1,600 | ) | | | (87,008 | ) |
| | Western Digital Corp. | | | United States | | | | (2,594 | ) | | | (83,475 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (557,518 | ) |
| | | | | | | | | | | | | | |
| | | Telecommunication Services 1.47% | | | | | | | | | |
| | Cellnex Telecom SA | | | Spain | | | | (4,612 | ) | | | (143,632 | ) |
| | SoftBank Group Corp. | | | Japan | | | | (9,700 | ) | | | (328,370 | ) |
| | Telenor ASA | | | Norway | | | | (5,816 | ) | | | (53,190 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (525,192 | ) |
| | | | | | | | | | | | | | |
| | | Transportation 2.09% | | | | | | | | | |
| | Central Japan Railway Co. | | | Japan | | | | (1,100 | ) | | | (128,699 | ) |
| | East Japan Railway Co. | | | Japan | | | | (2,300 | ) | | | (117,920 | ) |
| | Kuehne + Nagel International AG | | | Switzerland | | | | (443 | ) | | | (90,918 | ) |
| | Lyft Inc., A | | | United States | | | | (2,488 | ) | | | (32,767 | ) |
| | Uber Technologies Inc. | | | United States | | | | (11,783 | ) | | | (312,249 | ) |
| | West Japan Railway Co. | | | Japan | | | | (1,700 | ) | | | (65,066 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (747,619 | ) |
| | | | | | | | | | | | | | |
| | | Utilities 1.89% | | | | | | | | | |
| | AES Corp/The | | | United States | | | | (5,393 | ) | | | (121,882 | ) |
| | CLP Holdings Ltd. | | | Hong Kong | | | | (13,000 | ) | | | (98,288 | ) |
| | Hong Kong & China Gas Co. Ltd. | | | Hong Kong | | | | (91,000 | ) | | | (80,220 | ) |
| | PPL Corp. | | | United States | | | | (5,959 | ) | | | (151,061 | ) |
| | Public Service Enterprise Group Inc. | | | United States | | | | (4,015 | ) | | | (225,763 | ) |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | (677,214 | ) |
| | | | | | | | | | | | | | |
| | Total Value of Reference Entity — Morgan Stanley Capital Services LLC | | | | | | | | | | $ | (35,790,604 | ) |
| | | | | | | | | | | | | | |
See Note 11 regarding other derivative information.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| 166 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Core Bond ETFa
| | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020b | |
Per share operating performance (for a share outstanding throughout the period) | | | | | | | | | | | | | | | | |
| | | | |
Net asset value, beginning of period | | $ | 23.43 | | | $ | 25.14 | | | $ | 25.44 | | | $ | 25.00 | |
| | | | |
| | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | |
| | | | |
Net investment incomed | | | 0.25 | | | | 0.45 | | | | 0.51 | | | | 0.29 | |
| | | | |
Net realized and unrealized gains (losses) | | | (2.43 | ) | | | (1.61 | ) | | | 0.03 | | | | 0.49 | |
| | | | |
| | | | |
Total from investment operations | | | (2.18 | ) | | | (1.61 | ) | | | 0.54 | | | | 0.78 | |
| | | | |
| | | | |
Less distributions from: Net investment income | | | (0.28 | ) | | | (0.50 | ) | | | (0.65 | ) | | | (0.31 | ) |
| | | | |
Net realized gains | | | — | | | | (0.05 | ) | | | (0.19 | ) | | | (0.03 | ) |
| | | | |
| | | | |
Total Distributions | | | (0.28 | ) | | | (0.55 | ) | | | (0.84 | ) | | | (0.34 | ) |
| | | | |
| | | | |
Net asset value, end of period | | $ | 20.97 | | | $ | 23.43 | | | $ | 25.14 | | | $ | 25.44 | |
| | | | | | | | | | | | | | | | |
| | | | |
Total returne | | | (9.38)% | | | | (4.72)% | | | | 2.07% | | | | 3.12% | |
| | | | |
| Ratios to average net assetsf | | | | | | | | | | | | | | | | |
| | | | |
Expenses before waiver and payments by affiliates | | | 0.15% | | | | 0.16% | | | | 0.17% | | | | 0.19% | |
| | | | |
Expenses net of waiver and payments by affiliates | | | 0.14% | | | | 0.15% | | | | 0.15% | | | | 0.15% | |
| | | | |
Net investment income | | | 2.23% | | | | 1.80% | | | | 1.95% | | | | 2.14% | |
| | | | |
| Supplemental data | | | | | | | | | | | | | | | | |
| | | | |
Net assets, end of period (000’s) | | | $1,447,067 | | | | $1,509,961 | | | | $1,460,597 | | | | $853,532 | |
| | | | |
Portfolio turnover rateg | | | 35.72% | h | | | 69.88% | h | | | 90.99% | h | | | 126.68% | h |
aEffective August 1, 2022, Formerly, Franklin Liberty U.S. Core Bond ETF was renamed Franklin U.S. Core Bond ETF.
bFor the period September 17, 2019 (commencement of operations) to March 31, 2020.
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”).
| | | | | | | | | | | | | | |
| gPortfolio turnover rate excluding cash creations was as follows: | | 35.72% | | | 69.88% | | | | 90.99% | | | | 126.68% | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 167 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Core Bond ETF
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes 21.6% | | | | | | | | | |
| | | Aerospace & Defense 0.2% | | | | | | | | | |
| | The Boeing Co., Sr. Unsecured note, 3.50%, 3/01/39 | | | United States | | | | 5,000,000 | | | $ | 3,347,253 | |
| | | | | | | | | | | | | | |
| | | Agriculture 0.7% | |
| | Altria Group Inc., 3.40%, 5/06/30 | | | United States | | | | 5,000,000 | | | | 4,055,014 | |
| a | | Imperial Brands Finance PLC, 144A, 3.50%, 7/26/26 | | | United Kingdom | | | | 6,000,000 | | | | 5,421,888 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 9,476,902 | |
| | | | | | | | | | | | | | |
| | | Airlines 0.9% | | | | | | | | | |
| | American Airlines 2016-3 Class A Pass Through Trust,
3.25%, 4/15/30 | | | United States | | | | 4,406,313 | | | | 3,435,001 | |
| a | | Delta Air Lines Inc./SkyMiles IP Ltd., first lien, 144A, 4.50%,
4.50%, 10/20/25 | | | United States | | | | 7,700,000 | | | | 7,478,668 | |
| | United Airlines 2019-2 Class A Pass Through Trust, Series A,
2.90%, 11/01/29 | | | United States | | | | 904,484 | | | | 730,036 | |
| | | | |
| | United Airlines 2020-1 Class A Pass Through Trust, Series 20-1, 5.875%, 4/15/29 | | | United States | | | | 81,861 | | | | 79,088 | |
| | United Airlines 2020-1 Class B Pass Through Trust, 2020-1 Class B, 4.875%, 7/15/27 | | | United States | | | | 1,910,400 | | | | 1,786,798 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 13,509,591 | |
| | | | | | | | | | | | | | |
| | | Banks 6.1% | |
| a | | Banco de Chile, Sr. Unsecured , 144A, 2.99%, 12/09/31 | | | Chile | | | | 1,200,000 | | | | 933,437 | |
| | Bank of America Corp., | | | | | | | | | | | | |
| | Sr. Unsecured, 1.922%, 10/24/31 | | | United States | | | | 1,500,000 | | | | 1,111,728 | |
| | Sr. Unsecured note, 2.592% to 4/29/30, FRN thereafter, 4/29/31 | | | United States | | | | 3,000,000 | | | | 2,382,194 | |
| | Sr. Unsecured note, 3.864% to 7/23/23, FRN thereafter, 7/23/24 | | | United States | | | | 5,100,000 | | | | 5,032,292 | |
| a | | BNP Paribas SA, Sr. Unsecured, 144A, 2.819%, 11/19/25 | | | France | | | | 2,200,000 | | | | 2,051,497 | |
| a | | BPCE SA, Sr. Unsecured, 144A, 2.045% to 10/19/26, FRN
thereafter, 10/19/27 | | | France | | | | 3,700,000 | | | | 3,119,787 | |
| | Citigroup Inc., | | | | | | | | | | | | |
| | 3.057% to 1/25/32, FRN thereafter, 1/25/33 | | | United States | | | | 1,800,000 | | | | 1,419,576 | |
| | Sr. Unsecured, 4.044% to 6/01/23, FRN thereafter, 6/01/24 | | | United States | | | | 5,100,000 | | | | 5,061,166 | |
| | sub. bond, 4.45%, 9/29/27 | | | United States | | | | 1,500,000 | | | | 1,390,861 | |
| | subordinate, 4.125%, 7/25/28 | | | United States | | | | 2,300,000 | | | | 2,078,901 | |
| | Deutsche Bank AG, Sr. Unsecured, 5.371%, 9/09/27 | | | Germany | | | | 3,700,000 | | | | 3,575,828 | |
| | Goldman Sachs Group Inc., | | | | | | | | | | | | |
| | 3.691%, 6/05/28 | | | United States | | | | 2,500,000 | | | | 2,263,629 | |
| | Sr. Unsecured, 1.948%, 10/21/27 | | | United States | | | | 5,200,000 | | | | 4,453,416 | |
| | HSBC Holdings PLC, | | | | | | | | | | | | |
| | senior note, 2.013% to 9/22/27, FRN thereafter, 9/22/28 | | | United Kingdom | | | | 4,100,000 | | | | 3,282,849 | |
| | senior note, 2.357% to 8/18/30, FRN thereafter, 8/18/31 | | | United Kingdom | | | | 1,300,000 | | | | 957,254 | |
| | senior note, 0.976% to 5/24/24, FRN thereafter, 5/24/25 | | | United Kingdom | | | | 4,800,000 | | | | 4,413,437 | |
| | JPMorgan Chase & Co., | | | | | | | | | | | | |
| | subordinated, 2.956% to 5/13/30, FRN thereafter, 5/13/31 | | | United States | | | | 5,000,000 | | | | 3,967,147 | |
| | senior bond, 2.522% to 4/22/30, FRN thereafter, 4/22/31 | | | United States | | | | 2,000,000 | | | | 1,583,595 | |
| | Sr. Unsecured, 1.953% to 2/04/31, FRN thereafter, 2/04/32 | | | United States | | | | 2,000,000 | | | | 1,482,240 | |
| | KeyBank NA, 4.15%, 8/08/25 | | | United States | | | | 2,500,000 | | | | 2,425,236 | |
| | Mitsubishi UFJ Financial Group Inc., Sr. Unsecured, 5.063%, 9/12/25 | | | Japan | | | | 4,500,000 | | | | 4,454,489 | |
| | Morgan Stanley, | | | | | | | | | | | | |
| | 3.622% to 4/01/30, FRN thereafter, 4/01/31 | | | United States | | | | 4,300,000 | | | | 3,720,584 | |
| | 3.95%, 4/23/27 | | | United States | | | | 3,600,000 | | | | 3,350,728 | |
| a | | Nordea Bank Abp, Sr. Unsecured, 144A, 4.75%, 9/22/25 | | | Finland | | | | 2,200,000 | | | | 2,165,761 | |
| | Santander UK Group Holdings PLC, 1.673% to 6/14/26, FRN thereafter, 6/14/27 | | | United Kingdom | | | | 3,200,000 | | | | 2,663,986 | |
| a | | Societe Generale SA, Sr. Unsecured, 144A, 1.792%, 6/09/27 | | | France | | | | 4,300,000 | | | | 3,584,198 | |
| | | | | | | | | | |
| | | | | | |
| 168 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Banks (continued) | |
| | Toronto-Dominion Bank, Sr. Unsecured, MTN, 4.693%, 9/15/27 | | | Canada | | | | 4,700,000 | | | $ | 4,548,5 42 | |
| | Truist Bank, sub. Bond, 2.25%, 3/11/30 | | | United States | | | | 4,300,000 | | | | 3,376,619 | |
| | Wells Fargo & Co.,
senior bond, 2.879% to 10/30/29, FRN thereafter, 10/30/30 | | | United States | | | | 7,700,000 | | | | 6,336,552 | |
| | 4.54%, 8/15/26 | | | United States | | | | 1,600,000 | | | | 1,548,746 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 88,736,275 | |
| | | | | | | | | | | | | | |
| | | Beverages 0.6% | |
| | Anheuser-Busch InBev Worldwide Inc., senior bond, 3.50%, 6/01/30 | | | United States | | | | 3,900,000 | | | | 3,487,524 | |
| | PepsiCo Inc., Sr. Unsecured, 3.90%, 7/18/32 | | | United States | | | | 6,000,000 | | | | 5,554,873 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 9,042,397 | |
| | | | | | | | | | | | | | |
| | | Biotechnology 0.3% | |
| | Bio-Rad Laboratories Inc., 3.30%, 3/15/27 | | | United States | | | | 500,000 | | | | 454,523 | |
| | Royalty Pharma PLC, 2.20%, 9/02/30 | | | United Kingdom | | | | 5,000,000 | | | | 3,816,063 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 4,270,586 | |
| | | | | | | | | | | | | | |
| | | Building Products 0.3% | |
| | NVR Inc., Sr. Unsecured, 3.00%, 5/15/30 | | | United States | | | | 4,500,000 | | | | 3,680,494 | |
| | | | | | | | | | | | | | |
| | | Chemicals 0.3% | |
| a | | International Flavors & Fragrances Inc., Sr. Unsecured, 144A,
2.30%, 11/01/30 | | | United States | | | | 6,500,000 | | | | 4,997,383 | |
| | | | | | | | | | | | | | |
| | | Commercial Services & Supplies 0.6% | |
| | Boardwalk Pipelines LP, senior note, 4.80%, 5/03/29 | | | United States | | | | 3,950,000 | | | | 3,633,757 | |
| | Rockefeller University, Series 2020, Unsecured, 3.75%, 7/01/51 | | | United States | | | | 7,000,000 | | | | 5,615,011 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 9,248,768 | |
| | | | | | | | | | | | | | |
| | | Diversified Financial Services 0.4% | |
| | AerCap Ireland Capital DAC / AerCap Global Aviation Trust,
3.40%, 10/29/33 | | | Ireland | | | | 3,500,000 | | | | 2,544,469 | |
| | Capital One Financial Corp., Sr. Unsecured, 4.985% to 7/24/25, FRN thereafter, 7/24/26 | | | United States | | | | 4,000,000 | | | | 3,912,750 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 6,457,219 | |
| | | | | | | | | | | | | | |
| | | Diversified Telecommunication Services 1.0% | |
| | America Movil SAB de CV, Sr. Unsecured note, 2.875%, 5/07/30 | | | Mexico | | | | 3,800,000 | | | | 3,197,039 | |
| | Orange SA, senior bond, 9.00%, 3/01/31 | | | France | | | | 4,300,000 | | | | 5,162,876 | |
| | Verizon Communications Inc., | | | | | | | | | | | | |
| | Sr. Unsecured note, 1.75%, 1/20/31 | | | United States | | | | 5,000,000 | | | | 3,757,995 | |
| | Sr. Unsecured note, 2.85%, 9/03/41 | | | United States | | | | 3,900,000 | | | | 2,611,278 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 14,729,188 | |
| | | | | | | | | | | | | | |
| | | Electric Utilities 1.9% | |
| | Baltimore Gas and Electric Co., senior bond, 3.50%, 8/15/46 | | | United States | | | | 1,400,000 | | | | 1,034,660 | |
| a | | Comision Federal de Electricidad, 144A, 3.348%, 2/09/31 | | | Mexico | | | | 3,800,000 | | | | 2,728,362 | |
| | Duke Energy Corp., senior bond, 3.75%, 9/01/46 | | | United States | | | | 5,000,000 | | | | 3,554,127 | |
| a | | EDP Finance BV, senior note, 144A, 1.71%, 1/24/28 | | | Netherlands | | | | 4,500,000 | | | | 3,653,591 | |
| | Enel Finance International NV,
a senior bond, 144A, 3.50%, 4/06/28 | | | Netherlands | | | | 2,700,000 | | | | 2,331,759 | |
| | a 144A, 2.25%, 7/12/31 | | | Italy | | | | 3,500,000 | | | | 2,434,508 | |
| | Exelon Corp., senior bond, 4.05%, 4/15/30 | | | United States | | | | 3,000,000 | | | | 2,722,461 | |
| | Georgia Power Co., senior bond, 4.75%, 9/01/40 | | | United States | | | | 1,400,000 | | | | 1,180,564 | |
| | MidAmerican Energy Co., secured bond, 3.65%, 8/01/48 | | | United States | | | | 1,100,000 | | | | 835,085 | |
| a | | Perusahaan Perseroan Persero PT Perusahaan Listrik Negara, senior bond, 144A, 4.875%, 7/17/49 | | | Indonesia | | | | 750,000 | | | | 523,930 | |
| | The Southern Co., senior bond, 3.70%, 4/30/30 | | | United States | | | | 3,000,000 | | | | 2,643,601 | |
| | Virginia Electric and Power Co., senior bond, 3.80%, 9/15/47 | | | United States | | | | 5,100,000 | | | | 3,902,223 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 27,544,871 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 169 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Electronic Equipment, Instruments & Components 0.4% | |
| | Flex Ltd., senior note, 4.875%, 5/12/30 | | | Singapore | | | | 4,300,000 | | | $ | 3,882,424 | |
| | Teledyne FLIR LLC, Sr. Unsecured note, 2.50%, 8/01/30 | | | United States | | | | 3,000,000 | | | | 2,348,551 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 6,230,975 | |
| | | | | | | | | | | | | | |
| | | Energy Equipment & Services 0.5% | | | | | | | | | |
| | Kinder Morgan Inc., 2.00%, 2/15/31 | | | United States | | | | 4,100,000 | | | | 3,056,976 | |
| | MPLX LP, Sr. Unsecured, 2.65%, 8/15/30 | | | United States | | | | 2,500,000 | | | | 1,962,230 | |
| a | | Schlumberger Holdings Corp., senior bond, 144A, 3.90%, 5/17/28 | | | United States | | | | 1,950,000 | | | | 1,760,895 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 6,780,101 | |
| | | | | | | | | | | | | | |
| | | Entertainment 0.1% | | | | | | | | | |
| a | | Warnermedia Holdings Inc., 144A, 4.054%, 3/15/29 | | | United States | | | | 900,000 | | | | 778,395 | |
| | | | | | | | | | | | | | |
| | | Food Products 0.4% | | | | | | | | | |
| | Kraft Heinz Foods Co., | | | | | | | | | | | | |
| | senior bond, 3.00%, 6/01/26 | | | United States | | | | 4,100,000 | | | | 3,783,957 | |
| | senior bond, 3.75%, 4/01/30 | | | United States | | | | 2,000,000 | | | | 1,765,233 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 5,549,190 | |
| | | | | | | | | | | | | | |
| | | Health Care Providers & Services 0.9% | | | | | | | | | |
| | CVS Health Corp., | | | | | | | | | | | | |
| | senior bond, 4.875%, 7/20/35 | | | United States | | | | 1,400,000 | | | | 1,268,073 | |
| | senior bond, 4.30%, 3/25/28 | | | United States | | | | 1,117,000 | | | | 1,055,474 | |
| | Elevance Health Inc., 5.10%, 1/15/44 | | | United States | | | | 2,000,000 | | | | 1,821,333 | |
| | Quest Diagnostics Inc., senior bond, 2.80%, 6/30/31 | | | United States | | | | 6,800,000 | | | | 5,491,829 | |
| | STERIS Irish FinCo UnLtd Co., 2.70%, 3/15/31 | | | Ireland | | | | 5,000,000 | | | | 3,936,195 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 13,572,904 | |
| | | | | | | | | | | | | | |
| | | Independent Power Producers & Energy Traders 0.3% | | | | | | | | | |
| a | | Colbun SA, senior note, 144A, 3.95%, 10/11/27 | | | Chile | | | | 5,550,000 | | | | 4,988,728 | |
| | | | | | | | | | | | | | |
| | | Insurance 0.6% | | | | | | | | | |
| | Berkshire Hathaway Finance Corp., 3.85%, 3/15/52 | | | United States | | | | 1,200,000 | | | | 921,230 | |
| a | | Five Corners Funding Trust II, senior note, 144A, 2.85%, 5/15/30 | | | United States | | | | 4,000,000 | | | | 3,298,447 | |
| | MetLife Inc., senior bond, 5.875%, 2/06/41 | | | United States | | | | 1,100,000 | | | | 1,099,986 | |
| a | | Metropolitan Life Global Funding I, 144A, 4.30%, 8/25/29 | | | United States | | | | 1,400,000 | | | | 1,305,606 | |
| | Reinsurance Group of America Inc., Sr. Unsecured, 3.90%, 5/15/29 | | | United States | | | | 2,250,000 | | | | 2,008,203 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 8,633,472 | |
| | | | | | | | | | | | | | |
| | | Internet Software & Services 0.1% | | | | | | | | | |
| a | | Tencent Holdings Ltd., Sr. Unsecured, 144A, 3.925%, 1/19/38 | | | Cayman Islands | | | | 2,000,000 | | | | 1,554,930 | |
| | | | | | | | | | | | | | |
| | | IT Services 0.6% | | | | | | | | | |
| | Apple Inc., 2.65%, 5/11/50 | | | United States | | | | 2,000,000 | | | | 1,322,888 | |
| | Fidelity National Information Services Inc., Sr. Unsecured note,
2.25%, 3/01/31 | | | United States | | | | 4,500,000 | | | | 3,470,912 | |
| | Fiserv Inc., senior bond, 2.65%, 6/01/30 | | | United States | | | | 4,700,000 | | | | 3,815,208 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 8,609,008 | |
| | | | | | | | | | | | | | |
| | | Media 0.6% | | | | | | | | | |
| | Charter Communications Operating LLC/Charter Communications Operating Capital, | | | | | | | | | | | | |
| | senior bond, 2.80%, 4/01/31 | | | United States | | | | 5,000,000 | | | | 3,788,063 | |
| | senior secured note, 3.50%, 3/01/42 | | | United States | | | | 1,500,000 | | | | 955,177 | |
| | Comcast Corp., senior bond, 4.25%, 1/15/33 | | | United States | | | | 4,000,000 | | | | 3,630,837 | |
| | NBCUniversal Media LLC, senior bond, 4.45%, 1/15/43 | | | United States | | | | 1,100,000 | | | | 915,991 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 9,290,068 | |
| | | | | | | | | | | | | | |
| | | Metals & Mining 0.1% | | | | | | | | | |
| a | | Corp. Nacional del Cobre de Chile, Sr. Unsecured , 144A,
4.50%, 8/01/47 . | | | Chile | | | | 1,160,000 | | | | 889,563 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 170 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Oil, Gas & Consumable Fuels 1.3% | | | | | | | | | |
| a | | Aker BP ASA, 144A, 3.10%, 7/15/31 | | | Netherlands | | | | 4,700,000 | | | $ | 3,686,732 | |
| | Canadian Natural Resources Ltd., senior bond, 3.85%, 6/01/27 | | | Canada | | | | 3,000,000 | | | | 2,775,244 | |
| | Cheniere Corpus Christi Holdings LLC, senior secured note, first lien, 5.875%, 3/31/25 | | | United States | | | | 2,200,000 | | | | 2,210,824 | |
| | Equinor ASA, senior note, 2.375%, 5/22/30 | | | Norway | | | | 3,000,000 | | | | 2,495,571 | |
| | Exxon Mobil Corp., senior bond, 2.61%, 10/15/30 | | | United States | | | | 3,000,000 | | | | 2,546,758 | |
| a | | Pertamina Persero PT, senior bond, 144A, 4.70%, 7/30/49 | | | Indonesia | | | | 1,000,000 | | | | 748,987 | |
| | Sabine Pass Liquefaction LLC, first lien, senior secured bond,
4.20%, 3/15/28 | | | United States | | | | 4,000,000 | | | | 3,654,571 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 18,118,687 | |
| | | | | | | | | | | | | | |
| | | Packaging & Containers 0.2% | | | | | | | | | |
| | Amcor Flexibles North America Inc., senior note, 2.63%, 6/19/30 | | | United States | | | | 3,500,000 | | | | 2,817,441 | |
| | | | | | | | | | | | | | |
| | | Paper & Forest Products 0.1% | | | | | | | | | |
| | Suzano Austria GmbH, 3.125%, 1/15/32 | | | Austria | | | | 1,300,000 | | | | 937,521 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 0.6% | | | | | | | | | |
| | AbbVie Inc., 4.75%, 3/15/45 | | | United States | | | | 1,000,000 | | | | 861,505 | |
| | Bristol-Myers Squibb Co., senior bond, 4.125%, 6/15/39 | | | United States | | | | 3,200,000 | | | | 2,805,939 | |
| | Takeda Pharmaceutical Co. Ltd.,
senior note, 2.05%, 3/31/30 | | | Japan | | | | 2,600,000 | | | | 2,059,054 | |
| | senior note, 5.00%, 11/26/28 | | | Japan | | | | 2,500,000 | | | | 2,423,477 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 8,149,975 | |
| | | | | | | | | | | | | | |
| | | Pipelines 0.2% | | | | | | | | | |
| | Energy Transfer LP, senior note, 3.90%, 5/15/24 | | | United States | | | | 2,650,000 | | | | 2,585,571 | |
| | | | | | | | | | | | | | |
| | | Real Estate Management & Development 0.1% | | | | | | | | | |
| | Simon Property Group LP, Sr. Unsecured, 2.20%, 2/01/31 | | | United States | | | | 2,000,000 | | | | 1,530,312 | |
| | | | | | | | | | | | | | |
| | | Road & Rail 0.3% | | | | | | | | | |
| | Burlington Northern Santa Fe LLC,
senior bond, 4.90%, 4/01/44 | | | United States | | | | 1,100,000 | | | | 1,008,292 | |
| | senior bond, 4.15%, 4/01/45 | | | United States | | | | 2,300,000 | | | | 1,895,457 | |
| | CSX Corp., senior bond, 4.25%, 11/01/66 | | | United States | | | | 1,000,000 | | | | 764,132 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 3,667,881 | |
| | | | | | | | | | | | | | |
| | | Software 0.3% | | | | | | | | | |
| | ServiceNow Inc., senior bond, 1.40%, 9/01/30 | | | United States | | | | 6,000,000 | | | | 4,426,353 | |
| | | | | | | | | | | | | | |
| | | Wireless Telecommunication Services 0.6% | | | | | | | | | |
| | T-Mobile USA Inc.,
senior note, 3.75%, 4/15/27 | | | United States | | | | 5,000,000 | | | | 4,620,802 | |
| | senior secured bond, 3.875%, 4/15/30 | | | United States | | | | 1,000,000 | | | | 887,627 | |
| | Vodafone Group PLC,
senior bond, 4.875%, 6/19/49 | | | United Kingdom | | | | 1,000,000 | | | | 788,843 | |
| | senior bond, 6.15%, 2/27/37 | | | United Kingdom | | | | 2,300,000 | | | | 2,177,338 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 8,474,610 | |
| | | | | | | | | | | | | | |
| | Total Corporate Bonds & Notes (Cost $370,905,768) | | | | | | | | | | | 312,626,612 | |
| | | | | | | | | | | | | | |
| | | U.S. Government & Agency Securities 45.1% | | | | | | | | | |
| | Federal Home Loan Mortgage Corp.,
2.00%, 4/01/37 | | | United States | | | | 5,125,278 | | | | 4,527,214 | |
| | 2.00%, 4/01/52 | | | United States | | | | 5,271,984 | | | | 4,283,814 | |
| | 2.50%, 4/01/52 | | | United States | | | | 13,869,912 | | | | 11,681,828 | |
| | 3.50%, 4/01/52 | | | United States | | | | 3,288,003 | | | | 2,967,812 | |
| | Federal National Mortgage Association, | | | | | | | | | | | | |
| | 2.00%, 4/01/37 | | | United States | | | | 5,051,548 | | | | 4,462,202 | |
| | 3.50%, 6/01/49 | | | United States | | | | 658,734 | | | | 603,120 | |
| | U.S. Treasury Bond, | | | | | | | | | | | | |
| | 1.125%, 8/15/40 | | | United States | | | | 3,700,000 | | | | 2,294,144 | |
| | 1.25%, 5/15/50 | | | United States | | | | 21,443,000 | | | | 12,011,849 | |
| | 1.375%, 8/15/50 | | | United States | | | | 41,500,000 | | | | 24,053,789 | |
| | 2.00%, 11/15/41 | | | United States | | | | 40,450,000 | | | | 28,976,263 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | U.S. Government & Agency Securities (continued) | | | | | | | | | |
| | 2.00%, 2/15/50 | | | United States | | | | 11,100,000 | | | $ | 7,632,551 | |
| | 2.25%, 8/15/46 | | | United States | | | | 25,354,000 | | | | 18,279,640 | |
| | 2.25%, 8/15/49 | | | United States | | | | 2,050,000 | | | | 1,500,344 | |
| | 2.75%, 8/15/42 | | | United States | | | | 17,450,000 | | | | 14,191,076 | |
| | 2.75%, 11/15/42 | | | United States | | | | 7,100,000 | | | | 5,758,211 | |
| | 3.00%, 11/15/44 | | | United States | | | | 12,595,000 | | | | 10,532,569 | |
| | 3.00%, 2/15/49 | | | United States | | | | 7,293,000 | | | | 6,227,681 | |
| | U.S. Treasury Note, | | | | | | | | | | | | |
| | 0.25%, 6/30/25 | | | United States | | | | 24,509,000 | | | | 22,002,093 | |
| | 0.375%, 11/30/25 | | | United States | | | | 91,791,000 | | | | 81,398,179 | |
| | 0.375%, 1/31/26 | | | United States | | | | 62,772,000 | | | | 55,303,112 | |
| | 0.50%, 3/31/25 | | | United States | | | | 51,900,000 | | | | 47,356,723 | |
| | 0.875%, 6/30/26 | | | United States | | | | 24,500,000 | | | | 21,695,898 | |
| | 1.25%, 12/31/26 | | | United States | | | | 81,600,000 | | | | 72,496,500 | |
| | 1.25%, 8/15/31 | | | United States | | | | 13,200,000 | | | | 10,670,859 | |
| | 1.50%, 10/31/24 | | | United States | | | | 5,750,000 | | | | 5,438,467 | |
| | 2.125%, 2/29/24 | | | United States | | | | 100,665,000 | | | | 97,668,644 | |
| | 2.125%, 3/31/24 | | | United States | | | | 28,000,000 | | | | 27,117,344 | |
| | 2.75%, 8/15/32 | | | United States | | | | 21,100,000 | | | | 19,296,609 | |
| | 2.875%, 5/15/32 | | | United States | | | | 2,600,000 | | | | 2,404,391 | |
| | 3.25%, 6/30/27 | | | United States | | | | 31,750,000 | | | | 30,605,264 | |
| | | | | | | | | | | | | | |
| | Total U.S. Government & Agency Securities
(Cost $737,733,783) | | | | | | | | | | | 653,438,190 | |
| | | | | | | | | | | | | | |
| | | Municipal Bonds 3.0% | |
| | | Alabama 0.3% | |
| | Southeast Alabama Gas Supply District, Series 2018B, Monthly, VRDN, 2.568%, 6/01/49 | | | United States | | | | 5,000,000 | | | | 4,922,442 | |
| | | | | | | | | | | | | | |
| | | California 2.3% | | | | | | | | | |
| | California Health Facilities Financing Authority, State of California Personal Income Tax Revenue, 2.934%, 6/01/32 | | | United States | | | | 530,000 | | | | 439,392 | |
| | Clovis Unified School District, Refunding, Series 2021B, 3.067%, 8/01/39 | | | United States | | | | 12,580,000 | | | | 9,328,568 | |
| | Contra Costa Community College District, Refunding, 2.926%, 8/01/38 | | | United States | | | | 4,000,000 | | | | 3,045,226 | |
| | Golden State Tobacco Securitization Corp., Subordinate Bond, Refunding, Series 2021, 3.85%, 6/01/50 | | | United States | | | | 7,200,000 | | | | 6,258,060 | |
| | San Bernardino Community College District, | | | | | | | | | | | | |
| | Refunding, 2.686%,8/01/41 | | | United States | | | | 6,140,000 | | | | 4,290,595 | |
| | Refunding, 2.856%,8/01/49 | | | United States | | | | 3,575,000 | | | | 2,316,227 | |
| | State of California, 4.00%, 3/01/46 | | | United States | | | | 2,500,000 | | | | 2,290,457 | |
| | Whittier City School District, Refunding, 3.306%, 8/01/43 | | | United States | | | | 7,500,000 | | | | 5,465,951 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 33,434,476 | |
| | | | | | | | | | | | | | |
| | | Ohio 0.1% | | | | | | | | | |
| | Greenville City School District, Refunding, 3.541%, 1/01/51 | | | United States | | | | 1,295,000 | | | | 960,208 | |
| | | | | | | | | | | | | | |
| | | Texas 0.3% | | | | | | | | | |
| | City of Austin, Electric Utility Revenue, Refunding, 6.262%, 11/15/32 | | | United States | | | | 940,000 | | | | 997,700 | |
| | Texas Water Development Board, Series 2019A, 4.00%, 10/15/44 | | | United States | | | | 3,750,000 | | | | 3,406,721 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 4,404,421 | |
| | | | | | | | | | | | | | |
| | Total Municipals (Cost $55,791,464) | | | | | | | | | | | 43,721,547 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Mortgage-Backed Securities 23.9% | | | | | | | | | |
| | | Fannie Mae 7.3% | | | | | | | | | |
| | Federal Home Loan Mortgage Corp.,
2.00%, 2/1/36 | | | United States | | | | 209,608 | | | $ | 185,169 | |
| | 3.50%, 2/1/47 | | | United States | | | | 1,549,822 | | | | 1,428,192 | |
| | 3.50%, 3/1/48 | | | United States | | | | 1,867,528 | | | | 1,707,669 | |
| | 4.00%, 11/1/45 | | | United States | | | | 2,673,748 | | | | 2,542,788 | |
| | 3.50%, 2/1/47 | | | United States | | | | 2,876,977 | | | | 2,645,542 | |
| | 3.50%, 3/1/48 | | | United States | | | | 3,808,688 | | | | 3,482,680 | |
| | 3.00%, 6/1/37 | | | United States | | | | 4,550,419 | | | | 4,233,184 | |
| | 2.00%, 1/1/37 | | | United States | | | | 2,250,079 | | | | 1,987,585 | |
| | 2.00%, 4/1/37 | | | United States | | | | 5,114,230 | | | | 4,517,475 | |
| | 2.50%, 4/1/37 | | | United States | | | | 5,132,714 | | | | 4,655,261 | |
| | 2.00%, 5/1/37 | | | United States | | | | 5,167,910 | | | | 4,564,867 | |
| | 4.00%, 5/1/50 | | | United States | | | | 6,119,003 | | | | 5,783,064 | |
| | 4.00%, 6/1/48 | | | United States | | | | 5,564,664 | | | | 5,275,528 | |
| | 3.00%, 3/1/50 | | | United States | | | | 15,472,341 | | | | 13,702,011 | |
| | 3.00%, 3/1/50 | | | United States | | | | 6,058,381 | | | | 5,358,343 | |
| | 2.00%, 6/1/37 | | | United States | | | | 7,268,101 | | | | 6,419,956 | |
| | 2.00%, 1/1/52 | | | United States | | | | 18,791,837 | | | | 15,257,840 | |
| | 2.50%, 12/1/51 | | | United States | | | | 3,689,402 | | | | 3,109,833 | |
| | 2.00%, 12/1/51 | | | United States | | | | 5,680,740 | | | | 4,609,755 | |
| | 2.00%, 2/1/52 | | | United States | | | | 584,323 | | | | 474,429 | |
| | 2.50%, 5/1/37 | | | United States | | | | 5,633,733 | | | | 5,109,661 | |
| | 2.00%, 8/1/52 | | | United States | | | | 4,327,168 | | | | 3,513,356 | |
| | 4.50%, 8/1/52 | | | United States | | | | 5,371,843 | | | | 5,136,979 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 105,701,167 | |
| | | | | | | | | | | | | | |
| | | Freddie Mac 12.1% | | | | | | | | | |
| | Federal National Mortgage Association,
2.00%, 10/15/52 | | | United States | | | | 10,035,000 | | | | 8,127,566 | |
| | 2.00%, 7/1/51 | | | United States | | | | 22,648,062 | | | | 18,456,528 | |
| | 2.50%, 7/1/51 | | | United States | | | | 7,529,756 | | | | 6,360,240 | |
| | 2.50%, 12/1/51 | | | United States | | | | 16,645,622 | | | | 14,036,024 | |
| | 2.50%, 2/1/52 | | | United States | | | | 1,682,169 | | | | 1,417,719 | |
| | 5.00%, 10/15/52 | | | United States | | | | 4,340,000 | | | | 4,228,810 | |
| | 2.50%, 8/1/51 | | | United States | | | | 4,704,895 | | | | 3,972,892 | |
| | 3.50%, 6/1/52 | | | United States | | | | 3,582,018 | | | | 3,232,827 | |
| | 4.00%, 6/1/52 | | | United States | | | | 2,090,904 | | | | 1,944,398 | |
| | 4.50%, 7/1/47 | | | United States | | | | 5,676,036 | | | | 5,509,623 | |
| | 4.50%, 12/1/48 | | | United States | | | | 4,187,706 | | | | 4,092,785 | |
| | 4.50%, 5/1/48 | | | United States | | | | 2,886,628 | | | | 2,817,579 | |
| | 3.50%, 8/1/49 | | | United States | | | | 10,866,126 | | | | 9,923,763 | |
| | 4.50%, 2/1/50 | | | United States | | | | 1,727,742 | | | | 1,669,003 | |
| | 3.00%, 9/1/50 | | | United States | | | | 5,191,975 | | | | 4,594,307 | |
| | 4.00%, 2/1/49 | | | United States | | | | 440,172 | | | | 417,195 | |
| | 3.00%, 4/1/50 | | | United States | | | | 6,407,386 | | | | 5,678,146 | |
| | 2.00%, 7/1/36 | | | United States | | | | 9,896,355 | | | | 8,742,300 | |
| | 2.50%, 7/1/36 | | | United States | | | | 6,947,148 | | | | 6,320,686 | |
| | 2.00%, 8/1/51 | | | United States | | | | 14,896,233 | | | | 12,134,752 | |
| | 3.00%, 11/1/51 | | | United States | | | | 5,826,000 | | | | 5,105,190 | |
| | 2.00%, 5/1/36 | | | United States | | | | 11,479,320 | | | | 10,140,836 | |
| | 2.00%, 3/1/52 | | | United States | | | | 8,311,943 | | | | 6,759,775 | |
| | 2.00%, 4/1/37 | | | United States | | | | 4,486,427 | | | | 3,962,929 | |
| | 2.50%, 4/1/37 | | | United States | | | | 653,043 | | | | 593,303 | |
| | 2.00%, 5/1/37 | | | United States | | | | 5,145,553 | | | | 4,545,119 | |
| | 2.00%, 1/1/52 | | | United States | | | | 5,663,775 | | | | 4,593,385 | |
| | 2.00%, 2/1/52 | | | United States | | | | 5,685,116 | | | | 4,619,451 | |
| | 2.00%, 2/1/52 | | | United States | | | | 5,681,052 | | | | 4,607,324 | |
| | 2.00%, 6/1/37 | | | United States | | | | 1,569,519 | | | | 1,386,365 | |
| | 4.00%, 8/1/52 | | | United States | | | | 5,033,508 | | | | 4,677,899 | |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 174,668,719 | |
| | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Mortgage-Backed Securities (continued) | | | | | | | | | |
| | | Ginnie Mae 4.5% | | | | | | | | | |
| | Government National Mortgage Association, | | | | | | | | | | | | |
| | 2.00%, 10/15/52 | | | United States | | | | 4,892,000 | | | $ | 4,075,265 | |
| | 2.50%, 4/20/52 | | | United States | | | | 9,855,836 | | | | 8,488,287 | |
| | 2.00%, 4/20/52 | | | United States | | | | 25,910,820 | | | | 21,650,953 | |
| | 2.00%, 5/20/52 | | | United States | | | | 13,984,629 | | | | 11,688,299 | |
| | 2.00%, 6/20/52 | | | United States | | | | 5,559,593 | | | | 4,647,123 | |
| | 2.50%, 6/20/52 | | | United States | | | | 15,430,463 | | | | 13,311,422 | |
| | 3.00%, 6/20/52 | | | United States | | | | 1,528,176 | | | | 1,354,812 | |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 65,216,161 | |
| | | | | | | | | | | |
| | Total Mortgage-Backed Securities
(Cost $386,348,564) | | | . | | | | | | | | 345,586,047 | |
| | | | | | | | | | | |
| | Foreign Government and Agency Securities 1.6% | | | | | | | | | | | | |
| | | Chile 0.1% | | | |
| | Chile Government International Bond, Sr. Unsecured note, 3.500%, 1/25/50 | | | Chile | | | | 1,100,000 | | | | 751,306 | |
| | | | | | | | | | | |
| | | Panama 0.4% | | | |
| | Panama Notas del Tesoro, senior note, 3.750%, 4/17/26 | | | Panama | | | | 5,950,000 | | | | 5,662,912 | |
| | | | | | | | | | | |
| | | Peru 0.3% | | | |
| | Peruvian Government International Bond, senior bond, 2.783%, 1/23/31 | | | Peru | | | | 5,850,000 | | | | 4,646,587 | |
| | | | | | | | | | | |
| | | Romania 0.1% | | | |
| a | | Romanian Government International Bond, senior bond, 144A,
5.125%, 6/15/48 | | | Romania | | | | 2,270,000 | | | | 1,586,685 | |
| | | | | | | | | | | |
| | | South Korea 0.1% | | | |
| a | | Korea Electric Power Corp., Sr. Unsecured, 144A, 5.375%, 4/06/26 | | | South Korea | | | | 1,600,000 | | | | 1,600,918 | |
| | | | | | | | | | | |
| | | Supranational 0.6% | | | |
| a | | African Export-Import Bank, senior bond, 144A, 3.994%, 9/21/29 | | | Supranational | | | | 6,100,000 | | | | 5,125,830 | |
| a | | Banque Ouest Africaine de Developpement, Sr. Unsecured note, 144A, 5.000%, 7/27/27 | | | Supranational | | | | 3,800,000 | | | | 3,486,690 | |
| | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 8,612,520 | |
| | | | | | | | | | | |
| | Total Foreign Government and Agency Securities
(Cost $28,285,363) | | | | | | | | | | | 22,860,928 | |
| | | | | | | | | | | |
| | | Asset-Backed Securities 3.0% | | | | | | | | | |
| | BANK 2021-BNK33, Series 2021-BN33, Class A5, 2.556%, 5/15/64 | | | United States | | | | 2,780,000 | | | | 2,274,355 | |
| | BANK 2022-BNK40, Series 2022-BN40, Class A4, 3.507%, 3/15/64 | | | United States | | | | 2,800,000 | | | | 2,438,761 | |
| | Benchmark Mortgage Trust,
Series 2021-B31, Class A5, 2.669%,12/15/54 | | | United States | | | | 2,780,000 | | | | 2,267,364 | |
| | Series 2022-B32, Class A5, 3.002%,1/15/55 | | | United States | | | | 5,560,000 | | | | 4,652,983 | |
| a | | BX 2021-LBA3 Mortgage Trust, Series 2021-PAC, Class A, 144A,
3.507%, 10/15/36 | | | United States | | | | 3,090,000 | | | | 2,951,127 | |
| | BX Commercial Mortgage Trust, | | | | | | | | | | | | |
| | a Series 2019-XL, Class A, 144A, 3.738%,10/15/36 | | | United States | | | | 3,792,238 | | | | 3,738,047 | |
| | a Series 2021-VOLT, Class B, 144A, 3.768%,9/15/36 | | | United States | | | | 3,190,000 | | | | 2,997,326 | |
| | a Series 2022-LP2, CLass A, 144A, 3.935%,2/15/39 | | | United States | | | | 2,988,240 | | | | 2,874,564 | |
| a | | BX Trust, Series 2022-IND, Class A, 144A, 4.413%, 4/15/37 | | | United States | | | | 5,110,000 | | | | 4,972,212 | |
| a | | DBCG Mortgage Trust, Series 2017-BBG, Class A, 144A, 3.518%, 6/15/34 | | | United States | | | | 7,190,000 | | | | 7,009,665 | |
| | Discover Card Execution Note Trust, Series 2019-A3, Class A,
1.89%, 10/15/24 | | | United States | | | | 1,610,000 | | | | 1,609,203 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Bond ETF (continued)
Fund (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount* | | | Value | |
| | | Asset-Backed Securities (continued) | | | | | | | | | |
| a | | New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1,
144A, 1.91%, 10/20/61 | | | United States | | | | 6,660,000 | | | $ | 5,646,899 | |
| | | | | | | | | | | | | | |
| | Total Asset-Backed Securities (Cost $47,139,422) | | | | | | | | | | | 43,432,506 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $1,626,204,364) | | | | | | | | | | | 1,421,665,830 | |
| | | | | | | | | | | | | | |
| | Short-Term Investments 2.4% | | | | | | | | | | | | |
| | Money Market Funds 2.4% | | | | | | | | | | | | |
| b,c | | Institutional Fiduciary Trust Portfolio, 2.45% | | | United States | | | | 34,495,264 | | | | 34,495,264 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $34,495,264) | | | | | | | | | | | 34,495,264 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $1,660,699,628) 100.6% | | | | | | | | | | | 1,456,161,094 | |
| | Other Assets, less Liabilities (0.6)% | | | | | | | | | | | (9,094,322 | ) |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 1,447,066,772 | |
| | | | | | | | | | | | | | |
*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 September 30, 2022, the value of was $102,427,013, representing 7.1% of net assets.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee Note 3(d) regarding investments in affiliated management investment companies.
At September 30, 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 Protectiona,b | | | | | | | | | | | | | | | | | | | | | |
Long: s25995201 CDS USD R F 1.00000 Mexico Government International Bond | | | 1 | % | | | Quarterly | | | | 6/20/26 | | | $ | 5,200,000 | | | $ | (99,380 | ) | | $ | 14,678 | | | $ | (114,058 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | $ | (114,058 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
aPerformance 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.
bThe Fund enters contracts to sell protection to create a long credit position.
At September 30, 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) | |
| Interest rate contracts | | | | | | | | | | | | | | | |
U.S. Treasury 5 Yr. Note | | | Long | | | | 80 | | | $ | 8,600,625 | | | | 12/30/22 | | | $ | (73,679 | ) |
*As of period end.
See Note 11 regarding other derivative information.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 175 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Low Volatility ETFa
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 49.07 | | | $ | 43.69 | | | $ | 30.93 | | | $ | 33.61 | | | $ | 30.03 | | | $ | 26.97 | |
| | | | |
| | | | | | |
Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.41 | | | | 0.70 | | | | 0.67 | | | | 0.64 | | | | 0.52 | | | | 0.45 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (7.56 | ) | | | 5.39 | | | | 12.73 | | | | (2.84 | ) | | | 3.88 | | | | 3.06 | |
| | | | |
| | | | | | |
Total from investment operations | | | (7.15 | ) | | | 6.09 | | | | 13.40 | | | | (2.20 | ) | | | 4.40 | | | | 3.51 | |
| | | | |
| | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | (0.39 | ) | | | (0.71 | ) | | | (0.64 | ) | | | (0.48 | ) | | | (0.47 | ) | | | (0.45 | ) |
| | | | | | |
Net realized gains | | | — | | | | — | | | | — | | | | — | | | | (0.35 | ) | | | — | |
| | | | |
| | | | | | |
Total Distributions | | | (0.39 | ) | | | (0.71 | ) | | | (0.64 | ) | | | (0.48 | ) | | | (0.82 | ) | | | (0.45 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 41.53 | | | $ | 49.07 | | | $ | 43.69 | | | $ | 30.93 | | | $ | 33.61 | | | $ | 30.03 | |
| | | | |
| | | | | | |
Total returnd | | | (14.61)% | | | | 13.98% | | | | 43.52% | | | | (6.74)% | | | | 14.98% | | | | 13.08% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.29% | | | | 0.33% | | | | 0.37% | | | | 0.57% | | | | 1.12% | | | | 2.11% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.29% | | | | 0.29% | | | | 0.29% | | | | 0.33% | | | | 0.50% | | | | 0.50% | |
| | | | | | |
Net investment income | | | 1.75% | | | | 1.47% | | | | 1.71% | | | | 1.75% | | | | 1.64% | | | | 1.56% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $118,364 | | | | $134,935 | | | | $139,822 | | | | $74,223 | | | | $13,443 | | | | $6,005 | |
| | | | | | |
Portfolio turnover ratef | | | 13.76% | g | | | 21.90% | g | | | 40.54% | g | | | 32.61% | g | | | 46.90% | | | | 65.68% | |
aEffective August 1, 2022, Formerly, Franklin Liberty U.S. Low Volatility ETF was renamed Franklin U.S. Low Volatility ETF.
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: | | | 13.76% | | | | 21.90% | | | | 40.54% | | | | 32.61% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 176 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Low Volatility ETF
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks 99.0% | | | | | | |
| | | Communication Services 7.0% | | | | | | |
| a | | Alphabet Inc., A | | | 13,024 | | | $ | 1,245,746 | |
| | AT&T Inc. | | | 80,096 | | | | 1,228,673 | |
| | Comcast Corp., A | | | 38,956 | | | | 1,142,580 | |
| a | | Liberty Broadband Corp. | | | 14,823 | | | | 1,093,937 | |
| | TELUS Corp. | | | 61,778 | | | | 1,226,911 | |
| | Verizon Communications Inc. | | | 32,551 | | | | 1,235,961 | |
| a | | Walt Disney Co. | | | 12,297 | | | | 1,159,976 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 8,333,784 | |
| | | | | | | | | | |
| | | Consumer Discretionary 12.0% | | | | | | |
| a | | Amazon.com Inc. | | | 11,109 | | | | 1,255,317 | |
| | Dollar General Corp. | | | 5,622 | | | | 1,348,493 | |
| | McDonald’s Corp. | | | 5,372 | | | | 1,239,535 | |
| | NIKE Inc., B | | | 12,880 | | | | 1,070,586 | |
| a | | NVR Inc. | | | 334 | | | | 1,331,685 | |
| a | | O’Reilly Automotive Inc. | | | 1,987 | | | | 1,397,557 | |
| | Starbucks Corp. | | | 14,986 | | | | 1,262,720 | |
| | Target Corp. | | | 8,380 | | | | 1,243,508 | |
| | The Home Depot Inc. | | | 4,924 | | | | 1,358,729 | |
| | The TJX Cos Inc. | | | 21,210 | | | | 1,317,565 | |
| | Tractor Supply Co. | | | 7,155 | | | | 1,329,971 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 14,155,666 | |
| | | | | | | | | | |
| | | Consumer Staples 6.4% | | | | | | |
| | Coca-Cola Co. | | | 27,279 | | | | 1,528,170 | |
| | Colgate-Palmolive Co. | | | 21,530 | | | | 1,512,483 | |
| | Mondelez International Inc., A | | | 27,103 | | | | 1,486,057 | |
| | PepsiCo Inc. | | | 9,698 | | | | 1,583,295 | |
| | The Procter & Gamble Co. | | | 11,859 | | | | 1,497,199 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 7,607,204 | |
| | | | | | | | | | |
| | | Energy 4.6% | | | | | | |
| | Chevron Corp. | | | 12,467 | | | | 1,791,134 | |
| a | | DTE Midstream LLC | | | 34,819 | | | | 1,806,758 | |
| | Exxon Mobil Corp. | | | 20,988 | | | | 1,832,462 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 5,430,354 | |
| | | | | | | | | | |
| | | Financials 11.2% | | | | | | |
| | Arthur J Gallagher & Co. | | | 8,036 | | | | 1,375,924 | |
| | BlackRock Inc. | | | 2,296 | | | | 1,263,443 | |
| | Intercontinental Exchange Inc. | | | 15,117 | | | | 1,365,821 | |
| | JPMorgan Chase & Co. | | | 12,332 | | | | 1,288,694 | |
| | MetLife Inc. | | | 21,990 | | | | 1,336,552 | |
| | Nasdaq Inc. | | | 23,999 | | | | 1,360,263 | |
| | S&P Global Inc. | | | 4,228 | | | | 1,291,020 | |
| | The Progressive Corp. | | | 11,451 | | | | 1,330,721 | |
| | The Travelers Companies Inc. | | | 8,872 | | | | 1,359,190 | |
| | US Bancorp | | | 31,581 | | | | 1,273,346 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 13,244,974 | |
| | | | | | | | | | |
| | | Health Care 14.5% | | | | | | |
| | Abbott Laboratories | | | 15,722 | | | | 1,521,261 | |
| | AbbVie Inc. | | | 11,471 | | | | 1,539,523 | |
| | Amgen Inc. | | | 7,092 | | | | 1,598,537 | |
| | Becton Dickinson and Co. | | | 6,498 | | | | 1,447,949 | |
| | Bristol-Myers Squibb Co. | | | 23,314 | | | | 1,657,392 | |
| | Danaher Corp. | | | 5,867 | | | | 1,515,387 | |
| | Johnson & Johnson | | | 9,842 | | | | 1,607,789 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 177 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Low Volatility ETF (continued)
| | | | | | | | | | |
| | | |
| | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | |
| | | Health Care (continued) | | | | | | |
| | Medtronic PLC | | | 18,248 | | | $ | 1,473,526 | |
| | Merck & Co. Inc. | | | 18,888 | | | | 1,626,635 | |
| | Quest Diagnostics Inc. | | | 13,030 | | | | 1,598,651 | |
| | UnitedHealth Group Inc. | | | 3,126 | | | | 1,578,755 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 17,165,405 | |
| | | | | | | | | | |
| | | Industrials 10.0% | | | | | | |
| | AMETEK Inc. | | | 9,122 | | | | 1,034,526 | |
| | General Dynamics Corp. | | | 4,803 | | | | 1,019,052 | |
| | Honeywell International Inc. | | | 6,156 | | | | 1,027,867 | |
| | Huntington Ingalls Industries Inc. | | | 4,686 | | | | 1,037,949 | |
| | IDEX Corp. | | | 5,251 | | | | 1,049,412 | |
| | Illinois Tool Works Inc. | | | 5,569 | | | | 1,006,040 | |
| | Lockheed Martin Corp. | | | 2,640 | | | | 1,019,806 | |
| | Republic Services Inc. | | | 7,532 | | | | 1,024,653 | |
| | Roper Technologies Inc. | | | 4,514 | | | | 1,623,415 | |
| | Union Pacific Corp. | | | 5,085 | | | | 990,660 | |
| | Verisk Analytics Inc. | | | 5,968 | | | | 1,017,723 | |
| | | | | | | | | | |
| | | | | | | | | 11,851,103 | |
| | | | | | | | | | |
| | | Information Technology 24.4% | | | | | | |
| | Accenture PLC, A | | | 6,276 | | | | 1,614,815 | |
| | Amphenol Corp., A | | | 23,589 | | | | 1,579,520 | |
| | Analog Devices Inc. | | | 11,536 | | | | 1,607,426 | |
| a | | ANSYS Inc. | | | 7,149 | | | | 1,584,933 | |
| | Apple Inc. | | | 11,172 | | | | 1,543,970 | |
| | Automatic Data Processing Inc. | | | 7,322 | | | | 1,656,163 | |
| a | | Black Knight Inc. | | | 27,379 | | | | 1,772,242 | |
| | Cisco Systems Inc. | | | 39,861 | | | | 1,594,440 | |
| | Fidelity National Information Services Inc. | | | 20,949 | | | | 1,583,116 | |
| | International Business Machines Corp. | | | 13,512 | | | | 1,605,361 | |
| | Intuit Inc. | | | 4,074 | | | | 1,577,942 | |
| a | | Keysight Technologies Inc. | | | 10,400 | | | | 1,636,544 | |
| | Mastercard Inc., A | | | 5,496 | | | | 1,562,733 | |
| | Microsoft Corp. | | | 7,059 | | | | 1,644,041 | |
| | Oracle Corp. | | | 24,989 | | | | 1,526,078 | |
| a | | Synopsys Inc. | | | 5,439 | | | | 1,661,669 | |
| | Texas Instruments Inc. | | | 10,381 | | | | 1,606,771 | |
| | Visa Inc., A | | | 8,937 | | | | 1,587,658 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 28,945,422 | |
| | | | | | | | | | |
| | | Materials 2.7% | | | | | | |
| | Air Products and Chemicals Inc. | | | 4,614 | | | | 1,073,816 | |
| | Ecolab Inc. | | | 7,200 | | | | 1,039,824 | |
| | Linde PLC | | | 4,036 | | | | 1,088,065 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 3,201,705 | |
| | | | | | | | | | |
| | | Real Estate 3.2% | | | | | | |
| | Crown Castle Inc. | | | 8,371 | | | | 1,210,028 | |
| | Equinix Inc. | | | 2,185 | | | | 1,242,916 | |
| | Public Storage | | | 4,378 | | | | 1,281,922 | |
| | | | | | | | | | |
| | | |
| | | | | | | | | 3,734,866 | |
| | | | | | | | | | |
| | | Utilities 3.0% | | | | | | |
| | American Electric Power Co. Inc. | | | 10,116 | | | | 874,528 | |
| | Dominion Energy Inc. | | | 12,599 | | | | 870,717 | |
| | Duke Energy Corp. | | | 9,576 | | | | 890,759 | |
| | | | | | | | | | |
| | | | | | |
| 178 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Low Volatility ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | | |
| | Utilities (continued) | | | | | | | | | | | | |
| | | | |
| | NextEra Energy Inc. | | | | | | | 11,778 | | | $ | 923,513 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,559,517 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $119,637,812) | | | | | | | | | | | 117,230,000 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments (Cost $119,637,812) | | | | | | | | | | | 117,230,000 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | Country | | | Principal
Amount* | | | | |
| | Short-Term Investments 0.9% | | | | | | | | | | | | |
| | U.S. Government & Agency Securities 0.9% | | | | | | | | | | | | |
| b | | Federal Home Loan Bank Discount Notes, 10/03/22 | | | United States | | | $ | 1,065,000 | | | | 1,065,000 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $1,064,846) | | | | | | | | | | | 1,065,000 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $120,702,658) 99.9% | | | | | | | | | | | 118,295,000 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 69,471 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 118,364,471 | |
| | | | | | | | | | | | | | |
*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.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 179 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Treasury Bond ETFa
| | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021b | |
| | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | |
| | | |
Net asset value, beginning of period | | $ | 22.67 | | | $ | 23.83 | | | $ | 25.00 | |
| | | | | | | | | | | | |
| | | |
| Income from investment operationsc: | | | | | | | | | | | | |
| | | |
Net investment incomed | | | 0.15 | | | | 0.18 | | | | 0.11 | |
| | | |
Net realized and unrealized gains (losses) | | | (1.78 | ) | | | (0.96 | ) | | | (0.94 | ) |
| | | | | | | | | | | | |
| | | |
Total from investment operations | | | (1.63 | ) | | | (0.78 | ) | | | (0.83 | ) |
| | | | | | | | | | | | |
| | | |
Less distributions from net investment income | | | (0.23 | ) | | | (0.38 | ) | | | (0.34 | ) |
| | | | | | | | | | | | |
| | | |
Net asset value, end of period | | $ | 20.81 | | | $ | 22.67 | | | $ | 23.83 | |
| | | | | | | | | | | | |
| | | |
Total returne | | | (7.22)% | | | | (3.35)% | | | | (3.36)% | |
| | | |
| Ratios to average net assetsf | | | | | | | | | | | | |
| | | |
Expenses before waiver and payments by affiliates | | | 0.09% | | | | 0.28% | | | | 0.50% | |
| | | |
Expenses net of waiver and payments by affiliates | | | 0.08% | | | | 0.09% | | | | 0.09% | |
| | | |
Net investment income | | | 1.39% | | | | 0.77% | | | | 0.54% | |
| | | |
| Supplemental data | | | | | | | | | | | | |
| | | |
Net assets, end of period (000’s) | | | $363,055 | | | | $403,543 | | | | $418,199 | |
| | | |
Portfolio turnover rateg | | | 79.34% | h | | | 13.86% | h | | | 102.09% | h |
aEffective August 1, 2022, Formerly, Franklin Liberty U.S. Treasury Bond ETF was renamed Franklin U.S. Treasury Bond ETF.
bFor the period June 9, 2020 (commencement of operations) to March 31, 2021.
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: | | | 79.34% | | | | 13.86% | | | | 102.09% | |
| | | | | | | | | | |
| | | | | | |
| 180 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Treasury Bond ETF
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount | | | Value | |
| | | U.S. Government & Agency Securities 91.7% | |
| | U.S. Treasury Bond, | | | | | | | | | | | | |
| | 1.375%, 11/15/40 | | | United States | | | | 3,795,000 | | | $ | 2,455,558 | |
| | 1.875%, 11/15/51 | | | United States | | | | 6,712,000 | | | | 4,441,718 | |
| | 2.00%, 8/15/51 | | | United States | | | | 26,448,000 | | | | 18,077,621 | |
| | 2.375%, 2/15/42 | | | United States | | | | 24,716,000 | | | | 18,950,220 | |
| | 2.875%, 5/15/49 | | | United States | | | | 4,980,000 | | | | 4,154,507 | |
| | 3.00%, 5/15/42 | | | United States | | | | 17,320,000 | | | | 14,748,386 | |
| | U.S. Treasury Note, | | | | | | | | | | | | |
| | 0.25%, 7/31/25 | | | United States | | | | 15,300,000 | | | | 13,678,260 | |
| | 0.375%, 1/31/26 | | | United States | | | | 15,900,000 | | | | 14,008,148 | |
| | 0.375%, 9/30/27 | | | United States | | | | 11,640,000 | | | | 9,713,489 | |
| | 0.50%, 6/30/27 | | | United States | | | | 14,175,000 | | | | 12,003,899 | |
| | 0.50%, 1/15/28 | | | United States | | | | 5,885,537 | | | | 5,464,936 | |
| | 0.625%, 12/31/27 | | | United States | | | | 8,100,000 | | | | 6,796,090 | |
| | 0.625%, 8/15/30 | | | United States | | | | 5,450,000 | | | | 4,271,650 | |
| | 0.75%, 8/31/26 | | | United States | | | | 1,795,000 | | | | 1,574,622 | |
| | 0.75%, 1/31/28 | | | United States | | | | 10,000,000 | | | | 8,420,703 | |
| | 1.125%, 2/29/28 | | | United States | | | | 5,367,000 | | | | 4,607,444 | |
| | 1.125%, 2/15/31 | | | United States | | | | 8,210,000 | | | | 6,650,421 | |
| | 1.25%, 8/31/24 | | | United States | | | | 2,670,000 | | | | 2,524,089 | |
| | 1.25%, 4/30/28 | | | United States | | | | 18,200,000 | | | | 15,662,664 | |
| | 1.25%, 8/15/31 | | | United States | | | | 13,400,000 | | | | 10,832,539 | |
| | 1.375%, 12/31/28 | | | United States | | | | 16,000,000 | | | | 13,698,125 | |
| | 1.375%, 11/15/31 | | | United States | | | | 8,130,000 | | | | 6,607,689 | |
| | 1.50%, 9/30/24 | | | United States | | | | 12,610,000 | | | | 11,956,595 | |
| | 1.50%, 11/30/24 | | | United States | | | | 14,631,000 | | | | 13,805,149 | |
| | 1.625%, 8/15/29 | | | United States | | | | 2,600,000 | | | | 2,242,805 | |
| | 1.75%, 7/31/24 | | | United States | | | | 7,080,000 | | | | 6,767,761 | |
| | 1.875%, 7/31/26 | | | United States | | | | 6,500,000 | | | | 5,976,191 | |
| | 1.875%, 2/15/32 | | | United States | | | | 8,500,000 | | | | 7,204,414 | |
| | 2.125%, 9/30/24 | | | United States | | | | 9,390,000 | | | | 9,013,666 | |
| | 2.125%, 11/30/24 | | | United States | | | | 12,920,000 | | | | 12,352,731 | |
| | 2.25%, 10/31/24 | | | United States | | | | 10,600,000 | | | | 10,180,555 | |
| | 2.375%, 2/29/24 | | | United States | | | | 43,189,000 | | | | 42,055,289 | |
| | 2.375%, 5/15/27 | | | United States | | | | 11,000,000 | | | | 10,198,203 | |
| | 2.875%, 8/15/28 | | | United States | | | | 1,764,000 | | | | 1,655,404 | |
| | | | | | | | | | | | | | |
| | Total U.S. Government & Agency Securities
(Cost $355,824,311) | | | | | | | | | | | 332,751,541 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $355,824,311) | | | | | | | | | | | 332,751,541 | |
| | | | | | | | | | | | | | |
| | Short-Term Investments 0.5% | | | | | | | | | | | | |
| | Money Market Funds 0.5% | | | | | | | | | | | | |
| | | United States 0.5% | | | | | | | | | |
| | a,b Institutional Fiduciary Trust Portfolio, 2.45% | | | United States | | | | 1,813,760 | | | | 1,813,760 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $1,813,760) | | | | | | | | | | | 1,813,760 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $357,638,071) 92.2% | | | | | | | | | | | 334,565,301 | |
| | Other Assets, less Liabilities 7.8% | | | | | | | | | | | 28,489,405 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 363,054,706 | |
| | | | | | | | | | | | | | |
aThe rate shown is the annualized seven-day effective yield at period end.
bSee Note 3(d) regarding investments in affiliated management investment companies.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 181 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Ultra Short Bond ETFa
| | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021b | |
| | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | |
| | | |
Net asset value, beginning of period | | $ | 24.55 | | | $ | 24.88 | | | $ | 25.00 | |
| | | | |
| | | |
| Income from investment operationsc: | | | | | | | | | | | | |
| | | |
Net investment incomed | | | 0.15 | | | | 0.14 | | | | 0.10 | |
| | | |
Net realized and unrealized gains (losses) | | | (0.17 | ) | | | (0.33 | ) | | | 0.13 | |
| | | | |
| | | |
Total from investment operations | | | (0.02 | ) | | | (0.19 | ) | | | 0.23 | |
| | | | |
| | | |
| Less distributions from: | | | | | | | | | | | | |
| | | |
Net investment income | | | (0.14 | ) | | | (0.14 | ) | | | (0.33 | ) |
| | | |
Net realized gains | | | — | | | | — | | | | (0.02 | ) |
| | | | |
| | | |
Total Distributions | | | (0.14 | ) | | | (0.14 | ) | | | (0.35 | ) |
| | | | |
| | | |
Net asset value, end of period | | $ | 24.39 | | | $ | 24.55 | | | $ | 24.88 | |
| | | | |
| | | |
Total returne | | | (0.08)% | | | | (0.78)% | | | | 0.91% | |
| | | |
| Ratios to average net assetsf | | | | | | | | | | | | |
| | | |
Expenses before waiver and payments by affiliates | | | 0.15% | | | | 1.71% | | | | 4.17% | |
| | | |
Expenses net of waiver and payments by affiliates | | | 0.13% | | | | 0.15% | | | | 0.15% | |
| | | |
Net investment income | | | 1.23% | | | | 0.55% | | | | 0.58% | |
| | | |
| Supplemental data | | | | | | | | | | | | |
| | | |
Net assets, end of period (000’s) | | | $2,439 | | | | $3,682 | | | | $2,488 | |
| | | |
Portfolio turnover rateg | | | 11.61% | h | | | 24.71% | h | | | 10.49% | h |
aEffective August 1, 2022, Formerly, Franklin Liberty Ultra Short Bond ETF was renamed Franklin Ultra Short Bond ETF.
bFor the period July 14, 2020 (commencement of operations) to March 31, 2021.
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: | | | 11.61% | | | | 24.17% | | | | 10.49% | |
| | | | | | | | | | |
| | | | | | |
| 182 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Ultra Short Bond ETF
| | | | | | | | | | | | | | |
| | | |
| | | Country | | | Principal Amount | | | Value | |
| | | Corporate Bonds & Notes 77.8% | | | | | | | | | |
| | | Aerospace & Defense 4.1% | | | | | | | | | |
| | Boeing Co., 1.167%, 2/04/23 | | | United States | | | | 100,000 | | | $ | 98,781 | |
| | | | | | | | | | | | | | |
| | | Auto Manufacturers 8.0% | | | | | | | | | |
| | General Motors Financial Co. Inc., 1.70%, 8/18/23 | | | United States | | | | 100,000 | | | | 97,063 | |
| a | | Hyundai Capital America, 144A, 2.375%, 2/10/23 | | | United States | | | | 100,000 | | | | 99,140 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 196,203 | |
| | | | | | | | | | | | | | |
| | | Banks 24.4% | | | | | | | | | |
| | Bank of Montreal, 3.547%, 3/10/23 | | | Canada | | | | 50,000 | | | | 49,999 | |
| | Canadian Imperial Bank of Commerce, 3.75%, 3/17/23 | | | Canada | | | | 50,000 | | | | 50,000 | |
| | Goldman Sachs Group Inc., | | | | | | | | | | | | |
| | 3.708% to 11/23/22, FRN thereafter, 2/23/23 | | | United States | | | | 50,000 | | | | 49,984 | |
| | senior unsecured note, 3.23% to 11/17/22, FRN thereafter, 11/17/23 | | | United States | | | | 100,000 | | | | 99,752 | |
| | Morgan Stanley, 0.731% to 4/05/23, FRN thereafter, 4/05/24 | | | United States | | | | 100,000 | | | | 97,606 | |
| | Sumitomo Mitsui Financial Group Inc., senior note, 3.478% to 10/18/22, FRN thereafter, 1/17/23 | | | Japan | | | | 50,000 | | | | 50,031 | |
| | Toronto-Dominion Bank, Sr. Unsecured, MTN, 4.285%, 9/13/24 | | | Canada | | | | 100,000 | | | | 98,571 | |
| | Westpac Banking Corp., 3.78% to 5/28/19, FRN thereafter, 2/26/24 | | | Australia | | | | 100,000 | | | | 100,277 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 596,220 | |
| | | | | | | | | | | | | | |
| | | Biotechnology 2.0% | | | | | | | | | |
| | Royalty Pharma PLC, 0.75%, 9/02/23 | | | United States | | | | 50,000 | | | | 47,904 | |
| | | | | | | | | | | | | | |
| | | Chemicals 1.1% | | | | | | | | | |
| | LYB International Finance B.V., 4.00%, 7/15/23 | | | Netherlands | | | | 28,000 | | | | 27,844 | |
| | | | | | | | | | | | | | |
| | | Diversified Financial Services 2.0% | | | | | | | | | |
| | Capital One Financial Corp., 2.60%, 5/11/23 | | | United States | | | | 50,000 | | | | 49,437 | |
| | | | | | | | | | | | | | |
| | | Electric Utilities 2.0% | | | | | | | | | |
| a | | Vistra Operations Co. LLC, senior secured note, first lien, 144A,
3.55%, 7/15/24 | | | United States | | | | 50,000 | | | | 47,681 | |
| | | | | | | | | | | | | | |
| | | Entertainment 2.0% | | | | | | | | | |
| a | | Warnermedia Holdings Inc., 144A, 3.428%, 3/15/24 | | | United States | | | | 50,000 | | | | 48,337 | |
| | | | | | | | | | | | | | |
| | | Healthcare-Products 3.9% | | | | | | | | | |
| | Thermo Fisher Scientific Inc., 0.797%, 10/18/23 | | | United States | | | | 100,000 | | | | 96,257 | |
| | | | | | | | | | | | | | |
| | | Insurance 3.9% | | | | | | | | | |
| a | | Brighthouse Financial Global Funding, secured note, Secured, 144A,
1.20%, 12/15/23 | | | United States | | | | 100,000 | | | | 95,441 | |
| | | | | | | | | | | | | | |
| | | Internet 4.1% | | | | | | | | | |
| | eBay Inc., senior note, 3.676%, 1/30/23 | | | United States | | | | 100,000 | | | | 100,075 | |
| | | | | | | | | | | | | | |
| | | Miscellaneous Manufacturing 6.1% | | | | | | | | | |
| | General Electric Co., 4.293% to 9/16/18, FRN thereafter, 3/15/23 | | | United States | | | | 50,000 | | | | 49,883 | |
| | Parker-Hannifin Corp., Sr. Unsecured, 3.65%, 6/15/24 | | | United States | | | | 100,000 | | | | 97,879 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 147,762 | |
| | | | | | | | | | | | | | |
| | | Oil & Gas Services 2.0% | | | | | | | | | |
| a | | Schlumberger Finance Canada Ltd., senior note, 144A, 2.65%, 11/20/22 | | | Canada | | | | 50,000 | | | | 49,967 | |
| | | | | | | | | | | | | | |
| | | Pharmaceuticals 2.0% | | | | | | | | | |
| | AbbVie Inc., 3.634%, 11/21/22 | | | United States | | | | 50,000 | | | | 49,978 | |
| | | | | | | | | | | | | | |
| | | Pipelines 4.1% | | | | | | | | | |
| | Energy Transfer LP, 3.60%, 2/01/23 | | | United States | | | | 50,000 | | | | 49,797 | |
| a | | Kinder Morgan Inc., 144A, 5.625%, 11/15/23 | | | United States | | | | 50,000 | | | | 50,039 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 99,836 | |
| | | | | | | | | | | | | | |
| | | Retail 2.0% | | | | | | | | | |
| | Walgreens Boots Alliance Inc., Sr. Unsecured, 0.95%, 11/17/23 | | | United States | | | | 50,000 | | | | 47,895 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 183 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Ultra Short Bond ETF (continued)
| | | | | | | | | | | | | | |
| | | | | Country | | | Principal Amount | | | Value | |
| | | Corporate Bonds & Notes (continued) | | | | | | | | | |
| | | Transportation 4.1% | | | | | | | | | |
| a | | Penske Truck Leasing Co. LP / PTL Finance Corp., senior note, 144A,
2.70%, 3/14/23 | | | United States | | | | 100,000 | | | $ | 98,964 | |
| | | | | | | | | | | | | | |
| | Total Corporate Bonds & Notes (Cost $1,935,909) | | | | | | | | | | | 1,898,582 | |
| | | | | | | | | | | | | | |
| | Asset-Backed Securities 8.2% | | | | | | | | | | | | |
| | Citibank Credit Card Issuance Trust, Series 2017-A5, A5, 3.672%, 4/22/26 | | | United States | | | | 100,000 | | | | 100,033 | |
| | Discover Card Execution Note Trust, Series 2017-A5, A5,
3.418%, 12/15/26 | | | United States | | | | 100,000 | | | | 100,008 | |
| | | | | | | | | | | | | | |
| | Total Asset-Backed Securities (Cost $200,922) | | | | | | | | | | | 200,041 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $2,136,831) | | | | | | | | | | | 2,098,623 | |
| | | | | | | | | | | | | | |
| | Short-Term Investments 13.6% | | | | | | | | | | | | |
| | | Money Market Funds 13.6% | | | | | | | | | |
| | | United States 13.6% | | | | | | | | | |
| b,c | | Institutional Fiduciary Trust Portfolio, 2.45% | | | United States | | | | 331,066 | | | | 331,066 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $331,066) | | | | | | | | | | | 331,066 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $2,467,897) 99.6% | | | | | | | | | | | 2,429,689 | |
| | Other Assets, less Liabilities 0.4% | | | | | | | | | | | 9,460 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 2,439,149 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $489,569, representing 20.1% of net assets.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee Note 3(d) regarding investments in affiliated management investment companies.
See Abbreviations on page 223.
| | | | | | | | | | |
| | | | | | |
| 184 | | | | | | | | Semiannual 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
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Disruptive
Commerce
ETF | | | Franklin
Exponential
Data ETF | | | Franklin
Genomic
Advancements
ETF | | | Franklin
Intelligent
Machines
ETF | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 11,578,381 | | | $ | 2,856,409 | | | $ | 13,919,783 | | | $ | 7,706,465 | |
Cost – Non-controlled affiliates (Note 3d) | | | — | | | | 2,910 | | | | — | | | | — | |
Value – Unaffiliated issuers | | $ | 8,006,231 | | | $ | 2,364,367 | | | $ | 10,280,777 | | | $ | 6,762,440 | |
Value – Non-controlled affiliates (Note 3d) | | | — | | | | 2,910 | | | | — | | | | — | |
Cash | | | 181,777 | | | | 778 | | | | 108,586 | | | | 2,202 | |
Foreign currency, at value (cost $1,038) | | | — | | | | 1,021 | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends | | | 2,465 | | | | 164 | | | | 4,152 | | | | 2,728 | |
Other assets | | | — | | | | 14 | | | | 13 | | | | 14 | |
| | | | |
Total assets | | | 8,190,473 | | | | 2,369,254 | | | | 10,393,528 | | | | 6,767,384 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Management fees | | | 3,654 | | | | 1,020 | | | | 4,525 | | | | 3,008 | |
| | | | |
Total liabilities | | | 3,654 | | | | 1,020 | | | | 4,525 | | | | 3,008 | |
| | | | |
Net assets, at value | | $ | 8,186,819 | | | $ | 2,368,234 | | | $ | 10,389,003 | | | $ | 6,764,376 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 22,723,882 | | | $ | 3,779,731 | | | $ | 22,092,685 | | | $ | 8,209,903 | |
Total distributable earnings (loss) | | | (14,537,063 | ) | | | (1,411,497 | ) | | | (11,703,682 | ) | | | (1,445,527 | ) |
| | | | |
Net assets, at value | | $ | 8,186,819 | | | $ | 2,368,234 | | | $ | 10,389,003 | | | $ | 6,764,376 | |
| | | | |
Shares outstanding | | | 400,000 | | | | 150,000 | | | | 350,000 | | | | 200,000 | |
| | | | |
Net asset value per share | | $ | 20.47 | | | $ | 15.79 | | | $ | 29.68 | | | $ | 33.82 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 185 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Dynamic
Municipal
Bond ETF | | | Franklin
High Yield
Corporate
ETF | | | Franklin
International
Aggregate
Bond ETF | | | Franklin
Municipal
Green Bond
ETF | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 99,729,625 | | | $ | 206,380,261 | | | $ | 199,390,921 | | | $ | 112,966,243 | |
Cost – Non-controlled affiliates (Note 3d) | | | — | | | | 10,323,509 | | | | 17,182,518 | | | | — | |
Value – Unaffiliated issuers | | $ | 89,691,214 | | | $ | 174,479,074 | | | $ | 153,912,242 | | | $ | 98,178,941 | |
Value – Non-controlled affiliates (Note 3d) | | | — | | | | 10,325,000 | | | | 17,185,000 | | | | — | |
Cash | | | 1,373,908 | | | | 71,696 | | | | 113,157 | | | | 319,945 | |
Foreign currency, at value (cost $5,973,200) | | | — | | | | — | | | | 6,295,073 | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 1,007,494 | | | | 3,061,220 | | | | 919,682 | | | | 1,230,735 | |
Investment securities sold | | | — | | | | 34,798,623 | | | | — | | | | — | |
Unrealized appreciation on OTC forward exchange contracts | | | — | | | | — | | | | 10,717,565 | | | | — | |
Other assets | | | — | | | | 14 | | | | 14 | | | | — | |
| | | | |
Total assets | | | 92,072,616 | | | | 222,735,627 | | | | 189,142,733 | | | | 99,729,621 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Investment securities purchased | | | 796,191 | | | | 932,142 | | | | — | | | | — | |
Capital shares redeemed | | | 2,280,356 | | | | 34,446,976 | | | | — | | | | — | |
Management fees | | | 15,873 | | | | 75,172 | | | | 39,018 | | | | 21,242 | |
Transfer agent fees | | | 6,017 | | | | — | | | | — | | | | 6,017 | |
Trustees’ fees and expenses | | | — | | | | — | | | | — | | | | 572 | |
Custodian fees | | | 684 | | | | — | | | | — | | | | 907 | |
Professional fees | | | 18,766 | | | | — | | | | — | | | | 38,059 | |
Reports to shareholders | | | 3,699 | | | | — | | | | — | | | | 3,533 | |
Registration and filing fees | | | 4,812 | | | | — | | | | — | | | | 2,372 | |
Unrealized depreciation on OTC forward exchange contracts | | | — | | | | — | | | | 19,172 | | | | — | |
Accrued expenses and other liabilities | | | 12,346 | | | | — | | | | — | | | | 12,709 | |
| | | | |
Total liabilities | | | 3,138,744 | | | | 35,454,290 | | | | 58,190 | | | | 85,411 | |
| | | | |
Net assets, at value | | $ | 88,933,872 | | | $ | 187,281,337 | | | $ | 189,084,543 | | | $ | 99,644,210 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 99,965,676 | | | $ | 238,796,013 | | | $ | 212,912,068 | | | $ | 118,798,722 | |
Total distributable earnings (loss) | | | (11,031,804 | ) | | | (51,514,676 | ) | | | (23,827,525 | ) | | | (19,154,512 | ) |
| | | | |
Net assets, at value | | $ | 88,933,872 | | | $ | 187,281,337 | | | $ | 189,084,543 | | | $ | 99,644,210 | |
| | | | |
Shares outstanding | | | 3,900,000 | | | | 8,700,000 | | | | 8,450,000 | | | | 4,450,000 | |
| | | | |
Net asset value per share | | $ | 22.80 | | | $ | 21.53 | | | $ | 22.38 | | | $ | 22.39 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 186 | | | | | | | | Semiannual 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)
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Investment
Grade Corporate
ETF | | | Franklin
Senior Loan
ETF | | | Franklin
Systematic Style
Premia ETF* | | | Franklin
U.S. Core
Bond ETF | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 669,202,692 | | | $ | 218,078,874 | | | $ | 54,263,616 | | | $ | 1,626,204,364 | |
Cost – Non-controlled affiliates (Note 3d) | | | 24,426,471 | | | | 16,037,683 | | | | — | | | | 34,495,264 | |
Value – Unaffiliated issuers | | $ | 548,026,737 | | | $ | 201,079,969 | | | $ | 51,456,424 | | | $ | 1,421,665,830 | |
Value – Non-controlled affiliates (Note 3d) | | | 24,430,000 | | | | 16,040,000 | | | | — | | | | 34,495,264 | |
Cash | | | 225,820 | | | | 748,353 | | | | 39,922,717 | | | | 4,479,649 | |
Foreign currency, at value (cost $181,163) | | | — | | | | — | | | | 180,439 | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 5,692,385 | | | | 1,352,425 | | | | 124,906 | | | | 8,412,824 | |
Investment securities sold | | | — | | | | 1,431,928 | | | | — | | | | 21,471,948 | |
Variation margin on futures contracts | | | 45,808 | | | | — | | | | — | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | | | | | |
Futures contracts | | | 358,499 | | | | — | | | | 5,090,986 | | | | 120,001 | |
OTC swap contracts premiums paid | | | — | | | | — | | | | — | | | | 14,678 | |
Unrealized appreciation on OTC forward exchange contracts | | | — | | | | — | | | | 728,444 | | | | — | |
Unrealized appreciation on OTC swap contracts | | | — | | | | — | | | | 4,311,435 | | | | — | |
Other assets | | | 14 | | | | 15 | | | | 14 | | | | 11 | |
| | | | |
Total assets | | | 578,779,263 | | | | 220,652,690 | | | | 101,815,365 | | | | 1,490,660,205 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Investment securities purchased | | | — | | | | 1,944,930 | | | | 4 | | | | 43,193,504 | |
Management fees | | | 171,796 | | | | 82,544 | | | | 53,036 | | | | 173,753 | |
Transfer agent fees | | | — | | | | — | | | | 3,136 | | | | — | |
Custodian fees | | | — | | | | — | | | | 482 | | | | — | |
Professional fees | | | — | | | | — | | | | 333 | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | 385,336 | | | | 112,118 | |
Unrealized depreciation on OTC forward exchange contracts | | | — | | | | — | | | | 385,207 | | | | — | |
Unrealized depreciation on OTC swap contracts | | | — | | | | — | | | | — | | | | 114,058 | |
Accrued expenses and other liabilities | | | — | | | | — | | | | 770 | | | | — | |
| | | | |
Total liabilities | | | 171,796 | | | | 2,027,474 | | | | 828,304 | | | | 43,593,433 | |
| | | | |
Net assets, at value | | $ | 578,607,467 | | | $ | 218,625,216 | | | $ | 100,987,061 | | | $ | 1,447,066,772 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 777,549,570 | | | $ | 239,375,597 | | | $ | 110,452,967 | | | $ | 1,741,551,896 | |
Total distributable earnings (loss) | | | (198,942,103 | ) | | | (20,750,381 | ) | | | (9,465,906 | ) | | | (294,485,124 | ) |
| | | | |
Net assets, at value | | $ | 578,607,467 | | | $ | 218,625,216 | | | $ | 100,987,061 | | | $ | 1,447,066,772 | |
| | | | |
Shares outstanding | | | 28,350,000 | | | | 9,450,000 | | | | 4,700,000 | | | | 69,000,000 | |
| | | | |
Net asset value per share | | $ | 20.41 | | | $ | 23.13 | | | $ | 21.49 | | | $ | 20.97 | |
| | | | |
*Consolidated financial statements. See Notes 13.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 187 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
| | | | | | | | | | | | |
| | | |
| | | Franklin
U.S. Low
Volatility ETF | | | Franklin U.S.
Treasury
Bond ETF | | | Franklin
Ultra Short
Bond ETF | |
Assets: | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 119,637,812 | | | $ | 355,824,311 | | | $ | 2,136,831 | |
Cost – Non-controlled affiliates (Note 3d) | | | 1,064,846 | | | | 1,813,760 | | | | 331,066 | |
Value – Unaffiliated issuers | | $ | 117,230,000 | | | $ | 332,751,541 | | | $ | 2,098,623 | |
Value – Non-controlled affiliates (Note 3d) | | | 1,065,000 | | | | 1,813,760 | | | | 331,066 | |
Cash | | | 14,016 | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | |
Capital shares sold | | | — | | | | 20,807,270 | | | | — | |
Dividends and interest | | | 115,921 | | | | 1,289,294 | | | | 9,673 | |
Investment securities sold | | | 2,077,698 | | | | 99,315,444 | | | | — | |
Other assets | | | 252 | | | | 14 | | | | 14 | |
| | | | |
Total assets | | | 120,502,887 | | | | 455,977,323 | | | | 2,439,376 | |
| | | | |
Liabilities: | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | |
Investment securities purchased | | | — | | | | 92,897,224 | | | | — | |
Capital shares redeemed | | | 2,107,774 | | | | — | | | | — | |
Management fees | | | 30,642 | | | | 24,815 | | | | 214 | |
Funds advanced by custodian | | | — | | | | 578 | | | | 13 | |
| | | | |
Total liabilities | | | 2,138,416 | | | | 92,922,617 | | | | 227 | |
| | | | |
Net assets, at value | | $ | 118,364,471 | | | $ | 363,054,706 | | | $ | 2,439,149 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 122,090,732 | | | $ | 436,981,125 | | | $ | 2,518,804 | |
Total distributable earnings (loss) | | | (3,726,261 | ) | | | (73,926,419 | ) | | | (79,655 | ) |
| | | | |
Net assets, at value | | $ | 118,364,471 | | | $ | 363,054,706 | | | $ | 2,439,149 | |
| | | | |
Shares outstanding | | | 2,850,000 | | | | 17,450,000 | | | | 100,000 | |
| | | | |
Net asset value per share | | $ | 41.53 | | | $ | 20.81 | | | $ | 24.39 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 188 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Disruptive
Commerce
ETF | | | Franklin
Dynamic
Municipal
Bond ETF | | | Franklin
Exponential
Data ETF | | | Franklin
Genomic
Advancements
ETF | |
Investment income: | |
Dividends: (net of foreign taxes)a | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | $ | 34,106 | | | $ | — | | | $ | 4,686 | | | $ | 23,940 | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | — | | | | 1,322,625 | | | | — | | | | — | |
| | | | |
Total investment income | | | 34,106 | | | | 1,322,625 | | | | 4,686 | | | | 23,940 | |
| | | | |
Expenses: | |
Management fees (Note 3a) | | | 30,892 | | | | 273,783 | | | | 6,777 | | | | 30,771 | |
Transfer agent fees | | | — | | | | 6,017 | | | | — | | | | — | |
Custodian fees | | | — | | | | 764 | | | | — | | | | — | |
Reports to shareholders | | | — | | | | 2,298 | | | | — | | | | — | |
Registration and filing fees | | | — | | | | 5,606 | | | | — | | | | — | |
Professional fees | | | — | | | | 16,980 | | | | — | | | | — | |
Trustee fees (Note 3a) | | | — | | | | 1,417 | | | | — | | | | — | |
Other | | | — | | | | 6,388 | | | | — | | | | — | |
| | | | |
Total expenses | | | 30,892 | | | | 313,253 | | | | 6,777 | | | | 30,771 | |
Expenses waived/paid by affiliates (Note 3c) | | | — | | | | (181,838 | ) | | | (76 | ) | | | — | |
| | | | |
Net expenses | | | 30,892 | | | | 131,415 | | | | 6,701 | | | | 30,771 | |
| | | | |
Net investment income | | | 3,214 | | | | 1,191,210 | | | | (2,015 | ) | | | (6,831 | ) |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (3,054,089 | ) | | | (845,370 | ) | | | (364,585 | ) | | | (1,640,199 | ) |
In-kind redemptions | | | (1,618,133 | ) | | | — | | | | — | | | | (364,779 | ) |
Foreign currency transactions | | | (252 | ) | | | — | | | | (142 | ) | | | 289 | |
| | | | |
Net realized gain (loss) | | | (4,672,474 | ) | | | (845,370 | ) | | | (364,727 | ) | | | (2,004,689 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (1,414,946 | ) | | | (6,358,197 | ) | | | (682,123 | ) | | | (842,577 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | (49 | ) | | | — | | | | (27 | ) | | | (27 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (1,414,995 | ) | | | (6,358,197 | ) | | | (682,150 | ) | | | (842,604 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (6,087,469 | ) | | | (7,203,567 | ) | | | (1,046,877 | ) | | | (2,847,293 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (6,084,255 | ) | | $ | (6,012,357 | ) | | $ | (1,048,892 | ) | | $ | (2,854,124 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 50 | | | $ | — | | | $ | — | | | $ | 682 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 189 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
High Yield
Corporate ETF | | | Franklin
Intelligent
Machines
ETF | | | Franklin
International
Aggregate
Bond ETF | | | Franklin
Investment
Grade Corporate
ETF | |
Investment income: | | | | | | | | | | | | | | | | |
Dividends: (net of foreign taxes)a | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | $ | — | | | $ | 20,364 | | | $ | — | | | $ | — | |
Interest: (net of foreign taxes)b | |
Unaffiliated issuers | | | 7,251,883 | | | | — | | | | 905,474 | | | | 12,844,998 | |
| | | | |
Total investment income | | | 7,251,883 | | | | 20,364 | | | | 905,474 | | | | 12,844,998 | |
| | | | |
Expenses: | |
Management fees (Note 3a) | | | 517,461 | | | | 21,067 | | | | 243,085 | | | | 1,381,553 | |
| | | | |
Total expenses | | | 517,461 | | | | 21,067 | | | | 243,085 | | | | 1,381,553 | |
| | | | |
Net investment income | | | 6,734,422 | | | | (703 | ) | | | 662,389 | | | | 11,463,445 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (1,088,010 | ) | | | (286,239 | ) | | | (2,392,584 | ) | | | (16,402,629 | ) |
In-kind redemptions | | | (17,063,902 | ) | | | 453,481 | | | | — | | | | (51,941,965 | ) |
Foreign currency transactions | | | — | | | | (181 | ) | | | (2,541,573 | ) | | | — | |
Forward exchange contracts | | | — | | | | — | | | | 19,702,306 | | | | — | |
Futures contracts | | | — | | | | — | | | | — | | | | 2,070,832 | |
| | | | |
Net realized gain (loss) | | | (18,151,912 | ) | | | 167,061 | | | | 14,768,149 | | | | (66,273,762 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (15,585,806 | ) | | | (3,041,948 | ) | | | (29,822,091 | ) | | | (49,216,472 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | (15 | ) | | | 847,573 | | | | — | |
Futures contracts | | | — | | | | — | | | | — | | | | 114,485 | |
Forward exchange contracts | | | — | | | | — | | | | 5,944,270 | | | | — | |
Change in deferred taxes on unrealized appreciation | | | — | | | | — | | | | 1,629 | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (15,585,806 | ) | | | (3,041,963 | ) | | | (23,028,619 | ) | | | (49,101,987 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (33,737,718 | ) | | | (2,874,902 | ) | | | (8,260,470 | ) | | | (115,375,749 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (27,003,296 | ) | | $ | (2,875,605 | ) | | $ | (7,598,081 | ) | | $ | (103,912,304 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | — | | | $ | 1,395 | | | $ | — | | | $ | — | |
bForeign taxes withheld on interest | | | — | | | | — | | | | 209 | | | | (223 | ) |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 190 | | | | | | | | Semiannual 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 period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin Municipal
Green Bond
ETF | | | Franklin
Senior Loan
ETF | | | Franklin
Systematic Style
Premia ETF* | | | Franklin U.S. Core
Bond ETF | |
Investment income: | | | | | | | | | | | | | | | | |
Dividends: (net of foreign taxes)a | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | $ | — | | | $ | 6,494,521 | | | $ | 664,375 | | | $ | 163,405 | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | 1,340,667 | | | | 37,261 | | | | — | | | | 17,461,190 | |
| | | | |
Total investment income | | | 1,340,667 | | | | 6,531,782 | | | | 664,375 | | | | 17,624,595 | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
Management fees (Note 3a) | | | 328,615 | | | | 547,889 | | | | 276,101 | | | | 1,113,581 | |
Transfer agent fees | | | 6,017 | | | | — | | | | 3,761 | | | | — | |
Custodian fees | | | 894 | | | | — | | | | 591 | | | | — | |
Reports to shareholders | | | 2,407 | | | | — | | | | — | | | | — | |
Registration and filing fees | | | 4,786 | | | | — | | | | — | | | | — | |
Professional fees | | | 64,813 | | | | — | | | | — | | | | — | |
Trustee fees (Note 3a) | | | 2,698 | | | | — | | | | — | | | | — | |
Other | | | 6,497 | | | | 7,589 | | | | — | | | | — | |
| | | | |
Total expenses | | | 416,727 | | | | 555,478 | | | | 280,453 | | | | 1,113,581 | |
Expenses waived/paid by affiliates (Note 3c) | | | (257,158 | ) | | | — | | | | (18,911 | ) | | | (54,289 | ) |
| | | | |
Net expenses | | | 159,569 | | | | 555,478 | | | | 261,542 | | | | 1,059,292 | |
| | | | |
Net investment income | | | 1,181,098 | | | | 5,976,304 | | | | 402,833 | | | | 16,565,303 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (2,089,130 | ) | | | (3,124,018 | ) | | | 1,311,680 | | | | (50,312,155 | ) |
Foreign currency transactions | | | — | | | | — | | | | (34,293 | ) | | | — | |
Forward exchange contracts | | | — | | | | — | | | | 729,632 | | | | — | |
Futures contracts | | | — | | | | — | | | | (1,004,814 | ) | | | 345,524 | |
Swap contracts | | | — | | | | — | | | | — | | | | 43,134 | |
| | | | |
Net realized gain (loss) | | | (2,089,130 | ) | | | (3,124,018 | ) | | | 1,002,205 | | | | (49,923,497 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (8,815,611 | ) | | | (13,753,642 | ) | | | (6,280,312 | ) | | | (113,607,188 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | (13,382 | ) | | | — | |
Futures contracts | | | — | | | | — | | | | 555,160 | | | | (189,660 | ) |
Swap contracts | | | — | | | | — | | | | 4,311,435 | | | | (96,030 | ) |
Forward exchange contracts | | | — | | | | — | | | | 69,755 | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (8,815,611 | ) | | | (13,753,642 | ) | | | (1,357,344 | ) | | | (113,892,878 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (10,904,741 | ) | | | (16,877,660 | ) | | | (355,139 | ) | | | (163,816,375 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (9,723,643 | ) | | $ | (10,901,356 | ) | | $ | 47,694 | | | $ | (147,251,072 | ) |
| | | | |
| | | | |
aForeign taxes withheld on dividends | | $ | — | | | $ | — | | | $ | 33,369 | | | $ | — | |
| | | | |
*Consolidated financial statements. See Notes 13.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 191 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | |
| | | |
| | | Franklin
U.S. Low
Volatility ETF | | | Franklin
U.S. Treasury
Bond ETF | | | Franklin
Ultra Short
Bond ETF | |
Investment income: | | | | | | | | | | | | |
Dividends: (net of foreign taxes)a | | | | | | | | | | | | |
Unaffiliated issuers | | $ | 1,316,699 | | | $ | 34,121 | | | $ | 1,378 | |
Interest: | | | | | | | | | | | | |
Unaffiliated issuers | | | 5,813 | | | | 2,353,932 | | | | 16,905 | |
Inflation principle adjustments | | | — | | | | 285,051 | | | | — | |
| | | | |
Total investment income | | | 1,322,512 | | | | 2,673,104 | | | | 18,283 | |
| | | | |
Expenses: | | | | | | | | | | | | |
Management fees (Note 3a) | | | 187,779 | | | | 163,350 | | | | 2,015 | |
| | | | |
Total expenses | | | 187,779 | | | | 163,350 | | | | 2,015 | |
Expenses waived/paid by affiliates (Note 3c) | | | — | | | | (15,858 | ) | | | (282 | ) |
| | | | |
Net expenses | | | 187,779 | | | | 147,492 | | | | 1,733 | |
| | | | |
Net investment income | | | 1,134,733 | | | | 2,525,612 | | | | 16,550 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | |
Unaffiliated issuers | | | (1,234,358 | ) | | | (37,542,525 | ) | | | (23,277 | ) |
In-kind redemptions | | | 303,201 | | | | — | | | | — | |
Foreign currency transactions | | | (110 | ) | | | — | | | | — | |
| | | | |
Net realized gain (loss) | | | (931,267 | ) | | | (37,542,525 | ) | | | (23,277 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | |
Unaffiliated issuers | | | (20,602,411 | ) | | | 7,435,629 | | | | 3,670 | |
Translation of other assets and liabilities denominated in foreign currencies | | | (938 | ) | | | — | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (20,603,349 | ) | | | 7,435,629 | | | | 3,670 | |
| | | | |
Net realized and unrealized gain (loss) | | | (21,534,616 | ) | | | (30,106,896 | ) | | | (19,607 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (20,399,883 | ) | | $ | (27,581,284 | ) | | $ | (3,057 | ) |
| | | | |
| | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 4,585 | | | $ | — | | | $ | — | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 192 | | | | | | | | Semiannual 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
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin Disruptive Commerce ETF | | | Franklin Dynamic Municipal Bond ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 3,214 | | | $ | (136,756 | ) | | $ | 1,191,210 | | | $ | 1,338,701 | |
Net realized gain (loss) | | | (4,672,474 | ) | | | (3,530,248 | ) | | | (845,370 | ) | | | (4,924 | ) |
Net change in unrealized appreciation (depreciation) | | | (1,414,995 | ) | | | (8,910,981 | ) | | | (6,358,197 | ) | | | (5,026,347 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (6,084,255 | ) | | | (12,577,985 | ) | | | (6,012,357 | ) | | | (3,692,570 | ) |
| | | | |
Distributions to shareholders (Note 1g) | | | — | | | | (222,554 | ) | | | (1,181,283 | ) | | | (1,204,849 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (4,312,705 | ) | | | (10,442,439 | ) | | | 19,219,091 | | | | 39,693,714 | |
| | | | |
Net increase (decrease) in net assets | | | (10,396,960 | ) | | | (23,242,978 | ) | | | 12,025,451 | | | | 34,796,295 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 18,583,779 | | | | 41,826,757 | | | | 76,908,421 | | | | 42,112,126 | |
| | | | |
End of period | | $ | 8,186,819 | | | $ | 18,583,779 | | | $ | 88,933,872 | | | $ | 76,908,421 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 193 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin Exponential Data ETF | | | Franklin Genomic Advancements ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income loss | | $ | (2,015 | ) | | $ | (7,332 | ) | | $ | (6,831 | ) | | $ | (69,697 | ) |
Net realized gain (loss) | | | (364,727 | ) | | | (487,396 | ) | | | (2,004,689 | ) | | | (1,268,783 | ) |
Net change in unrealized appreciation (depreciation) | | | (682,150 | ) | | | 292,285 | | | | (842,604 | ) | | | (5,044,128 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (1,048,892 | ) | | | (202,443 | ) | | | (2,854,124 | ) | | | (6,382,608 | ) |
| | | | |
Distributions to shareholders (Note 1g) | | | — | | | | — | | | | — | | | | (64,946 | ) |
| | | | |
Capital share transactions: (Note 2) | | | — | | | | 1,286,009 | | | | (1,555,550 | ) | | | 6,106,586 | |
| | | | |
Net increase (decrease) in net assets | | | (1,048,892 | ) | | | 1,083,566 | | | | (4,409,674 | ) | | | (340,968 | ) |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 3,417,126 | | | | 2,333,560 | | | | 14,798,677 | | | | 15,139,645 | |
| | | | |
End of period | | $ | 2,368,234 | | | $ | 3,417,126 | | | $ | 10,389,003 | | | $ | 14,798,677 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 194 | | | | | | | | Semiannual 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 High Yield Corporate ETF | | | Franklin Intelligent Machines ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 6,734,422 | | | $ | 16,556,505 | | | $ | (703 | ) | | $ | (25,737 | ) |
Net realized gain (loss) | | | (18,151,912 | ) | | | 371,679 | | | | 167,061 | | | | (667,586 | ) |
Net change in unrealized appreciation (depreciation) | | | (15,585,806 | ) | | | (21,274,898 | ) | | | (3,041,963 | ) | | | 1,481,764 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (27,003,296 | ) | | | (4,346,714 | ) | | | (2,875,605 | ) | | | 788,441 | |
| | | | |
Distributions to shareholders (Note 1g) | | | (8,385,263 | ) | | | (17,355,367 | ) | | | — | | | | (23,504 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (111,615,935 | ) | | | 9,401,694 | | | | (1,933,835 | ) | | | — | |
| | | | |
Net increase (decrease) in net assets | | | (147,004,494 | ) | | | (12,300,387 | ) | | | (4,809,440 | ) | | | 764,937 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 334,285,831 | | | | 346,586,218 | | | | 11,573,816 | | | | 10,808,879 | |
| | | | |
End of period | | $ | 187,281,337 | | | $ | 334,285,831 | | | $ | 6,764,376 | | | $ | 11,573,816 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 195 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin International
Aggregate Bond ETF | | | Franklin Investment Grade
Corporate ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | |
Operations: | |
Net investment income | | $ | 662,389 | | | $ | 406,482 | | | $ | 11,463,445 | | | $ | 23,268,333 | |
Net realized gain (loss) | | | 14,768,149 | | | | 10,960,307 | | | | (66,273,762 | ) | | | 5,999,435 | |
Net change in unrealized appreciation (depreciation) | | | (23,028,619 | ) | | | (18,640,042 | ) | | | (49,101,987 | ) | | | (69,996,857 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (7,598,081 | ) | | | (7,273,253 | ) | | | (103,912,304 | ) | | | (40,729,089 | ) |
| | | | |
Distributions to shareholders (Note 1g) | | | (3,272,181 | ) | | | (4,976,496 | ) | | | (14,728,514 | ) | | | (28,480,201 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 5,987,000 | | | | 24,812,593 | | | | (284,353,542 | ) | | | 32,171,961 | |
| | | | |
Net increase (decrease) in net assets | | | (4,883,262 | ) | | | 12,562,844 | | | | (402,994,360 | ) | | | (37,037,329 | ) |
Net assets: | |
Beginning of period | | | 193,967,805 | | | | 181,404,961 | | | | 981,601,827 | | | | 1,018,639,156 | |
| | | | |
End of period | | $ | 189,084,543 | | | $ | 193,967,805 | | | $ | 578,607,467 | | | $ | 981,601,827 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 196 | | | | | | | | Semiannual 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 Municipal Green Bond ETF | | | Franklin Senior Loan ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | |
Operations: | |
Net investment income | | $ | 1,181,098 | | | $ | 1,675,014 | | | $ | 5,976,304 | | | $ | 7,866,054 | |
Net realized gain (loss) | | | (2,089,130 | ) | | | (413,327 | ) | | | (3,124,018 | ) | | | (374,967 | ) |
Net change in unrealized appreciation (depreciation) | | | (8,815,611 | ) | | | (7,422,486 | ) | | | (13,753,642 | ) | | | (2,789,129 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (9,723,643 | ) | | | (6,160,799 | ) | | | (10,901,356 | ) | | | 4,701,958 | |
| | | | |
Distributions to shareholders (Note 1g) | | | (1,396,499 | ) | | | (2,038,684 | ) | | | (5,948,855 | ) | | | (6,696,117 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 5,825,810 | | | | (13,082,950 | ) | | | (57,246,816 | ) | | | 93,615,229 | |
| | | | |
Net increase (decrease) in net assets | | | (5,294,332 | ) | | | (21,282,433 | ) | | | (74,097,027 | ) | | | 91,621,070 | |
Net assets: | |
Beginning of period | | | 104,938,542 | | | | 126,220,975 | | | | 292,722,243 | | | | 201,101,173 | |
| | | | |
End of period | | $ | 99,644,210 | | | $ | 104,938,542 | | | $ | 218,625,216 | | | $ | 292,722,243 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 197 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin Systematic Style Premia ETF | | | Franklin U.S. Core Bond ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | |
Operations: | |
Net investment income | | $ | 402,833 | | | $ | 375,343 | | | $ | 16,565,303 | | | $ | 28,834,509 | |
Net realized gain (loss) | | | 1,002,205 | | | | 4,711,707 | | | | (49,923,497 | ) | | | (24,963,931 | ) |
Net change in unrealized appreciation (depreciation) | | | (1,357,344 | ) | | | 61,304 | | | | (113,892,878 | ) | | | (78,870,127 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | 47,694 | | | | 5,148,354 | | | | (147,251,072 | ) | | | (74,999,549 | ) |
| | | | |
Distributions to shareholders (Note 1g) | | | — | | | | (697,021 | ) | | | (18,609,070 | ) | | | (35,701,883 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 45,681,053 | | | | 3,879,642 | | | | 102,965,606 | | | | 160,065,825 | |
| | | | |
Net increase (decrease) in net assets | | | 45,728,747 | | | | 8,330,975 | | | | (62,894,536 | ) | | | 49,364,393 | |
Net assets: | |
Beginning of period | | | 55,258,314 | | | | 46,927,339 | | | | 1,509,961,308 | | | | 1,460,596,915 | |
| | | | |
End of period | | $ | 100,987,061 | | | $ | 55,258,314 | | | $ | 1,447,066,772 | | | $ | 1,509,961,308 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 198 | | | | | | | | Semiannual 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 U.S. Low Volatility ETF | | | Franklin U.S. Treasury Bond ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | |
Operations: | |
Net investment income | | $ | 1,134,733 | | | $ | 2,051,655 | | | $ | 2,525,612 | | | $ | 3,222,981 | |
Net realized gain (loss) | | | (931,267 | ) | | | 17,449,280 | | | | (37,542,525 | ) | | | (939,252 | ) |
Net change in unrealized appreciation (depreciation) | | | (20,603,349 | ) | | | (1,376,584 | ) | | | 7,435,629 | | | | (15,335,003 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (20,399,883 | ) | | | 18,124,351 | | | | (27,581,284 | ) | | | (13,051,274 | ) |
| | | | |
Distributions to shareholders (Note 1g) | | | (1,109,117 | ) | | | (2,063,975 | ) | | | (3,930,756 | ) | | | (6,661,686 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 4,938,056 | | | | (20,946,579 | ) | | | (8,975,971 | ) | | | 5,056,701 | |
| | | | |
Net increase (decrease) in net assets | | | (16,570,944 | ) | | | (4,886,203 | ) | | | (40,488,011 | ) | | | (14,656,259 | ) |
Net assets: | |
Beginning of period | | | 134,935,415 | | | | 139,821,618 | | | | 403,542,717 | | | | 418,198,976 | |
| | | | |
End of period | | $ | 118,364,471 | | | $ | 134,935,415 | | | $ | 363,054,706 | | | $ | 403,542,717 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 199 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | |
| |
| | | Franklin Ultra Short Bond ETF | |
| | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | |
Operations: | | | | | | | | |
Net investment income | | $ | 16,550 | | | $ | 17,705 | |
Net realized gain (loss) | | | (23,277 | ) | | | 1,348 | |
Net change in unrealized appreciation (depreciation) | | | 3,670 | | | | (51,611 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (3,057 | ) | | | (32,558 | ) |
| | | | |
Distributions to shareholders (Note 1g) | | | (15,730 | ) | | | (17,586 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (1,224,045 | ) | | | 1,244,484 | |
| | | | |
Net increase (decrease) in net assets | | | (1,242,832 | ) | | | 1,194,340 | |
Net assets: | | | | | | | | |
Beginning of period | | | 3,681,981 | | | | 2,487,641 | |
| | | | |
End of period | | $ | 2,439,149 | | | $ | 3,681,981 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 200 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
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 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.
Effective 08/01/2022, the following name changes occurred:
Old name
| * | Franklin Liberty Investment Grade Corporate ETF |
| * | Franklin Liberty U.S. Low Volatility ETF |
| * | Franklin Liberty International Aggregate Bond ETF |
| * | Franklin Liberty Senior Loan ETF |
| * | Franklin Liberty High Yield Corporate ETF |
| * | Franklin Liberty Systematic Style Premia ETF |
| * | Franklin Liberty U.S. Core Bond ETF |
| * | Franklin Liberty Ultra Short Bond ETF |
| * | Franklin Liberty U.S. Treasury Bond ETF |
New name
| * | Franklin Investment Grade Corporate ETF |
| * | Franklin U.S. Low Volatility ETF |
| * | Franklin International Aggregate Bond ETF |
| * | Franklin Senior Loan ETF |
| * | Franklin High Yield Corporate ETF |
| * | Franklin Systematic Style Premia ETF |
| * | Franklin U.S. Core Bond ETF |
| * | Franklin Ultra Short Bond ETF |
| * | Franklin U.S. Treasury Bond ETF |
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, 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
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 201 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
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, 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
| | | | | | | | | | |
| | | | | | |
| 202 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
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 11 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 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 September 30, 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 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.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
At September 30, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Franklin Disruptive Commerce ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | 5 | | | | | | | | — | | | $ | 157 | |
Shares redeemed | | | (200,000 | ) | | | (4,312,710 | ) | | | | | | | (250,000 | ) | | | (10,442,596 | ) |
| | | | |
Net increase (decrease) | | | (200,000 | ) | | $ | (4,312,705 | ) | | | | | | | (250,000 | ) | | $ | (10,442,439 | ) |
| | | | |
| |
| | | Franklin Dynamic Municipal Bond ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | �� | | 1,150,000 | | | $ | 27,512,016 | | | | | | | | 1,550,000 | | | $ | 40,942,801 | |
Shares redeemed | | | (350,000 | ) | | | (8,292,925 | ) | | | | | | | (50,000 | ) | | | (1,249,087 | ) |
| | | | |
Net increase (decrease) | | | 800,000 | | | $ | 19,219,091 | | | | | | | | 1,500,000 | | | $ | 39,693,714 | |
| | | | |
| |
| | | Franklin Exponential Data ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 50,000 | | | $ | 1,286,009 | |
| | | | |
Net increase (decrease) | | | — | | | $ | — | | | | | | | | 50,000 | | | $ | 1,286,009 | |
| | | | |
| |
| | | Franklin Genomic Advancements ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 50,000 | | | $ | 1,681,091 | | | | | | | | 400,000 | | | $ | 22,040,989 | |
Shares redeemed | | | (100,000 | ) | | | (3,236,641 | ) | | | | | | | (350,000 | ) | | | (15,934,403 | ) |
| | | | |
Net increase (decrease) | | | (50,000 | ) | | $ | (1,555,550 | ) | | | | | | | 50,000 | | | $ | 6,106,586 | |
| | | | |
| |
| | | Franklin High Yield Corporate ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 3,600,000 | | | $ | 80,593,087 | | | | | | | | 4,500,000 | | | $ | 117,942,112 | |
Shares redeemed | | | (8,400,000 | ) | | | (192,209,022 | ) | | | | | | | (4,250,000 | ) | | | (108,540,418 | ) |
| | | | |
Net increase (decrease) | | | (4,800,000 | ) | | $ | (111,615,935 | ) | | | | | | | 250,000 | | | $ | 9,401,694 | |
| | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Franklin Intelligent Machines ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | 9 | | | | | | | | — | | | $ | — | |
Shares redeemed | | | (50,000 | ) | | | (1,933,844 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | (50,000 | ) | | $ | (1,933,835 | ) | | | | | | | — | | | $ | — | |
| | | | |
| |
| | | Franklin International Aggregate Bond ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 750,000 | | | $ | 17,492,946 | | | | | | | | 2,400,000 | | | $ | 60,490,312 | |
Shares redeemed | | | (500,000 | ) | | | (11,505,946 | ) | | | | | | | (1,450,000 | ) | | | (35,677,719 | ) |
| | | | |
Net increase (decrease) | | | 250,000 | | | $ | 5,987,000 | | | | | | | | 950,000 | | | $ | 24,812,593 | |
| | | | |
| |
| | | Franklin Investment Grade Corporate ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 3,350,000 | | | $ | 74,295,403 | | | | | | | | 4,300,000 | | | $ | 107,793,585 | |
Shares redeemed | | | (16,400,000 | ) | | | (358,648,945 | ) | | | | | | | (2,900,000 | ) | | | (75,621,624 | ) |
| | | | |
Net increase (decrease) | | | (13,050,000 | ) | | $ | (284,353,542 | ) | | | | | | | 1,400,000 | | | $ | 32,171,961 | |
| | | | |
| |
| | | Franklin Municipal Green Bond ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 650,000 | | | $ | 15,339,997 | | | | | | | | 1,200,000 | | | $ | 32,661,307 | |
Shares redeemed | | | (400,000 | ) | | | (9,514,187 | ) | | | | | | | (1,700,000 | ) | | | (45,744,257 | ) |
| | | | |
Net increase (decrease) | | | 250,000 | | | $ | 5,825,810 | | | | | | | | (500,000 | ) | | $ | (13,082,950 | ) |
| | | | |
| |
| | | Franklin Senior Loan ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 2,150,000 | | | $ | 53,128,370 | | | | | | | | 5,300,000 | | | $ | 132,222,340 | |
Shares redeemed | | | (4,550,000 | ) | | | (110,375,186 | ) | | | | | | | (1,550,000 | ) | | | (38,607,111 | ) |
| | | | |
Net increase (decrease) | | | (2,400,000 | ) | | $ | (57,246,816 | ) | | | | | | | 3,750,000 | | | $ | 93,615,229 | |
| | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Franklin Systematic Style Premia ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 2,100,000 | | | $ | 45,681,053 | | | | | | | | 300,000 | | | $ | 6,039,974 | |
Shares redeemed | | | — | | | | — | | | | | | | | (100,000 | ) | | | (2,160,332 | ) |
| | | | |
Net increase (decrease) | | | 2,100,000 | | | $ | 45,681,053 | | | | | | | | 200,000 | | | $ | 3,879,642 | |
| | | | |
| |
| | | Franklin U.S. Core Bond ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 9,250,000 | | | $ | 206,737,666 | | | | | | | | 14,950,000 | | | $ | 373,614,883 | |
Shares redeemed | | | (4,700,000 | ) | | | (103,772,060 | ) | | | | | | | (8,600,000 | ) | | | (213,549,058 | ) |
| | | | |
Net increase (decrease) | | | 4,550,000 | | | $ | 102,965,606 | | | | | | | | 6,350,000 | | | $ | 160,065,825 | |
| | | | |
| |
| | | Franklin U.S. Low Volatility ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended
March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 150,000 | | | $ | 7,045,830 | | | | | | | | 850,000 | | | $ | 39,828,368 | |
Shares redeemed | | | (50,000 | ) | | | (2,107,774 | ) | | | | | | | (1,300,000 | ) | | | (60,774,947 | ) |
| | | | |
Net increase (decrease) | | | 100,000 | | | $ | 4,938,056 | | | | | | | | (450,000 | ) | | $ | (20,946,579 | ) |
| | | | |
| |
| | | Franklin U.S. Treasury Bond ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 6,100,000 | | | $ | 131,727,975 | | | | | | | | 1,850,000 | | | $ | 43,376,401 | |
Shares redeemed | | | (6,450,000 | ) | | | (140,703,946 | ) | | | | | | | (1,600,000 | ) | | | (38,319,700 | ) |
| | | | |
Net increase (decrease) | | | (350,000 | ) | | $ | (8,975,971 | ) | | | | | | | 250,000 | | | $ | 5,056,701 | |
| | | | |
| |
| | | Franklin Ultra Short Bond ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 50,000 | | | $ | 1,244,484 | |
Shares redeemed | | | (50,000 | ) | | | (1,224,045 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | (50,000 | ) | | $ | (1,224,045 | ) | | | | | | | 50,000 | | | $ | 1,244,484 | |
| | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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
For the six months ended September 30, 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 Dynamic Municipal Bond ETF | | 0.625% |
Franklin Exponential Data ETF | | 0.50% |
Franklin Genomic Advancements ETF | | 0.50% |
Franklin High Yield Corporate ETF | | 0.40% |
Franklin Intelligent Machines ETF | | 0.50% |
Franklin International Aggregate Bond ETF | | 0.25% |
Franklin Investment Grade Corporate ETF | | 0.35% |
Franklin Municipal Green Bond ETF | | 0.62% |
Franklin Senior Loan ETF | | 0.45% |
Franklin Systematic Style Premia ETF | | 0.65% |
Franklin U.S. Core Bond ETF | | 0.15% |
Franklin U.S. Low Volatility ETF | | 0.29% |
Franklin U.S. Treasury Bond ETF | | 0.09% |
Franklin Ultra Short Bond ETF | | 0.15% |
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.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
c. Waiver and Expense Reimbursements
For Franklin Systematic Style Premia ETF, 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 Islandsbased company that is wholly-owned by the Fund (Subsidiary).
For the Franklin Dynamic Municipal Bond ETF, Franklin Municipal Green 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.
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 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 period ended September 30, 2022, investments in affiliated management investment companies were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | Value at
Beginning
of Period | | | Purchases | | | Sales | | | Realized
Gain (Loss) | | | Net Change in
Unrealized
Appreciation
(Depreciation) | | | Value at
End of
Period | | | Number
of Shares
Held at
End of Period | | | Investment
Income | |
| | | | | | | | |
| Franklin Exponential Data ETF | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | Dividend Income | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 591 | | | $ | 191,393 | | | $ | (189,074 | ) | | $ | — | | | $ | — | | | $ | 2,910 | | | | 2,910 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Franklin U.S. Core Bond ETF | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | Dividend Income | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 48,548,641 | | | $ | 379,535,490 | | | $ | (393,588,867 | ) | | $ | — | | | $ | — | | | $ | 34,495,264 | | | | 34,495,264 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Franklin U.S. Treasury Bond ETF | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | Dividend Income | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 4,633,381 | | | $ | 96,171,323 | | | $ | (98,990,944 | ) | | $ | — | | | $ | — | | | $ | 1,813,760 | | | | 1,813,760 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Franklin Ultra Short Bond ETF | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | Dividend Income | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 81,009 | | | $ | 845,173 | | | $ | (595,116 | ) | | $ | — | | | $ | — | | | $ | 331,066 | | | | 331,066 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
e. Other Affiliated Transactions
At September 30, 2022, the shares of the funds were owned by the following investment entities:
| | | | | | | | |
| | |
| Funds | | Shares | | | Percentage of
Outstanding Sharesa | |
| | |
| Franklin Disruptive Commerce ETF | | | | | | | | |
Franklin Resources Inc. | | | 25,000 | | | | 6.3% | |
| | | | |
| | |
| Franklin Dynamic Municipal Bond ETF | | | | | | | | |
Franklin High Yield Tax-Free Income Fund | | | 1,605,000 | | | | 41.2% | |
| | | | |
| | |
| Franklin High Yield Corporate ETF | | | | | | | | |
Franklin Conservative Allocation Fund | | | 1,212,833 | | | | 13.9% | |
Franklin Moderate Allocation Fund | | | 1,294,370 | | | | 14.9% | |
Franklin 529 Portfolios | | | 4,160,446 | | | | 47.8% | |
| | | | |
| | | 6,667,649 | | | | 76.6% | |
| | | | |
| | |
| Franklin Intelligent Machines ETF | | | | | | | | |
Franklin Resources Inc. | | | 20,000 | | | | 10.0% | |
| | | | |
| | |
| Franklin International Aggregate Bond ETF | | | | | | | | |
Franklin Conservative Allocation Fund | | | 908,916 | | | | 10.8% | |
Franklin Moderate Allocation Fund | | | 885,688 | | | | 10.5% | |
Franklin 529 Portfolios | | | 5,586,728 | | | | 66.1% | |
| | | | |
| | | 7,381,332 | | | | 87.4% | |
| | | | |
| | |
| Franklin Investment Grade Corporate ETF | | | | | | | | |
Franklin Total Return Fund | | | 16,060,000 | | | | 56.6% | |
Franklin 529 Portfolios | | | 4,369,282 | | | | 15.4% | |
| | | | |
| | | 20,429,282 | | | | 72.0% | |
| | | | |
| | |
| Franklin Municipal Green Bond ETF | | | | | | | | |
Franklin Federal Limited-Term Tax-Free Income Fund | | | 1,550,000 | | | | 34.8% | |
Franklin Federal Intermediate-Term Tax-Free Income Fund | | | 2,115,000 | | | | 47.5% | |
| | | | |
| | | 3,665,000 | | | | 82.3% | |
| | | | |
| | |
| Franklin Senior Loan ETF | | | | | | | | |
Franklin Total Return Fund | | | 1,737,400 | | | | 18.4% | |
Franklin Floating Rate Master Trust | | | 510,877 | | | | 5.4% | |
| | | | |
| | | 2,248,277 | | | | 23.8% | |
| | | | |
| | |
| Franklin Systematic Style Premia ETF | | | | | | | | |
Franklin Conservative Allocation Fund | | | 486,201 | | | | 10.3% | |
Franklin Moderate Allocation Fund | | | 788,623 | | | | 16.8% | |
Franklin Growth Allocation Fund | | | 560,257 | | | | 11.9% | |
Franklin Managed Income Fund | | | 1,175,000 | | | | 25.0% | |
| | | | |
| | | 3,010,081 | | | | 64.0% | |
| | | | |
| | |
| Franklin U.S. Core Bond ETF | | | | | | | | |
Franklin Conservative Allocation Fund | | | 9,684,066 | | | | 14.0% | |
Franklin Moderate Allocation Fund | | | 10,335,391 | | | | 15.0% | |
Franklin 529 Portfolios | | | 32,866,401 | | | | 47.6% | |
| | | | |
| | | 52,885,858 | | | | 76.6% | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Transactions with Affiliates (continued)
e. Other Affiliated Transactions (continued)
| | | | | | | | |
| | |
| Funds | | Shares | | | Percentage of
Outstanding Sharesa | |
| | |
| Franklin U.S. Treasury Bond ETF | | | | | | | | |
Franklin Conservative Allocation Fund | | | 2,529,587 | | | | 14.5% | |
Franklin Moderate Allocation Fund | | | 2,699,747 | | | | 15.5% | |
Franklin 529 Portfolios | | | 8,461,533 | | | | 48.5% | |
| | | | |
| | | 13,690,867 | | | | 78.5% | |
| | | | |
| Franklin Ultra Short Bond ETF | | | | | | | | |
Franklin Resources Inc. | | | 33,000 | | | | 33.0% | |
| | | | |
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. At March 31, 2022, the capital loss carryforwards were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Disruptive
Commerce ETF | | | Franklin
Dynamic
Municipal
Bond ETF | | | Franklin
Exponential
Data ETF | | | Franklin
Genomic
Advancements ETF | |
| Capital loss carryforwards not subject to expiration: | | | | | | | | | | | | | | | | |
Long term | | $ | 129,808 | | | $ | 77,115 | | | $ | 99,216 | | | $ | 339,406 | |
Short term | | | 6,001,047 | | | | 165,126 | | | | 404,511 | | | | 5,641,835 | |
| | | | |
Total capital loss carryforwards | | $ | 6,130,855 | | | $ | 242,241 | | | $ | 503,727 | | | $ | 5,981,241 | |
| | | | |
| | | | |
| | | Franklin
High Yield
Corporate ETF | | | Franklin
Intelligent
Machines ETF | | | Franklin
International
Aggregate
Bond ETF | | | Franklin
Investment
Grade
Corporate ETF | |
| Capital loss carryforwards not subject to expiration: | | | | | | | | | | | | | | | | |
Long term | | $ | — | | | $ | 44,508 | | | $ | 661,680 | | | $ | — | |
Short term | | | — | | | | 623,321 | | | | 621,329 | | | | — | |
| | | | |
Total capital loss carryforwards | | $ | — | | | $ | 667,829 | | | $ | 1,283,009 | | | $ | — | |
| | | | |
| | | | |
| | | Franklin
Municipal Green
Bond ETF | | | Franklin
Senior Loan
ETF | | | Franklin
Systematic
Style Premia ETF | | | Franklin
U.S.
Core Bond ETF | |
| Capital loss carryforwards not subject to expiration: | | | | | | | | | | | | | | | | |
Long term | | $ | 477,407 | | | $ | 1,148,492 | | | $ | — | | | $ | 12,324,674 | |
Short term | | | 1,277,016 | | | | 792,621 | | | | 12,077,714 | | | | 16,633,065 | |
| | | | |
Total capital loss carryforwards | | $ | 1,754,423 | | | $ | 1,941,113 | | | $ | 12,077,714 | | | $ | 28,957,739 | |
| | | | |
| | | | |
| | | Franklin
U.S. Low
Volatility ETF | | | Franklin U.S.
Treasury
Bond ETF | | | Franklin
Ultra Short
Bond 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 | | | | | |
| | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
At September 30, 2022, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Disruptive
Commerce
ETF | | | Franklin
Dynamic
Municipal
Bond
ETF | | | Franklin
Exponential
Data
ETF | | | Franklin
Genomic
Advancements
ETF | |
Cost of investments | | $ | 11,578,381 | | | $ | 99,729,625 | | | $ | 2,859,319 | | | $ | 13,919,783 | |
| | | | |
Unrealized appreciation | | $ | 8,565 | | | $ | 19,755 | | | $ | 89,892 | | | $ | 79,351 | |
Unrealized depreciation | | | (3,580,715 | ) | | | (10,058,167 | ) | | | (581,934 | ) | | | (3,718,357 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (3,572,150 | ) | | $ | (10,038,412 | ) | | $ | (492,042 | ) | | $ | (3,639,006 | ) |
| | | | |
| | | | |
| | | Franklin
High Yield
Corporate
ETF | | | Franklin
Intelligent
Machines
ETF | | | Franklin
International
Aggregate
Bond ETF | | | Franklin
Investment
Grade
Corporate ETF | |
Cost of investments | | $ | 216,703,770 | | | $ | 7,706,465 | | | $ | 216,573,439 | | | $ | 693,629,163 | |
| | | | |
Unrealized appreciation | | $ | 632,929 | | | $ | 415,397 | | | $ | 2,021,399 | | | $ | 2,530,552 | |
Unrealized depreciation | | | (32,532,624 | ) | | | (1,359,423 | ) | | | (47,497,596 | ) | | | (123,702,978 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (31,899,695 | ) | | $ | (944,026 | ) | | $ | (45,476,197 | ) | | $ | (121,172,426 | ) |
| | | | |
| | | | |
| | | Franklin
Municipal
Green Bond
ETF | | | Franklin
Senior Loan
ETF | | | Franklin
Systematic
Style Premia
ETF | | | Franklin U.S.
Core Bond
ETF | |
Cost of investments | | $ | 112,996,243 | | | $ | 234,116,557 | | | $ | 54,263,616 | | | $ | 1,660,699,628 | |
| | | | |
Unrealized appreciation | | $ | 13,057 | | | $ | 62,406 | | | $ | 1,531,308 | | | $ | 6,074,716 | |
Unrealized depreciation | | | (14,800,359 | ) | | | (17,058,994 | ) | | | (4,338,500 | ) | | | (210,613,250 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (14,787,302 | ) | | $ | (16,996,588 | ) | | $ | (2,807,192 | ) | | $ | (204,538,534 | ) |
| | | | |
| | | | |
| | | Franklin U.S.
Low
Volatility
ETF | | | Franklin U.S.
Treasury
Bond
ETF | | | Franklin
Ultra Short
Bond
ETF | | | | |
Cost of investments | | $ | 120,702,658 | | | $ | 357,638,071 | | | $ | 2,467,897 | | | | | |
| | | | | | | | |
Unrealized appreciation | | $ | 9,422,925 | | | $ | 1,219,470 | | | $ | 88 | | | | | |
Unrealized depreciation | | | (11,830,583 | ) | | | (24,292,240 | ) | | | (38,296 | ) | | | | |
| | | | | | | | |
Net unrealized appreciation (depreciation) . | | $ | (2,407,658 | ) | | $ | (23,072,770 | ) | | $ | (38,208 | ) | | | | |
| | | | | | | | |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of corporate actions, passive foreign investment company shares and wash sales.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Disruptive
Commerce
ETF | | | Franklin
Dynamic
Municipal
Bond
ETF | | | Franklin
Exponential
Data
ETF | | | Franklin
Genomic
Advancements
ETF | |
Purchases | | $ | 3,930,546 | | | $ | 45,532,057 | | | $ | 509,759 | | | $ | 3,503,868 | |
Sales | | $ | 7,982,321 | | | $ | 22,416,936 | | | $ | 534,183 | | | $ | 3,256,236 | |
| | | | |
| | | Franklin
High Yield
Corporate
ETF | | | Franklin
Intelligent
Machines
ETF | | | Franklin
International
Aggregate
Bond
ETF | | | Franklin
Investment
Grade
Corporate
ETF | |
Purchases | | $ | 8,280,832 | | | $ | 1,653,920 | | | $ | 25,841,847 | | | $ | 125,400,928 | |
Sales | | $ | 15,430,092 | | | $ | 1,485,913 | | | $ | 10,776,306 | | | $ | 111,220,373 | |
| | | | |
| | | Franklin
Municipal
Green
Bond
ETF | | | Franklin
Senior Loan
ETF | | | Franklin
Systematic
Style Premia
ETF | | | Franklin U.S.
Core Bond
ETF | |
Purchases | | $ | 38,285,661 | | | $ | 2,070,718,180 | | | $ | 67,728,108 | | | $ | 596,646,795 | |
Sales | | $ | 31,802,945 | | | $ | 2,130,487,215 | | | $ | 42,180,207 | | | $ | 515,874,708 | |
| | | | |
| | | Franklin
U.S. Low
Volatility
ETF | | | Franklin U.S.
Treasury
Bond
ETF | | | Franklin
Ultra Short
Bond
ETF | | | | |
Purchases | | $ | 17,567,170 | | | $ | 284,488,992 | | | $ | 300,256 | | | | | |
Sales | | $ | 17,431,148 | | | $ | 316,245,341 | | | $ | 1,782,818 | | | | | |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
Disruptive
Commerce
ETF | | | Franklin
Dynamic
Municipal
Bond ETF | | | Franklin
Exponential
Data
ETF | | | Franklin
Genomic
Advancements
ETF | |
Cost of Securities Received | | $ | — | | | $ | — | | | $ | — | | | $ | 1,581,290 | |
Value of Securities Delivereda | | $ | — | | | $ | — | | | $ | — | | | $ | 3,042,537 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
High Yield
Corporate
ETF | | | Franklin
Intelligent
Machines
ETF | | | Franklin
International
Aggregate
Bond ETF | | | Franklin
Investment
Grade
Corporate
ETF | |
Cost of Securities Received | | $ | 79,591,847 | | | $ | — | | | $ | — | | | $ | 68,073,099 | |
Value of Securities Delivereda | | $ | 187,073,192 | | | $ | 1,816,647 | | | $ | — | | | $ | 353,936,089 | |
| | | | |
| | | Franklin
Municipal
Green
Bond
ETF | | | Franklin Senior Loan
ETF | | | Franklin
Systematic
Style
Premia
ETF | | | Franklin
U.S. Core
Bond ETF | |
Cost of Securities Received | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Value of Securities Delivereda | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | |
| | | Franklin
U.S. Low
Volatility
ETF | | | Franklin
U.S.
Treasury
Bond
ETF | | | Franklin
Ultra Short
Bond
ETF | | | | |
Cost of Securities Received | | $ | 6,956,287 | | | $ | — | | | $ | — | | | | | |
Value of Securities Delivereda | | $ | 2,077,698 | | | $ | — | | | $ | — | | | | | |
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
6. 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 period ended September 30, 2022, the Franklin Senior Loan ETF utilized the Facility May 09, 2022 through May 18, 2022 with an average borrowing of $18,125,000; the average interest rate during the period was 1.88% and total interest paid amounted to $7,589.
7. 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.
8. 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
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Geopolitical Risk (continued)
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.
9. 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.
10. Credit Risk and Defaulted Securities
At September 30, 2022, Franklin Dynamic Municipal Bond ETF, Franklin Municipal Green Bond ETF, Franklin High Yield Corporate ETF, Franklin Investment Grade Corporate ETF and Franklin Senior Loan ETF had 37.47%, 5.43%, 91.74%, 3.03% 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.
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 September 30, 2022, Franklin Dynamic Municipal Bond ETF, Franklin High Yield Corporate ETF, and Franklin Senior Loan ETF the aggregate long value of distressed company securities for which interest recognition has been discontinued representing 0.2%, 1.4% and 0.3% of the Fund’s net assets respectively. For information as to specific securities, see the accompanying Schedule of Investments.
11. Other Derivative Information
At September 30, 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 International Aggregate Bond ETF | | | |
| | | | |
Foreign exchange contracts | | Unrealized appreciation on OTC forward exchange contracts | | $ | 10,717,565 | | | Unrealized appreciation on OTC forward exchange contracts | | $ | 19,172 | |
| | | | | | | | | | | | |
Franklin Investment Grade
Corporate ETF | | | | | | | | | | |
| | | | |
Interest rate contracts | | Variation margin on futures contracts | | $ | 985,371 | | | Variation margin on futures contracts | | $ | — | |
| | | | | | | | | | | | |
Franklin Systematic Style Premia ETF | | | |
| | | | |
Foreign exchange contracts | | Unrealized appreciation on OTC forward exchange contracts | | $ | 728,444 | | | Unrealized appreciation on OTC forward exchange contracts | | $ | 385,207 | |
| | | | |
Index contracts | | Variation margin on futures contracts | | | 2,412,150 | | | Variation margin on futures contracts | | | 2,206,746 | |
| | | | |
Equity contracts | | Swap contracts | | | 4,311,435 | | | Swap contracts | | | — | |
| | | | | | | | | | | | |
| | | | |
Totals | | | | $ | 7,452,029 | | | | | $ | 2,591,953 | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | |
| | | Asset Derivatives | | | Liability Derivatives | |
| | | | |
| | | Statements of Assets and
Liabilities Location | | Fair Value | | | Statements of Assets and
Liabilities Location | | Fair Value | |
| Franklin U.S. Core Bond ETF | | | |
| | | | |
Interest rate contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 73,679 | |
| | | | |
Credit contracts | | | | | — | | | | | | 114,058 | |
| | | | | | | | | | | | |
| | | | |
Totals | | | | $ | — | | | | | $ | 187,737 | |
| | | | | | | | | | | | |
For the period ended September 30, 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 International Aggregate Bond ETF | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized
appreciation (depreciation) on: | |
| | | | |
Foreign exchange contracts | | Forward exchange contracts | | $ | 19,702,306 | | | Forward exchange contracts | | $ | 5,944,270 | |
| | | | | | | | | | | | |
| Franklin Investment Grade Corporate ETF | |
| | Net realized gain (loss) from: | | | Net change in unrealized
appreciation (depreciation) on: | |
| | | | |
Interest rate contracts | | Futures contracts | | $ | 2,070,832 | | | Futures contracts | | $ | 114,485 | |
| | | | | | | | | | | | |
| Franklin Systematic Style Premia ETF | |
| | Net realized gain (loss) from: | | | Net change in unrealized
appreciation (depreciation) on: | |
| | | | |
Foreign exchange contracts | | Forward exchange contracts | | $ | 729,632 | | | Forward exchange contracts | | $ | 69,755 | |
| | | | |
Equity contracts | | Futures contracts | | | (1,004,814 | ) | | Futures contracts | | | 555,160 | |
| | | | |
Equity contracts | | Swap contracts | | | 4,026,792 | | | Swap contracts | | | 4,311,435 | |
| | | | | | | | | | | | |
| | | | |
Totals | | | | $ | 3,751,610 | | | | | $ | 4,936,350 | |
| | | | | | | | | | | | |
| Franklin U.S. Core Bond ETF | |
| | Net realized gain (loss) from: | | | Net change in unrealized
appreciation (depreciation) on: | |
| | | | |
Equity contracts | | Futures contracts | | $ | 345,524 | | | Futures contracts | | $ | (115,981 | ) |
| | | | |
Interest rate contracts | | Futures contracts | | | — | | | Futures contracts | | | (73,679 | ) |
| | | | |
Credit contracts | | Swap contracts | | | — | | | Swap Contracts | | | (114,058 | ) |
| | | | |
Interest rate contracts | | Swap contracts | | | 43,134 | | | Swap contracts | | | 18,028 | |
| | | | | | | | | | | | |
| | | | |
Totals | | | | $ | 388,658 | | | | | $ | (285,690 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
11. Other Derivative Information (continued)
For the period ended September 30, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
| | | | | | | | | | | | |
| | | |
| | | Franklin
International
Aggregate
Bond ETF | | | Franklin
Investment
Grade
Corporate
ETF | | | Franklin
Systematic
Style
Premia
ETF | |
Futures contracts | | $ | — | | | $ | 27,041,642 | | | $ | 68,490,754 | |
Forward exchange contracts | | $ | 179,051,311 | | | $ | — | | | $ | 46,891,554 | |
| | | |
| | | Franklin
U.S. Core
Bond ETF | | | | | | | |
Futures contracts | | $ | 18,148,445 | | | | | | | | | |
At September 30, 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 | |
| | |
| | | Assetsaa | | | Liabilitiesaa | |
| Franklin International Aggregate Bond ETF | | | | | | |
Foreign exchange contracts | | $ | 10,717,565 | | | $ | 19,172 | |
| | | | |
| | |
| Franklin Systematic Style Premia ETF | | | | | | |
Equity contracts | | $ | 4,311,435 | | | $ | — | |
Foreign exchange contracts | | $ | 728,444 | | | $ | 385,207 | |
Credit contracts | | $ | — | | | $ | 114,058 | |
| | | | |
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 September 30, 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
Received | | | Cash
Collateral
Received | | | Net Amount (Not
less than zero) | |
Franklin International
Aggregate Bond ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
CITI | | $ | 10,717,565 | | | $ | (19,172 | ) | | $ | — | | | $ | — | | | $ | 10,698,393 | |
| | | | |
Franklin Systematic Style
Premia ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
MSCO | | $ | 728,444 | | | $ | (385,207 | ) | | $ | — | | | $ | — | | | $ | 343,237 | |
MSCS | | | 4,311,435 | | | | — | | | | — | | | | — | | | | 4,311,435 | |
| | | | |
Total | | $ | 5,039,879 | | | $ | (385,207 | ) | | $ | — | | | $ | — | | | $ | 4,654,672 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
At September 30, 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 International
Aggregate Bond ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
CITI | | $ | 19,172 | | | $ | (19,172 | ) | | $ | — | | | $ | — | | | $ | — | |
| | | | |
Franklin Systematic Style
Premia ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
MSCO | | $ | 385,207 | | | $ | (385,207 | ) | | $ | — | | | $ | — | | | $ | — | |
| | | | |
Franklin U.S. Core Bond ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
BrCd 92449 | | $ | 114,058 | | | $ | — | | | $ | — | | | $ | — | | | $ | 114,058 | |
| | | | |
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 overcollateral-ization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
See Note 1(c) regarding derivative financial instruments.
12. 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 September 30, 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: | | | | | | | | | | | | | | | | |
Equity Investments | | $ | 8,006,231 | | | $ | — | | | $ | — | | | $ | 8,006,231 | |
| | | | |
| | | | |
| Franklin Dynamic Municipal Bond ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Municipal Bonds | | $ | — | | | $ | 89,691,214 | | | $ | — | | | $ | 89,691,214 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
12. Fair Value Measurements (continued)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin Exponential Data ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Equity Investments | | $ | 2,364,367 | | | $ | — | | | $ | — | | | $ | 2,364,367 | |
Short-Term Investments | | | 2,910 | | | | — | | | | — | | | | 2,910 | |
| | | | |
Total Investments in Securities | | $ | 2,367,277 | | | $ | — | | | $ | — | | | $ | 2,367,277 | |
| | | | |
| | | | |
| Franklin Genomic Advancements ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Equity Investments | | $ | 10,280,777 | | | $ | — | | | $ | — | | | $ | 10,280,777 | |
| | | | |
| | | | |
| Franklin High Yield Corporate ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Corporate Bonds & Notes | | $ | — | | | $ | 166,611,438 | | | $ | — | | | $ | 166,611,438 | |
Senior Floating Rate Interests | | | — | | | | 7,867,636 | | | | — | | | | 7,867,636 | |
Short-Term Investments | | | — | | | | 10,325,000 | | | | — | | | | 10,325,000 | |
| | | | |
Total Investments in Securities | | $ | — | | | $ | 184,804,074 | | | $ | — | | | $ | 184,804,074 | |
| | | | |
| | | | |
| Franklin Intelligent Machines ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Equity Investments | | $ | 6,762,440 | | | $ | — | | | $ | — | | | $ | 6,762,440 | |
| | | | |
| | | |
| Franklin International Aggregate Bond ETF | | | | | | | | | | | | |
| | | |
| Assets: | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Foreign Government and Agency Securities | | $ | — | | | $ | 144,794,934 | | | $ | — | | | $ | 144,794,934 | |
Corporate Bonds & Notes | | | — | | | | 9,117,308 | | | | — | | | | 9,117,308 | |
Short-Term Investments | | | — | | | | 17,185,000 | | | | — | | | | 17,185,000 | |
| | | | |
Total Investments in Securities | | $ | — | | | $ | 171,097,242 | | | $ | — | | | $ | 171,097,242 | |
| | | | |
| | | | |
| Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 10,717,565 | | | | $— | | | $ | 10,717,565 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 19,172 | | | | $— | | | $ | 19,172 | |
| | | | |
| | | | |
| Franklin Investment Grade Corporate ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Corporate Bonds & Notes | | $ | — | | | $ | 546,110,859 | | | $ | — | | | $ | 546,110,859 | |
Discount Note | | | — | | | | 1,915,878 | | | | — | | | | 1,915,878 | |
Short-Term Investments | | | — | | | | 24,430,000 | | | | — | | | | 24,430,000 | |
| | | | |
Total Investments in Securities | | $ | — | | | $ | 572,456,737 | | | $ | — | | | $ | 572,456,737 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 985,371 | | | $ | — | | | | $— | | | $ | 985,371 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin Municipal Green Bond ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Municipal Bonds | | $ | — | | | $ | 98,178,941 | | | $ | — | | | $ | 98,178,941 | |
| | | | |
| | | | |
| Franklin Senior Loan ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Corporate Bonds & Notes | | $ | — | | | $ | 6,584,730 | | | | $— | | | $ | 6,584,730 | |
Senior Floating Rate Interests | | | — | | | | 192,626,257 | | | | — | | | | 192,626,257 | |
Asset-Backed Securities | | | — | | | | 1,868,982 | | | | — | | | | 1,868,982 | |
Short-Term Investments | | | — | | | | 16,040,000 | | | | — | | | | 16,040,000 | |
| | | | |
Total Investments in Securities | | $ | — | | | $ | 217,119,969 | | | $ | — | | | $ | 217,119,969 | |
| | | | |
| | | | |
| Franklin Systematic Style Premia ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 51,456,424 | | | $ | — | | | $ | — | | | $ | 51,456,424 | |
| | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 728,444 | | | $ | — | | | $ | 728,444 | |
Futures Contracts | | | 2,299,573 | | | | — | | | | — | | | | 2,299,573 | |
Swap Contracts | | | — | | | | 4,311,435 | | | | — | | | | 4,311,435 | |
| | | | |
Total Other Financial Instruments | | $ | 2,299,573 | | | $ | 5,039,879 | | | $ | — | | | $ | 7,339,452 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 385,207 | | | $ | — | | | $ | 385,207 | |
Futures Contracts | | | 2,094,169 | | | | — | | | | — | | | | 2,094,169 | |
| | | | |
Total Other Financial Instruments | | $ | 2,094,169 | | | $ | 385,207 | | | $ | — | | | $ | 2,479,376 | |
| | | | |
| | | |
| Franklin U.S. Core Bond ETF | | | | | | | | | | | | |
| | | |
| Assets: | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Corporate Bonds & Notes | | $ | — | | | $ | 312,626,612 | | | $ | — | | | $ | 312,626,612 | |
Municipal Bonds | | | — | | | | 43,721,547 | | | | — | | | | 43,721,547 | |
Mortgage-Backed Securities | | | — | | | | 345,586,047 | | | | — | | | | 345,586,047 | |
Foreign Government and Agency Securities | | | — | | | | 22,860,928 | | | | — | | | | 22,860,928 | |
Asset-Backed Securities | | | — | | | | 43,432,506 | | | | — | | | | 43,432,506 | |
Short-Term Investments | | | 34,495,264 | | | | 653,438,190 | | | | — | | | | 687,933,454 | |
| | | | |
Total Investments in Securities | | $ | 34,495,264 | | | $ | 1,421,665,830 | | | $ | — | | | $ | 1,456,161,094 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 73,679 | | | $ | — | | | $ | — | | | $ | 73,679 | |
Credit Default Swap Contracts | | | — | | | | (114,058 | ) | | | — | | | | (114,058 | ) |
| | | | |
Total Other Financial Instruments | | $ | 73,679 | | | $ | 114,058 | | | $ | — | | | $ | 187,737 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
12.Fair Value Measurements (continued)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin U.S. Low Volatility ETF | | | | | | | | | | | | | | | | |
| | | |
| Assets: | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Equity Investments | | $ | 117,230,000 | | | $ | — | | | $ | — | | | $ | 117,230,000 | |
Short-Term Investments | | | — | | | | 1,065,000 | | | | — | | | | 1,065,000 | |
| | | | |
Total Investments in Securities | | $ | 117,230,000 | | | $ | 1,065,000 | | | $ | — | | | $ | 118,295,000 | |
| | | | |
| | | | |
| Franklin U.S. Treasury Bond ETF | | | | | | | | | | | | | | | | |
| | | |
| Assets: | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Short-Term Investments | | $ | 1,813,760 | | | $ | 332,751,541 | | | $ | — | | | $ | 334,565,301 | |
| | | | |
| | | |
| Franklin Ultra Short Bond ETF | | | | | | | | | | | | |
| | | |
| Assets: | | | | | | | | | | | | |
Investments in Securities: | | | | | | | | | | | | | | | | |
Corporate Bonds & Notes | | $ | — | | | $ | 1,898,582 | | | $ | — | | | $ | 1,898,582 | |
Asset-Backed Securities | | | — | | | | 200,041 | | | | — | | | | 200,041 | |
Short-Term Investments | | | 331,066 | | | | — | | | | — | | | | 331,066 | |
| | | | |
Total Investments in Securities | | $ | 331,066 | | | $ | 2,098,623 | | | $ | — | | | $ | 2,429,689 | |
| | | | |
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and convertible preferred stocks.
13. Investments in FLSP Holdings Corporation
Franklin 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 September 30, 2022, the Franklin Systematic Style Premia ETF investment(s) FLSP Holdings Corporation is reflected in the Fund’s Consolidated Schedule of Investments. At September 30, 2022, the net assets of the FLSP Holdings Corporation were $3,405,362, representing 3.37% of the Fund’s consolidated net assets. The Fund’s investment(s) in the FLSP Holdings Corporation is limited to 25% of consolidated assets.
14. 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.
15. 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.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Abbreviations
| | | | | | | | | | |
| Selected Portfolio | | Currency | | | | Counterparty |
| ADR | | American Depositary Receipt | | AUD | | Australian Dollar | | CITI | | CITIBANK |
| CAC | | Cotation Assistée en Continu | | CAD | | Canadian Dollar | | MSCO | | Morgan Stanley |
| CLO | | Collateralized Loan Obligation | | CNY | | Chinese Yuan Renminbi | | MSCS | | Morgan Stanley Capital Services Inc. |
| CSCDA | | California Statewide Communities | | DKK | | Danish Krone | | | | |
| | Development Authority | | EUR | | Euro | | | | |
| FRN | | Floating Rate Note | | GBP | | United Kingdom Pound | | | | |
| LIBOR | | London InterBank Offered Rate | | JPY | | Japanese Yen | | | | |
| OAT | | Obligation Assumable by the Treasurer | | MXN | | Mexican Peso | | | | |
| REIT | | Real Estate Investment Trust | | PLN | | Polish Zloty | | | | |
| SBA | | Small Business Administration | | SEK | | Swedish Krona | | | | |
| SOFR | | Secured Overnight Financing Rate | | USD | | United States Dollar | | | | |
| TBD | | To be determined | | | | | | | | |
| ULSD | | Ultra-Low Sulfur Diesel | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Shareholder Information
Liquidity Risk Management Program
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
Franklin Dynamic Municipal Bond ETF
Franklin Exponential Data ETF
Franklin Genomic Advancements ETF
Franklin High Yield Corporate ETF
Franklin Intelligent Machines ETF
Franklin International Aggregate Bond ETF
Franklin Investment Grade Corporate ETF
Franklin Municipal Green Bond ETF
Franklin Systematic Style Premia ETF
Franklin U.S. Core Bond ETF
Franklin U.S. Treasury Bond ETF
Franklin Ultra Short Bond ETF
(each a Fund)
Each Fund has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP for the Franklin Templeton and Legg Mason Funds is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for Franklin Templeton and Legg Mason products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
Each Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Liquidity Risk Management Program
FRANKLIN TEMPLETON ETF TRUST
In Kind ETF
Franklin U.S. Low Volatility ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow
projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Liquidity Risk Management Program
FRANKLIN TEMPLETON ETF TRUST
Franklin Senior Loan ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds investments where the time required to settle a sale of the investment may exceed 7 calendar days and are classified as “Less Liquid Investments”. Less liquid Investments are defined as any investment reasonably expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, but where the sale or disposition is reasonably expected to settle in more than seven calendar days. The Fund established and maintained a HLIM. During the
reporting period, the Fund maintained the necessary level of Highly Liquid Investments and did not experience any HLIM shortfalls.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
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
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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.
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 | | Semiannual Report Franklin Templeton ETF Trust | | |
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| | Investment Managers | | 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
Trust Company
1 Heritage Drive
Mail Stop OHD0100
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| © 2022 Franklin Templeton Investments. All rights reserved. | | | | ETF2 S 11/22 |
SEMIANNUAL REPORT
FRANKLIN TEMPLETON ETF TRUST
September 30, 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.
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| Not FDIC Insured | | | | | May Lose Value | | | | | No Bank Guarantee |
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SEMIANNUAL REPORT
Economic and Market Overview
Global developed and emerging market equities, as measured by the MSCI All Country World Index-NR (net of tax withholding when dividends are paid), posted a -21.41% total return for the six months ended September 30, 2022.1 Supply-chain disruptions and volatile prices for energy and commodities contributed to higher inflation in many countries. This inflationary pressure led many of the world’s central banks to adopt less accommodative stances regarding monetary policy. New lockdowns imposed by China’s government to quell the spread of the Omicron variant of COVID-19 pressured Asian and global emerging market stocks. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine and international sanctions on Russia, adding to investor uncertainty about the trajectory of the global economy.
In the U.S., gross domestic product (GDP) growth contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed investments. The inflation rate escalated during the six-month period to the highest level since 1981, precipitating 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 four times during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated, spending and production grew, job growth remained robust and the unemployment rate continued to be low. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
Economies in the eurozone maintained a slow growth rate in the second quarter of 2022 as the easing of COVID-related restrictions and a strong start to the summer tourism season increased household spending. The war in Ukraine contributed to record high inflation across the eurozone as commodity and oil prices soared. The European Central
Bank raised interest rates in July 2022 for the first time in more than a decade, increasing rates again at its subsequent meeting in September, to fight growing inflation. In this environment, European developed market equities, as measured by the MSCI Europe Index-NR, posted a -23.17% total return for the six months under review.1
Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index-NR, posted a -21.45% total return for the six-month period.1 Japan’s economy expanded in the second quarter of 2022 as private consumption increased following the lifting of COVID-related restrictions and expansion of government spending. For the first time since 2020, China’s economy contracted in the second quarter, pressured by COVID-related restrictions and government measures to limit real estate speculation. Unexpected regulatory changes by China’s government, which negatively impacted technology-related businesses, and investor concerns about the solvency of several large property developers in China further pressured stocks in that country.
Global emerging market stocks, as measured by the MSCI Emerging Markets Index-NR, posted a -21.70% total return for the six months under review.1 Following Russia’s invasion of Ukraine, climbing food and energy prices kindled inflationary pressures, which, combined with a strong U.S. dollar, raised concerns over the possibility of government debt defaults in some countries. Rising U.S. interest rates led investors to sell off many holdings in emerging markets, including the major markets of India, South Korea and Taiwan.
The foregoing information reflects our analysis and opinions as of September 30, 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 semiannual report for Franklin FTSE Asia ex Japan ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -21.44% based on market price and -21.44% based on net asset value. In comparison, the FTSE Asia ex Japan Capped Index posted a -21.38% 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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it
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| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 11.9% | |
Semiconductors & Semiconductor Equipment | | | 8.7% | |
Internet & Catalog Retail | | | 6.1% | |
Interactive Media & Services | | | 5.4% | |
Technology Hardware, Storage & Peripherals | | | 5.1% | |
Oil, Gas & Consumable Fuels | | | 4.2% | |
Insurance | | | 4.2% | |
Real Estate Management & Development | | | 3.6% | |
Automobiles | | | 3.4% | |
Electronic Equipment, Instruments & Components | | | 3.0% | |
may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 119.
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FRANKLIN FTSE ASIA EX JAPAN ETF
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| Top 10 Holdings | | | |
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| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan | | | 6.0% | |
Tencent Holdings Ltd. Interactive Media & Services, China | | | 3.8% | |
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea | | | 3.8% | |
Alibaba Group Holding Ltd., A Internet & Catalog Retail, China | | | 2.8% | |
AIA Group Ltd., A Insurance, Hong Kong | | | 1.9% | |
Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India | | | 1.8% | |
Meituan Dianping, B, 144A Internet & Catalog Retail, China | | | 1.6% | |
Infosys Ltd. IT Services, India | | | 1.2% | |
JD.com Inc., A
Internet & Catalog Retail, China | | | 1.1% | |
China Construction Bank Corp., H Banks, China | | | 1.0% | |
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| Top 10 Countries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
China | | | 34.2% | |
India | | | 18.9% | |
Taiwan | | | 15.3% | |
South Korea | | | 11.9% | |
Hong Kong | | | 7.5% | |
Singapore | | | 3.7% | |
Thailand | | | 2.7% | |
Indonesia | | | 2.4% | |
Malaysia | | | 1.9% | |
Philippines | | | 0.8% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 FTSE ASIA EX JAPAN ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
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| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -21.44% | | | | -21.44% | | | | -21.44% | | | | -21.44% | |
1-Year | | | -27.86% | | | | -28.23% | | | | -27.86% | | | | -28.23% | |
3-Year | | | -2.32% | | | | -3.15% | | | | -0.78% | | | | -1.06% | |
Since Inception (2/6/18) | | | -12.27% | | | | -13.27% | | | | -2.78% | | | | -3.02% | |
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 FTSE ASIA EX JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.112327 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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.
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| | | Actual
(actual return after expenses) | | | Hypothetical
(5% annual return before expenses) | | | | |
| | | | | |
Beginning
Account
Value 4/1/22 | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| $1,000.00 | | $ | 785.60 | | | $ | 0.85 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Australia ETF
This semiannual report for Franklin FTSE Australia ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -22.95% based on market price -23.38% based on net asset value. In comparison, the FTSE Australia Capped Index posted a -23.36% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 22.6% | |
Metals & Mining | | | 21.2% | |
Biotechnology | | | 7.8% | |
Oil, Gas & Consumable Fuels | | | 6.5% | |
Food & Staples Retailing | | | 4.3% | |
Capital Markets | | | 4.1% | |
Equity Real Estate Investment Trusts (REITs) | | | 3.4% | |
Transportation Infrastructure | | | 2.9% | |
Multiline Retail | | | 2.9% | |
Insurance | | | 2.9% | |
these circumstances, we may use a representative sampling strategy whereby we will 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 154.
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FRANKLIN FTSE AUSTRALIA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
BHP Group Ltd. Metals & Mining, Australia | | | 11.0% | |
Commonwealth Bank of Australia Banks, Australia | | | 8.8% | |
CSL Ltd. Biotechnology, Australia | | | 7.8% | |
National Australia Bank Ltd. Banks, Australia | | | 5.2% | |
Westpac Banking Corp. Banks, Australia | | | 4.1% | |
Australia & New Zealand Banking Group Ltd. Banks, Australia | | | 4.0% | |
Woodside Petroleum Ltd. Oil, Gas & Consumable Fuels, Australia | | | 3.4% | |
Macquarie Group Ltd. Capital Markets, Australia | | | 3.0% | |
Wesfarmers Ltd. Multiline Retail, Australia | | | 2.8% | |
Woolworths Group Ltd. Food & Staples Retailing, Australia | | | 2.4% | |
Thank you for your participation in Franklin FTSE Australia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 AUSTRALIA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -23.38% | | | | -22.95% | | | | -23.38% | | | | -22.95% | |
1-Year | | | -15.94% | | | | -14.62% | | | | -15.94% | | | | -14.62% | |
3-Year | | | +4.75% | | | | +4.02% | | | | +1.56% | | | | +1.32% | |
Since Inception (11/2/17) | | | +12.67% | | | | +12.53% | | | | +2.46% | | | | +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 11 for Performance Summary footnotes.
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FRANKLIN FTSE AUSTRALIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.890273 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 766.20 | | | $ | 0.40 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Brazil ETF
This semiannual report for Franklin FTSE Brazil ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -18.30% based on market price -18.70% based on net asset value. In comparison, the FTSE Brazil Capped Index posted a -18.50% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 18.0% | |
Oil, Gas & Consumable Fuels | | | 16.9% | |
Metals & Mining | | | 16.5% | |
Electric Utilities | | | 7.9% | |
Capital Markets | | | 5.3% | |
Road & Rail | | | 3.7% | |
Beverages | | | 3.3% | |
Food Products | | | 3.0% | |
Food & Staples Retailing | | | 2.5% | |
Machinery | | | 2.4% | |
whereby we will 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 158.
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FRANKLIN FTSE BRAZIL ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Petroleo Brasileiro SA, 38.601%, pfd. Oil, Gas & Consumable Fuels, Brazil | | | 14.3% | |
Vale SA Metals & Mining, Brazil | | | 13.8% | |
Itau Unibanco Holding SA, 2.937%, pfd. Banks, Brazil | | | 7.2% | |
Banco Bradesco SA, 3.165%, pfd. Banks, Brazil | | | 6.3% | |
B3 SA - Brasil Bolsa Balcao Capital Markets, Brazil | | | 3.9% | |
Ambev SA Beverages, Brazil | | | 3.3% | |
Centrais Eletricas Brasileiras SA Electric Utilities, Brazil | | | 3.2% | |
WEG SA Machinery, Brazil | | | 2.4% | |
Localiza Rent a Car SA Road & Rail, Brazil | | | 2.3% | |
Itausa SA, 5.807%, pfd. Banks, Brazil | | | 2.3% | |
Thank you for your participation in Franklin FTSE Brazil ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 BRAZIL ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -18.70% | | | | -18.30% | | | | -18.70% | | | | -18.30% | |
1-Year | | | +1.47% | | | | +2.18% | | | | +1.47% | | | | +2.18% | |
3-Year | | | -16.60% | | | | -16.43% | | | | -5.87% | | | | -5.81% | |
Since Inception (11/3/17) | | | -5.55% | | | | -5.06% | | | | -1.16% | | | | -1.05% | |
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 16 for Performance Summary footnotes.
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FRANKLIN FTSE BRAZIL ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$1.025517 |
Total Annual Operating Expenses5
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 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 813.00 | | | $ | 0.86 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 17 |
Franklin FTSE Canada ETF
This semiannual report for Franklin FTSE Canada ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -22.55% based on market price and -21.85% based on net asset value. In comparison, the FTSE Canada Capped Index posted a -21.98% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Banks | | | 29.1% | |
| Oil, Gas & Consumable Fuels | | | 18.6% | |
| Road & Rail | | | 9.0% | |
| Insurance | | | 7.4% | |
| Metals & Mining | | | 6.9% | |
| Food & Staples Retailing | | | 4.4% | |
| Capital Markets | | | 4.0% | |
| IT Services | | | 3.3% | |
| Chemicals | | | 3.2% | |
| Commercial Services & Supplies | | | 2.4% | |
strategy whereby we will 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 162.
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FRANKLIN FTSE CANADA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Royal Bank of Canada Banks, Canada | | | 8.9% | |
The Toronto-Dominion Bank
Banks, Canada | | | 7.8% | |
Enbridge Inc.
Oil, Gas & Consumable Fuels, Canada | | | 5.3% | |
Canadian National Railway Co.
Road & Rail, Canada | | | 4.7% | |
Canadian Pacific Railway Ltd.
Road & Rail, Canada | | | 4.4% | |
Bank of Montreal
Banks, Canada | | | 4.2% | |
Bank of Nova Scotia
Banks, Canada | | | 4.0% | |
Brookfield Asset Management Inc., A
Capital Markets, Canada | | | 3.8% | |
Canadian Natural Resources Ltd.
Oil, Gas & Consumable Fuels, Canada | | | 3.6% | |
Nutrien Ltd.
Chemicals, Canada | | | 3.2% | |
Thank you for your participation in Franklin FTSE Canada ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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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| franklintempleton.com | | Semiannual Report | | | | | | | | 19 |
FRANKLIN FTSE CANADA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -21.85% | | | | -22.55% | | | | -21.85% | | | | -22.55% | |
1-Year | | | -11.64% | | | | -12.12% | | | | -11.64% | | | | -12.12% | |
3-Year | | | +17.07% | | | | +16.58% | | | | +5.39% | | | | +5.25% | |
Since Inception (11/2/17) | | | +25.77% | | | | +25.51% | | | | +4.78% | | | | +4.74% | |
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 21 for Performance Summary footnotes.
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FRANKLIN FTSE CANADA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.050796 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 21 |
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 781.50 | | | $ | 0.40 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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| 22 | | | | | | | | Semiannual Report | | franklintempleton.com |
Franklin FTSE China ETF
This semiannual report for Franklin FTSE China ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -19.29% based on market price and -20.42% based on net asset value. In comparison, the FTSE China Capped Index posted a -20.45% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 25.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Internet & Catalog Retail | | | 17.2% | |
| Interactive Media & Services | | | 13.6% | |
| Banks | | | 10.5% | |
| Automobiles | | | 4.6% | |
| Beverages | | | 3.9% | |
| Real Estate Management & Development | | | 3.6% | |
| Insurance | | | 3.5% | |
| Oil, Gas & Consumable Fuels | | | 3.0% | |
| Food Products | | | 2.0% | |
| Textiles, Apparel & Luxury Goods | | | 2.0% | |
whereby we will 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 165.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 23 |
FRANKLIN FTSE CHINA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Tencent Holdings Ltd.
Interactive Media & Services, China | | | 10.9% | |
Alibaba Group Holding Ltd., A
Internet & Catalog Retail, China | | | 8.0% | |
Meituan Dianping, B, 144A
Internet & Catalog Retail, China | | | 4.7% | |
JD.com Inc., A
Internet & Catalog Retail, China | | | 3.2% | |
China Construction Bank Corp., H
Banks, China | | | 2.9% | |
Industrial and Commercial Bank of China Ltd., H
Banks, China | | | 2.0% | |
Baidu Inc.
Interactive Media & Services, China | | | 1.8% | |
Ping An Insurance Group Co. of China Ltd., H
Insurance, China | | | 1.6% | |
NetEase Inc.
Entertainment, China | | | 1.5% | |
Bank of China Ltd., H
Banks, China | | | 1.3% | |
Thank you for your participation in Franklin FTSE China ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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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| | | | | | |
| 24 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN FTSE CHINA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -20.42% | | | | -19.29% | | | | -20.42% | | | | -19.29% | |
1-Year | | | -35.25% | | | | -35.32% | | | | -35.25% | | | | -35.32% | |
3-Year | | | -18.76% | | | | -18.46% | | | | -6.69% | | | | -6.58% | |
Since Inception (11/2/17) | | | -27.23% | | | | -27.39% | | | | -6.27% | | | | -6.31% | |
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 26 for Performance Summary footnotes.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 25 |
FRANKLIN FTSE CHINA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.140032 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
| | | | | | | | | | |
| | | | | | |
| 26 | | | | | | | | Semiannual Report | | franklintempleton.com |
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 795.80 | | | $ | 0.86 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Europe ETF
This semiannual report for Franklin FTSE Europe ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -23.70% based on market price and -23.57% based on net asset value. In comparison, the FTSE Developed Europe Capped Index posted a -23.75% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 30.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Pharmaceuticals | | | 11.8% | |
Banks | | | 7.3% | |
Oil, Gas & Consumable Fuels | | | 6.2% | |
Insurance | | | 5.1% | |
Food Products | | | 4.8% | |
Textiles, Apparel & Luxury Goods | | | 4.5% | |
Chemicals | | | 3.4% | |
Semiconductors & Semiconductor Equipment | | | 3.0% | |
Beverages | | | 2.8% | |
Personal Products | | | 2.7% | |
may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 186.
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FRANKLIN FTSE EUROPE ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
Nestle SA Food Products, Switzerland | | | 3.6% | |
Roche Holding AG, Non-Voting Pharmaceuticals, Switzerland | | | 2.8% | |
Shell PLC Oil, Gas & Consumable Fuels, Netherlands | | | 2.3% | |
ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands | | | 2.1% | |
AstraZeneca PLC Pharmaceuticals, United Kingdom | | | 2.0% | |
Novartis AG Pharmaceuticals, Switzerland | | | 2.0% | |
Novo Nordisk AS, B Pharmaceuticals, Denmark | | | 2.0% | |
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | | | 1.8% | |
Unilever PLC Personal Products, United Kingdom | | | 1.4% | |
TotalEnergies SE Oil, Gas & Consumable Fuels, France | | | 1.4% | |
Thank you for your participation in Franklin FTSE Europe ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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.
| | | | |
| Top 10 Countries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
United Kingdom | | | 20.2% | |
Switzerland | | | 16.4% | |
France | | | 16.2% | |
Germany | | | 11.7% | |
Netherlands | | | 9.0% | |
Sweden | | | 5.0% | |
Denmark | | | 4.0% | |
Spain | | | 3.7% | |
Italy | | | 3.2% | |
Finland | | | 2.1% | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 29 |
FRANKLIN FTSE EUROPE ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF���s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -23.57% | | | | -23.70% | | | | -23.57% | | | | -23.70% | |
1-Year | | | -25.48% | | | | -26.19% | | | | -25.48% | | | | -26.19% | |
3-Year | | | -4.88% | | | | -5.65% | | | | -1.65% | | | | -1.92% | |
Since Inception (11/2/17) | | | -6.21% | | | | -7.13% | | | | -1.30% | | | | -1.50% | |
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 EUROPE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.513368 |
Total Annual Operating Expenses5
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 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 31 |
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 764.30 | | | $ | 0.40 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Europe Hedged ETF
This semiannual report for Franklin FTSE Europe
Hedged ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -12.39% based on market price and -11.84% based on net asset value. In comparison, the FTSE
Developed Europe Capped Hedged Index posted a -11.96% 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 Hedged Index. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will replicate
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Pharmaceuticals | | | 11.9% | |
Banks | | | 7.3% | |
Oil, Gas & Consumable Fuels | | | 6.3% | |
Insurance | | | 5.2% | |
Food Products | | | 4.9% | |
Textiles, Apparel & Luxury Goods | | | 4.6% | |
Chemicals | | | 3.4% | |
Semiconductors & Semiconductor Equipment | | | 3.0% | |
Beverages | | | 2.8% | |
Personal Products | | | 2.7% | |
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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 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
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 199.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 33 |
FRANKLIN FTSE EUROPE HEDGED ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Nestle SA Food Products, Switzerland | | | 3.7% | |
Roche Holding AG, Non-Voting Pharmaceuticals, Switzerland | | | 2.9% | |
Shell PLC Oil, Gas & Consumable Fuels, Netherlands | | | 2.3% | |
ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands | | | 2.1% | |
AstraZeneca PLC Pharmaceuticals, United Kingdom | | | 2.1% | |
Novartis AG Pharmaceuticals, Switzerland | | | 2.0% | |
Novo Nordisk AS, B Pharmaceuticals, Denmark | | | 2.0% | |
LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France | | | 1.9% | |
Unilever PLC Personal Products, United Kingdom | | | 1.4% | |
TotalEnergies SE Oil, Gas & Consumable Fuels, France | | | 1.4% | |
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.
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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.
| | | | |
| Top 10 Countries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
United Kingdom | | | 20.3% | |
Switzerland | | | 16.5% | |
France | | | 16.3% | |
Germany | | | 11.9% | |
Netherlands | | | 9.1% | |
Sweden | | | 5.0% | |
Denmark | | | 4.0% | |
Spain | | | 3.7% | |
Italy | | | 3.3% | |
Finland | | | 2.2% | |
| | | | | | | | | | |
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FRANKLIN FTSE EUROPE HEDGED ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -11.84% | | | | -12.39% | | | | -11.84% | | | | -12.39% | |
1-Year | | | -10.93% | | | | -11.53% | | | | -10.93% | | | | -11.53% | |
3-Year | | | +8.83% | | | | +8.59% | | | | +2.86% | | | | +2.78% | |
Since Inception (11/2/17) | | | +19.68% | | | | +19.03% | | | | +3.73% | | | | +3.61% | |
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.
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 35 |
FRANKLIN FTSE EUROPE HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.237130 |
Total Annual Operating Expenses5
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 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 881.60 | | | $ | 0.42 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE France ETF
This semiannual report for Franklin FTSE France ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -22.82% based on market price and -22.36% based on net asset value. In comparison, the FTSE France Capped Index posted a -22.52% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 40.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Textiles, Apparel & Luxury Goods | | | 19.4% | |
Oil, Gas & Consumable Fuels | | | 8.4% | |
Aerospace & Defense | | | 7.0% | |
Pharmaceuticals | | | 6.5% | |
Personal Products | | | 6.0% | |
Electrical Equipment | | | 5.9% | |
Banks | | | 5.3% | |
Chemicals | | | 4.8% | |
Construction & Engineering | | | 3.9% | |
IT Services | | | 3.5% | |
whereby we will 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 213.
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FRANKLIN FTSE FRANCE ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
LVMH Moet Hennessy Louis Vuitton SE
Textiles, Apparel & Luxury Goods, France | | | 11.1% | |
TotalEnergies SE
Oil, Gas & Consumable Fuels, France | | | 8.4% | |
Sanofi
Pharmaceuticals, France | | | 6.2% | |
L’Oreal SA
Personal Products, France | | | 6.0% | |
Schneider Electric SE
Electrical Equipment, France | | | 4.6% | |
Air Liquide SA
Chemicals, France | | | 4.4% | |
Airbus SE
Aerospace & Defense, France | | | 3.6% | |
BNP Paribas SA
Banks, France | | | 3.4% | |
EssilorLuxottica SA
Textiles, Apparel & Luxury Goods, France | | | 3.1% | |
AXA SA
Insurance, France | | | 3.0% | |
Thank you for your participation in Franklin FTSE France ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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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| franklintempleton.com | | Semiannual Report | | | | | | | | 39 |
FRANKLIN FTSE FRANCE ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -22.36% | | | | -22.82% | | | | -22.36% | | | | -22.82% | |
1-Year | | | -24.35% | | | | -25.59% | | | | -24.35% | | | | -25.59% | |
3-Year | | | -4.94% | | | | -6.62% | | | | -1.68% | | | | -2.26% | |
Since Inception (11/2/17) | | | -2.52% | | | | -4.06% | | | | -0.52% | | | | -0.84% | |
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 41 for Performance Summary footnotes.
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FRANKLIN FTSE FRANCE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.454747 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 41 |
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 776.40 | | | $ | 0.40 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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| 42 | | | | | | | | Semiannual Report | | franklintempleton.com |
Franklin FTSE Germany ETF
This semiannual report for Franklin FTSE Germany ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -28.40% based on market price and -28.52% based on net asset value. In comparison, the FTSE Germany Capped Index posted a -28.78% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Insurance | | | 11.5% | |
Automobiles | | | 10.3% | |
Software | | | 9.9% | |
Industrial Conglomerates | | | 8.5% | |
Pharmaceuticals | | | 7.0% | |
Diversified Telecommunication Services | | | 6.7% | |
Chemicals | | | 6.6% | |
Capital Markets | | | 4.8% | |
Multi-Utilities | | | 4.2% | |
Air Freight & Logistics | | | 3.1% | |
strategy whereby we will 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 216.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 43 |
FRANKLIN FTSE GERMANY ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
SAP SE Software, Germany | | | 9.6% | |
Siemens AG Industrial Conglomerates, Germany | | | 7.8% | |
Allianz SE Insurance, Germany | | | 6.8% | |
Deutsche Telekom AG Diversified Telecommunication Services, Germany | | | 6.1% | |
Bayer AG Pharmaceuticals, Germany | | | 4.8% | |
Daimler AG Automobiles, Germany | | | 4.5% | |
BASF SE Chemicals, Germany | | | 3.7% | |
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen Insurance, Germany | | | 3.6% | |
Deutsche Boerse AG Capital Markets, Germany | | | 3.2% | |
Deutsche Post AG Air Freight & Logistics, Germany | | | 3.1% | |
Thank you for your participation in Franklin FTSE Germany ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 GERMANY ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -28.52% | | | | -28.40% | | | | -28.52% | | | | -28.40% | |
1-Year | | | -37.25% | | | | -37.86% | | | | -37.25% | | | | -37.86% | |
3-Year | | | -18.98% | | | | -19.86% | | | | -6.78% | | | | -7.12% | |
Since Inception (11/2/17) | | | -30.44% | | | | -31.17% | | | | -7.13% | | | | -7.33% | |
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 46 for Performance Summary footnotes.
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 45 |
FRANKLIN FTSE GERMANY ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.593319 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 714.80 | | | $ | 0.39 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Hong Kong ETF
This semiannual report for Franklin FTSE Hong Kong ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -17.42% based on market price and -18.38% based on net asset value. In comparison, the FTSE Hong Kong Capped Index posted a -18.40% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 50.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Real Estate Management & Development | | | 22.9% | |
Insurance | | | 19.3% | |
Capital Markets | | | 11.3% | |
Banks | | | 6.3% | |
Hotels, Restaurants & Leisure | | | 6.2% | |
Electric Utilities | | | 5.7% | |
Equity Real Estate Investment Trusts (REITs) | | | 4.0% | |
Household Durables | | | 3.8% | |
Industrial Conglomerates | | | 2.9% | |
Gas Utilities | | | 2.4% | |
strategy whereby we will 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 219.
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FRANKLIN FTSE HONG KONG ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
AIA Group Ltd., A Insurance, Hong Kong | | | 19.3% | |
Hong Kong Exchanges and Clearing Ltd. Capital Markets, Hong Kong | | | 11.1% | |
Sun Hung Kai Properties Ltd. Real Estate Management & Development, Hong Kong | | | 4.0% | |
Link REIT Equity Real Estate Investment Trusts (REITs), Hong Kong | | | 3.8% | |
CK Hutchison Holdings Ltd., A Real Estate Management & Development, United Kingdom | | | 3.8% | |
Galaxy Entertainment Group Ltd. Hotels, Restaurants & Leisure, Macau | | | 3.3% | |
Techtronic Industries Co. Ltd. Household Durables, Hong Kong | | | 3.2% | |
CLP Holdings Ltd. Electric Utilities, Hong Kong | | | 3.2% | |
BOC Hong Kong (Holdings) Ltd. Banks, China | | | 3.1% | |
CK Asset Holdings Ltd. Real Estate Management & Development, Hong Kong | | | 3.0% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 HONG KONG ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -18.38% | | | | -17.42% | | | | -18.38% | | | | -17.42% | |
1-Year | | | -24.31% | | | | -23.26% | | | | -24.31% | | | | -23.26% | |
3-Year | | | -12.74% | | | | -11.82% | | | | -4.44% | | | | -4.10% | |
Since Inception (11/2/17) | | | -15.10% | | | | -14.11% | | | | -3.28% | | | | -3.05% | |
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 51 for Performance Summary footnotes.
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FRANKLIN FTSE HONG KONG ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.416010 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 51 |
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 816.20 | | | $ | 0.41 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE India ETF
This semiannual report for Franklin FTSE India ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -8.25% based on market price -8.04% based on net asset value. In comparison, the FTSE India Capped Index posted a -8.41% total return for the same period.2 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will invest in what we believe to be a
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
IT Services | | | 13.6% | |
Oil, Gas & Consumable Fuels | | | 12.1% | |
Banks | | | 6.5% | |
Automobiles | | | 5.5% | |
Thrifts & Mortgage Finance | | | 5.1% | |
Chemicals | | | 4.7% | |
Pharmaceuticals | | | 4.2% | |
Metals & Mining | | | 3.5% | |
Consumer Finance | | | 3.4% | |
Construction Materials | | | 2.9% | |
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 223.
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FRANKLIN FTSE INDIA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India | | | 9.8% | |
Infosys Ltd. IT Services, India | | | 6.2% | |
Housing Development Finance Corp. Ltd. Thrifts & Mortgage Finance, India | | | 4.9% | |
Tata Consultancy Services Ltd. IT Services, India | | | 3.8% | |
Hindustan Unilever Ltd. Household Products, India | | | 2.9% | |
Bharti Airtel Ltd. Wireless Telecommunication Services, India | | | 2.4% | |
Bajaj Finance Ltd. Consumer Finance, India | | | 2.1% | |
Axis Bank Ltd. Banks, India | | | 2.1% | |
Asian Paints Ltd. Chemicals, India | | | 1.9% | |
ICICI Bank Ltd. Banks, India | | | 1.7% | |
Thank you for your participation in Franklin FTSE India ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 INDIA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -8.04% | | | | -8.25% | | | | -8.04% | | | | -8.25% | |
1-Year | | | -10.19% | | | | -10.79% | | | | -10.19% | | | | -10.79% | |
3-Year | | | +35.70% | | | | +33.50% | | | | +10.71% | | | | +10.11% | |
Since Inception (2/6/18) | | | +27.67% | | | | +26.68% | | | | +5.40% | | | | +5.22% | |
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.
See page 56 for Performance Summary footnotes.
| | | | | | | | | | |
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FRANKLIN FTSE INDIA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 919.60 | | | $ | 0.91 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Italy ETF
This semiannual report for Franklin FTSE Italy ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -25.49% based on market price and -25.44% based on net asset value. In comparison, the FTSE Italy Capped Index posted a -25.64% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 18.7% | |
Automobiles | | | 14.8% | |
Electric Utilities | | | 12.8% | |
Oil, Gas & Consumable Fuels | | | 8.1% | |
Insurance | | | 7.9% | |
Machinery | | | 4.6% | |
Gas Utilities | | | 4.0% | |
Transportation Infrastructure | | | 3.7% | |
IT Services | | | 3.6% | |
Textiles, Apparel & Luxury Goods | | | 3.2% | |
whereby we will 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 228.
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FRANKLIN FTSE ITALY ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Enel SpA Electric Utilities, Italy | | | 9.8% | |
Intesa Sanpaolo SpA Banks, Italy | | | 8.6% | |
Eni SpA Oil, Gas & Consumable Fuels, Italy | | | 8.1% | |
Stellantis NV Automobiles, United States | | | 7.6% | |
Ferrari NV Automobiles, Italy | | | 7.2% | |
Assicurazioni Generali SpA Insurance, Italy | | | 6.1% | |
UniCredit SpA Banks, Italy | | | 4.8% | |
Atlantia SpA Transportation Infrastructure, Italy | | | 3.7% | |
CNH Industrial NV Machinery, United Kingdom | | | 3.5% | |
Moncler SpA Textiles, Apparel & Luxury Goods, Italy | | | 3.2% | |
Thank you for your participation in Franklin FTSE Italy ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 ITALY ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -25.44% | | | | -25.49% | | | | -25.44% | | | | -25.49% | |
1-Year | | | -29.60% | | | | -30.12% | | | | -29.60% | | | | -30.12% | |
3-Year | | | -14.20% | | | | -14.95% | | | | -4.98% | | | | -5.26% | |
Since Inception (11/2/17) | | | -17.61% | | | | -18.34% | | | | -3.87% | | | | -4.04% | |
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.
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FRANKLIN FTSE ITALY ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.571345 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 745.60 | | | $ | 0.39 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Japan ETF
This semiannual report for Franklin FTSE Japan ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -19.11% based on market price and -20.31% based on net asset value. In comparison, the FTSE Japan Capped Index posted a -20.37% 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 Japan Capped Index. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Automobiles | | | 7.4% | |
Pharmaceuticals | | | 6.2% | |
Banks | | | 5.1% | |
Electronic Equipment, Instruments & Components | | | 5.0% | |
Machinery | | | 4.8% | |
Trading Companies & Distributors | | | 4.3% | |
Chemicals | | | 4.0% | |
Household Durables | | | 3.9% | |
Wireless Telecommunication Services | | | 3.4% | |
Road & Rail | | | 3.2% | |
whereby we will 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 230.
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FRANKLIN FTSE JAPAN ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Toyota Motor Corp. Automobiles, Japan | | | 4.8% | |
Sony Corp. Household Durables, Japan | | | 2.4% | |
Keyence Corp. Electronic Equipment, Instruments & Components, Japan | | | 2.0% | |
Mitsubishi UFJ Financial Group Inc. Banks, Japan | | | 1.7% | |
Daiichi Sankyo Co. Ltd. Pharmaceuticals, Japan | | | 1.6% | |
KDDI Corp. Wireless Telecommunication Services, Japan | | | 1.5% | |
Nintendo Co. Ltd. Entertainment, Japan | | | 1.3% | |
Daikin Industries Ltd. Building Products, Japan | | | 1.3% | |
Recruit Holdings Co. Ltd. Professional Services, Japan | | | 1.2% | |
Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan | | | 1.2% | |
Thank you for your participation in Franklin FTSE Japan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -20.31% | | | | -19.11% | | | | -20.31% | | | | -19.11% | |
1-Year | | | -28.77% | | | | -28.28% | | | | -28.77% | | | | -28.28% | |
3-Year | | | -7.08% | | | | -7.47% | | | | -2.42% | | | | -2.56% | |
Since Inception (11/2/17) | | | -8.77% | | | | -8.46% | | | | -1.85% | | | | -1.78% | |
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 66 for Performance Summary footnotes.
| | | | | | | | | | |
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FRANKLIN FTSE JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.255286 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 796.90 | | | $ | 0.41 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Japan Hedged ETF
This semiannual report for Franklin FTSE Japan Hedged ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -2.44% based on market price -3.50% based on net asset value. In comparison, the FTSE Japan Capped Hedged Index posted a -3.58% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Automobiles | | | 7.3% | |
Pharmaceuticals | | | 6.1% | |
Banks | | | 5.1% | |
Electronic Equipment, Instruments & Components | | | 5.0% | |
Machinery | | | 4.8% | |
Trading Companies & Distributors | | | 4.3% | |
Chemicals | | | 4.0% | |
Household Durables | | | 3.8% | |
Wireless Telecommunication Services | | | 3.4% | |
Road & Rail | | | 3.2% | |
respective weightings in the Underlying Index). However, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 241.
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FRANKLIN FTSE JAPAN HEDGED ETF
| | | | |
| Top 10 Holdings | |
|
| 9/30/22 | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Toyota Motor Corp.
Automobiles, Japan | | | 4.8% | |
Sony Corp.
Household Durables, Japan | | | 2.4% | |
Keyence Corp.
Electronic Equipment, Instruments & Components, Japan | | | 2.0% | |
Mitsubishi UFJ Financial Group Inc.
Banks, Japan | | | 1.6% | |
Daiichi Sankyo Co. Ltd.
Pharmaceuticals, Japan | | | 1.6% | |
KDDI Corp.
Wireless Telecommunication Services, Japan | | | 1.5% | |
Nintendo Co. Ltd.
Entertainment, Japan | | | 1.3% | |
Daikin Industries Ltd.
Building Products, Japan | | | 1.3% | |
Recruit Holdings Co. Ltd.
Professional Services, Japan | | | 1.2% | |
Takeda Pharmaceutical Co. Ltd.
Pharmaceuticals, Japan | | | 1.2% | |
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.
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 HEDGED ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -3.50% | | | | -2.44% | | | | -3.50% | | | | -2.44% | |
1-Year | | | -6.12% | | | | -5.47% | | | | -6.12% | | | | -5.47% | |
3-Year | | | +27.90% | | | | +27.23% | | | | +8.55% | | | | +8.36% | |
Since Inception (11/2/17) | | | +23.40% | | | | +23.99% | | | | +4.38% | | | | +4.48% | |
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.
See page 71 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN HEDGED ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.924931 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | | $965.00 | | | $ | 0.44 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Latin America ETF
This semiannual report for Franklin FTSE Latin America ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -19.04% based on market price and -18.91% based on net asset value. In comparison, the FTSE Latin America Capped Index posted a -18.81% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 75.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 19.1% | |
Metals & Mining | | | 13.0% | |
Oil, Gas & Consumable Fuels | | | 12.1% | |
Electric Utilities | | | 5.9% | |
Beverages | | | 5.7% | |
Food & Staples Retailing | | | 5.4% | |
Wireless Telecommunication Services | | | 4.5% | |
Food Products | | | 3.8% | |
Capital Markets | | | 3.5% | |
Chemicals | | | 3.2% | |
may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 252.
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FRANKLIN FTSE LATIN AMERICA ETF
| | | | |
| Top 10 Holdings | |
|
| 9/30/22 | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
Petroleo Brasileiro SA, 38.601%, pfd.
Oil, Gas & Consumable Fuels, Brazil | | | 9.4% | |
Vale SA
Metals & Mining, Brazil | | | 9.1% | |
Itau Unibanco Holding SA, 2.937%, pfd.
Banks, Brazil | | | 4.8% | |
America Movil SAB de CV
Wireless Telecommunication Services, Mexico | | | 4.1% | |
Banco Bradesco SA, 3.165%, pfd.
Banks, Brazil | | | 4.1% | |
Grupo Financiero Banorte SAB de CV
Banks, Mexico | | | 3.2% | |
Wal-Mart de Mexico SAB de CV, V
Food & Staples Retailing, Mexico | | | 3.2% | |
B3 SA – Brasil Bolsa Balcao
Capital Markets, Brazil | | | 2.6% | |
Sociedad Quimica y Minera de Chile SA, 0.005%, pfd., B
Chemicals, Chile | | | 2.5% | |
Ambev SA
Beverages, Brazil | | | 2.2% | |
| | | | |
| Country Composition | |
|
| 9/30/22 | |
| |
| | | % of Total
Net Assets | |
Brazil | | | 63.9% | |
Mexico | | | 25.9% | |
Chile | | | 6.7% | |
Colombia | | | 1.8% | |
United States | | | 1.3% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 LATIN AMERICA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -18.91% | | | | -19.04% | | | | -18.91% | | | | -19.04% | |
1-Year | | | -1.12% | | | | -1.39% | | | | -1.12% | | | | -1.39% | |
3-Year | | | -11.95% | | | | -12.25% | | | | -4.15% | | | | -4.26% | |
Since Inception (10/9/18) | | | -10.61% | | | | -10.55% | | | | -2.78% | | | | -2.77% | |
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.
See page 76 for Performance Summary footnotes.
| | | | | | | | | | |
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FRANKLIN FTSE LATIN AMERICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.799003 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 810.90 | | | $ | 0.86 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Mexico ETF
This semiannual report for Franklin FTSE Mexico ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -18.50% based on market price and -18.41% based on net asset value. In comparison, the FTSE Mexico Capped Index posted a -18.39% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 80.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 18.8% | |
Wireless Telecommunication Services | | | 13.3% | |
Beverages | | | 13.1% | |
Food & Staples Retailing | | | 11.6% | |
Transportation Infrastructure | | | 8.8% | |
Metals & Mining | | | 7.4% | |
Food Products | | | 6.7% | |
Construction Materials | | | 4.2% | |
Equity Real Estate Investment Trusts (REITs) | | | 4.0% | |
Industrial Conglomerates | | | 3.4% | |
whereby we will 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 257.
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FRANKLIN FTSE MEXICO ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
America Movil SAB de CV Wireless Telecommunication Services, Mexico | | | 13.3% | |
Grupo Financiero Banorte SAB de CV Banks, Mexico | | | 10.7% | |
Wal-Mart de Mexico SAB de CV, V Food & Staples Retailing, Mexico | | | 10.4% | |
| Fomento Economico Mexicano SAB de CV Beverages, Mexico | | | 7.0% | |
Grupo Mexico SAB de CV, B Metals & Mining, Mexico | | | 6.4% | |
Grupo Bimbo SAB de CV Food Products, Mexico | | | 4.6% | |
Cemex SAB de CV Construction Materials, Mexico | | | 3.4% | |
Grupo Aeroportuario del Pacifico SAB de CV Transportation Infrastructure, Mexico | | | 3.1% | |
Grupo Aeroportuario del Sureste SAB de CV Transportation Infrastructure, Mexico | | | 3.0% | |
Grupo Elektra SAB de CV Banks, Mexico | | | 2.8% | |
Thank you for your participation in Franklin FTSE Mexico ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 MEXICO ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -18.41% | | | | -18.50% | | | | -18.41% | | | | -18.50% | |
1-Year | | | -5.51% | | | | -5.03% | | | | -5.51% | | | | -5.03% | |
3-Year | | | +10.38% | | | | +10.12% | | | | +3.35% | | | | +3.27% | |
Since Inception (11/3/17) | | | +0.31% | | | | +0.39% | | | | +0.06% | | | | +0.08% | |
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 81 for Performance Summary footnotes.
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FRANKLIN FTSE MEXICO ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.339975 |
Total Annual Operating Expenses5
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 Mexican issuers involve risks that are specific to Mexico, 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 815.90 | | | $ | 0.86 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Russia ETF
This semiannual report for Franklin FTSE Russia ETF covers the period ended September 30, 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 net asset value (NAV) cannot be calculated. Additionally, the value and liquidity of Russian securities experienced significant declines 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. As a result, the Fund fair valued all Russian equity securities at $0 (as of September 30, 2022, such securities continue to be fair valued at $0). Accordingly, as of September 30, 2022, the Fund’s portfolio was comprised of Russian equity securities (fair valued at $0 as noted above) and cash. In addition, FTSE Russell has suspended rebalancings/reconstitutions of the FTSE Russia RIC Capped Index, the Fund’s underlying index, including application of the capping methodology, as well as other index policies until further notice. 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 significant tracking error. Further, if the Fund’s shares resume trading on NYSE Arca, Inc., the Fund may experience significant premiums or discounts to the Fund’s 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.
| | |
| Top 10 Sectors/Industries | | |
| |
| 9/30/22 | | |
This disclosure has not been included as all securities of the Fund are valued at zero as of September 30, 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.
This disclosure has not been included as all securities of the Fund are valued at zero as of September 30, 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.
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.
Performance Overview
During the six-month period ended September 30, 2022, the Fund’s portfolio was comprised of Russian equity securities (fair valued at $0 as noted above) and cash. During that period, the Fund’s NAV per share increased from $0.003378 as of March 31, 2022 to $0.005827 as of September 30, 2022. In comparison, the FTSE Russia Capped Index posted a -8.71% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 85.
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 suspended rebalancings/reconstitutions of the FTSE Russia Capped Index, including application of the capping methodology, as well as other index policies until further notice.
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 September 30, 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 259.
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FRANKLIN FTSE RUSSIA ETF
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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.
Thank you for your participation in Franklin FTSE Russia ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
1-Year | | | -99.98% | | | | -71.53% | | | | -99.98% | | | | -71.53% | |
3-Year | | | -99.97% | | | | -59.55% | | | | -93.63% | | | | -26.05% | |
Since Inception (2/6/18) | | | -99.97% | | | | -53.30% | | | | -82.56% | | | | -15.11% | |
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 86 for Performance Summary footnotes.
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FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5,6
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. 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 significant tracking error. Further, if 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. The Fund’s returns based on net asset value include the Fund’s valuation of its Russian securities based on fair value prices.
4. 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 September 30, 2022, the Fund did not have a daily closing market price.
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.
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. As noted above, 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. During the six-month period ended September 30, 2022, the Fund’s portfolio was comprised of Russian equity securities (fair valued at $0 as notes above) and cash, and Fund shares were note available for purchase.
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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio2 | |
| | $1,000.00 | | | $ | 1,725.00 | 3 | | $ | 0.00 | | | $ | 1,025.07 | | | $ | 0.00 | | | | 0.00 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. 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.
3. The amount shown above reflects the Fund’s NAV per share increasing from $0.003378 as of March 31, 2022 to $0.005827 as of September 30, 2022.
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Franklin FTSE Saudi Arabia ETF
This semiannual report for Franklin FTSE Saudi Arabia ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -12.23% based on market price and -11.10% based on net asset value. In comparison, the FTSE Saudi Arabia Capped Index posted a -11.12% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Banks | | | 43.9% | |
Chemicals | | | 15.3% | |
Oil, Gas & Consumable Fuels | | | 9.2% | |
Diversified Telecommunication Services | | | 6.2% | |
Metals & Mining | | | 4.7% | |
Health Care Providers & Services | | | 3.1% | |
Food Products | | | 2.1% | |
Independent Power Producers & Energy Traders | | | 2.0% | |
Electric Utilities | | | 1.7% | |
Wireless Telecommunication Services | | | 1.7% | |
may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 261.
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FRANKLIN FTSE SAUDI ARABIA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Al Rajhi Bank Banks, Saudi Arabia | | | 13.8% | |
Saudi National Bank Banks, Saudi Arabia | | | 11.9% | |
Saudi Arabian Oil Co., 144A Oil, Gas & Consumable Fuels, Saudi Arabia | | | 8.7% | |
Saudi Basic Industries Corp. Chemicals, Saudi Arabia | | | 6.9% | |
Saudi Telecom Co. Diversified Telecommunication Services, Saudi Arabia | | | 6.2% | |
Saudi Arabian Mining Co. Metals & Mining, Saudi Arabia | | | 4.7% | |
Riyad Bank Banks, Saudi Arabia | | | 3.9% | |
Saudi British Bank Banks, Saudi Arabia | | | 3.4% | |
SABIC Agri-Nutrients Co. Chemicals, Saudi Arabia | | | 3.2% | |
Alinma Bank Banks, Saudi Arabia | | | 3.1% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -11.10% | | | | -12.32% | | | | -11.10% | | | | -12.32% | |
1-Year | | | +4.14% | | | | +3.11% | | | | +4.14% | | | | +3.11% | |
3-Year | | | +52.04% | | | | +49.15% | | | | +14.99% | | | | +14.26% | |
Since Inception (10/9/18) | | | +60.11% | | | | +58.08% | | | | +12.57% | | | | +12.21% | |
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 91 for Performance Summary footnotes.
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FRANKLIN FTSE SAUDI ARABIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.332627 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 889.00 | | | $ | 1.85 | | | $ | 1,023.11 | | | $ | 1.98 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE South Africa ETF
This semiannual report for Franklin FTSE South Africa ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -33.29% based on market price and -32.23% based on net asset value. In comparison, the FTSE/JSE South Africa Capped Index posted a -32.24% 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/JSE South Africa Capped Index. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Metals & Mining | | | 18.2% | |
Banks | | | 14.4% | |
Internet & Direct Marketing Retail | | | 12.5% | |
Diversified Financial Services | | | 9.6% | |
Food & Staples Retailing | | | 8.5% | |
Wireless Telecommunication Services | | | 7.5% | |
Insurance | | | 6.3% | |
Chemicals | | | 4.1% | |
Specialty Retail | | | 3.6% | |
Equity Real Estate Investment Trusts (REITs) | | | 2.0% | |
respective weightings in the Underlying Index). However, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 264.
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FRANKLIN FTSE SOUTH AFRICA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Naspers Ltd., N Internet & Direct Marketing Retail, South Africa | | | 12.5% | |
FirstRand Ltd.
Diversified Financial Services, South Africa | | | 7.8% | |
MTN Group Ltd. Wireless Telecommunication Services, South Africa | | | 5.6% | |
Standard Bank Group Ltd. Banks, South Africa | | | 5.0% | |
Sasol Ltd. Chemicals, South Africa | | | 4.1% | |
Absa Group Ltd. Banks, South Africa | | | 3.8% | |
Impala Platinum Holdings Ltd. Metals & Mining, South Africa | | | 3.6% | |
Capitec Bank Holdings Ltd. Banks, South Africa | | | 3.4% | |
Gold Fields Ltd. Metals & Mining, South Africa | | | 3.4% | |
Sibanye Stillwater Ltd. Metals & Mining, South Africa | | | 3.1% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 SOUTH AFRICA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -32.23% | | | | -33.29% | | | | -32.23% | | | | -33.29% | |
1-Year | | | -19.06% | | | | -20.77% | | | | -19.06% | | | | -20.77% | |
3-Year | | | -3.47% | | | | -5.08% | | | | -1.17% | | | | -1.72% | |
Since Inception (10/10/18) | | | -1.39% | | | | -3.00% | | | | -0.35% | | | | -0.76% | |
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.
See page 96 for Performance Summary footnotes.
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FRANKLIN FTSE SOUTH AFRICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.598684 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 677.70 | | | $ | 0.80 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE South Korea ETF
This semiannual report for Franklin FTSE South Korea ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -34.13% based on market price and -33.72% based on net asset value. In comparison, the FTSE South Korea Capped Index posted a -33.70% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 100.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Technology Hardware, Storage & Peripherals | | | 20.9% | |
Banks | | | 7.5% | |
Semiconductors & Semiconductor Equipment | | | 6.1% | |
Automobiles | | | 6.0% | |
Electronic Equipment, Instruments & Components | | | 5.9% | |
Interactive Media & Services | | | 5.7% | |
Chemicals | | | 5.4% | |
Industrial Conglomerates | | | 3.2% | |
Electrical Equipment | | | 3.2% | |
Metals & Mining | | | 3.0% | |
be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 267.
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FRANKLIN FTSE SOUTH KOREA ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea | | | 20.9% | |
SK Hynix Inc. Semiconductors & Semiconductor Equipment, South Korea | | | 5.7% | |
Hyundai Motor Co. Automobiles, South Korea | | | 3.7% | |
Samsung SDI Co. Ltd. Electronic Equipment, Instruments & Components, South Korea | | | 3.6% | |
NAVER Corp. Interactive Media & Services, South Korea | | | 3.5% | |
LG Chem Ltd. Chemicals, South Korea | | | 3.3% | |
Celltrion Inc., A Biotechnology, South Korea | | | 2.4% | |
Kia Corp. Automobiles, South Korea | | | 2.3% | |
Kakao Corp. Interactive Media & Services, South Korea | | | 2.2% | |
KB Financial Group Inc. Banks, South Korea | | | 2.1% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 SOUTH KOREA ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -33.72% | | | | -34.13% | | | | -33.72% | | | | -34.13% | |
1-Year | | | -40.68% | | | | -41.14% | | | | -40.68% | | | | -41.14% | |
3-Year | | | -9.20% | | | | -10.37% | | | | -3.16% | | | | -3.58% | |
Since Inception (11/2/17) | | | -28.56% | | | | -29.62% | | | | -6.62% | | | | -6.91% | |
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 101 for Performance Summary footnotes.
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FRANKLIN FTSE SOUTH KOREA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.073957 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
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 $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 662.80 | | | $ | 0.38 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Switzerland ETF
This semiannual report for Franklin FTSE Switzerland ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -21.25% based on market price and -20.98% based on net asset value. In comparison, the FTSE Switzerland Capped Index posted a -21.13% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 105.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will replicate the component securities of the Underlying Index as closely as possible (i.e., invest in all of the component securities in their
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Pharmaceuticals | | | 28.8% | |
Food Products | | | 22.5% | |
Insurance | | | 8.1% | |
Capital Markets | | | 6.7% | |
Chemicals | | | 5.6% | |
Textiles, Apparel & Luxury Goods | | | 4.4% | |
Health Care Equipment & Supplies | | | 4.1% | |
Life Sciences Tools & Services | | | 3.4% | |
Electrical Equipment | | | 3.1% | |
Construction Materials | | | 1.9% | |
respective weightings in the Underlying Index). However, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 272.
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FRANKLIN FTSE SWITZERLAND ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
Nestle SA
Food Products, Switzerland | | | 20.1% | |
Roche Holding AG, Non-Voting
Pharmaceuticals, Switzerland | | | 16.5% | |
Novartis AG
Pharmaceuticals, Switzerland | | | 11.5% | |
Zurich Insurance Group AG
Insurance, Switzerland | | | 4.4% | |
Cie Financiere Richemont SA
Textiles, Apparel & Luxury Goods, Switzerland | | | 3.7% | |
UBS Group AG
Capital Markets, Switzerland | | | 3.4% | |
ABB Ltd.
Electrical Equipment, Switzerland | | | 3.1% | |
Lonza Group AG
Life Sciences Tools & Services, Switzerland | | | 2.9% | |
Sika AG
Chemicals, Switzerland | | | 2.5% | |
Givaudan AG
Chemicals, Switzerland | | | 2.4% | |
Thank you for your participation in Franklin FTSE Switzerland ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 SWITZERLAND ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -20.98% | | | | -21.25% | | | | -20.98% | | | | -21.25% | |
1-Year | | | -16.67% | | | | -17.10% | | | | -16.67% | | | | -17.10% | |
3-Year | | | +9.78% | | | | +8.53% | | | | +3.16% | | | | +2.77% | |
Since Inception (2/6/18) | | | +24.26% | | | | +23.13% | | | | +4.79% | | | | +4.58% | |
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 106 for Performance Summary footnotes.
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FRANKLIN FTSE SWITZERLAND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.543061 |
Total Annual Operating Expenses5
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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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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 × $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 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 790.20 | | | $ | 0.40 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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Franklin FTSE Taiwan ETF
This semiannual report for Franklin FTSE Taiwan ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -29.35% based on market price and -29.26% based on net asset value. In comparison, the FTSE Taiwan Capped Index posted a -29.23% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 110.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
Semiconductors & Semiconductor Equipment | | | 32.4% | |
Electronic Equipment, Instruments & Components | | | 14.5% | |
Banks | | | 13.6% | |
Technology Hardware, Storage & Peripherals | | | 7.3% | |
Chemicals | | | 5.0% | |
Insurance | | | 4.0% | |
Diversified Telecommunication Services | | | 2.2% | |
Metals & Mining | | | 1.6% | |
Food Products | | | 1.6% | |
Electrical Equipment | | | 1.5% | |
practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy whereby we will 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 275.
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FRANKLIN FTSE TAIWAN ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
Taiwan Semiconductor Manufacturing Co. Ltd.
Semiconductors & Semiconductor Equipment, Taiwan | | | 19.3% | |
Hon Hai Precision Industry Co. Ltd.
Electronic Equipment, Instruments & Components, Taiwan | | | 6.1% | |
MediaTek Inc.
Semiconductors & Semiconductor Equipment, Taiwan | | | 4.1% | |
Delta Electronics Inc., A
Electronic Equipment, Instruments & Components, Taiwan | | | 2.7% | |
Chunghwa Telecom Co. Ltd.
Diversified Telecommunication Services, Taiwan | | | 2.2% | |
United Microelectronics Corp.
Semiconductors & Semiconductor Equipment, Taiwan | | | 2.1% | |
Nan Ya Plastics Corp.
Chemicals, Taiwan | | | 1.9% | |
Fubon Financial Holding Co. Ltd.
Insurance, Taiwan | | | 1.8% | |
CTBC Financial Holding Co. Ltd., A
Banks, Taiwan | | | 1.8% | |
E.Sun Financial Holding Co. Ltd., A
Banks, Taiwan | | | 1.8% | |
Thank you for your participation in Franklin FTSE Taiwan ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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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| franklintempleton.com | | Semiannual Report | | | | | | | | 109 |
FRANKLIN FTSE TAIWAN ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -29.26% | | | | -29.35% | | | | -29.26% | | | | -29.35% | |
1-Year | | | -28.06% | | | | -28.68% | | | | -28.06% | | | | -28.68% | |
3-Year | | | +29.55% | | | | +27.10% | | | | +9.01% | | | | +8.32% | |
Since Inception (11/2/17) | | | +31.70% | | | | +29.86% | | | | +5.77% | | | | +5.47% | |
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 111 for Performance Summary footnotes.
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FRANKLIN FTSE TAIWAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.004973 |
Total Annual Operating Expenses5
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. 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 111 |
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 × $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 | | | Hypothetical | | | | |
| | | | (actual return after expenses) | | | (5% annual return before expenses) | | | | |
| | | | | |
Beginning
Account
Value 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 707.40 | | | $ | 0.81 | | | $ | 1,024.12 | | | $ | 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 183/365 to reflect the one-half year period.
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Franklin FTSE United Kingdom ETF
This semiannual report for Franklin FTSE United Kingdom ETF covers the period ended September 30, 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 six-month period, the Fund posted cumulative total returns of -20.95% based on market price and -20.61% based on net asset value. In comparison, the FTSE UK Capped Index posted a -20.61% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 115.
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. The Fund may use either a replication strategy or representative sampling strategy. Under a replication strategy, the Fund will 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, it may not be possible or practicable to replicate the Underlying Index. In these circumstances, we may use a representative sampling strategy
| | | | |
| Top 10 Sectors/Industries | | | |
| |
| 9/30/22 | | | |
| |
| | | % of Total
Net Assets | |
| Oil, Gas & Consumable Fuels | | | 13.3% | |
| Pharmaceuticals | | | 11.1% | |
| Banks | | | 9.3% | |
| Metals & Mining | | | 8.6% | |
| Personal Products | | | 6.2% | |
| Tobacco | | | 4.9% | |
| Beverages | | | 4.9% | |
| Professional Services | | | 3.9% | |
| Hotels, Restaurants & Leisure | | | 3.8% | |
| Insurance | | | 3.4% | |
whereby we will 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 279.
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FRANKLIN FTSE UNITED KINGDOM ETF
| | | | |
| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company
Sector/Industry, Country | | % of Total
Net Assets | |
Shell PLC Oil, Gas & Consumable Fuels, Netherlands | | | 8.9% | |
AstraZeneca PLC Pharmaceuticals, United Kingdom | | | 8.0% | |
Unilever PLC Personal Products, United Kingdom | | | 5.5% | |
HSBC Holdings PLC Banks, United Kingdom | | | 5.1% | |
Diageo PLC Beverages, United Kingdom | | | 4.7% | |
BP PLC Oil, Gas & Consumable Fuels, United Kingdom | | | 4.4% | |
British American Tobacco PLC Tobacco, United Kingdom | | | 3.9% | |
Glencore PLC Metals & Mining, Australia | | | 3.4% | |
Rio Tinto PLC Metals & Mining, Australia | | | 2.9% | |
GSK PLC Pharmaceuticals, United Kingdom | | | 2.8% | |
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
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 UNITED KINGDOM ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
| | | | | | | | | | | | | | | | |
| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -20.61% | | | | -20.95% | | | | -20.61% | | | | -20.95% | |
1-Year | | | -16.69% | | | | -17.33% | | | | -16.69% | | | | -17.33% | |
3-Year | | | -6.35% | | | | -7.36% | | | | -2.16% | | | | -2.51% | |
Since Inception (11/2/17) | | | -6.31% | | | | -7.25% | | | | -1.32% | | | | -1.52% | |
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 116 for Performance Summary footnotes.
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FRANKLIN FTSE UNITED KINGDOM ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.486685 |
Total Annual Operating Expenses5
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 U.K. issuers involve risks that are specific to 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 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. The total annual operating expenses are sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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| 116 | | | | | | | | Semiannual Report | | franklintempleton.com |
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 × $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 | | | Hypothetical | | | | |
| | | | (actual return after expenses) | | | (5% annual return before expenses) | | | | |
| | | | | |
Beginning
Account
Value 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221 | | | Net Annualized
Expense Ratio | |
| | $1,000.00 | | | $ | 793.90 | | | $ | 0.40 | | | $ | 1,024.62 | | | $ | 0.46 | | | | 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 183/365 to reflect the one-half year period.
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FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Asia ex Japan ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 24.22 | | | $ | 28.60 | | | $ | 18.39 | | | $ | 21.86 | | | $ | 23.63 | | | $ | 23.64 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.40 | | | | 0.55 | | | | 0.44 | | | | 0.49 | | | | 0.51 | | | | 0.04 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (5.58 | ) | | | (4.31 | ) | | | 10.21 | | | | (3.46 | ) | | | (1.82 | ) | | | (0.05 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (5.18 | ) | | | (3.76 | ) | | | 10.65 | | | | (2.97 | ) | | | (1.31 | ) | | | (0.01 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.11 | ) | | | (0.62 | ) | | | (0.44 | ) | | | (0.50 | ) | | | (0.46 | ) | | | — | |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 18.93 | | | $ | 24.22 | | | $ | 28.60 | | | $ | 18.39 | | | $ | 21.86 | | | $ | 23.63 | |
| | | | |
| | | | | | |
Total returnd | | | (21.44)% | | | | (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% | | | | 0.19% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | |
| | | | | | |
Net investment income | | | 3.60% | | | | 2.01% | | | | 1.78% | | | | 2.32% | | | | 2.34% | | | | 1.06% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $30,286 | | | | $38,751 | | | | $34,317 | | | | $14,712 | | | | $17,488 | | | | $9,451 | |
| | | | | | |
Portfolio turnover ratef | | | 3.00% | g | | | 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: | | | 3.00% | | | | 9.63% | | | | 11.45% | | | | 11.42% | | | |
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| 118 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Asia ex Japan ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.6% | | | | | | | |
| | | Cambodia 0.0%† | | | | | | | | | |
| a | | NagaCorp Ltd. | | | Hotels, Restaurants & Leisure | | | | 8,075 | | | $ | 5,308 | |
| | | | | | | | | | | | | | |
| | | China 34.2% | | | | | | | | | |
| | 360 DigiTech Inc. | | | Consumer Finance | | | | 724 | | | | 9,282 | |
| | 360 Security Technology Inc., A | | | Software | | | | 2,800 | | | | 2,553 | |
| b | | 3SBio Inc., A, 144A | | | Biotechnology | | | | 8,000 | | | | 5,677 | |
| a | | AAC Technologies Holdings Inc., H | | | Electronic Equipment, Instruments & Components | | | | 4,000 | | | | 6,257 | |
| | ADAMA Ltd. | | | Chemicals | | | | 400 | | | | 517 | |
| | Addsino Co. Ltd., A | | | Communications Equipment | | | | 800 | | | | 1,117 | |
| a | | Advanced Micro-Fabrication Equipment Inc. China, A | | | Semiconductors & Semiconductor Equipment | | | | 200 | | | | 3,026 | |
| | AECC Aero-Engine Control Co. Ltd., A | | | Aerospace & Defense | | | | 400 | | | | 1,409 | |
| | AECC Aviation Power Co. Ltd., A | | | Aerospace & Defense | | | | 1,200 | | | | 7,061 | |
| a | | Agile Group Holdings Ltd. | | | Real Estate Management & Development | | | | 8,000 | | | | 1,875 | |
| | Agricultural Bank of China Ltd., A | | | Banks | | | | 38,000 | | | | 15,244 | |
| | Agricultural Bank of China Ltd., H | | | Banks | | | | 176,000 | | | | 52,689 | |
| | Aier Eye Hospital Group Co. Ltd., A | | | Health Care Providers & Services | | | | 2,804 | | | | 11,276 | |
| a | | Air China Ltd., A | | | Airlines | | | | 2,400 | | | | 3,525 | |
| a | | Air China Ltd., H | | | Airlines | | | | 10,000 | | | | 7,643 | |
| | Airtac International Group, A | | | Machinery | | | | 880 | | | | 20,289 | |
| a,b | | Akeso Inc., 144A | | | Biotechnology | | | | 3,000 | | | | 8,293 | |
| a | | Alibaba Group Holding Ltd., A | | | Internet & Catalog Retail | | | | 85,000 | | | | 844,055 | |
| b | | A-Living Services Co. Ltd., H, 144A | | | Commercial Services & Supplies | | | | 4,000 | | | | 3,169 | |
| | All Winner Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 1,101 | |
| a | | Alpha Group, A | | | Leisure Products | | | | 400 | | | | 244 | |
| | Aluminum Corp. of China Ltd., A | | | Metals & Mining | | | | 4,800 | | | | 2,781 | |
| | Aluminum Corp. of China Ltd., H | | | Metals & Mining | | | | 22,000 | | | | 7,203 | |
| a | | Amlogic Shanghai Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 200 | | | | 1,823 | |
| a | | An Hui Wenergy Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 754 | |
| | Angang Steel Co. Ltd., A | | | Metals & Mining | | | | 2,000 | | | | 752 | |
| | Angang Steel Co. Ltd., H | | | Metals & Mining | | | | 8,000 | | | | 1,977 | |
| | Angel Yeast Co. Ltd., A | | | Food Products | | | | 400 | | | | 2,333 | |
| | Anhui Anke Biotechnology Group Co. Ltd., A | | | Pharmaceuticals | | | | 532 | | | | 672 | |
| | Anhui Conch Cement Co. Ltd., A | | | Construction Materials | | | | 1,600 | | | | 6,466 | |
| | Anhui Conch Cement Co. Ltd., H | | | Construction Materials | | | | 6,500 | | | | 20,618 | |
| | Anhui Expressway Co. Ltd., A | | | Transportation Infrastructure | | | | 400 | | | | 374 | |
| | Anhui Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 4,000 | | | | 2,543 | |
| | Anhui Gujing Distillery Co. Ltd., A | | | Beverages | | | | 200 | | | | 7,629 | |
| | Anhui Gujing Distillery Co. Ltd., B | | | Beverages | | | | 700 | | | | 10,344 | |
| | Anhui Zhongding Sealing Parts Co. Ltd., A | | | Auto Components | | | | 400 | | | | 786 | |
| | Anker Innovations Technology Co. Ltd., A | | | Technology Hardware, Storage & Peripherals | | | | 100 | | | | 778 | |
| | Anta Sports Products Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 6,400 | | | | 67,833 | |
| | Apeloa Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 921 | |
| | Asymchem Laboratories Tianjin Co. Ltd., A | | | Pharmaceuticals | | | | 140 | | | | 2,724 | |
| | Autohome Inc., ADR | | | Software | | | | 349 | | | | 10,037 | |
| | Avary Holding Shenzhen Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 1,454 | |
| | Avic Capital Co. Ltd., A | | | Diversified Financial Services | | | | 3,600 | | | | 1,520 | |
| | AVIC Electromechanical Systems Co. Ltd., A | | | Aerospace & Defense | | | | 1,600 | | | | 2,545 | |
| | AviChina Industry & Technology Co. Ltd., H | | | Aerospace & Defense | | | | 14,000 | | | | 5,422 | |
| | AVICOPTER PLC, A | | | Aerospace & Defense | | | | 400 | | | | 2,227 | |
| b | | BAIC Motor Corp. Ltd., A, 144A | | | Automobiles | | | | 14,000 | | | | 3,068 | |
| a | | Baidu Inc. | | | Interactive Media & Services | | | | 12,600 | | | | 183,144 | |
| | Bank of Beijing Co. Ltd., A | | | Banks | | | | 8,000 | | | | 4,612 | |
| | Bank of Changsha Co. Ltd., A | | | Banks | | | | 1,200 | | | | 1,114 | |
| | Bank of Chengdu Co. Ltd., A | | | Banks | | | | 400 | | | | 918 | |
| | Bank of China Ltd., A | | | Banks | | | | 18,000 | | | | 7,802 | |
| | Bank of China Ltd., H | | | Banks | | | | 434,000 | | | | 142,088 | |
| | Bank of Communications Co. Ltd., A | | | Banks | | | | 16,000 | | | | 10,369 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Bank of Communications Co. Ltd., H | | | Banks | | | | 42,000 | | | $ | 22,151 | |
| | Bank of Guiyang Co. Ltd., A | | | Banks | | | | 1,200 | | | | 912 | |
| | Bank of Hangzhou Co. Ltd., A | | | Banks | | | | 2,400 | | | | 4,797 | |
| | Bank of Jiangsu Co. Ltd., A | | | Banks | | | | 2,280 | | | | 2,379 | |
| | Bank of Nanjing Co. Ltd., A | | | Banks | | | | 3,600 | | | | 5,312 | |
| | Bank of Ningbo Co. Ltd., A | | | Banks | | | | 2,780 | | | | 12,303 | |
| | Bank of Qingdao Co. Ltd., A | | | Banks | | | | 1,600 | | | | 761 | |
| | Bank of Shanghai Co. Ltd., A | | | Banks | | | | 6,080 | | | | 4,989 | |
| a | | Bank of Zhengzhou Co. Ltd., A | | | Banks | | | | 3,484 | | | | 1,168 | |
| | Baoshan Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 7,200 | | | | 5,312 | |
| | BBMG Corp., A | | | Construction Materials | | | | 2,400 | | | | 838 | |
| | BBMG Corp., H | | | Construction Materials | | | | 16,000 | | | | 1,936 | |
| a | | BeiGene Ltd. | | | Biotechnology | | | | 3,400 | | | | 35,105 | |
| | Beijing Capital Co. Ltd., A | | | Water Utilities | | | | 3,200 | | | | 1,167 | |
| | Beijing Capital Development Co. Ltd., A | | | Real Estate Management & Development | | | | 800 | | | | 492 | |
| a | | Beijing Capital International Airport Co. Ltd., A | | | Transportation Infrastructure | | | | 10,000 | | | | 5,414 | |
| a | | Beijing Dabeinong Technology Group Co. Ltd., A | | | Food Products | | | | 1,200 | | | | 1,347 | |
| | Beijing Easpring Material Technology Co. Ltd. | | | Chemicals | | | | 200 | | | | 1,852 | |
| a | | Beijing E-Hualu Information Technology Co. Ltd., A | | | Software | | | | 400 | | | | 703 | |
| | Beijing Enlight Media Co. Ltd., H | | | Entertainment | | | | 1,200 | | | | 1,195 | |
| | Beijing Enterprises Holdings Ltd., H | | | Industrial Conglomerates | | | | 3,000 | | | | 8,427 | |
| a | | Beijing Jetsen Technology Co. Ltd., A | | | Software | | | | 1,200 | | | | 747 | |
| | Beijing Jingneng Clean Energy Co. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 10,000 | | | | 1,911 | |
| | Beijing Kingsoft Office Software Inc., A | | | Software | | | | 141 | | | | 3,978 | |
| | Beijing New Building Materials PLC, A | | | Building Products | | | | 800 | | | | 2,699 | |
| a | | Beijing Orient National Communication Science & Technology Co. Ltd., A | | | Software | | | | 400 | | | | 405 | |
| | Beijing Originwater Technology Co. Ltd., H | | | Commercial Services & Supplies | | | | 247 | | | | 164 | |
| | Beijing Sanju Environmental Protection and New Material Co. Ltd., A | | | Chemicals | | | | 800 | | | | 460 | |
| | Beijing Shiji Information Technology Co. Ltd., A | | | Software | | | | 800 | | | | 1,388 | |
| | Beijing Shougang Co. Ltd., A | | | Metals & Mining | | | | 2,000 | | | | 1,002 | |
| | Beijing Shunxin Agriculture Co. Ltd., A | | | Beverages | | | | 400 | | | | 1,117 | |
| | Beijing Sinnet Technology Co. Ltd., A | | | IT Services | | | | 800 | | | | 897 | |
| | Beijing SL Pharmaceutical Co. Ltd., H | | | Biotechnology | | | | 400 | | | | 462 | |
| | Beijing Tiantan Biological Products Corp. Ltd., A | | | Biotechnology | | | | 528 | | | | 1,495 | |
| | Beijing Tongrentang Co. Ltd., A | | | Pharmaceuticals | | | | 800 | | | | 5,111 | |
| | Beijing Ultrapower Software Co. Ltd., A | | | IT Services | | | | 800 | | | | 415 | |
| | Beijing United Information Technology Co. Ltd., A | | | Trading Companies & Distributors | | | | 145 | | | | 2,196 | |
| | Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., A | | | Biotechnology | | | | 145 | | | | 2,327 | |
| | Beijing Yanjing Brewery Co. Ltd., A | | | Beverages | | | | 800 | | | | 1,047 | |
| | Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 1,729 | |
| | Beijing Zhong Ke San Huan High-Tech Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 445 | | | | 864 | |
| | Beijing-Shanghai High Speed Railway Co. Ltd., A | | | Road & Rail | | | | 11,600 | | | | 7,355 | |
| | BGI Genomics Co. Ltd., A | | | Biotechnology | | | | 100 | | | | 748 | |
| a | | Bilibili Inc. | | | Entertainment | | | | 1,440 | | | | 21,940 | |
| b | | Blue Moon Group Holdings Ltd., 144A | | | Household Products | | | | 4,000 | | | | 2,823 | |
| a | | Blue Sail Medical Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 400 | | | | 437 | |
| | Bluefocus Intelligent Communications Group Co. Ltd., A | | | Media | | | | 800 | | | | 503 | |
| | Bluestar Adisseo Co., A | | | Chemicals | | | | 400 | | | | 553 | |
| | BOC Hong Kong (Holdings) Ltd. | | | Banks | | | | 20,500 | | | | 68,291 | |
| | BOC International China Co. Ltd., A | | | Capital Markets | | | | 400 | | | | 589 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | BOE Technology Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 14,800 | | | $ | 6,788 | |
| | BOE Technology Group Co. Ltd., B | | | Electronic Equipment, Instruments & Components | | | | 5,600 | | | | 2,390 | |
| | Boya Bio-pharmaceutical Group Co. Ltd., A | | | Biotechnology | | | | 400 | | | | 1,795 | |
| | Bright Dairy & Food Co. Ltd., A | | | Food Products | | | | 400 | | | | 587 | |
| | BTG Hotels Group Co. Ltd., A | | | Hotels, Restaurants & Leisure | | | | 400 | | | | 1,200 | |
| b | | Budweiser Brewing Co. APAC Ltd., H, 144A | | | Beverages | | | | 9,600 | | | | 25,132 | |
| | BYD Co. Ltd., A | | | Automobiles | | | | 800 | | | | 28,279 | |
| | BYD Co. Ltd., H | | | Automobiles | | | | 4,700 | | | | 116,394 | |
| | BYD Electronic International Co. Ltd. | | | Communications Equipment | | | | 4,500 | | | | 10,869 | |
| | By-health Co. Ltd., A | | | Personal Products | | | | 800 | | | | 1,975 | |
| | C&S Paper Co. Ltd., A | | | Household Products | | | | 400 | | | | 571 | |
| | Caitong Securities Co. Ltd., A | | | Capital Markets | | | | 2,020 | | | | 1,915 | |
| | Camel Group Co. Ltd., A | | | Electrical Equipment | | | | 460 | | | | 544 | |
| | CanSino Biologics Inc., A | | | Pharmaceuticals | | | | 26 | | | | 441 | |
| b,c | | CanSino Biologics Inc., H, 144A, Reg S | | | Pharmaceuticals | | | | 400 | | | | 2,270 | |
| a | | CECEP Solar Energy Co. Ltd., H | | | Semiconductors & Semiconductor Equipment | | | | 1,200 | | | | 1,150 | |
| | CECEP Wind-Power Corp, A | | | Independent Power Producers & Energy Traders | | | | 2,000 | | | | 1,234 | |
| | Central China Securities Co. Ltd., A | | | Capital Markets | | | | 1,200 | | | | 587 | |
| | Central China Securities Co. Ltd., H | | | Capital Markets | | | | 4,000 | | | | 515 | |
| | CGN Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 3,200 | | | | 1,185 | |
| b | | CGN Power Co. Ltd., H, 144A | | | Independent Power Producers & Energy Traders | | | | 64,000 | | | | 13,860 | |
| | Changchun High & New Technology Industry Group Inc., A | | | Pharmaceuticals | | | | 200 | | | | 4,779 | |
| | Changjiang Securities Co. Ltd., A | | | Capital Markets | | | | 2,400 | | | | 1,754 | |
| | Changzhou Xingyu Automotive LightingSystems Co. Ltd., A | | | Auto Components | | | | 100 | | | | 2,138 | |
| | Chaozhou Three-Circle Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 2,922 | |
| | Chengdu Xingrong Environment Co. Ltd., A | | | Water Utilities | | | | 1,600 | | | | 1,115 | |
| | Chengxin Lithium Group Co. Ltd., A | | | Paper & Forest Products | | | | 400 | | | | 2,624 | |
| | China Baoan Group Co. Ltd., A | | | Industrial Conglomerates | | | | 1,200 | | | | 1,889 | |
| | China Cinda Asset Management Co. Ltd., H | | | Capital Markets | | | | 52,000 | | | | 5,763 | |
| | China CITIC Bank Corp. Ltd., A | | | Banks | | | | 4,400 | | | | 2,814 | |
| | China CITIC Bank Corp. Ltd., H | | | Banks | | | | 54,000 | | | | 21,463 | |
| | China Coal Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 2,000 | | | | 2,985 | |
| | China Coal Energy Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 12,000 | | | | 10,884 | |
| | China Communications Services Corp. Ltd., H | | | Diversified Telecommunication Services | | | | 14,000 | | | | 4,708 | |
| a | | China Conch Environment Protection Holdings Ltd. | | | Commercial Services & Supplies | | | | 8,000 | | | | 4,097 | |
| | China Conch Venture Holdings Ltd. | | | Construction & Engineering | | | | 8,500 | | | | 13,557 | |
| | China Construction Bank Corp., A | | | Banks | | | | 4,000 | | | | 3,097 | |
| | China Construction Bank Corp., H | | | Banks | | | | 528,000 | | | | 305,369 | |
| | China CSSC Holdings Ltd., A | | | Machinery | | | | 1,800 | | | | 5,719 | |
| b,c | | China East Education Holdings Ltd., A, 144A, Reg S | | | Diversified Consumer Services | | | | 2,000 | | | | 662 | |
| a | | China Eastern Airlines Corp. Ltd., A | | | Airlines | | | | 4,400 | | | | 3,012 | |
| a | | China Eastern Airlines Corp. Ltd., H | | | Airlines | | | | 8,000 | | | | 2,721 | |
| | China Energy Engineering Corp. Ltd. | | | Construction & Engineering | | | | 13,200 | | | | 4,147 | |
| | China Everbright Bank Co. Ltd., A | | | Banks | | | | 17,200 | | | | 6,804 | |
| | China Everbright Bank Co. Ltd., H | | | Banks | | | | 17,000 | | | | 4,678 | |
| a | | China Evergrande Group, A | | | Real Estate Management & Development | | | | 24,000 | | | | 2,019 | |
| b,c | | China Feihe Ltd., 144A, Reg S | | | Food Products | | | | 22,000 | | | | 15,414 | |
| | China Galaxy Securities Co. Ltd., A | | | Capital Markets | | | | 800 | | | | 1,010 | |
| | China Galaxy Securities Co. Ltd., H | | | Capital Markets | | | | 21,000 | | | | 9,711 | |
| | China Great Wall Securities Co. Ltd., A | | | Capital Markets | | | | 800 | | | | 918 | |
| | China Greatwall Technology Group Co. Ltd., A | | | Technology Hardware, Storage & Peripherals | | | | 1,200 | | | | 1,437 | |
| | China Hongqiao Group Ltd. | | | Metals & Mining | | | | 12,500 | | | | 10,350 | |
| | China International Capital Corp. Ltd., A | | | Capital Markets | | | | 400 | | | | 1,931 | |
| b | | China International Capital Corp. Ltd., H, 144A | | | Capital Markets | | | | 8,500 | | | | 12,366 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | China International Marine Containers (Group) Co. Ltd., H | | | Machinery | | | | 4,200 | | | $ | 2,675 | |
| | China International Marine Containers Group Co. Ltd., A | | | Machinery | | | | 750 | | | | 727 | |
| | China Jinmao Holdings Group Ltd., A | | | Real Estate Management & Development | | | | 36,000 | | | | 7,338 | |
| | China Jushi Co. Ltd., A | | | Construction Materials | | | | 1,771 | | | | 3,274 | |
| | China Lesso Group Holdings Ltd. | | | Building Products | | | | 5,000 | | | | 4,656 | |
| | China Life Insurance Co. Ltd., H | | | Insurance | | | | 42,000 | | | | 53,825 | |
| a,b | | China Literature Ltd., A, 144A | | | Media | | | | 2,400 | | | | 6,803 | |
| | China Lodging Group Ltd., ADR | | | Hotels, Restaurants & Leisure | | | | 1,228 | | | | 41,187 | |
| | China Longyuan Power Group Corp., A | | | Independent Power Producers & Energy Traders | | | | 19,000 | | | | 23,841 | |
| | China Medical System Holdings Ltd. | | | Pharmaceuticals | | | | 7,000 | | | | 8,356 | |
| | China Meheco Co. Ltd., A | | | Trading Companies & Distributors | | | | 560 | | | | 946 | |
| | China Meidong Auto Holdings Ltd. | | | Specialty Retail | | | | 2,000 | | | | 3,164 | |
| | China Merchants Bank Co. Ltd., A | | | Banks | | | | 8,400 | | | | 39,648 | |
| | China Merchants Bank Co. Ltd., H | | | Banks | | | | 21,500 | | | | 99,969 | |
| | China Merchants Energy Shipping Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 4,000 | | | | 3,984 | |
| | China Merchants Expressway Network & Technology Holdings Co. Ltd., A | | | Transportation Infrastructure | | | | 800 | | | | 851 | |
| | China Merchants Port Holdings Co. Ltd. | | | Transportation Infrastructure | | | | 8,000 | | | | 10,059 | |
| | China Merchants Property Operation & Service Co. Ltd., A | | | Real Estate Management & Development | | | | 400 | | | | 856 | |
| b | | China Merchants Securities Co. Ltd., A, 144A | | | Capital Markets | | | | 2,400 | | | | 2,079 | |
| | China Merchants Securities Co. Ltd., A | | | Capital Markets | | | | 3,020 | | | | 5,227 | |
| | China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 2,800 | | | | 6,418 | |
| a | | China Minmetals Rare Earth Co. Ltd., A | | | Metals & Mining | | | | 400 | | | | 1,477 | |
| | China Minsheng Banking Corp. Ltd., A | | | Banks | | | | 14,000 | | | | 6,657 | |
| | China Minsheng Banking Corp. Ltd., H | | | Banks | | | | 36,000 | | | | 10,319 | |
| | China Molybdenum Co. Ltd., A | | | Metals & Mining | | | | 4,000 | | | | 2,648 | |
| | China Molybdenum Co. Ltd., H | | | Metals & Mining | | | | 24,000 | | | | 9,386 | |
| | China National Building Material Co. Ltd., H | | | Construction Materials | | | | 26,000 | | | | 19,906 | |
| | China National Chemical Engineering Co. Ltd., A | | | Construction & Engineering | | | | 2,400 | | | | 2,697 | |
| | China National Nuclear Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 6,600 | | | | 5,416 | |
| a | | China Nonferrous Metal Industry’s Foreign Engineeringand Construction Co. Ltd., A | | | Metals & Mining | | | | 800 | | | | 494 | |
| | China Northern Rare Earth Group High-Tech Co. Ltd., A | | | Metals & Mining | | | | 1,600 | | | | 5,961 | |
| | China Oilfield Services Ltd., A | | | Energy Equipment & Services | | | | 800 | | | | 1,610 | |
| | China Oilfield Services Ltd., H | | | Energy Equipment & Services | | | | 10,000 | | | | 9,924 | |
| | China Orient Securities Co. Ltd., A | | | Capital Markets | | | | 3,072 | | | | 3,314 | |
| | China Overseas Land & Investment Ltd., A | | | Real Estate Management & Development | | | | 22,000 | | | | 57,313 | |
| | China Pacific Insurance Group Co. Ltd., A | | | Insurance | | | | 2,800 | | | | 7,985 | |
| | China Pacific Insurance Group Co. Ltd., H | | | Insurance | | | | 14,800 | | | | 27,263 | |
| | China Petroleum & Chemical Corp., A | | | Oil, Gas & Consumable Fuels | | | | 13,200 | | | | 7,943 | |
| | China Petroleum & Chemical Corp., H | | | Oil, Gas & Consumable Fuels | | | | 146,000 | | | | 62,679 | |
| | China Railway Group Ltd., A | | | Construction & Engineering | | | | 8,000 | | | | 5,869 | |
| | China Railway Group Ltd., H | | | Construction & Engineering | | | | 24,000 | | | | 11,771 | |
| b,c | | China Railway Signal & Communication Corp. Ltd., 144A, Reg S | | | Electronic Equipment, Instruments & Components | | | | 8,000 | | | | 2,201 | |
| | China Railway Signal & Communication Corp. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 2,666 | | | | 1,552 | |
| | China Reinsurance Group Corp., H | | | Insurance | | | | 40,000 | | | | 2,471 | |
| | China Resources Cement Holdings Ltd. | | | Construction Materials | | | | 12,000 | | | | 5,564 | |
| | China Resources Double Crane Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 987 | |
| | China Resources Microelectronics Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 392 | | | | 2,618 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | China Resources Mixc Lifestyle Services Ltd., 144A | | | Real Estate Management & Development | | | | 3,400 | | | $ | 13,059 | |
| b | | China Resources Pharmaceutical Group Ltd., A, 144A | | | Pharmaceuticals | | | | 10,000 | | | | 6,866 | |
| | China Resources Power Holdings Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 10,000 | | | | 15,542 | |
| | China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., B | | | Pharmaceuticals | | | | 400 | | | | 2,155 | |
| | China Shenhua Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 2,800 | | | | 12,427 | |
| | China Shenhua Energy Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 19,500 | | | | 58,252 | |
| | China Shipping Container Lines Co. Ltd., A | | | Marine | | | | 3,200 | | | | 1,109 | |
| a | | China Shipping Development Co. Ltd., A | | | Marine | | | | 1,200 | | | | 3,045 | |
| | China South Publishing & Media Group Co. Ltd., A | | | Media | | | | 800 | | | | 1,104 | |
| a | | China Southern Airlines Co. Ltd., A | | | Airlines | | | | 4,400 | | | | 4,098 | |
| a | | China Southern Airlines Co. Ltd., H | | | Airlines | | | | 8,000 | | | | 4,219 | |
| | China Southern Power Grid Energy Efficiency & Clean Energy Co. Ltd., A | | | Commercial Services & Supplies | | | | 1,200 | | | | 956 | |
| | China State Construction Engineering Corp. Ltd., A | | | Construction & Engineering | | | | 16,800 | | | | 12,136 | |
| | China Suntien Green Energy Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 10,000 | | | | 3,669 | |
| | China Taiping Insurance Holdings Co. Ltd. | | | Insurance | | | | 8,000 | | | | 6,736 | |
| | China Three Gorges Renewables Group Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 10,000 | | | | 7,897 | |
| | China Tourism Group Duty Free Corp. Ltd., A | | | Hotels, Restaurants & Leisure | | | | 800 | | | | 22,247 | |
| b,c | | China Tower Corp. Ltd., H, 144A, Reg S | | | Diversified Telecommunication Services | | | | 264,000 | | | | 28,250 | |
| a | | China TransInfo Technology Co. Ltd., A | | | IT Services | | | | 400 | | | | 466 | |
| a | | China Travel International Investment Hong Kong Ltd., A | | | Hotels, Restaurants & Leisure | | | | 16,000 | | | | 2,813 | |
| | China United Network Communications Ltd., A | | | Wireless Telecommunication Services | | | | 10,000 | | | | 4,699 | |
| | China Vanke Co. Ltd., A | | | Real Estate Management & Development | | | | 4,000 | | | | 10,004 | |
| | China Vanke Co. Ltd., H | | | Real Estate Management & Development | | | | 10,800 | | | | 19,674 | |
| | China World Trade Center Co. Ltd., A | | | Real Estate Management & Development | | | | 400 | | | | 768 | |
| | China Yangtze Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 9,200 | | | | 29,345 | |
| | China Zhenhua Group Science & Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 200 | | | | 3,254 | |
| a | | China Zheshang Bank Co. Ltd., A | | | Banks | | | | 2,800 | | | | 1,170 | |
| | Chinalin Securities Co. Ltd., A | | | Capital Markets | | | | 400 | | | | 732 | |
| | Chinese Universe Publishing and Media Group Co. Ltd., A | | | Media | | | | 400 | | | | 471 | |
| | Chongqing Brewery Co. Ltd., A | | | Beverages | | | | 200 | | | | 3,148 | |
| | Chongqing Changan Automobile Co. Ltd., A | | | Automobiles | | | | 3,120 | | | | 5,497 | |
| | Chongqing Changan Automobile Co. Ltd., B | | | Automobiles | | | | 9,438 | | | | 4,340 | |
| | Chongqing Fuling Zhacai Group Co. Ltd., A | | | Food Products | | | | 400 | | | | 1,525 | |
| | Chongqing Rural Commercial Bank Co. Ltd., A | | | Banks | | | | 2,000 | | | | 1,002 | |
| | Chongqing Rural Commercial Bank Co. Ltd., H | | | Banks | | | | 13,000 | | | | 4,223 | |
| | Chongqing Water Group Co. Ltd., A | | | Water Utilities | | | | 400 | | | | 286 | |
| | Chongqing Zhifei Biological Products Co. Ltd., B | | | Biotechnology | | | | 600 | | | | 7,274 | |
| | Chow Tai Fook Jewellery Co. Ltd., A | | | Specialty Retail | | | | 10,000 | | | | 18,828 | |
| | CIFI Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 22,880 | | | | 2,332 | |
| | CITIC Ltd., B | | | Industrial Conglomerates | | | | 28,000 | | | | 26,395 | |
| | Citic Pacific Special Steel Group Co. Ltd., A | | | Metals & Mining | | | | 2,080 | | | | 5,141 | |
| | CITIC Securities Co. Ltd., A | | | Capital Markets | | | | 4,995 | | | | 12,205 | |
| | CITIC Securities Co. Ltd., H | | | Capital Markets | | | | 12,500 | | | | 21,242 | |
| | CMST Development Co. Ltd., A | | | Air Freight & Logistics | | | | 400 | | | | 273 | |
| | CNOOC Energy Technology & Services Ltd., A | | | Energy Equipment & Services | | | | 2,800 | | | | 1,131 | |
| | Contemporary Amperex Technology Co. Ltd., H | | | Electrical Equipment | | | | 1,000 | | | | 56,233 | |
| | COSCO SHIPPING Development Co. Ltd., H | | | Marine | | | | 20,000 | | | | 2,522 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| a | | COSCO SHIPPING Energy Transportation Co. Ltd., H | | | Marine | | | | 8,000 | | | $ | 6,655 | |
| | COSCO SHIPPING Holdings Co. Ltd., A | | | Marine | | | | 5,200 | | | | 8,038 | |
| | COSCO SHIPPING Holdings Co. Ltd., B | | | Marine | | | | 18,950 | | | | 22,233 | |
| | Country Garden Holdings Co. Ltd. | | | Real Estate Management & Development | | | | 52,000 | | | | 12,056 | |
| | Country Garden Services Holdings Co. Ltd. | | | Commercial Services & Supplies | | | | 10,600 | | | | 15,610 | |
| | CRRC Corp. Ltd., A | | | Machinery | | | | 9,200 | | | | 6,052 | |
| | CRRC Corp. Ltd., H | | | Machinery | | | | 24,000 | | | | 7,766 | |
| b | | CSC Financial Co. Ltd., A, 144A | | | Capital Markets | | | | 5,000 | | | | 3,822 | |
| | CSC Financial Co. Ltd., A | | | Capital Markets | | | | 2,000 | | | | 6,500 | |
| | CSG Holding Co. Ltd. | | | Construction Materials | | | | 6,101 | | | | 2,339 | |
| | CSG Holding Co. Ltd., A | | | Construction Materials | | | | 800 | | | | 779 | |
| | CSPC Pharmaceutical Group Ltd., A | | | Pharmaceuticals | | | | 48,000 | | | | 47,573 | |
| | Daan Gene Co. Ltd. | | | Biotechnology | | | | 612 | | | | 1,423 | |
| a | | Dada Nexus Ltd., A, ADR | | | Internet & Catalog Retail | | | | 392 | | | | 1,854 | |
| b | | Dali Foods Group Co. Ltd., 144A | | | Food Products | | | | 12,500 | | | | 5,382 | |
| | Daqin Railway Co. Ltd., A | | | Road & Rail | | | | 6,000 | | | | 5,698 | |
| a | | Daqo New Energy Corp. | | | Semiconductors & Semiconductor Equipment | | | | 320 | | | | 16,986 | |
| a | | Datang International Power Generation Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 3,200 | | | | 1,490 | |
| a | | Datang International Power Generation Co. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 16,000 | | | | 3,057 | |
| | DHC Software Co. Ltd., A | | | IT Services | | | | 1,200 | | | | 897 | |
| | Dian Diagnostics Group Co. Ltd., A | | | Health Care Providers & Services | | | | 400 | | | | 1,628 | |
| | Digital China Information Service Co. Ltd., H | | | IT Services | | | | 400 | | | | 541 | |
| | Do-Fluoride Chemicals Co. Ltd., A | | | Chemicals | | | | 400 | | | | 2,014 | |
| | Dong-E-E-Jiao Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 1,817 | |
| | Dongfang Electric Corp. Ltd., A | | | Electrical Equipment | | | | 1,200 | | | | 3,441 | |
| | Dongfang Electric Corp. Ltd., H | | | Electrical Equipment | | | | 2,000 | | | | 2,726 | |
| | Dongfeng Motor Group Co. Ltd., H | | | Automobiles | | | | 16,000 | | | | 8,561 | |
| | Dongguan Development Holdings Co. Ltd., A | | | Transportation Infrastructure | | | | 400 | | | | 515 | |
| | Dongxing Securities Co. Ltd., A | | | Capital Markets | | | | 1,200 | | | | 1,246 | |
| | East Group Co. Ltd., A | | | Electrical Equipment | | | | 400 | | | | 365 | |
| | East Money Information Co. Ltd. | | | Capital Markets | | | | 5,488 | | | | 13,564 | |
| | Easyhome New Retail Group Co. Ltd., A | | | Multiline Retail | | | | 1,200 | | | | 635 | |
| | Ecovacs Robotics Co. Ltd., A | | | Household Durables | | | | 200 | | | | 1,871 | |
| | ENN Ecological Holdings Co. Ltd., A | | | Chemicals | | | | 1,200 | | | | 3,124 | |
| | ENN Energy Holdings Ltd. | | | Gas Utilities | | | | 4,300 | | | | 57,517 | |
| b | | ESR Cayman Ltd., H, 144A | | | Real Estate Management & Development | | | | 11,200 | | | | 28,250 | |
| | Eternal Asia Supply Chain Management Ltd., A | | | Commercial Services & Supplies | | | | 1,000 | | | | 774 | |
| | Eve Energy Co. Ltd. | | | Electrical Equipment | | | | 780 | | | | 9,256 | |
| b | | Everbright Securities Co. Ltd., 144A | | | Capital Markets | | | | 1,600 | | | | 864 | |
| | Everbright Securities Co. Ltd., A | | | Capital Markets | | | | 1,600 | | | | 2,951 | |
| a,b | | Evergrande Property Services Group Ltd., 144A | | | Real Estate Management & Development | | | | 24,000 | | | | 2,536 | |
| a | | Fangda Carbon New Material Co. Ltd. | | | Electrical Equipment | | | | 1,660 | | | | 1,451 | |
| | Faw Jiefang Group Co. Ltd. | | | Automobiles | | | | 1,200 | | | | 1,209 | |
| | Fiberhome Telecommunication Technologies Co. Ltd., A | | | Communications Equipment | | | | 400 | | | | 697 | |
| a | | FIH Mobile Ltd. | | | Electronic Equipment, Instruments & Components | | | | 20,000 | | | | 2,064 | |
| | Financial Street Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 1,200 | | | | 855 | |
| | First Capital Securities Co. Ltd. | | | Capital Markets | | | | 1,600 | | | | 1,223 | |
| a | | Flat Glass Group Co Ltd., H | | | Semiconductors & Semiconductor Equipment | | | | 3,000 | | | | 7,299 | |
| a | | Flat Glass Group Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 1,835 | |
| | Focus Media Information Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 6,200 | | | | 4,801 | |
| | Foshan Haitian Flavouring & Food Co. Ltd. | | | Food Products | | | | 1,600 | | | | 18,587 | |
| | Fosun International Ltd. | | | Industrial Conglomerates | | | | 12,000 | | | | 7,445 | |
| | Founder Securities Co. Ltd., A | | | Capital Markets | | | | 3,400 | | | | 3,124 | |
| | Foxconn Industrial Internet Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 5,200 | | | | 6,214 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Fu Jian Anjoy Foods Co. Ltd., A | | | Food Products | | | | 100 | | | $ | 2,178 | |
| | Fujian Funeng Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 400 | | | | 600 | |
| | Fujian Sunner Development Co. Ltd. | | | Food Products | | | | 400 | | | | 1,086 | |
| a | | Full Truck Alliance Co. Ltd. | | | Road & Rail | | | | 3,628 | | | | 23,763 | |
| | Fuyao Glass Industry Group Co. Ltd., A | | | Auto Components | | | | 800 | | | | 4,018 | |
| b | | Fuyao Group Glass Industries Co. Ltd., 144A | | | Auto Components | | | | 3,600 | | | | 14,538 | |
| | Ganfeng Lithium Co. Ltd. | | | Metals & Mining | | | | 700 | | | | 7,348 | |
| b | | Ganfeng Lithium Co. Ltd., H, 144A | | | Metals & Mining | | | | 1,400 | | | | 9,319 | |
| a | | GCL System Integration Technology Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 1,600 | | | | 709 | |
| a | | GD Power Development Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 6,400 | | | | 3,654 | |
| a | | GDS Holdings Ltd. | | | IT Services | | | | 5,200 | | | | 11,394 | |
| | GEM Co. Ltd. | | | Metals & Mining | | | | 2,000 | | | | 2,070 | |
| | Gemdale Corp., A | | | Real Estate Management & Development | | | | 2,000 | | | | 3,223 | |
| a | | Genscript Biotech Corp. | | | Life Sciences Tools & Services | | | | 6,000 | | | | 13,116 | |
| | GF Securities Co. Ltd. | | | Capital Markets | | | | 2,500 | | | | 5,004 | |
| | GF Securities Co. Ltd., H | | | Capital Markets | | | | 6,400 | | | | 6,971 | |
| | Gigadevice Semiconductor Beijing Inc., A | | | Semiconductors & Semiconductor Equipment | | | | 300 | | | | 3,945 | |
| a | | Ginlong Technologies Co. Ltd., A | | | Electrical Equipment | | | | 150 | | | | 4,649 | |
| | Glarun Technology Co. Ltd., A | | | Communications Equipment | | | | 400 | | | | 752 | |
| | GoerTek Inc. | | | Electronic Equipment, Instruments & Components | | | | 1,200 | | | | 4,461 | |
| a | | GOME Retail Holdings Ltd. | | | Specialty Retail | | | | 68,000 | | | | 1,273 | |
| a | | Grandjoy Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 800 | | | | 376 | |
| | Great Wall Motor Co. Ltd., A | | | Automobiles | | | | 1,200 | | | | 4,679 | |
| | Great Wall Motor Co. Ltd., H | | | Automobiles | | | | 17,500 | | | | 20,109 | |
| a | | Greattown Holdings Ltd., A | | | Real Estate Management & Development | | | | 400 | | | | 178 | |
| | Greentown China Holdings Ltd. | | | Real Estate Management & Development | | | | 5,000 | | | | 9,401 | |
| | GRG Banking Equipment Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 800 | | | | 915 | |
| | Guangdong Baolihua New Energy Stock Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 794 | |
| a | | Guangdong Electric Power Development Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 751 | |
| a | | Guangdong Electric Power Development Co. Ltd., B | | | Independent Power Producers & Energy Traders | | | | 3,600 | | | | 968 | |
| | Guangdong Golden Dragon Development Inc. | | | Capital Markets | | | | 400 | | | | 759 | |
| | Guangdong Haid Group Co. Ltd. | | | Food Products | | | | 800 | | | | 6,764 | |
| | Guangdong HEC Technology Holding Co. Ltd., A | | | Metals & Mining | | | | 800 | | | | 988 | |
| | Guangdong Kinlong Hardware Products Co. Ltd. | | | Building Products | | | | 100 | | | | 1,242 | |
| a | | Guangdong LY Intelligent Manufacturing Co. Ltd. | | | Electrical Equipment | | | | 3,200 | | | | 1,997 | |
| | Guangdong Xinbao Electrical Appliances Holdings Co. Ltd. | | | Household Durables | | | | 400 | | | | 994 | |
| | Guanghui Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 2,400 | | | | 4,134 | |
| a | | Guangshen Railway Co. Ltd., A | | | Road & Rail | | | | 1,200 | | | | 328 | |
| a | | Guangshen Railway Co. Ltd., H | | | Road & Rail | | | | 8,000 | | | | 1,090 | |
| | Guangxi Guiguan Electric Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 986 | |
| | Guangxi Liugong Machinery Co. Ltd. | | | Machinery | | | | 500 | | | | 396 | |
| | Guangzhou Automobile Group Co. Ltd., A | | | Automobiles | | | | 1,200 | | | | 2,042 | |
| | Guangzhou Automobile Group Co. Ltd., H | | | Automobiles | | | | 18,000 | | | | 12,841 | |
| | Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 1,457 | |
| | Guangzhou Baiyunshan Pharmceutical Holdings Co. Ltd. | | | Pharmaceuticals | | | | 1,200 | | | | 2,593 | |
| | Guangzhou Haige Communications Group Inc. Co. | | | Communications Equipment | | | | 800 | | | | 872 | |
| | Guangzhou Kingmed Diagnostics Group Co. Ltd. | | | Health Care Providers & Services | | | | 200 | | | | 1,778 | |
| | Guangzhou Shiyuan Electronic Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 837 | |
| | Guangzhou TInc.i Materials Technology Co. Ltd. | | | Chemicals | | | | 820 | | | | 5,068 | |
| | Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A | | | Capital Markets | | | | 1,080 | | | | 860 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Guangzhou Zhujiang Brewery Co. Ltd. | | | Beverages | | | | 400 | | | $ | 425 | |
| | Guizhou Panjiang Refined Coal Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 800 | | | | 952 | |
| | Guizhou Xinbang Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 272 | |
| | Guolian Securities Co. Ltd., A | | | Capital Markets | | | | 800 | | | | 981 | |
| | Guosen Securities Co. Ltd. | | | Capital Markets | | | | 1,800 | | | | 2,171 | |
| a | | Guosheng Financial Holding Inc. | | | Electrical Equipment | | | | 400 | | | | 428 | |
| b | | Guotai Junan Securities Co. Ltd., 144A | | | Capital Markets | | | | 4,000 | | | | 4,250 | |
| | Guotai Junan Securities Co. Ltd., A | | | Capital Markets | | | | 2,800 | | | | 5,369 | |
| | Guoxuan High-Tech Co. Ltd. | | | Electrical Equipment | | | | 800 | | | | 3,426 | |
| | Guoyuan Securities Co. Ltd. | | | Capital Markets | | | | 2,120 | | | | 1,903 | |
| a,b,c | | Haidilao International Holding Ltd., 144A, Reg S | | | Hotels, Restaurants & Leisure | | | | 6,200 | | | | 12,163 | |
| | Haier Smart Home Co. Ltd., A | | | Household Durables | | | | 2,400 | | | | 8,339 | |
| | Haier Smart Home Co. Ltd., H | | | Household Durables | | | | 13,200 | | | | 40,441 | |
| | Haisco Pharmaceutical Group Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 1,075 | |
| | Haitian International Holdings Ltd. | | | Machinery | | | | 3,000 | | | | 5,702 | |
| | Haitong Securities Co. Ltd., A | | | Capital Markets | | | | 3,600 | | | | 4,373 | |
| | Haitong Securities Co. Ltd., H | | | Capital Markets | | | | 19,200 | | | | 10,175 | |
| a | | Hang Zhou Great Star Industrial Co. Ltd. | | | Household Durables | | | | 400 | | | | 1,066 | |
| | Hangzhou Binjiang Real Estate Group Co. Ltd. | | | Real Estate Management & Development | | | | 800 | | | | 1,175 | |
| | Hangzhou Chang Chuan Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 3,199 | |
| | Hangzhou First Applied Material Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 324 | | | | 2,418 | |
| | Hangzhou Lion Electronics Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 2,555 | |
| | Hangzhou Oxygen Plant Group Co. Ltd. | | | Machinery | | | | 400 | | | | 1,924 | |
| | Hangzhou Robam Appliances Co. Ltd., A | | | Household Durables | | | | 400 | | | | 1,287 | |
| | Hangzhou Shunwang Technology Co. Ltd. | | | Entertainment | | | | 400 | | | | 555 | |
| | Hangzhou Silan Microelectronics Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 600 | | | | 2,697 | |
| | Hangzhou Tigermed Consulting Co. Ltd. | | | Life Sciences Tools & Services | | | | 300 | | | | 3,837 | |
| b,c | | Hangzhou Tigermed Consulting Co. Ltd., A, 144A, Reg S | | | Life Sciences Tools & Services | | | | 700 | | | | 5,676 | |
| | Han’s Laser Technology Industry Group Co. Ltd., A | | | Machinery | | | | 400 | | | | 1,462 | |
| b | | Hansoh Pharmaceutical Group Co. Ltd., 144A | | | Pharmaceuticals | | | | 6,000 | | | | 9,493 | |
| | Haohua Chemical Science & Technology Co. Ltd., A | | | Chemicals | | | | 400 | | | | 2,183 | |
| | Hefei Meiya Optoelectronic Technology Inc. | | | Machinery | | | | 120 | | | | 385 | |
| | Heilongjiang Agriculture Co. Ltd., A | | | Food Products | | | | 800 | | | | 1,494 | |
| | Henan Shuanghui Investment & Development Co. Ltd. | | | Food Products | | | | 1,300 | | | | 4,460 | |
| | Hengan International Group Co. Ltd. | | | Personal Products | | | | 4,000 | | | | 17,886 | |
| | Hengdian Group DMEGC Magnetics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 2,221 | |
| | Hengli Petrochemical Co. Ltd., A | | | Chemicals | | | | 1,360 | | | | 3,228 | |
| a | | HengTen Networks Group Ltd. | | | Internet & Catalog Retail | | | | 16,000 | | | | 3,424 | |
| | Hengtong Optic-electric Co. Ltd. | | | Communications Equipment | | | | 800 | | | | 2,042 | |
| | Hengyi Petrochemical Co. Ltd., A | | | Chemicals | | | | 1,200 | | | | 1,298 | |
| | Hesteel Co. Ltd. | | | Metals & Mining | | | | 5,200 | | | | 1,641 | |
| | Hithink RoyalFlush Information Network Co. Ltd., A | | | Capital Markets | | | | 200 | | | | 2,174 | |
| a | | Holitech Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 292 | |
| | Hongfa Technology Co. Ltd., A | | | Electrical Equipment | | | | 560 | | | | 2,736 | |
| | Hopson Development Holdings Ltd. | | | Real Estate Management & Development | | | | 4,257 | | | | 4,458 | |
| | Hoshine Silicon Industry Co. Ltd., A | | | Chemicals | | | | 200 | | | | 3,073 | |
| a,b,c | | Hua Hong Semiconductor Ltd., 144A | | | Semiconductors & Semiconductor Equipment | | | | 2,000 | | | | 4,576 | |
| | Huadian Power International Corp. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 2,000 | | | | 1,669 | |
| | Huadian Power International Corp. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 10,000 | | | | 3,656 | |
| | Huadong Medicine Co. Ltd., A | | | Health Care Providers & Services | | | | 800 | | | | 4,502 | |
| | Huafa Industrial Co. Ltd. Zhuhai, A | | | Real Estate Management & Development | | | | 800 | | | | 1,105 | |
| | Huafon Chemical Co. Ltd. | | | Chemicals | | | | 1,600 | | | | 1,466 | |
| | Huagong Tech Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 1,037 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Huaibei Mining Holdings Co. Ltd., A | | | Metals & Mining | | | | 800 | | | $ | 1,891 | |
| | Hualan Biological Engineering Inc. | | | Biotechnology | | | | 800 | | | | 2,038 | |
| a | | Huaneng Power International Inc., A | | | Independent Power Producers & Energy Traders | | | | 3,200 | | | | 3,407 | |
| a | | Huaneng Power International Inc., H | | | Independent Power Producers & Energy Traders | | | | 24,000 | | | | 10,456 | |
| | Huapont Life Sciences Co. Ltd. | | | Chemicals | | | | 1,200 | | | | 895 | |
| b | | Huatai Securities Co. Ltd., 144A | | | Capital Markets | | | | 9,200 | | | | 10,126 | |
| | Huatai Securities Co. Ltd., A | | | Capital Markets | | | | 3,000 | | | | 5,100 | |
| | Huaxi Securities Co. Ltd. | | | Capital Markets | | | | 800 | | | | 823 | |
| | Huaxia Bank Co. Ltd., A | | | Banks | | | | 5,600 | | | | 3,951 | |
| | Huaxin Cement Co. Ltd., H | | | Construction Materials | | | | 1,500 | | | | 1,546 | |
| | Huaxin Cement Co. Ltd., A | | | Construction Materials | | | | 400 | | | | 940 | |
| | Huayu Automotive Systems Co. Ltd. | | | Auto Components | | | | 1,200 | | | | 2,781 | |
| | Hubei Biocause Pharmaceutical Co. Ltd. | | | Insurance | | | | 800 | | | | 340 | |
| | Hubei Energy Group Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 2,400 | | | | 1,478 | |
| | Hubei Xingfa Chemicals Group Co. Ltd., A | | | Chemicals | | | | 400 | | | | 1,878 | |
| | Hubei Xinyangfeng Fertilizer Co. Ltd. | | | Chemicals | | | | 400 | | | | 728 | |
| | Huizhou Desay Sv Automotive Co. Ltd. | | | Household Durables | | | | 200 | | | | 3,870 | |
| | Humanwell Healthcare Group Co. Ltd., A | | | Pharmaceuticals | | | | 800 | | | | 1,967 | |
| | Hunan Gold Corp. Ltd. | | | Metals & Mining | | | | 400 | | | | 674 | |
| | Hunan Valin Steel Co. Ltd., A | | | Metals & Mining | | | | 2,800 | | | | 1,602 | |
| | Hundsun Technologies Inc., A | | | Software | | | | 676 | | | | 3,214 | |
| | Huolinhe Opencut Coal Industry Corp. Ltd. of Inner Mongolia | | | Oil, Gas & Consumable Fuels | | | | 400 | | | | 733 | |
| a | | HUTCHMED China Ltd. | | | Pharmaceuticals | | | | 3,000 | | | | 5,052 | |
| a,b | | Hygeia Healthcare Holdings Co. Ltd., 144A | | | Health Care Providers & Services | | | | 2,000 | | | | 11,300 | |
| a | | Hytera Communications Corp. Ltd., A | | | Communications Equipment | | | | 400 | | | | 251 | |
| | Iflytek Co. Ltd. | | | Software | | | | 900 | | | | 4,143 | |
| | Imeik Technology Development Co. Ltd., A | | | Biotechnology | | | | 100 | | | | 6,878 | |
| | Industrial and Commercial Bank of China Ltd. | | | Banks | | | | 30,400 | | | | 18,549 | |
| | Industrial and Commercial Bank of China Ltd., H | | | Banks | | | | 444,000 | | | | 208,145 | |
| | Industrial Bank Co. Ltd., A | | | Banks | | | | 8,400 | | | | 19,618 | |
| a | | Industrial Securities Co. Ltd., A | | | Capital Markets | | | | 3,640 | | | | 2,783 | |
| | Ingenic Semiconductor Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 200 | | | | 2,075 | |
| | Inmyshow Digital Technology Group Co. Ltd. | | | Media | | | | 800 | | | | 667 | |
| | Inner Mongolia BaoTou Steel Union Co. Ltd., A | | | Metals & Mining | | | | 15,200 | | | | 3,923 | |
| | Inner Mongolia ERDOS Resources Co. Ltd., B | | | Metals & Mining | | | | 2,400 | | | | 4,543 | |
| | Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | | | Chemicals | | | | 3,200 | | | | 1,764 | |
| | Inner Mongolia Yili Industrial Group Co. Ltd., A | | | Food Products | | | | 2,500 | | | | 11,565 | |
| | Inner Mongolia Yitai Coal Co. Ltd., B | | | Oil, Gas & Consumable Fuels | | | | 5,600 | | | | 8,439 | |
| a,b | | Innovent Biologics Inc., B, 144A | | | Biotechnology | | | | 7,500 | | | | 23,360 | |
| | Inspur Electronic Information Industry Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 400 | | | | 1,108 | |
| | Intco Medical Technology Co. Ltd. | | | Health Care Equipment & Supplies | | | | 180 | | | | 503 | |
| a | | Iqiyi Inc., ADR | | | Entertainment | | | | 1,830 | | | | 4,959 | |
| | JA Solar Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 840 | | | | 7,546 | |
| | Jafron Biomedical Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 400 | | | | 2,720 | |
| | Jason Furniture Hangzhou Co. Ltd., A | | | Household Durables | | | | 460 | | | | 2,577 | |
| a,b | | JD Health International Inc., 144A | | | Internet & Catalog Retail | | | | 4,200 | | | | 24,130 | |
| a,b | | JD Logistics Inc., 144A | | | Air Freight & Logistics | | | | 9,200 | | | | 16,173 | |
| | JD.com Inc., A | | | Internet & Catalog Retail | | | | 13,400 | | | | 339,016 | |
| a | | Jiajiayue Group Co. Ltd., A | | | Food & Staples Retailing | | | | 400 | | | | 605 | |
| | Jiangling Motors Corp. Ltd., A | | | Automobiles | | | | 400 | | | | 816 | |
| | Jiangsu Changjiang Electronics Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 800 | | | | 2,405 | |
| | Jiangsu Eastern Shenghong Co. Ltd. | | | Chemicals | | | | 1,600 | | | | 3,910 | |
| | Jiangsu Expressway Co. Ltd., A | | | Transportation Infrastructure | | | | 400 | | | | 403 | |
| | Jiangsu Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 8,000 | | | | 6,003 | |
| | Jiangsu Hengli Hydraulic Co. Ltd., A | | | Machinery | | | | 496 | | | | 3,150 | |
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 127 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Jiangsu Hengrui Medicine Co. Ltd., A | | | Pharmaceuticals | | | | 2,632 | | | $ | 12,959 | |
| | Jiangsu King’s Luck Brewery JSC Ltd. | | | Beverages | | | | 500 | | | | 3,218 | |
| | Jiangsu Linyang Energy Co. Ltd., A | | | Electrical Equipment | | | | 800 | | | | 753 | |
| | Jiangsu Yanghe Brewery JST Co. Ltd., A | | | Beverages | | | | 600 | | | | 13,310 | |
| | Jiangsu Yangnong Chemical Co. Ltd., A | | | Chemicals | | | | 100 | | | | 1,403 | |
| | Jiangsu Yuyue Medical Equipment & Supply Co. Ltd. | | | Health Care Equipment & Supplies | | | | 400 | | | | 1,616 | |
| | Jiangsu Zhangjiagang Rural Commercial Bank Co. Ltd. | | | Banks | | | | 480 | | | | 313 | |
| a | | Jiangsu Zhongnan Construction Group Co. Ltd. | | | Real Estate Management & Development | | | | 2,000 | | | | 651 | |
| | Jiangsu Zhongtian Technology Co. Ltd., A | | | Electrical Equipment | | | | 1,200 | | | | 3,782 | |
| | Jiangxi Copper Co. Ltd., A | | | Metals & Mining | | | | 800 | | | | 1,710 | |
| | Jiangxi Copper Co. Ltd., H | | | Metals & Mining | | | | 7,000 | | | | 8,097 | |
| a | | Jiangxi Special Electric Motor Co. Ltd., A | | | Electrical Equipment | | | | 800 | | | | 2,203 | |
| a | | Jiangxi Zhengbang Technology Co. Ltd., A | | | Food Products | | | | 800 | | | | 502 | |
| | Jilin Aodong Pharmaceutical Group Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 751 | |
| a | | Jinke Properties Group Co. Ltd. | | | Real Estate Management & Development | | | | 2,800 | | | | 821 | |
| | Jinke Smart Services Group Co. Ltd., H | | | Real Estate Management & Development | | | | 1,600 | | | | 2,426 | |
| b,c | | Jinxin Fertility Group Ltd., 144A, Reg S | | | Health Care Providers & Services | | | | 8,500 | | | | 4,169 | |
| | JiuGui Liquor Co. Ltd., A | | | Beverages | | | | 100 | | | | 1,762 | |
| b | | Jiumaojiu International Holdings Ltd., 144A | | | Hotels, Restaurants & Leisure | | | | 4,000 | | | | 6,563 | |
| | Jizhong Energy Resources Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 1,200 | | | | 1,220 | |
| | JoInc.are Pharmaceutical Group Industry Co. Ltd., A | | | Pharmaceuticals | | | | 800 | | | | 1,181 | |
| | Joinn Laboratories China Co. Ltd., A | | | Life Sciences Tools & Services | | | | 140 | | | | 1,110 | |
| b | | Joinn Laboratories China Co. Ltd., H, 144A | | | Life Sciences Tools & Services | | | | 560 | | | | 2,137 | |
| a | | Jointo Energy Investment Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 400 | | | | 247 | |
| | Jointown Pharmaceutical Group Co. Ltd., A | | | Health Care Providers & Services | | | | 800 | | | | 1,284 | |
| | Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., A | | | Food Products | | | | 400 | | | | 1,789 | |
| | Joyoung Co. Ltd. | | | Household Durables | | | | 400 | | | | 829 | |
| | JOYY Inc., ADR | | | Interactive Media & Services | | | | 260 | | | | 6,760 | |
| | Juewei Food Co. Ltd., A | | | Food Products | | | | 100 | | | | 703 | |
| a | | Juneyao Airlines Co. Ltd., A | | | Airlines | | | | 400 | | | | 849 | |
| a | | Kaishan Group Co. Ltd., A | | | Machinery | | | | 400 | | | | 1,043 | |
| a | | Kanzhun Ltd., ADR | | | Interactive Media & Services | | | | 768 | | | | 12,964 | |
| a | | KE Holdings Inc., ADR | | | Real Estate Management & Development | | | | 3,432 | | | | 60,129 | |
| | Keda Industrial Group Co. Ltd. | | | Machinery | | | | 800 | | | | 1,878 | |
| | Kerry Logistics Network Ltd. | | | Air Freight & Logistics | | | | 1,500 | | | | 2,412 | |
| | Kingboard Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,000 | | | | 11,312 | |
| a | | Kingdee International Software Group Co. Ltd. | | | Software | | | | 14,000 | | | | 18,334 | |
| | Kingfa Sci & Tech Co. Ltd., A | | | Chemicals | | | | 1,200 | | | | 1,579 | |
| a | | Kingsoft Cloud Holdings Ltd., ADR | | | IT Services | | | | 561 | | | | 1,116 | |
| | Kingsoft Corp. Ltd. | | | Software | | | | 5,000 | | | | 13,312 | |
| a,b | | Kuaishou Technology, B, 144A | | | Interactive Media & Services | | | | 11,000 | | | | 71,396 | |
| a | | Kuang-Chi Technologies Co. Ltd. | | | Auto Components | | | | 800 | | | | 1,666 | |
| | Kunlun Tech Co. Ltd. | | | Entertainment | | | | 400 | | | | 695 | |
| | Kweichow Moutai Co. Ltd., A | | | Beverages | | | | 500 | | | | 131,327 | |
| a | | KWG Group Holdings Ltd. | | | Real Estate Management & Development | | | | 8,000 | | | | 989 | |
| a | | Lakala Payment Co. Ltd., A | | | IT Services | | | | 400 | | | | 768 | |
| | Lao Feng Xiang Co. Ltd., B | | | Textiles, Apparel & Luxury Goods | | | | 1,200 | | | | 3,468 | |
| | Laobaixing Pharmacy Chain JSC | | | Food & Staples Retailing | | | | 130 | | | | 585 | |
| | Lee & Man Paper Manufacturing Ltd. | | | Paper & Forest Products | | | | 8,000 | | | | 2,568 | |
| b | | Legend Holdings Corp., 144A | | | Technology Hardware, Storage & Peripherals | | | | 3,000 | | | | 2,606 | |
| | Lenovo Group Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 44,000 | | | | 30,604 | |
| | Lens Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 2,000 | | | | 2,589 | |
| a | | Leo Group Co. Ltd. | | | Media | | | | 2,400 | | | | 589 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Lepu Medical Technology Beijing Co. Ltd. | | | Health Care Equipment & Supplies | | | | 800 | | | $ | 2,371 | |
| | Levima Advanced Materials Corp., A | | | Chemicals | | | | 400 | | | | 2,243 | |
| | Leyard Optoelectronic Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 618 | |
| a | | Li Auto Inc., ADR | | | Automobiles | | | | 2,944 | | | | 67,741 | |
| | Li Ning Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 12,500 | | | | 95,702 | |
| | LianChuang Electronic Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 769 | |
| | Lianhe Chemical Technology Co. Ltd. | | | Chemicals | | | | 400 | | | | 1,004 | |
| | Liaoning Port Co. Ltd., A | | | Transportation Infrastructure | | | | 7,600 | | | | 1,706 | |
| | Liuzhou Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 400 | | | | 190 | |
| | Livzon Pharmaceutical Group Inc. | | | Pharmaceuticals | | | | 400 | | | | 1,689 | |
| | Livzon Pharmaceutical Group Inc., H | | | Pharmaceuticals | | | | 900 | | | | 2,256 | |
| | Lomon Billions Group Co. Ltd. | | | Chemicals | | | | 1,000 | | | | 2,209 | |
| b,c | | Longfor Group Holdings Ltd., 144A, Reg S | | | Real Estate Management & Development | | | | 10,660 | | | | 30,622 | |
| | LONGi Green Energy Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 3,052 | | | | 20,510 | |
| | Longshine Technology Group Co. Ltd., A | | | Software | | | | 400 | | | | 1,203 | |
| | Luenmei Quantum Co. Ltd., A | | | Water Utilities | | | | 800 | | | | 794 | |
| | Lufax Holding Ltd., ADR | | | Consumer Finance | | | | 3,908 | | | | 9,926 | |
| | Luolai Lifestyle Technology Co. Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 400 | | | | 573 | |
| | Luxi Chemical Group Co. Ltd., A | | | Chemicals | | | | 800 | | | | 1,454 | |
| | Luxshare Precision Industry Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 2,800 | | | | 11,547 | |
| a,b | | Luye Pharma Group Ltd., 144A | | | Pharmaceuticals | | | | 10,500 | | | | 2,916 | |
| | Luzhou Laojiao Co. Ltd., A | | | Beverages | | | | 600 | | | | 19,413 | |
| | Maanshan Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 2,000 | | | | 755 | |
| | Maanshan Iron & Steel Co. Ltd., H | | | Metals & Mining | | | | 4,000 | | | | 831 | |
| | Mango Excellent Media Co. Ltd. | | | Entertainment | | | | 840 | | | | 2,937 | |
| | Maxscend Microelectronics Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 160 | | | | 1,984 | |
| a | | Meinian Onehealth Healthcare Holdings Co. Ltd. | | | Health Care Providers & Services | | | | 1,720 | | | | 1,030 | |
| a,b | | Meituan Dianping, B, 144A | | | Internet & Catalog Retail | | | | 23,200 | | | | 489,423 | |
| | Metallurgical Corp. of China Ltd. | | | Construction & Engineering | | | | 17,000 | | | | 2,772 | |
| | Metallurgical Corp. of China Ltd., A | | | Construction & Engineering | | | | 6,400 | | | | 2,684 | |
| a | | Microport Scientific Corp. | | | Health Care Equipment & Supplies | | | | 2,900 | | | | 4,995 | |
| | Ming Yang Smart Energy Group Ltd. | | | Electrical Equipment | | | | 800 | | | | 2,708 | |
| | Ming Yuan Cloud Group Holdings Ltd. | | | Software | | | | 3,000 | | | | 1,777 | |
| | MINISO Group Holding Ltd., ADR | | | Multiline Retail | | | | 416 | | | | 2,284 | |
| | Minth Group Ltd. | | | Auto Components | | | | 4,000 | | | | 8,856 | |
| a | | MMG Ltd. | | | Metals & Mining | | | | 16,000 | | | | 3,832 | |
| | Montage Technology Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 339 | | | | 2,488 | |
| a | | Montnets Rongxin Technology Group Co. Ltd. | | | Software | | | | 400 | | | | 549 | |
| | Muyuan Foods Co. Ltd. | | | Food Products | | | | 2,096 | | | | 16,029 | |
| | NanJi E-Commerce Co. Ltd. | | | Media | | | | 800 | | | | 499 | |
| | Nanjing Hanrui Cobalt Co. Ltd., A | | | Metals & Mining | | | | 100 | | | | 615 | |
| | Nanjing Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 2,800 | | | | 1,072 | |
| | Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 520 | | | | 1,214 | |
| | Nanjing Securities Co. Ltd., A | | | Capital Markets | | | | 1,200 | | | | 1,284 | |
| | Nanyang Topsec Technologies Group Inc., A | | | Electrical Equipment | | | | 400 | | | | 516 | |
| | Nari Technology Development Co. Ltd., A | | | Electrical Equipment | | | | 2,880 | | | | 10,047 | |
| a | | National Silicon Industry Group Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 712 | | | | 1,783 | |
| | NAURA Technology Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 200 | | | | 7,810 | |
| | NavInfo Co. Ltd. | | | Household Durables | | | | 800 | | | | 1,295 | |
| | NetEase Inc. | | | Entertainment | | | | 10,400 | | | | 156,996 | |
| | New China Life Insurance Co. Ltd., A | | | Insurance | | | | 800 | | | | 3,023 | |
| | New China Life Insurance Co. Ltd., H | | | Insurance | | | | 5,200 | | | | 9,923 | |
| a | | New Hope Liuhe Co. Ltd. | | | Food Products | | | | 1,600 | | | | 3,120 | |
| a | | New Oriental Education & Technology Group Inc., Sponsored ADR | | | Diversified Consumer Services | | | | 751 | | | | 18,001 | |
| | Newland Digital Technology Co. Ltd. | | | Software | | | | 400 | | | | 679 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Nexteer Automotive Group Ltd. | | | Auto Components | | | | 5,000 | | | $ | 2,713 | |
| | Nine Dragons Paper Holdings Ltd. | | | Paper & Forest Products | | | | 9,000 | | | | 5,595 | |
| | Ninestar Corp. | | | Technology Hardware, Storage & Peripherals | | | | 800 | | | | 4,842 | |
| | Ningbo Deye Technology Co. Ltd., A | | | Machinery | | | | 140 | | | | 8,252 | |
| a | | Ningbo Joyson Electronic Corp. | | | Auto Components | | | | 500 | | | | 927 | |
| | Ningbo Orient Wires & Cables Co. Ltd., A | | | Electrical Equipment | | | | 300 | | | | 2,934 | |
| | Ningbo Ronbay New Energy Technology Co. Ltd. | | | Electrical Equipment | | | | 200 | | | | 2,361 | |
| | Ningbo Sanxing Medical Electric Co. Ltd., A | | | Electrical Equipment | | | | 400 | | | | 642 | |
| | Ningbo Shanshan Co. Ltd., A | | | Chemicals | | | | 800 | | | | 2,340 | |
| | Ningbo Tuopu Group Co. Ltd., A | | | Auto Components | | | | 400 | | | | 4,141 | |
| | Ningbo Zhoushan Port Co. Ltd., A | | | Transportation Infrastructure | | | | 3,600 | | | | 1,833 | |
| | Ningxia Baofeng Energy Group Co. Ltd., A | | | Chemicals | | | | 1,200 | | | | 2,242 | |
| a | | NIO Inc., ADR | | | Automobiles | | | | 7,408 | | | | 116,824 | |
| b | | Nongfu Spring Co. Ltd., H, 144A | | | Beverages | | | | 9,600 | | | | 55,705 | |
| | North Huajin Chemical Industries Co. Ltd. | | | Chemicals | | | | 400 | | | | 399 | |
| | North Industries Group Red Arrow Co. Ltd., A | | | Machinery | | | | 400 | | | | 1,254 | |
| | Northeast Securities Co. Ltd. | | | Capital Markets | | | | 800 | | | | 724 | |
| | NSFOCUS Information Technology Co. Ltd. | | | Software | | | | 400 | | | | 457 | |
| a | | Oceanwide Holdings Co. Ltd. | | | Diversified Financial Services | | | | 800 | | | | 134 | |
| a | | Offcn Education Technology Co. Ltd., A | | | Diversified Consumer Services | | | | 800 | | | | 454 | |
| | Offshore Oil Engineering Co. Ltd., A | | | Energy Equipment & Services | | | | 2,000 | | | | 1,248 | |
| a | | OFILM Group Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,600 | | | | 1,183 | |
| | Oppein Home Group Inc., A | | | Household Durables | | | | 100 | | | | 1,594 | |
| | ORG Technology Co. Ltd. | | | Containers & Packaging | | | | 800 | | | | 520 | |
| b | | Orient Securities Co. Ltd. of China, 144A | | | Capital Markets | | | | 4,000 | | | | 1,569 | |
| | Oriental Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 800 | | | | 855 | |
| a | | Ourpalm Co. Ltd. | | | Entertainment | | | | 1,600 | | | | 626 | |
| | Ovctek China Inc., A | | | Health Care Equipment & Supplies | | | | 400 | | | | 2,317 | |
| a | | Pangang Group Vanadium Titanium & Resources Co. Ltd., A | | | Metals & Mining | | | | 2,800 | | | | 1,815 | |
| | People.cn Co. Ltd. | | | Media | | | | 400 | | | | 579 | |
| | Perfect World Co. Ltd. | | | Entertainment | | | | 400 | | | | 697 | |
| | PetroChina Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 10,000 | | | | 7,196 | |
| | PetroChina Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 120,000 | | | | 49,224 | |
| | Pharmaron Beijing Co. Ltd., A | | | Life Sciences Tools & Services | | | | 150 | | | | 1,137 | |
| b,c | | Pharmaron Beijing Co. Ltd., H, 144A, Reg S | | | Life Sciences Tools & Services | | | | 1,100 | | | | 5,346 | |
| | PICC Property and Casualty Co. Ltd., H | | | Insurance | | | | 38,000 | | | | 39,404 | |
| a | | Pinduoduo Inc., ADR | | | Internet & Direct Marketing Retail | | | | 2,112 | | | | 132,169 | |
| | Ping An Bank Co. Ltd., A | | | Banks | | | | 7,600 | | | | 12,622 | |
| a,b,c | | Ping An Healthcare and Technology Co. Ltd., 144A, Reg S | | | Health Care Technology | | | | 2,200 | | | | 4,148 | |
| | Ping An Insurance Group Co. of China Ltd., A | | | Insurance | | | | 4,400 | | | | 25,663 | |
| | Ping An Insurance Group Co. of China Ltd., H | | | Insurance | | | | 34,000 | | | | 169,786 | |
| | Pingdingshan Tianan Coal Mining Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 900 | | | | 1,722 | |
| | Poly Developments and Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 4,800 | | | | 12,119 | |
| | Poly Property Services Co. Ltd., H | | | Real Estate Management & Development | | | | 800 | | | | 4,245 | |
| b | | Pop Mart International Group Ltd., 144A | | | Specialty Retail | | | | 4,000 | | | | 7,358 | |
| b | | Postal Savings Bank of China Co. Ltd., 144A | | | Banks | | | | 54,000 | | | | 31,850 | |
| | Postal Savings Bank of China Co. Ltd. | | | Banks | | | | 8,400 | | | | 5,255 | |
| | Power Construction Corp. of China Ltd. | | | Construction & Engineering | | | | 4,400 | | | | 4,302 | |
| | Qingdao Port International Co. Ltd., A | | | Transportation Infrastructure | | | | 400 | | | | 307 | |
| | Qingdao TGOOD Electric Co. Ltd. | | | Electrical Equipment | | | | 400 | | | | 816 | |
| a | | Qinghai Salt Lake Industry Co. Ltd., A | | | Chemicals | | | | 2,000 | | | | 6,699 | |
| | Qinhuangdao Port Co. Ltd., A | | | Transportation Infrastructure | | | | 800 | | | | 298 | |
| | Raytron Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 126 | | | | 672 | |
| b | | Red Star Macalline Group Corp. Ltd., 144A | | | Real Estate Management & Development | | | | 4,000 | | | | 1,096 | |
| | Red Star Macalline Group Corp. Ltd., A | | | Real Estate Management & Development | | | | 420 | | | | 256 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| a,b | | Remegen Co. Ltd., H, 144A | | | Biotechnology | | | | 1,000 | | | $ | 4,847 | |
| a | | RiseSun Real Estate Development Co. Ltd. | | | Real Estate Management & Development | | | | 1,200 | | | | 396 | |
| a | | RLX Technology Inc., ADR | | | Tobacco | | | | 4,056 | | | | 4,259 | |
| | Rongsheng Petro Chemical Co. Ltd. | | | Chemicals | | | | 1,350 | | | | 2,619 | |
| | SAIC Motor Corp. Ltd. | | | Automobiles | | | | 4,000 | | | | 8,023 | |
| | Sailun Group Co. Ltd., A | | | Auto Components | | | | 1,200 | | | | 1,703 | |
| | Sangfor Technologies Inc. | | | Software | | | | 100 | | | | 1,403 | |
| | Sansteel Minguang Co. Ltd. | | | Metals & Mining | | | | 800 | | | | 549 | |
| | Sany Heavy Industry Co. Ltd., A | | | Machinery | | | | 3,200 | | | | 6,230 | |
| | SDIC Power Holdings Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 2,800 | | | | 4,218 | |
| | Sealand Securities Co. Ltd. | | | Capital Markets | | | | 1,380 | | | | 625 | |
| a | | Seazen Group Ltd. | | | Real Estate Management & Development | | | | 12,000 | | | | 2,813 | |
| a | | Seazen Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 900 | | | | 2,207 | |
| | SF Holding Co. Ltd. | | | Air Freight & Logistics | | | | 2,000 | | | | 13,247 | |
| | SG Micro Corp., A | | | Semiconductors & Semiconductor Equipment | | | | 150 | | | | 2,964 | |
| | Shaanxi Coal Industry Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,000 | | | | 12,776 | |
| | Shaanxi International Trust Co. Ltd. | | | Capital Markets | | | | 800 | | | | 324 | |
| a | | Shandong Chenming Paper Holdings Ltd., A | | | Paper & Forest Products | | | | 800 | | | | 525 | |
| a | | Shandong Chenming Paper Holdings Ltd., B | | | Paper & Forest Products | | | | 4,000 | | | | 1,187 | |
| a | | Shandong Chenming Paper Holdings Ltd., H | | | Paper & Forest Products | | | | 3,000 | | | | 829 | |
| | Shandong Denghai Seeds Co. Ltd. | | | Food Products | | | | 400 | | | | 1,071 | |
| b | | Shandong Gold Mining Co. Ltd., 144A | | | Metals & Mining | | | | 4,000 | | | | 6,359 | |
| | Shandong Gold Mining Co. Ltd., A | | | Metals & Mining | | | | 1,600 | | | | 3,845 | |
| | Shandong Himile Mechanical Science & | | | | | | | | | | | | |
| | Technology Co. Ltd. | | | Machinery | | | | 400 | | | | 1,296 | |
| | Shandong Hi-speed Co. Ltd., A | | | Transportation Infrastructure | | | | 1,200 | | | | 914 | |
| | Shandong Hualu Hengsheng Chemical Co. Ltd., A | | | Chemicals | | | | 800 | | | | 3,273 | |
| | Shandong Humon Smelting Co. Ltd. | | | Metals & Mining | | | | 400 | | | | 510 | |
| | Shandong Linglong Tyre Co. Ltd., A | | | Auto Components | | | | 400 | | | | 1,021 | |
| | Shandong Nanshan Aluminum Co. Ltd., A | | | Metals & Mining | | | | 4,000 | | | | 1,689 | |
| | Shandong Pharmaceutical Glass Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 400 | | | | 1,625 | |
| | Shandong Shida Shenghua Chemical Group Co. Ltd., A | | | Chemicals | | | | 100 | | | | 1,356 | |
| | Shandong Sun Paper Industry JSC Ltd., A | | | Paper & Forest Products | | | | 800 | | | | 1,285 | |
| | Shandong Weigao Group Medical Polymer Co. Ltd., H | | | Health Care Equipment & Supplies | | | | 13,400 | | | | 18,026 | |
| | Shanghai 2345 Network Holding Group Co. Ltd. | | | Software | | | | 1,200 | | | | 323 | |
| | Shanghai AJ Group Co. Ltd., A | | | Diversified Financial Services | | | | 400 | | | | 298 | |
| | Shanghai Bailian Group Co. Ltd., B | | | Food & Staples Retailing | | | | 1,600 | | | | 1,072 | |
| | Shanghai Bairun Investment Holding Group Co. Ltd. | | | Beverages | | | | 392 | | | | 1,481 | |
| | Shanghai Baosight Software Co. Ltd., A | | | Software | | | | 520 | | | | 2,683 | |
| | Shanghai Baosight Software Co. Ltd., B | | | Software | | | | 2,912 | | | | 8,474 | |
| | Shanghai Construction Group Co. Ltd., A | | | Construction & Engineering | | | | 2,800 | | | | 994 | |
| | Shanghai Dazhong Public Utilities Group Co. Ltd., A | | | Gas Utilities | | | | 800 | | | | 334 | |
| a | | Shanghai Electric Group Co. Ltd., A | | | Electrical Equipment | | | | 3,200 | | | | 1,737 | |
| a | | Shanghai Electric Group Co. Ltd., H | | | Electrical Equipment | | | | 16,000 | | | | 3,180 | |
| a | | Shanghai Electric Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 1,200 | | | | 1,513 | |
| | Shanghai Environment Group Co. Ltd., A | | | Commercial Services & Supplies | | | | 400 | | | | 499 | |
| | Shanghai Fosun Pharmaceutical Group Co. Ltd., A | | | Pharmaceuticals | | | | 800 | | | | 3,317 | |
| | Shanghai Fosun Pharmaceutical Group Co. Ltd., H | | | Pharmaceuticals | | | | 3,000 | | | | 7,277 | |
| | Shanghai Huayi Group Co. Ltd., B | | | Chemicals | | | | 800 | | | | 471 | |
| a | | Shanghai International Airport Co. Ltd., A | | | Transportation Infrastructure | | | | 1,200 | | | | 9,726 | |
| | Shanghai International Port Group Co. Ltd., A | | | Transportation Infrastructure | | | | 4,000 | | | | 3,120 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Shanghai Jinjiang International Hotels Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 800 | | | $ | 1,486 | |
| | Shanghai Jinjiang International Hotels Co. Ltd., A | | | Hotels, Restaurants & Leisure | | | | 400 | | | | 3,235 | |
| | Shanghai Jinqiao Export Processing Zone Development Co. Ltd., A | | | Real Estate Management & Development | | | | 400 | | | | 597 | |
| | Shanghai Jinqiao Export Processing Zone Development Co. Ltd., B | | | Real Estate Management & Development | | | | 1,200 | | | | 1,068 | |
| a,b | | Shanghai Junshi Biosciences Co. Ltd., H, 144A | | | Biotechnology | | | | 1,000 | | | | 3,178 | |
| | Shanghai Lingang Holdings Corp. Ltd. | | | Real Estate Management & Development | | | | 520 | | | | 862 | |
| | Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A | | | Real Estate Management & Development | | | | 800 | | | | 1,081 | |
| | Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | | | Real Estate Management & Development | | | | 6,000 | | | | 4,698 | |
| | Shanghai Mechanical and Electrical Industry Co. Ltd., B | | | Machinery | | | | 1,600 | | | | 1,629 | |
| | Shanghai Pharmaceuticals Holding Co. Ltd., A | | | Health Care Providers & Services | | | | 1,600 | | | | 3,705 | |
| | Shanghai Pharmaceuticals Holding Co. Ltd., H | | | Health Care Providers & Services | | | | 5,000 | | | | 6,905 | |
| | Shanghai Pudong Development Bank Co. Ltd., A | | | Banks | | | | 12,000 | | | | 11,850 | |
| | Shanghai Putailai New Energy Technology Co. Ltd., A | | | Chemicals | | | | 540 | | | | 4,227 | |
| | Shanghai RAAS Blood Products Co. Ltd., A | | | Biotechnology | | | | 2,000 | | | | 1,495 | |
| | Shanghai Shibei Hi-Tech Co. Ltd., B | | | Real Estate Management & Development | | | | 3,600 | | | | 882 | |
| a | | Shanghai Shimao Co. Ltd., A | | | Real Estate Management & Development | | | | 1,600 | | | | 530 | |
| | Shanghai Tunnel Engineering Co. Ltd., A | | | Construction & Engineering | | | | 1,600 | | | | 1,106 | |
| | Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd. | | | Trading Companies & Distributors | | | | 800 | | | | 686 | |
| | Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd., A | | | Trading Companies & Distributors | | | | 400 | | | | 654 | |
| | Shanghai Yuyuan Tourist Mart Group Co. Ltd., A | | | Specialty Retail | | | | 1,600 | | | | 1,497 | |
| | Shanghai Zhangjiang High-Tech Park Development Co. Ltd., A | | | Real Estate Management & Development | | | | 800 | | | | 1,166 | |
| | Shanghai Zhenhua Port Machinery Co. Ltd., B | | | Machinery | | | | 4,400 | | | | 1,065 | |
| a | | Shangri-La Asia Ltd. | | | Hotels, Restaurants & Leisure | | | | 6,000 | | | | 4,166 | |
| | Shanxi Lu’an Environmental Energy Development Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 1,200 | | | | 2,841 | |
| | Shanxi Meijin Energy Co. Ltd., A | | | Metals & Mining | | | | 1,600 | | | | 2,157 | |
| | Shanxi Securities Co. Ltd. | | | Capital Markets | | | | 920 | | | | 653 | |
| | Shanxi Taigang Stainless Steel Co. Ltd., A | | | Metals & Mining | | | | 2,400 | | | | 1,505 | |
| | Shanxi Xinghuacun Fen Wine Factory Co. Ltd., A | | | Beverages | | | | 500 | | | | 21,243 | |
| | Shanxi Xishan Coal & Electricity Power Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 1,680 | | | | 3,530 | |
| | Shanying International Holding Co. Ltd., A | | | Paper & Forest Products | | | | 1,200 | | | | 401 | |
| | Shenghe Resources Holding Co. Ltd., A | | | Metals & Mining | | | | 800 | | | | 1,699 | |
| | Shengyi Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 1,470 | |
| | Shennan Circuits Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 1,060 | |
| | Shenwan Hongyuan Group Co. Ltd. | | | Capital Markets | | | | 8,400 | | | | 4,548 | |
| b,c | | Shenwan Hongyuan Group Co. Ltd., 144A, Reg S | | | Capital Markets | | | | 9,600 | | | | 1,565 | |
| | Shenzhen Accord Pharmaceutical Co. Ltd., B | | | Health Care Providers & Services | | | | 400 | | | | 824 | |
| | Shenzhen Agricultural Products Group Co. Ltd. | | | Food & Staples Retailing | | | | 400 | | | | 291 | |
| | Shenzhen Airport Co. Ltd. | | | Transportation Infrastructure | | | | 800 | | | | 754 | |
| | Shenzhen Aisidi Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 471 | |
| | Shenzhen Capchem Technology Co. Ltd., A | | | Chemicals | | | | 360 | | | | 2,115 | |
| | Shenzhen Dynanonic Co. Ltd., A | | | Chemicals | | | | 100 | | | | 3,953 | |
| | Shenzhen Energy Group Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 2,080 | | | | 1,637 | |
| a | | Shenzhen Everwin Precision Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 460 | | | | 692 | |
| | Shenzhen Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 4,000 | | | | 2,925 | |
| | Shenzhen Gas Corporation Ltd., A | | | Gas Utilities | | | | 1,200 | | | | 1,145 | |
| b | | Shenzhen Hepalink Pharmaceutical Group Co. Ltd., 144A | | | Pharmaceuticals | | | | 500 | | | | 330 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Shenzhen Huaqiang Industry Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 400 | | | $ | 669 | |
| a | | Shenzhen Infogem Technologies Co. Ltd., A | | | Software | | | | 400 | | | | 486 | |
| | Shenzhen Inovance Technology Co. Ltd. | | | Machinery | | | | 1,200 | | | | 9,680 | |
| | Shenzhen International Holdings Ltd. | | | Transportation Infrastructure | | | | 8,000 | | | | 6,115 | |
| | Shenzhen Investment Ltd. | | | Real Estate Management & Development | | | | 16,000 | | | | 2,426 | |
| | Shenzhen Jinjia Group Co. Ltd. | | | Containers & Packaging | | | | 400 | | | | 476 | |
| | Shenzhen Kaifa Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 400 | | | | 589 | |
| | Shenzhen Kangtai Biological Products Co. Ltd. | | | Biotechnology | | | | 480 | | | | 2,041 | |
| | Shenzhen Kedali Industry Co. Ltd., A | | | Auto Components | | | | 100 | | | | 1,349 | |
| | Shenzhen Kingdom Sci-Tech Co. Ltd., A | | | Software | | | | 400 | | | | 552 | |
| | Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 500 | | | | 20,970 | |
| a | | Shenzhen MTC Co. Ltd. | | | Household Durables | | | | 2,400 | | | | 1,097 | |
| | Shenzhen Overseas Chinese Town Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 2,800 | | | | 1,889 | |
| | Shenzhen Salubris Pharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 1,371 | |
| | Shenzhen SC New Energy Technology Corp., A | | | Semiconductors & Semiconductor Equipment | | | | 100 | | | | 1,616 | |
| | Shenzhen Sunway Communication Co. Ltd. | | | Communications Equipment | | | | 400 | | | | 794 | |
| | Shenzhen Transsion Holdings Co. Ltd., A | | | Technology Hardware, Storage & Peripherals | | | | 246 | | | | 2,007 | |
| | Shenzhen Yan Tian Port Holding Co. Ltd., A | | | Transportation Infrastructure | | | | 800 | | | | 572 | |
| | Shenzhen YUTO Packaging Technology Co. Ltd. | | | Containers & Packaging | | | | 400 | | | | 1,689 | |
| | Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., A | | | Metals & Mining | | | | 1,200 | | | | 693 | |
| | Shenzhou International Group Holdings Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 4,300 | | | | 33,606 | |
| a | | Shijiazhuang Changshan BeiMing Technology Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 400 | | | | 306 | |
| | Shijiazhuang Yiling Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 820 | | | | 2,497 | |
| a | | Shimao Group Holdings Ltd. | | | Real Estate Management & Development | | | | 8,500 | | | | 2,006 | |
| a,b | | Shimao Services Holdings Ltd., Z, 144A | | | Real Estate Management & Development | | | | 4,000 | | | | 851 | |
| | Shui On Land Ltd. | | | Real Estate Management & Development | | | | 20,500 | | | | 2,089 | |
| a | | Siasun Robot & Automation Co. Ltd. | | | Machinery | | | | 400 | | | | 490 | |
| | Sichuan Chuantou Energy Co Ltd., A | | | Independent Power Producers & Energy Traders | | | | 1,600 | | | | 2,700 | |
| | Sichuan Hebang Biotechnology Co. Ltd., A | | | Chemicals | | | | 4,000 | | | | 1,807 | |
| | Sichuan Kelun Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 1,237 | |
| a | | Sichuan New Energy Power Co. Ltd. | | | Trading Companies & Distributors | | | | 400 | | | | 1,057 | |
| | Sichuan Road & Bridge Co. Ltd., A | | | Construction & Engineering | | | | 2,000 | | | | 2,867 | |
| | Sichuan Swellfun Co. Ltd., A | | | Beverages | | | | 200 | | | | 1,760 | |
| | Sichuan Yahua Industrial Group Co. Ltd., A | | | Chemicals | | | | 400 | | | | 1,426 | |
| | Sieyuan Electric Co. Ltd. | | | Electrical Equipment | | | | 400 | | | | 2,144 | |
| | Silergy Corp. | | | Semiconductors & Semiconductor Equipment | | | | 1,840 | | | | 24,399 | |
| | Sinolink Securities Co. Ltd., A | | | Capital Markets | | | | 1,200 | | | | 1,286 | |
| | Sinoma International Engineering Co. | | | Construction & Engineering | | | | 800 | | | | 921 | |
| | Sinoma Science & Technology Co. Ltd. | | | Chemicals | | | | 800 | | | | 2,235 | |
| | Sino-Ocean Land Holdings Ltd. | | | Real Estate Management & Development | | | | 16,000 | | | | 1,671 | |
| | Sinopec Engineering Group Co. Ltd. | | | Construction & Engineering | | | | 8,500 | | | | 3,411 | |
| a | | Sinopec Oilfield Service Corp. | | | Energy Equipment & Services | | | | 16,000 | | | | 927 | |
| a | | Sinopec Oilfield Service Corp., A | | | Energy Equipment & Services | | | | 1,200 | | | | 310 | |
| | Sinopec Shangıhai Petrochemical Co. Ltd., A | | | Chemicals | | | | 1,600 | | | | 669 | |
| | Sinopec Shanghai Petrochemical Co. Ltd., H | | | Chemicals | | | | 20,000 | | | | 2,624 | |
| | Sinopharm Group Co. Ltd., H | | | Health Care Providers & Services | | | | 7,200 | | | | 14,437 | |
| | Sinotrans Ltd., A | | | Air Freight & Logistics | | | | 2,000 | | | | 996 | |
| | Sinotrans Ltd., H | | | Air Freight & Logistics | | | | 12,000 | | | | 3,027 | |
| | Sinotruk Hong Kong Ltd. | | | Machinery | | | | 4,000 | | | | 3,348 | |
| | SITC International Holdings Co. Ltd. | | | Marine | | | | 7,000 | | | | 12,948 | |
| a | | Skshu Paint Co. Ltd., A | | | Chemicals | | | | 100 | | | | 1,229 | |
| | Skyworth Digital Co. Ltd., A | | | Communications Equipment | | | | 400 | | | | 897 | |
| b | | Smoore International Holdings Ltd., 144A | | | Tobacco | | | | 10,000 | | | | 11,962 | |
| | Songcheng Performance Development Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 1,200 | | | | 2,020 | |
| | SooChow Securities Co. Ltd., A | | | Capital Markets | | | | 2,086 | | | | 1,802 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Southwest Securities Co. Ltd., A | | | Capital Markets | | | | 2,800 | | | $ | 1,441 | |
| | StarPower Semiconductor Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 100 | | | | 4,545 | |
| a | | STO Express Co. Ltd. | | | Air Freight & Logistics | | | | 400 | | | | 715 | |
| | Sun Art Retail Group Ltd. | | | Food & Staples Retailing | | | | 10,000 | | | | 2,140 | |
| a | | Sunac China Holdings Ltd. | | | Real Estate Management & Development | | | | 18,000 | | | | 2,440 | |
| b | | Sunac Services Holdings Ltd., 144A | | | Real Estate Management & Development | | | | 4,000 | | | | 1,004 | |
| | Sungrow Power Supply Co. Ltd. | | | Electrical Equipment | | | | 600 | | | | 9,310 | |
| | Suning Universal Co. Ltd. | | | Real Estate Management & Development | | | | 2,000 | | | | 864 | |
| | Sunny Optical Technology Group Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 3,700 | | | | 35,421 | |
| | Sunwoda Electronic Co. Ltd., A | | | Electrical Equipment | | | | 800 | | | | 2,612 | |
| | Suofeiya Home Collection Co. Ltd. | | | Household Durables | | | | 400 | | | | 942 | |
| | Suzhou Anjie Technology Co. Ltd., A | | | Electrical Equipment | | | | 400 | | | | 697 | |
| | Suzhou Dongshan Precision Manufacturing Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 2,598 | |
| a | | Suzhou Gold Mantis Construction Decoration Co. Ltd. | | | Construction & Engineering | | | | 800 | | | | 507 | |
| | Suzhou Maxwell Technologies Co. Ltd. | | | Electrical Equipment | | | | 100 | | | | 6,788 | |
| | Suzhou TA&A Ultra Clean Technology Co. Ltd., A | | | Chemicals | | | | 200 | | | | 1,859 | |
| | Taiji Computer Corp. Ltd. | | | IT Services | | | | 400 | | | | 946 | |
| a | | TAL Education Group, ADR | | | Diversified Consumer Services | | | | 2,504 | | | | 12,370 | |
| | Tangshan Jidong Cement Co. Ltd. | | | Construction Materials | | | | 1,200 | | | | 1,407 | |
| | TangShan Port Group Co. Ltd., A | | | Transportation Infrastructure | | | | 1,600 | | | | 579 | |
| | Tangshan Sanyou Chemical Industries Co. Ltd., A | | | Chemicals | | | | 800 | | | | 688 | |
| | TBEA Co. Ltd., A | | | Electrical Equipment | | | | 1,600 | | | | 4,863 | |
| | TCL Corp. | | | Household Durables | | | | 5,200 | | | | 2,648 | |
| | Tencent Holdings Ltd. | | | Interactive Media & Services | | | | 33,900 | | | | 1,150,455 | |
| a | | Tencent Music Entertainment Group, ADR | | | Entertainment | | | | 3,352 | | | | 13,609 | |
| | The People’s Insurance Co. Group of China Ltd., H | | | Insurance | | | | 46,000 | | | | 13,361 | |
| | Thunder Software Technology Co. Ltd. | | | Software | | | | 200 | | | | 2,962 | |
| | Tian Di Science & Technology Co. Ltd., A | | | Machinery | | | | 1,600 | | | | 1,071 | |
| | Tianjin Chase Sun Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 1,200 | | | | 885 | |
| | Tianjin Guangyu Development Co. Ltd., A | | | Real Estate Management & Development | | | | 800 | | | | 1,394 | |
| | Tianjin Zhonghuan Semiconductor Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 1,200 | | | | 7,534 | |
| | Tianma Microelectronics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 900 | | | | 1,074 | |
| a | | Tianqi Lithium Corp., A | | | Chemicals | | | | 800 | | | | 11,266 | |
| | Tianshan Aluminum Group Co. Ltd., A | | | Machinery | | | | 800 | | | | 803 | |
| | Tianshui Huatian Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 1,200 | | | | 1,363 | |
| a | | Tibet Summit Resources Co. Ltd., A | | | Metals & Mining | | | | 400 | | | | 1,251 | |
| | Tingyi Cayman Islands Holding Corp. | | | Food Products | | | | 10,000 | | | | 17,249 | |
| | Titan Wind Energy Suzhou Co. Ltd., A | | | Electrical Equipment | | | | 800 | | | | 1,420 | |
| a,c | | Tongcheng-Elong Holdings Ltd., Reg S | | | Internet & Catalog Retail | | | | 4,800 | | | | 9,417 | |
| a | | TongFu Microelectronics Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 846 | |
| | Tongkun Group Co. Ltd., A | | | Chemicals | | | | 800 | | | | 1,515 | |
| | Tongling Nonferrous Metals Group Co. Ltd. | | | Metals & Mining | | | | 4,400 | | | | 1,611 | |
| | Tongwei Co. Ltd., A | | | Food Products | | | | 2,000 | | | | 13,174 | |
| a | | Topchoice Medical Investment Corp., A | | | Health Care Providers & Services | | | | 100 | | | | 1,795 | |
| b | | Topsports International Holdings Ltd., 144A | | | Specialty Retail | | | | 10,000 | | | | 7,045 | |
| | Towngas China Co. Ltd. | | | Gas Utilities | | | | 6,000 | | | | 2,301 | |
| | TravelSky Technology Ltd., H | | | IT Services | | | | 5,000 | | | | 7,656 | |
| | Trina Solar Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 844 | | | | 7,590 | |
| a | | Trip.com Group Ltd., ADR | | | Internet & Catalog Retail | | | | 3,024 | | | | 82,585 | |
| | Tsingtao Brewery Co. Ltd., A | | | Beverages | | | | 300 | | | | 4,469 | |
| | Tsingtao Brewery Co. Ltd., H | | | Beverages | | | | 3,500 | | | | 33,195 | |
| a | | Tuya Inc., ADR | | | Software | | | | 672 | | | | 625 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Unigroup Guoxin Microelectronics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 419 | | | $ | 8,463 | |
| | Uni-President China Holdings Ltd. | | | Food Products | | | | 7,000 | | | | 5,877 | |
| | Unisplendour Corp. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 560 | | | | 1,246 | |
| | Universal Scientific Industrial Shanghai Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 846 | |
| | Valiant Co. Ltd., A | | | Chemicals | | | | 400 | | | | 818 | |
| a | | Vipshop Holdings Ltd., ADR | | | Internet & Catalog Retail | | | | 2,336 | | | | 19,646 | |
| | Visual China Group Co. Ltd., A | | | Internet & Catalog Retail | | | | 400 | | | | 555 | |
| | Walvax Biotechnology Co. Ltd. | | | Biotechnology | | | | 800 | | | | 4,163 | |
| | Wangsu Science & Technology Co. Ltd. | | | IT Services | | | | 800 | | | | 509 | |
| | Wanhua Chemical Group Co. Ltd., A | | | Chemicals | | | | 1,300 | | | | 16,794 | |
| | Want Want China Holdings Ltd. | | | Food Products | | | | 25,000 | | | | 16,338 | |
| | Wanxiang Qianchao Co. Ltd. | | | Auto Components | | | | 1,600 | | | | 1,104 | |
| a | | Weibo Corp., ADR | | | Interactive Media & Services | | | | 404 | | | | 6,908 | |
| | Weichai Power Co. Ltd., A | | | Machinery | | | | 2,800 | | | | 3,778 | |
| | Weichai Power Co. Ltd., H | | | Machinery | | | | 11,000 | | | | 10,440 | |
| | Weifu High-Technology Co. Ltd., B | | | Auto Components | | | | 800 | | | | 1,371 | |
| | Weifu High-Technology Group Co. Ltd., A | | | Auto Components | | | | 400 | | | | 968 | |
| | Weihai Guangwei Composites Co. Ltd., A | | | Chemicals | | | | 200 | | | | 2,326 | |
| a | | Wens Foodstuffs Group Co. Ltd. | | | Food Products | | | | 800 | | | | 2,302 | |
| | Western Mining Co. Ltd., A | | | Metals & Mining | | | | 800 | | | | 1,048 | |
| | Western Securities Co. Ltd. | | | Capital Markets | | | | 2,000 | | | | 1,636 | |
| | Western Superconducting Technologies Co. Ltd., A | | | Metals & Mining | | | | 135 | | | | 2,024 | |
| | Westone Information Industry Inc. | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 1,543 | |
| | Will Semiconductor Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 405 | | | | 4,552 | |
| | Wingtech Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 500 | | | | 3,343 | |
| | Winning Health Technology Group Co. Ltd. | | | Health Care Technology | | | | 800 | | | | 790 | |
| | Wolong Electric Group Co. Ltd., A | | | Electrical Equipment | | | | 400 | | | | 651 | |
| | Wuchan Zhongda Group Co. Ltd., A | | | Distributors | | | | 2,000 | | | | 1,156 | |
| | Wuhan Guide Infrared Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,142 | | | | 1,861 | |
| | Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. | | | Entertainment | | | | 1,200 | | | | 2,932 | |
| | Wuliangye Yibin Co. Ltd., A | | | Beverages | | | | 1,600 | | | | 37,980 | |
| | WUS Printed Circuit Kunshan Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 1,118 | |
| b | | WuXi AppTec Co. Ltd., 144A | | | Life Sciences Tools & Services | | | | 1,940 | | | | 15,681 | |
| | WuXi AppTec Co. Ltd., A | | | Life Sciences Tools & Services | | | | 1,000 | | | | 10,056 | |
| a,b | | WuXi Biologics (Cayman) Inc., 144A | | | Life Sciences Tools & Services | | | | 20,000 | | | | 120,766 | |
| | Wuxi Shangji Automation Co. Ltd., A | | | Machinery | | | | 140 | | | | 2,649 | |
| | XCMG Construction Machinery Co. Ltd. | | | Machinery | | | | 2,800 | | | | 1,760 | |
| | Xiamen C & D Inc., A | | | Trading Companies & Distributors | | | | 1,200 | | | | 2,331 | |
| | Xiamen Faratronic Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 2,254 | |
| | Xiamen ITG Group Corp. Ltd., A | | | Trading Companies & Distributors | | | | 800 | | | | 716 | |
| | Xiamen Tungsten Co. Ltd., A | | | Metals & Mining | | | | 1,200 | | | | 3,809 | |
| | Xiangcai Co. Ltd., A | | | Real Estate Management & Development | | | | 800 | | | | 710 | |
| a,b | | Xiaomi Corp., B, 144A | | | Technology Hardware, Storage & Peripherals | | | | 83,600 | | | | 95,422 | |
| | Xinhua Winshare Publishing and Media Co. Ltd., H | | | Distributors | | | | 2,000 | | | | 1,271 | |
| | Xinjiang Goldwind Science & Technology Co. Ltd. | | | Electrical Equipment | | | | 1,200 | | | | 1,909 | |
| | Xinjiang Goldwind Science & Technology Co. Ltd., H | | | Electrical Equipment | | | | 4,000 | | | | 4,642 | |
| | Xinjiang Tianshan Cement Co. Ltd., A | | | Construction Materials | | | | 800 | | | | 998 | |
| | Xinjiang Zhongtai Chemical Co. Ltd., A | | | Chemicals | | | | 1,200 | | | | 1,123 | |
| | Xinxing Ductile Iron Pipes Co. Ltd. | | | Metals & Mining | | | | 2,000 | | | | 1,004 | |
| | Xinyi Solar Holdings Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 24,000 | | | | 25,407 | |
| a | | XPeng Inc., ADR | | | Automobiles | | | | 2,988 | | | | 35,707 | |
| | Xtep International Holdings Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 6,000 | | | | 6,382 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Xuji Electric Co. Ltd., A | | | Electrical Equipment | | | | 400 | | | $ | 934 | |
| b,c | | Yadea Group Holdings Ltd., 144A, Reg S | | | Automobiles | | | | 5,300 | | | | 8,507 | |
| | Yang Quan Coal Industry Group Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 800 | | | | 2,050 | |
| a | | Yango Group Co. Ltd. | | | Real Estate Management & Development | | | | 2,400 | | | | 656 | |
| b,c | | Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., 144A, Reg S | | | Communications Equipment | | | | 1,000 | | | | 2,273 | |
| | Yangzhou Yangjie Electronic Technology Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 200 | | | | 1,386 | |
| | Yangzijiang Shipbuilding Holdings Ltd. | | | Machinery | | | | 14,400 | | | | 10,337 | |
| | Yantai Changyu Pioneer Wine Co. Ltd., B | | | Beverages | | | | 1,200 | | | | 1,761 | |
| | Yantai Eddie Precision Machinery Co. Ltd., A | | | Machinery | | | | 440 | | | | 882 | |
| | Yantai Jereh Oilfield Services Group Co. Ltd. | | | Energy Equipment & Services | | | | 400 | | | | 1,831 | |
| | Yanzhou Coal Mining Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 500 | | | | 3,519 | |
| | Yanzhou Coal Mining Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 10,000 | | | | 36,370 | |
| a | | Yatsen Holding Ltd., ADR | | | Personal Products | | | | 1,468 | | | | 1,600 | |
| | Yealink Network Technology Corp. Ltd. | | | Communications Equipment | | | | 300 | | | | 2,651 | |
| a | | Yifan Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 587 | |
| | Yifeng Pharmacy Chain Co. Ltd. | | | Food & Staples Retailing | | | | 260 | | | | 1,815 | |
| | Yihai International Holding Ltd. | | | Food Products | | | | 2,600 | | | | 5,498 | |
| | Yihai Kerry Arawana Holdings Co. Ltd., A | | | Food Products | | | | 800 | | | | 4,847 | |
| | Yintai Gold Co. Ltd. | | | Metals & Mining | | | | 800 | | | | 1,443 | |
| | YongXing Special Materials Technology Co. Ltd. | | | Metals & Mining | | | | 200 | | | | 3,484 | |
| | Yonyou Network Technology Co. Ltd., A | | | Software | | | | 1,380 | | | | 3,407 | |
| | Youngor Group Co. Ltd., A | | | Real Estate Management & Development | | | | 2,000 | | | | 1,773 | |
| | YTO Express Group Co. Ltd., A | | | Air Freight & Logistics | | | | 1,200 | | | | 3,493 | |
| a | | Yuan Longping High-tech Agriculture Co. Ltd. | | | Food Products | | | | 400 | | | | 775 | |
| | Yuexiu Property Co. Ltd. | | | Real Estate Management & Development | | | | 7,000 | | | | 8,454 | |
| | Yum China Holdings Inc. | | | Hotels, Restaurants & Leisure | | | | 2,400 | | | | 114,835 | |
| | Yunda Holding Co. Ltd., A | | | Air Freight & Logistics | | | | 400 | | | | 878 | |
| | Yunnan Aluminium Co. Ltd. | | | Metals & Mining | | | | 1,200 | | | | 1,550 | |
| | Yunnan Baiyao Group Co. Ltd. | | | Pharmaceuticals | | | | 600 | | | | 4,406 | |
| | Yunnan Botanee Bio-Technology Group Co. Ltd., A | | | Personal Products | | | | 100 | | | | 2,413 | |
| | Yunnan Copper Co. Ltd. | | | Metals & Mining | | | | 800 | | | | 1,103 | |
| | Yunnan Energy New Material Co. Ltd. | | | Containers & Packaging | | | | 300 | | | | 7,327 | |
| | Yunnan Hongxiang Yixintang Pharmaceutical Co. Ltd. | | | Food & Staples Retailing | | | | 200 | | | | 678 | |
| | Yunnan Tin Co. Ltd. | | | Metals & Mining | | | | 600 | | | | 1,037 | |
| a | | Zai Lab Ltd., ADR | | | Biotechnology | | | | 524 | | | | 17,921 | |
| | Zhangzhou Pientzehuang Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 300 | | | | 11,227 | |
| a | | Zhaojin Mining Industry Co. Ltd., H | | | Metals & Mining | | | | 6,000 | | | | 4,097 | |
| | Zhefu Holding Group Co. Ltd. | | | Electrical Equipment | | | | 2,400 | | | | 1,316 | |
| a | | Zhejiang Century Huatong Group Co. Ltd., A | | | Entertainment | | | | 3,200 | | | | 1,674 | |
| | Zhejiang China Commodities City Group Co. Ltd., A | | | Real Estate Management & Development | | | | 2,400 | | | | 1,501 | |
| | Zhejiang Chint Electrics Co. Ltd., A | | | Electrical Equipment | | | | 500 | | | | 1,878 | |
| | Zhejiang Crystal-Optech Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 580 | | | | 868 | |
| | Zhejiang Dahua Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,200 | | | | 2,163 | |
| | Zhejiang Dingli Machinery Co. Ltd. | | | Machinery | | | | 200 | | | | 1,018 | |
| | Zhejiang Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 8,000 | | | | 5,452 | |
| | Zhejiang Hailiang Co. Ltd. | | | Metals & Mining | | | | 400 | | | | 650 | |
| | Zhejiang Hisoar Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 381 | |
| | Zhejiang Huace Film & TV Co. Ltd., A | | | Entertainment | | | | 400 | | | | 274 | |
| | Zhejiang Huahai Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 1,077 | |
| | Zhejiang Huayou Cobalt Co. Ltd., A | | | Metals & Mining | | | | 650 | | | | 5,866 | |
| | Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 500 | | | | 4,742 | |
| | Zhejiang Jiuzhou Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 2,198 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Zhejiang Juhua Co. Ltd., A | | | Chemicals | | | | 1,200 | | | $ | 2,338 | |
| | Zhejiang Medicine Co. Ltd., A | | | Pharmaceuticals | | | | 400 | | | | 760 | |
| | Zhejiang NHU Co. Ltd. | | | Pharmaceuticals | | | | 1,344 | | | | 4,183 | |
| | Zhejiang Runtu Co. Ltd. | | | Chemicals | | | | 400 | | | | 453 | |
| | Zhejiang Sanhua Intelligent Controls Co. Ltd. | | | Machinery | | | | 400 | | | | 1,380 | |
| | Zhejiang Satellite Petrochemical Co. Ltd. | | | Chemicals | | | | 867 | | | | 2,587 | |
| | Zhejiang Semir Garment Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 400 | | | | 268 | |
| | Zhejiang Supor Co. Ltd. | | | Household Durables | | | | 200 | | | | 1,294 | |
| a | | Zhejiang Wanfeng Auto Wheel Co. Ltd. | | | Auto Components | | | | 2,400 | | | | 1,788 | |
| a | | Zhejiang Wanliyang Co. Ltd. | | | Machinery | | | | 400 | | | | 445 | |
| | Zhejiang Weiming Environment Protection Co. Ltd., A | | | Commercial Services & Supplies | | | | 520 | | | | 1,706 | |
| | Zhejiang Weixing New Building Materials Co. Ltd., A | | | Building Products | | | | 800 | | | | 2,312 | |
| | Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 200 | | | | 1,367 | |
| | Zhejiang Yongtai Technology Co. Ltd., A | | | Chemicals | | | | 400 | | | | 1,288 | |
| | Zhengzhou Coal Mining Machinery Group Co. Ltd., A | | | Machinery | | | | 800 | | | | 1,458 | |
| | Zheshang Securities Co. Ltd., A | | | Capital Markets | | | | 400 | | | | 532 | |
| a | | Zhihu Inc., ADR | | | Interactive Media & Services | | | | 892 | | | | 946 | |
| a,b,c | | ZhongAn Online P & C Insurance Co. Ltd., 144A, Reg S | | | Insurance | | | | 4,400 | | | | 9,865 | |
| | Zhongji Innolight Co. Ltd. | | | Machinery | | | | 400 | | | | 1,463 | |
| | Zhongshan Public Utilities Group Co. Ltd., A | | | Water Utilities | | | | 800 | | | | 731 | |
| | Zhongsheng Group Holdings Ltd. | | | Specialty Retail | | | | 4,000 | | | | 15,975 | |
| | Zhongtai Securities Co. Ltd., A | | | Capital Markets | | | | 1,200 | | | | 1,111 | |
| | Zhuzhau CRRC Times Electric Co. Ltd., A | | | Electrical Equipment | | | | 228 | | | | 1,733 | |
| | Zhuzhou CRRC Times Electric Co. Ltd., H | | | Electrical Equipment | | | | 3,000 | | | | 12,612 | |
| | Zhuzhou Hongda Electronics Corp. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 200 | | | | 1,247 | |
| | Zhuzhou Kibing Group Co. Ltd., A | | | Building Products | | | | 800 | | | | 1,083 | |
| | Zijin Mining Group Co. Ltd., A | | | Metals & Mining | | | | 8,400 | | | | 9,238 | |
| | Zijin Mining Group Co. Ltd., H | | | Metals & Mining | | | | 32,000 | | | | 31,185 | |
| | Zoomlion Heavy Industry Science and Technology Co. Ltd. | | | Machinery | | | | 3,200 | | | | 2,487 | |
| | Zoomlion Heavy Industry Science and Technology Co. Ltd., H | | | Machinery | | | | 8,800 | | | | 3,060 | |
| | ZTE Corp. | | | Communications Equipment | | | | 1,600 | | | | 4,803 | |
| | ZTE Corp., H | | | Communications Equipment | | | | 4,400 | | | | 7,892 | |
| | ZTO Express Cayman Inc. | | | Air Freight & Logistics | | | | 2,600 | | | | 62,368 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,359,464 | |
| | | | | | | | | | | | | | |
| | | Hong Kong 7.5% | | | | | | | | | |
| | AIA Group Ltd., A | | | Insurance | | | | 67,400 | | | | 561,960 | |
| a | | Alibaba Health Information Technology Ltd., A | | | Health Care Technology | | | | 26,000 | | | | 11,924 | |
| a | | Alibaba Pictures Group Ltd., A | | | Media | | | | 80,000 | | | | 4,127 | |
| | ASM Pacific Technology Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 1,800 | | | | 10,961 | |
| | Beijing Enterprises Water Group Ltd., A | | | Water Utilities | | | | 24,000 | | | | 5,534 | |
| | Bosideng International Holdings Ltd., A | | | Household Durables | | | | 16,000 | | | | 7,929 | |
| | Cafe de Coral Holdings Ltd., A | | | Hotels, Restaurants & Leisure | | | | 2,000 | | | | 2,489 | |
| a | | Cathay Pacific Airways Ltd., A | | | Airlines | | | | 6,000 | | | | 6,329 | |
| | Champion REIT, A | | | Equity Real Estate Investment Trusts (REITs | ) | | | 12,000 | | | | 4,234 | |
| | China Everbright Environment Group Ltd., B | | | Commercial Services & Supplies | | | | 21,000 | | | | 8,721 | |
| | China Everbright Ltd., A | | | Capital Markets | | | | 4,000 | | | | 2,313 | |
| | China Gas Holdings Ltd., A | | | Gas Utilities | | | | 16,800 | | | | 20,139 | |
| | China Mengniu Dairy Co. Ltd., B | | | Food Products | | | | 17,000 | | | | 67,459 | |
| | China Power International Development Ltd., H | | | Independent Power Producers & Energy Traders | | | | 32,000 | | | | 12,759 | |
| | China Resources Beer Holdings Co. Ltd., A | | | Beverages | | | | 8,960 | | | | 62,378 | |
| | China Resources Gas Group Ltd., A | | | Gas Utilities | | | | 5,100 | | | | 16,210 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Hong Kong (continued) | | | | | | | | | |
| | China Resources Land Ltd., H | | | Real Estate Management & Development | | | | 16,000 | | | $ | 62,982 | |
| | China State Construction International Holdings Ltd., A | | | Construction & Engineering | | | | 10,000 | | | | 10,128 | |
| | China Traditional Chinese Medicine Co. Ltd. | | | Pharmaceuticals | | | | 14,000 | | | | 4,887 | |
| | CK Asset Holdings Ltd. | | | Real Estate Management & Development | | | | 11,000 | | | | 66,141 | |
| | CK Infrastructure Holdings Ltd., A | | | Electric Utilities | | | | 3,300 | | | | 16,837 | |
| | CLP Holdings Ltd. | | | Electric Utilities | | | | 9,000 | | | | 68,045 | |
| | COSCO SHIPPING Ports Ltd., B | | | Transportation Infrastructure | | | | 10,000 | | | | 6,306 | |
| | Dah Sing Banking Group Ltd., A | | | Banks | | | | 2,400 | | | | 1,590 | |
| | Dah Sing Financial Group, H | | | Banks | | | | 800 | | | | 1,822 | |
| | Dairy Farm International Holdings Ltd., A | | | Food & Staples Retailing | | | | 1,700 | | | | 3,927 | |
| | Far East Horizon Ltd. | | | Diversified Financial Services | | | | 8,000 | | | | 5,401 | |
| | Geely Automobile Holdings Ltd. | | | Automobiles | | | | 31,000 | | | | 42,729 | |
| | Guangdong Investment Ltd. | | | Water Utilities | | | | 16,000 | | | | 12,821 | |
| | Guotai Junan International Holdings Ltd. | | | Capital Markets | | | | 14,000 | | | | 1,034 | |
| a | | Haitong International Securities Group Ltd. | | | Capital Markets | | | | 17,600 | | | | 1,502 | |
| | Hang Lung Group Ltd. | | | Real Estate Management & Development | | | | 5,000 | | | | 8,077 | |
| | Hang Lung Properties Ltd. | | | Real Estate Management & Development | | | | 10,000 | | | | 16,408 | |
| | Hang Seng Bank Ltd. | | | Banks | | | | 4,100 | | | | 62,258 | |
| | Henderson Land Development Co. Ltd. | | | Real Estate Management & Development | | | | 7,000 | | | | 19,618 | |
| | Hong Kong and China Gas Co. Ltd. | | | Gas Utilities | | | | 62,000 | | | | 54,655 | |
| | Hong Kong Exchanges and Clearing Ltd. | | | Capital Markets | | | | 7,200 | | | | 247,280 | |
| | Hongkong Land Holdings Ltd. | | | Real Estate Management & Development | | | | 6,400 | | | | 28,288 | |
| | Huabao International Holdings Ltd. | | | Chemicals | | | | 5,000 | | | | 2,318 | |
| | Hutchison Port Holdings Trust | | | Transportation Infrastructure | | | | 30,000 | | | | 5,520 | |
| | Hutchison Telecommunications Hong Kong Holdings Ltd. | | | Diversified Telecommunication Services | | | | 8,000 | | | | 1,172 | |
| | Hysan Development Co. Ltd. | | | Real Estate Management & Development | | | | 3,000 | | | | 7,559 | |
| | Jardine Matheson Holdings Ltd. | | | Industrial Conglomerates | | | | 1,120 | | | | 56,717 | |
| | Johnson Electric Holdings Ltd. | | | Electrical Equipment | | | | 2,000 | | | | 2,008 | |
| | Kerry Properties Ltd. | | | Real Estate Management & Development | | | | 3,500 | | | | 6,643 | |
| | Kingboard Laminates Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 6,000 | | | | 5,404 | |
| | Kunlun Energy Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 22,000 | | | | 15,891 | |
| | Link REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 12,000 | | | | 83,925 | |
| | Man Wah Holdings Ltd. | | | Household Durables | | | | 8,800 | | | | 5,605 | |
| a | | Melco International Development Ltd. | | | Hotels, Restaurants & Leisure | | | | 4,000 | | | | 3,108 | |
| | MTR Corp. Ltd. | | | Road & Rail | | | | 8,500 | | | | 39,036 | |
| | New World Development Co. Ltd. | | | Real Estate Management & Development | | | | 8,000 | | | | 22,726 | |
| | NWS Holdings Ltd. | | | Industrial Conglomerates | | | | 8,000 | | | | 7,236 | |
| | Orient Overseas International Ltd. | | | Marine | | | | 750 | | | | 13,137 | |
| | PCCW Ltd. | | | Diversified Telecommunication Services | | | | 24,000 | | | | 10,854 | |
| | Power Assets Holdings Ltd. | | | Electric Utilities | | | | 8,000 | | | | 40,153 | |
| | Shanghai Industrial Holdings Ltd. | | | Industrial Conglomerates | | | | 3,000 | | | | 3,248 | |
| | Shougang Fushan Resources Group Ltd. | | | Metals & Mining | | | | 8,000 | | | | 2,334 | |
| | Sino Biopharmaceutical Ltd. | | | Pharmaceuticals | | | | 56,000 | | | | 26,324 | |
| | Sino Land Co. Ltd. | | | Real Estate Management & Development | | | | 20,000 | | | | 26,446 | |
| | Sun Hung Kai Properties Ltd. | | | Real Estate Management & Development | | | | 8,000 | | | | 88,511 | |
| | Swire Pacific Ltd., A | | | Real Estate Management & Development | | | | 3,000 | | | | 22,453 | |
| | Swire Pacific Ltd., B | | | Real Estate Management & Development | | | | 5,000 | | | | 5,841 | |
| | Swire Properties Ltd. | | | Real Estate Management & Development | | | | 6,400 | | | | 13,779 | |
| | Techtronic Industries Co. Ltd. | | | Household Durables | | | | 7,500 | | | | 72,469 | |
| | The Bank of East Asia Ltd., A | | | Banks | | | | 5,600 | | | | 6,135 | |
| | The Wharf Holdings Ltd. | | | Real Estate Management & Development | | | | 7,000 | | | | 22,427 | |
| | United Energy Group Ltd. | | | Oil, Gas & Consumable Fuels | | | | 40,000 | | | | 4,586 | |
| | Vinda International Holdings Ltd. | | | Household Products | | | | 1,000 | | | | 2,354 | |
| a | | Vitasoy International Holdings Ltd. | | | Food Products | | | | 4,000 | | | | 4,978 | |
| | VTech Holdings Ltd. | | | Communications Equipment | | | | 900 | | | | 5,165 | |
| b | | WH Group Ltd., 144A, Reg S | | | Food Products | | | | 44,000 | | | | 27,746 | |
| | | | | | | | | | |
| | | | | | |
| 138 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Hong Kong (continued) | | | | | | | | | |
| | Wharf Real Estate Investment Co. Ltd. | | | Real Estate Management & Development | | | | 9,000 | | | $ | 40,930 | |
| | Xinyi Glass Holdings Ltd. | | | Auto Components | | | | 11,000 | | | | 16,003 | |
| | Yue Yuen Industrial Holdings Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 4,000 | | | | 5,116 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,274,059 | |
| | | | | | | | | | | | | | |
| | | India 18.9% | | | | | | | | | |
| a | | 3M India Ltd. | | | Industrial Conglomerates | | | | 16 | | | | 4,839 | |
| | Aarti Industries Ltd. | | | Chemicals | | | | 1,064 | | | | 9,745 | |
| | ABB India Ltd. | | | Electrical Equipment | | | | 308 | | | | 11,693 | |
| | ACC Ltd. | | | Construction Materials | | | | 488 | | | | 14,491 | |
| | Adani Enterprises Ltd. | | | Trading Companies & Distributors | | | | 1,496 | | | | 63,549 | |
| a | | Adani Green Energy Ltd. | | | Independent Power Producers & Energy Traders | | | | 2,236 | | | | 62,140 | |
| | Adani Ports & Special Economic Zone Ltd. | | | Transportation Infrastructure | | | | 4,508 | | | | 45,475 | |
| a | | Adani Power Ltd. | | | Independent Power Producers & Energy Traders | | | | 5,496 | | | | 25,233 | |
| | Adani Total Gas Ltd. | | | Gas Utilities | | | | 1,524 | | | | 62,567 | |
| a | | Adani Transmission Ltd. | | | Electric Utilities | | | | 1,416 | | | | 57,262 | |
| a | | Adani Wilmar Ltd. | | | Food Products | | | | 880 | | | | 8,172 | |
| a | | Aditya Birla Capital Ltd. | | | Diversified Financial Services | | | | 2,745 | | | | 3,772 | |
| | Alkem Laboratories Ltd. | | | Pharmaceuticals | | | | 148 | | | | 5,962 | |
| | Ambuja Cements Ltd. | | | Construction Materials | | | | 3,908 | | | | 24,769 | |
| | Apollo Hospitals Enterprise Ltd. | | | Health Care Providers & Services | | | | 560 | | | | 30,174 | |
| | Ashok Leyland Ltd. | | | Machinery | | | | 8,080 | | | | 15,162 | |
| | Asian Paints Ltd. | | | Chemicals | | | | 2,508 | | | | 103,045 | |
| | Astral Ltd. | | | Building Products | | | | 500 | | | | 13,721 | |
| b | | AU Small Finance Bank Ltd., 144A | | | Banks | | | | 1,792 | | | | 13,640 | |
| | Aurobindo Pharma Ltd. | | | Pharmaceuticals | | | | 1,504 | | | | 9,440 | |
| a,b | | Avenue Supermarts Ltd., 144A | | | Food & Staples Retailing | | | | 804 | | | | 43,353 | |
| | Axis Bank Ltd. | | | Banks | | | | 12,688 | | | | 114,354 | |
| | Bajaj Auto Ltd. | | | Automobiles | | | | 392 | | | | 16,999 | |
| | Bajaj Finance Ltd. | | | Consumer Finance | | | | 1,316 | | | | 118,669 | |
| | Bajaj Finserv Ltd. | | | Diversified Financial Services | | | | 2,080 | | | | 42,912 | |
| | Bajaj Holdings & Investment Ltd. | | | Diversified Financial Services | | | | 148 | | | | 11,626 | |
| | Balkrishna Industries Ltd. | | | Auto Components | | | | 448 | | | | 10,373 | |
| a,b | | Bandhan Bank Ltd, 144A | | | Banks | | | | 4,568 | | | | 14,970 | |
| | Bank of Baroda | | | Banks | | | | 5,904 | | | | 9,609 | |
| | Bank of India | | | Banks | | | | 2,744 | | | | 1,626 | |
| | Bata India Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 352 | | | | 7,881 | |
| | Bayer CropScience Ltd. | | | Chemicals | | | | 68 | | | | 4,082 | |
| | Berger Paints India Ltd. | | | Chemicals | | | | 1,380 | | | | 10,466 | |
| | Bharat Electronics Ltd. | | | Aerospace & Defense | | | | 18,684 | | | | 23,185 | |
| | Bharat Forge Ltd. | | | Auto Components | | | | 1,416 | | | | 12,106 | |
| a | | Bharat Heavy Electricals Ltd. | | | Electrical Equipment | | | | 7,456 | | | | 5,490 | |
| | Bharat Petroleum Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 5,748 | | | | 21,536 | |
| | Bharti Airtel Ltd. | | | Wireless Telecommunication Services | | | | 840 | | | | 4,151 | |
| | Bharti Airtel Ltd. | | | Wireless Telecommunication Services | | | | 13,016 | | | | 127,982 | |
| | Bharti Infratel Ltd. | | | Diversified Telecommunication Services | | | | 4,984 | | | | 12,097 | |
| | Biocon Ltd. | | | Biotechnology | | | | 2,520 | | | | 9,013 | |
| | Bosch Ltd. | | | Auto Components | | | | 48 | | | | 9,331 | |
| | Britannia Industries Ltd. | | | Food Products | | | | 684 | | | | 32,312 | |
| | Canara Bank Ltd. | | | Banks | | | | 2,128 | | | | 5,984 | |
| | Castrol India Ltd. | | | Chemicals | | | | 2,816 | | | | 3,901 | |
| a | | CG Power & Industrial Solutions Ltd. | | | Electrical Equipment | | | | 3,952 | | | | 11,450 | |
| | Cholamandalam Investment and Finance Co. Ltd. | | | Consumer Finance | | | | 2,304 | | | | 20,737 | |
| | Cipla Ltd. | | | Pharmaceuticals | | | | 2,896 | | | | 39,691 | |
| | Coal India Ltd. | | | Oil, Gas & Consumable Fuels | | | | 10,728 | | | | 27,990 | |
| | Coforge Ltd. | | | IT Services | | | | 204 | | | | 8,431 | |
| | Colgate-Palmolive India Ltd. | | | Personal Products | | | | 744 | | | | 14,902 | |
| | Container Corp. Of India Ltd. | | | Road & Rail | | | | 1,564 | | | | 13,682 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 139 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | India (continued) | | | | | | | | | |
| | Coromandel International Ltd. | | | Chemicals | | | | 632 | | | $ | 7,724 | |
| | Cummins India Ltd. | | | Machinery | | | | 756 | | | | 11,113 | |
| | Dabur India Ltd. | | | Personal Products | | | | 3,284 | | | | 23,129 | |
| | Dalmia Bharat Ltd. | | | Construction Materials | | | | 480 | | | | 9,429 | |
| | Deepak Nitrite Ltd. | | | Chemicals | | | | 424 | | | | 10,612 | |
| | Divi’s Laboratories Ltd. | | | Life Sciences Tools & Services | | | | 676 | | | | 30,789 | |
| | Dixon Technologies India Ltd. | | | Household Durables | | | | 204 | | | | 10,962 | |
| | DLF Ltd. | | | Real Estate Management & Development | | | | 3,440 | | | | 15,083 | |
| b | | Dr Lal PathLabs Ltd., 144A | | | Health Care Providers & Services | | | | 200 | | | | 6,192 | |
| | Dr Reddy’s Laboratories Ltd. | | | Pharmaceuticals | | | | 684 | | | | 36,454 | |
| | Eicher Motors Ltd. | | | Automobiles | | | | 792 | | | | 35,745 | |
| | Emami Ltd. | | | Personal Products | | | | 1,240 | | | | 7,687 | |
| | Embassy Office Parks REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3,053 | | | | 12,979 | |
| | Exide Industries Ltd. | | | Auto Components | | | | 2,508 | | | | 4,839 | |
| | Federal Bank Ltd. | | | Banks | | | | 7,508 | | | | 10,960 | |
| a | | FSN E-Commerce Ventures Ltd. | | | Internet & Catalog Retail | | | | 332 | | | | 5,192 | |
| | GAIL India Ltd. | | | Gas Utilities | | | | 15,234 | | | | 16,301 | |
| b | | General Insurance Corp. of India, 144A | | | Insurance | | | | 592 | | | | 895 | |
| | Gillette India Ltd. | | | Personal Products | | | | 48 | | | | 3,053 | |
| | GlaxoSmithKline Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 228 | | | | 3,992 | |
| | Glenmark Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 808 | | | | 3,860 | |
| a | | GMR Infrastructure Ltd. | | | Construction & Engineering | | | | 13,596 | | | | 5,941 | |
| a | | Godrej Consumer Products Ltd. | | | Personal Products | | | | 2,100 | | | | 23,502 | |
| a | | Godrej Industries Ltd. | | | Chemicals | | | | 480 | | | | 2,590 | |
| a | | Godrej Properties Ltd. | | | Real Estate Management & Development | | | | 504 | | | | 7,397 | |
| | Grasim Industries Ltd. | | | Construction Materials | | | | 2,184 | | | | 44,964 | |
| | Gujarat Fluorochemicals Ltd. | | | Chemicals | | | | 196 | | | | 9,505 | |
| | Gujarat Gas Ltd. | | | Gas Utilities | | | | 1,176 | | | | 7,275 | |
| | Havells India Ltd. | | | Electrical Equipment | | | | 1,376 | | | | 22,810 | |
| | HCL Technologies Ltd. | | | IT Services | | | | 6,180 | | | | 70,828 | |
| b | | HDFC Asset Management Co. Ltd., 144A | | | Capital Markets | | | | 320 | | | | 7,433 | |
| b | | HDFC Life Insurance Co. Ltd., 144A | | | Insurance | | | | 5,520 | | | | 35,993 | |
| | Hero MotoCorp Ltd. | | | Automobiles | | | | 680 | | | | 21,308 | |
| | Hindalco Industries Ltd. | | | Metals & Mining | | | | 7,956 | | | | 38,195 | |
| | Hindustan Aeronautics Ltd. | | | Aerospace & Defense | | | | 472 | | | | 13,605 | |
| | Hindustan Petroleum Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 3,952 | | | | 10,508 | |
| | Hindustan Unilever Ltd. | | | Household Products | | | | 4,964 | | | | 164,536 | |
| | Hindustan Zinc Ltd. | | | Metals & Mining | | | | 1,380 | | | | 4,533 | |
| | Honeywell Automation India Ltd. | | | Electronic Equipment, Instruments & Components | | | | 13 | | | | 6,393 | |
| | Housing Development Finance Corp. Ltd. | | | Thrifts & Mortgage Finance | | | | 9,900 | | | | 278,407 | |
| | ICICI Bank Ltd. | | | Banks | | | | 8,904 | | | | 94,347 | |
| b,c | | ICICI Lombard General Insurance Co. Ltd., 144A, Reg S | | | Insurance | | | | 1,356 | | | | 19,188 | |
| b,c | | ICICI Prudential Life Insurance Co. Ltd., 144A, Reg S | | | Insurance | | | | 2,180 | | | | 14,094 | |
| a | | IDFC First Bank Ltd. | | | Banks | | | | 17,928 | | | | 10,986 | |
| | Indian Hotels Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 4,660 | | | | 19,001 | |
| | Indian Oil Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 23,226 | | | | 19,114 | |
| | Indian Railway Catering and Tourism Corp. Ltd. | | | Commercial Services & Supplies | | | | 1,452 | | | | 12,601 | |
| b | | Indian Railway Finance Corp. Ltd., 144A | | | Diversified Financial Services | | | | 10,936 | | | | 2,857 | |
| | Indraprastha Gas Ltd. | | | Gas Utilities | | | | 1,992 | | | | 9,716 | |
| | Info Edge India Ltd. | | | Interactive Media & Services | | | | 428 | | | | 20,311 | |
| | Infosys Ltd. | | | IT Services | | | | 20,236 | | | | 351,594 | |
| a,b,c | | InterGlobe Aviation Ltd., 144A, Reg S | | | Airlines | | | | 540 | | | | 12,315 | |
| | Ipca Laboratories Ltd. | | | Pharmaceuticals | | | | 792 | | | | 8,908 | |
| | ITC Ltd. | | | Tobacco | | | | 16,844 | | | | 68,783 | |
| | Jindal Steel & Power Ltd. | | | Metals & Mining | | | | 2,244 | | | | 11,823 | |
| | JSW Energy Ltd. | | | Independent Power Producers & Energy Traders | | | | 2,124 | | | | 7,842 | |
| | | | | | | | | | |
| | | | | | |
| 140 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | India (continued) | | | | | | | | | |
| | JSW Steel Ltd. | | | Metals & Mining | | | | 5,700 | | | $ | 44,258 | |
| | Jubilant Foodworks Ltd. | | | Hotels, Restaurants & Leisure | | | | 2,080 | | | | 15,921 | |
| | Kansai Nerolac Paints Ltd. | | | Chemicals | | | | 772 | | | | 4,647 | |
| | L&T Finance Holdings Ltd. | | | Diversified Financial Services | | | | 5,140 | | | | 4,720 | |
| b | | L&T Technology Services Ltd., 144A | | | Professional Services | | | | 152 | | | | 6,711 | |
| b,c | | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | | | IT Services | | | | 256 | | | | 14,028 | |
| | Larsen & Toubro Ltd. | | | Construction & Engineering | | | | 3,816 | | | | 86,671 | |
| b | | Laurus Labs Ltd., 144A | | | Pharmaceuticals | | | | 2,064 | | | | 13,016 | |
| | LIC Housing Finance Ltd. | | | Thrifts & Mortgage Finance | | | | 1,912 | | | | 9,727 | |
| | Linde India Ltd. | | | Chemicals | | | | 120 | | | | 4,885 | |
| | Lupin Ltd. | | | Pharmaceuticals | | | | 1,404 | | | | 11,733 | |
| | Macrotech Developers Ltd. | | | Real Estate Management & Development | | | | 440 | | | | 4,999 | |
| | Mahindra & Mahindra Financial Services Ltd. | | | Consumer Finance | | | | 3,464 | | | | 7,888 | |
| | Mahindra & Mahindra Ltd. | | | Automobiles | | | | 5,236 | | | | 81,625 | |
| a | | Mangalore Refinery & Petrochemicals Ltd. | | | Oil, Gas & Consumable Fuels | | | | 892 | | | | 651 | |
| | Marico Ltd. | | | Personal Products | | | | 2,988 | | | | 19,755 | |
| | Maruti Suzuki India Ltd. | | | Automobiles | | | | 752 | | | | 81,606 | |
| a | | Max Financial Services Ltd. | | | Insurance | | | | 1,400 | | | | 13,124 | |
| a | | Max Healthcare Institute Ltd. | | | Health Care Providers & Services | | | | 4,124 | | | | 20,678 | |
| | Minda Industries Ltd. | | | Auto Components | | | | 968 | | | | 6,653 | |
| | Mindtree Ltd. | | | IT Services | | | | 240 | | | | 9,320 | |
| | Mphasis Ltd. | | | IT Services | | | | 516 | | | | 13,242 | |
| | MRF Ltd. | | | Auto Components | | | | 15 | | | | 15,056 | |
| | Muthoot Finance Ltd. | | | Consumer Finance | | | | 616 | | | | 7,875 | |
| | Nestle India Ltd. | | | Food Products | | | | 204 | | | | 48,008 | |
| | NHPC Ltd. | | | Independent Power Producers & Energy Traders | | | | 13,216 | | | | 5,800 | |
| b | | Nippon Life India Asset Management Ltd., 144A | | | Capital Markets | | | | 904 | | | | 2,985 | |
| | NMDC Ltd. | | | Metals & Mining | | | | 6,544 | | | | 10,276 | |
| | NTPC Ltd. | | | Independent Power Producers & Energy Traders | | | | 24,944 | | | | 48,952 | |
| | Oberoi Realty Ltd. | | | Real Estate Management & Development | | | | 688 | | | | 7,762 | |
| | Oil & Natural Gas Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 21,152 | | | | 32,969 | |
| | Oil India Ltd. | | | Oil, Gas & Consumable Fuels | | | | 1,956 | | | | 4,194 | |
| | One 97 Communications Ltd. | | | IT Services | | | | 524 | | | | 4,109 | |
| | Oracle Financial Services Software Ltd. | | | Software | | | | 136 | | | | 4,986 | |
| | Page Industries Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 33 | | | | 20,553 | |
| a | | PB Fintech Ltd. | | | Insurance | | | | 900 | | | | 5,228 | |
| | Persistent Systems Ltd. | | | IT Services | | | | 280 | | | | 11,156 | |
| | Petronet LNG Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,348 | | | | 10,684 | |
| | PI Industries Ltd. | | | Chemicals | | | | 416 | | | | 15,332 | |
| | Pidilite Industries Ltd. | | | Chemicals | | | | 852 | | | | 28,176 | |
| | Piramal Enterprises Ltd. | | | Pharmaceuticals | | | | 724 | | | | 7,692 | |
| a | | Piramal Pharma Ltd. | | | Pharmaceuticals | | | | 2,896 | | | | 7,801 | |
| | Polycab India Ltd. | | | Electrical Equipment | | | | 152 | | | | 4,785 | |
| | Power Finance Corp. Ltd. | | | Diversified Financial Services | | | | 6,840 | | | | 8,795 | |
| | Power Grid Corp. of India Ltd. | | | Electric Utilities | | | | 17,892 | | | | 46,670 | |
| | Punjab National Bank | | | Banks | | | | 6,412 | | | | 2,881 | |
| | Rajesh Exports Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 788 | | | | 5,606 | |
| a,b,c | | RBL Bank Ltd., 144A, Reg S | | | Banks | | | | 2,720 | | | | 3,803 | |
| | REC Ltd. | | | Diversified Financial Services | | | | 7,274 | | | | 8,405 | |
| | Relaxo Footwears Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 420 | | | | 5,198 | |
| | Reliance Industries Ltd. | | | Oil, Gas & Consumable Fuels | | | | 19,020 | | | | 555,920 | |
| | Samvardhana Motherson International Ltd. | | | Auto Components | | | | 8,348 | | | | 11,185 | |
| | SBI Cards & Payment Services Ltd. | | | Consumer Finance | | | | 1,660 | | | | 18,640 | |
| b | | SBI Life Insurance Co. Ltd., 144A | | | Insurance | | | | 2,388 | | | | 36,706 | |
| | Schaeffler India Ltd. | | | Machinery | | | | 228 | | | | 9,003 | |
| | Shree Cement Ltd. | | | Construction Materials | | | | 76 | | | | 19,650 | |
| | Shriram Transport Finance Co. Ltd. | | | Consumer Finance | | | | 1,152 | | | | 16,958 | |
| | Siemens Ltd. | | | Industrial Conglomerates | | | | 448 | | | | 15,259 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 141 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | India (continued) | | | | | | | | | |
| b | | Sona Blw Precision Forgings Ltd., 144A | | | Auto Components | | | | 1,472 | | | $ | 8,391 | |
| | SRF Ltd. | | | Chemicals | | | | 788 | | | | 24,249 | |
| a | | Star Health & Allied Insurance Co. Ltd. | | | Insurance | | | | 468 | | | | 4,063 | |
| | State Bank of India | | | Banks | | | | 10,164 | | | | 66,293 | |
| | Steel Authority of India Ltd. | | | Metals & Mining | | | | 8,056 | | | | 7,600 | |
| | Sun Pharmaceutical Industries Ltd. | | | Pharmaceuticals | | | | 6,180 | | | | 72,066 | |
| | Sun TV Network Ltd. | | | Media | | | | 572 | | | | 3,578 | |
| | Tata Communications Ltd. | | | Diversified Telecommunication Services | | | | 660 | | | | 9,336 | |
| | Tata Consultancy Services Ltd. | | | IT Services | | | | 5,828 | | | | 215,246 | |
| | Tata Consumer Products Ltd. | | | Food Products | | | | 3,432 | | | | 33,870 | |
| | Tata Elxsi Ltd. | | | Software | | | | 192 | | | | 20,194 | |
| a | | Tata Motors Ltd. | | | Automobiles | | | | 2,048 | | | | 4,925 | |
| a | | Tata Motors Ltd., A | | | Automobiles | | | | 10,476 | | | | 52,102 | |
| | Tata Power Co. Ltd. | | | Electric Utilities | | | | 9,304 | | | | 24,761 | |
| | Tata Steel Ltd. | | | Metals & Mining | | | | 46,440 | | | | 56,686 | |
| a | | Tata Teleservices Maharashtra Ltd. | | | Diversified Telecommunication Services | | | | 2,920 | | | | 3,711 | |
| | Tech Mahindra Ltd. | | | IT Services | | | | 3,464 | | | | 42,947 | |
| | Titan Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 2,368 | | | | 75,884 | |
| | Torrent Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 536 | | | | 10,277 | |
| | Torrent Power Ltd. | | | Electric Utilities | | | | 1,188 | | | | 7,110 | |
| | Trent Ltd. | | | Multiline Retail | | | | 1,040 | | | | 18,153 | |
| | Tube Investments of India Ltd. | | | Auto Components | | | | 560 | | | | 18,891 | |
| | TVS Motor Co. Ltd. | | | Automobiles | | | | 1,160 | | | | 14,719 | |
| | UltraTech Cement Ltd. | | | Construction Materials | | | | 652 | | | | 50,132 | |
| | Union Bank of India Ltd. | | | Banks | | | | 6,424 | | | | 3,526 | |
| | United Breweries Ltd. | | | Beverages | | | | 412 | | | | 8,644 | |
| a | | United Spirits Ltd. | | | Beverages | | | | 1,676 | | | | 17,353 | |
| | UPL Ltd. | | | Chemicals | | | | 3,000 | | | | 24,783 | |
| | Varun Beverages Ltd. | | | Beverages | | | | 1,152 | | | | 14,787 | |
| | Vedanta Ltd. | | | Metals & Mining | | | | 6,916 | | | | 22,958 | |
| a | | Vodafone Idea Ltd. | | | Wireless Telecommunication Services | | | | 47,708 | | | | 5,161 | |
| | Voltas Ltd. | | | Construction & Engineering | | | | 1,320 | | | | 14,708 | |
| | Whirlpool of India Ltd. | | | Household Durables | | | | 180 | | | | 3,617 | |
| | Wipro Ltd. | | | IT Services | | | | 7,148 | | | | 34,641 | |
| a | | Yes Bank Ltd. | | | Banks | | | | 71,244 | | | | 13,706 | |
| | Zee Entertainment Enterprises Ltd. | | | Media | | | | 4,632 | | | | 14,699 | |
| a | | Zomato Ltd. | | | Internet & Catalog Retail | | | | 25,972 | | | | 19,906 | |
| | Zydus Lifesciences Ltd. | | | Pharmaceuticals | | | | 1,352 | | | | 6,430 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,716,954 | |
| | | | | | | | | | | | | | |
| | | Indonesia 2.4% | | | | | | | | | |
| | Adaro Energy Tbk PT, B | | | Oil, Gas & Consumable Fuels | | | | 72,400 | | | | 18,828 | |
| | Astra Agro Lestari Tbk PT, H | | | Food Products | | | | 2,800 | | | | 1,517 | |
| | Astra International Tbk PT, H | | | Automobiles | | | | 109,600 | | | | 47,683 | |
| | Avia Avian Tbk PT | | | Chemicals | | | | 66,800 | | | | 3,488 | |
| | Bank Central Asia Tbk PT, A | | | Banks | | | | 313,200 | | | | 175,857 | |
| | Bank Danamon Indonesia Tbk PT, H | | | Banks | | | | 4,800 | | | | 801 | |
| | Bank Mandiri Persero Tbk PT, A | | | Banks | | | | 105,200 | | | | 65,113 | |
| | Bank Negara Indonesia Persero Tbk PT, H | | | Banks | | | | 42,400 | | | | 24,990 | |
| | Bank Rakyat Indonesia Persero Tbk PT, A | | | Banks | | | | 361,200 | | | | 106,504 | |
| | Bank Syariah Indonesia Tbk PT | | | Banks | | | | 16,800 | | | | 1,622 | |
| | Bukit Asam Tbk PT, A | | | Oil, Gas & Consumable Fuels | | | | 23,200 | | | | 6,353 | |
| a | | Bumi Serpong Damai Tbk PT, A | | | Real Estate Management & Development | | | | 50,400 | | | | 2,995 | |
| | Charoen Pokphand Indonesia Tbk PT, A | | | Food Products | | | | 42,000 | | | | 15,584 | |
| | Dayamitra Telekomunikasi PT | | | Diversified Telecommunication Services | | | | 133,600 | | | | 6,361 | |
| | Elang Mahkota Teknologi Tbk PT | | | Media | | | | 170,000 | | | | 16,969 | |
| | First Pacific Co. Ltd. | | | Diversified Financial Services | | | | 14,000 | | | | 4,262 | |
| | Gudang Garam Tbk PT | | | Tobacco | | | | 2,800 | | | | 4,215 | |
| | | | | | | | | | |
| | | | | | |
| 142 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Indonesia (continued) | | | | | | | | | |
| | Hanjaya Mandala Sampoerna Tbk PT | | | Tobacco | | | | 50,800 | | | $ | 3,036 | |
| | Indah Kiat Pulp & Paper Corp Tbk PT | | | Paper & Forest Products | | | | 14,400 | | | | 8,558 | |
| | Indocement Tunggal Prakarsa Tbk PT | | | Construction Materials | | | | 10,400 | | | | 6,488 | |
| | Indofood CBP Sukses Makmur Tbk PT | | | Food Products | | | | 12,400 | | | | 7,044 | |
| | Indofood Sukses Makmur Tbk PT | | | Food Products | | | | 24,400 | | | | 9,654 | |
| a | | Jasa Marga Persero Tbk PT | | | Transportation Infrastructure | | | | 12,800 | | | | 2,724 | |
| | Kalbe Farma Tbk PT | | | Pharmaceuticals | | | | 105,600 | | | | 12,691 | |
| | Mayora Indah Tbk PT | | | Food Products | | | | 22,400 | | | | 2,692 | |
| a | | Media Nusantara Citra Tbk PT | | | Media | | | | 24,800 | | | | 1,352 | |
| a | | MNC Digital Entertainment Tbk PT | | | Entertainment | | | | 9,200 | | | | 2,966 | |
| | Perusahaan Gas Negara Tbk PT | | | Gas Utilities | | | | 57,200 | | | | 6,592 | |
| | Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B | | | Diversified Telecommunication Services | | | | 263,600 | | | | 77,206 | |
| | PT Barito Pacific Tbk, A | | | Chemicals | | | | 138,000 | | | | 7,205 | |
| | PT XL Axiata Tbk | | | Wireless Telecommunication Services | | | | 21,600 | | | | 3,489 | |
| | Sarana Menara Nusantara Tbk PT | | | Diversified Telecommunication Services | | | | 141,600 | | | | 11,484 | |
| | Semen Indonesia (Persero) Tbk PT | | | Construction Materials | | | | 16,400 | | | | 8,051 | |
| a | | Smartfren Telecom Tbk PT | | | Wireless Telecommunication Services | | | | 581,655 | | | | 3,056 | |
| | Sumber Alfaria Trijaya Tbk PT | | | Food & Staples Retailing | | | | 108,000 | | | | 16,951 | |
| | Surya Citra Media Tbk PT | | | Media | | | | 160,000 | | | | 2,165 | |
| | Tower Bersama Infrastructure Tbk PT | | | Diversified Telecommunication Services | | | | 23,200 | | | | 4,312 | |
| | Unilever Indonesia Tbk PT | | | Household Products | | | | 31,600 | | | | 10,023 | |
| | United Tractors Tbk PT | | | Oil, Gas & Consumable Fuels | | | | 8,700 | | | | 18,754 | |
| a | | Vale Indonesia Tbk PT | | | Metals & Mining | | | | 12,000 | | | | 5,044 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 734,679 | |
| | | | | | | | | | | | | | |
| | | Italy 0.1% | | | | | | | | | |
| | Prada SpA | | | Textiles, Apparel & Luxury Goods | | | | 3,000 | | | | 13,911 | |
| | | | | | | | | | | | | | |
| | | Luxembourg 0.0%† | | | | | | | | | |
| | L’Occitane International SA | | | Specialty Retail | | | | 2,500 | | | | 7,596 | |
| | | | | | | | | | | | | | |
| | | Macau 0.4% | | | | | | | | | |
| | Galaxy Entertainment Group Ltd. | | | Hotels, Restaurants & Leisure | | | | 12,400 | | | | 73,295 | |
| a | | MGM China Holdings Ltd. | | | Hotels, Restaurants & Leisure | | | | 4,800 | | | | 2,654 | |
| a | | Sands China Ltd. | | | Hotels, Restaurants & Leisure | | | | 13,600 | | | | 34,130 | |
| a | | SJM Holdings Ltd. | | | Hotels, Restaurants & Leisure | | | | 12,500 | | | | 4,682 | |
| a | | Wynn Macau Ltd. | | | Hotels, Restaurants & Leisure | | | | 8,400 | | | | 5,393 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 120,154 | |
| | | | | | | | | | | | | | |
| | | Malaysia 1.9% | | | | | | | | | |
| | Alliance Bank Malaysia Bhd., A | | | Banks | | | | 6,800 | | | | 5,177 | |
| | AMMB Holdings Bhd. | | | Beverages | | | | 12,000 | | | | 10,093 | |
| | Astro Malaysia Holdings Bhd., A | | | Media | | | | 6,800 | | | | 1,122 | |
| | Axiata Group Bhd., A | | | Wireless Telecommunication Services | | | | 26,000 | | | | 14,690 | |
| | British American Tobacco Malaysia Bhd., A | | | Tobacco | | | | 800 | | | | 1,770 | |
| | CIMB Group Holdings Bhd., A | | | Banks | | | | 35,600 | | | | 39,385 | |
| | Dialog Group Bhd., A | | | Energy Equipment & Services | | | | 23,200 | | | | 9,956 | |
| | Digi.com Bhd. | | | Wireless Telecommunication Services | | | | 18,000 | | | | 13,121 | |
| | FGV Holdings Bhd. | | | Food Products | | | | 3,600 | | | | 1,095 | |
| | Fraser & Neave Holdings Bhd. | | | Beverages | | | | 600 | | | | 2,795 | |
| | Gamuda Bhd. | | | Construction & Engineering | | | | 12,400 | | | | 10,509 | |
| | Genting Bhd. | | | Hotels, Restaurants & Leisure | | | | 12,800 | | | | 12,367 | |
| | Genting Malaysia Bhd. | | | Hotels, Restaurants & Leisure | | | | 16,000 | | | | 9,627 | |
| | Hartalega Holdings Bhd. | | | Health Care Equipment & Supplies | | | | 9,000 | | | | 3,222 | |
| | Hong Leong Bank Bhd. | | | Banks | | | | 3,600 | | | | 15,915 | |
| | Hong Leong Financial Group Bhd. | | | Banks | | | | 1,200 | | | | 4,777 | |
| | IHH Healthcare Bhd. | | | Health Care Providers & Services | | | | 11,600 | | | | 14,760 | |
| | IJM Corp. Bhd. | | | Construction & Engineering | | | | 17,600 | | | | 6,339 | |
| | IOI Corp. Bhd. | | | Food Products | | | | 18,000 | | | | 14,634 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 143 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Malaysia (continued) | | | | | | | | | |
| | Kuala Lumpur Kepong Bhd. | | | Food Products | | | | 2,400 | | | $ | 10,714 | |
| | Malayan Banking Bhd. | | | Banks | | | | 40,400 | | | | 74,753 | |
| a | | Malaysia Airports Holdings Bhd. | | | Transportation Infrastructure | | | | 5,200 | | | | 6,280 | |
| | Maxis Bhd. | | | Wireless Telecommunication Services | | | | 11,600 | | | | 8,781 | |
| | MISC Bhd. | | | Marine | | | | 10,000 | | | | 14,578 | |
| b | | MR DIY Group M Bhd., 144A | | | Specialty Retail | | | | 12,600 | | | | 5,353 | |
| | Nestle (Malaysia) Bhd. | | | Food Products | | | | 300 | | | | 8,443 | |
| | Petronas Chemicals Group Bhd. | | | Chemicals | | | | 16,000 | | | | 28,950 | |
| | Petronas Dagangan Bhd. | | | Oil, Gas & Consumable Fuels | | | | 1,600 | | | | 6,908 | |
| | Petronas Gas Bhd. | | | Gas Utilities | | | | 3,300 | | | | 11,742 | |
| | PPB Group Bhd. | | | Food Products | | | | 3,200 | | | | 11,111 | |
| | Press Metal Aluminium Holdings Bhd. | | | Metals & Mining | | | | 20,000 | | | | 17,425 | |
| | Public Bank Bhd. | | | Banks | | | | 80,800 | | | | 73,708 | |
| | QL Resources Bhd. | | | Food Products | | | | 6,500 | | | | 6,981 | |
| | RHB Bank Bhd. | | | Banks | | | | 9,200 | | | | 11,031 | |
| | Sime Darby Bhd. | | | Industrial Conglomerates | | | | 20,200 | | | | 9,322 | |
| | Sime Darby Plantation Bhd. | | | Food Products | | | | 20,400 | | | | 17,993 | |
| | Telekom Malaysia Bhd. | | | Diversified Telecommunication Services | | | | 6,800 | | | | 8,022 | |
| | Tenaga Nasional Bhd. | | | Electric Utilities | | | | 18,400 | | | | 31,943 | |
| | Top Glove Corp. Bhd. | | | Health Care Equipment & Supplies | | | | 30,000 | | | | 4,044 | |
| | Westports Holdings Bhd. | | | Transportation Infrastructure | | | | 4,000 | | | | 2,640 | |
| | YTL Corp. Bhd. | | | Multi-Utilities | | | | 23,613 | | | | 2,953 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 565,029 | |
| | | | | | | | | | | | | | |
| | | Pakistan 0.0%† | | | | | | | | | |
| | Fauji Fertilizer Co. Ltd. | | | Chemicals | | | | 4,000 | | | | 1,777 | |
| | Habib Bank Ltd. | | | Banks | | | | 4,000 | | | | 1,222 | |
| | Oil & Gas Development Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,000 | | | | 1,328 | |
| | Pakistan Petroleum Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,008 | | | | 1,080 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,407 | |
| | | | | | | | | | | | | | |
| | | Philippines 0.8% | | | | | | | | | |
| | Aboitiz Power Corp., A | | | Independent Power Producers & Energy Traders | | | | 9,200 | | | | 4,833 | |
| | AC Energy Corp. | | | Independent Power Producers & Energy Traders | | | | 37,640 | | | | 3,595 | |
| | Alliance Global Group Inc., A | | | Industrial Conglomerates | | | | 22,000 | | | | 3,096 | |
| | Ayala Corp., A | | | Diversified Financial Services | | | | 1,600 | | | | 16,812 | |
| | Ayala Land Inc., A | | | Real Estate Management & Development | | | | 45,600 | | | | 17,773 | |
| | Bank of the Philippine Islands, A | | | Banks | | | | 10,160 | | | | 15,511 | |
| | BDO Unibank Inc., A | | | Banks | | | | 11,280 | | | | 21,454 | |
| a | | Bloomberry Resorts Corp., H | | | Hotels, Restaurants & Leisure | | | | 17,200 | | | | 1,966 | |
| a | | Converge Information and Communications Technology Solutions Inc. | | | Diversified Telecommunication Services | | | | 11,600 | | | | 2,592 | |
| | DMCI Holdings Inc., A | | | Industrial Conglomerates | | | | 20,400 | | | | 3,442 | |
| a | | Emperador Inc. | | | Beverages | | | | 13,600 | | | | 4,463 | |
| | Globe Telecom Inc. | | | Wireless Telecommunication Services | | | | 160 | | | | 5,540 | |
| | GT Capital Holdings Inc. | | | Diversified Financial Services | | | | 600 | | | | 4,254 | |
| | International Container Terminal Services Inc. | | | Transportation Infrastructure | | | | 6,320 | | | | 16,882 | |
| | JG Summit Holdings Inc. | | | Industrial Conglomerates | | | | 17,160 | | | | 12,308 | |
| | Jollibee Foods Corp. | | | Hotels, Restaurants & Leisure | | | | 2,440 | | | | 9,531 | |
| | LT Group Inc. | | | Industrial Conglomerates | | | | 18,000 | | | | 2,536 | |
| | Manila Electric Co. | | | Electric Utilities | | | | 1,520 | | | | 6,819 | |
| | Megaworld Corp. | | | Real Estate Management & Development | | | | 72,000 | | | | 2,505 | |
| | Metro Pacific Investments Corp. | | | Diversified Financial Services | | | | 40,000 | | | | 2,272 | |
| | Metropolitan Bank & Trust Co. | | | Banks | | | | 10,260 | | | | 8,488 | |
| b | | Monde Nissin Corp., 144A | | | Food Products | | | | 41,600 | | | | 8,643 | |
| | PLDT Inc. | | | Wireless Telecommunication Services | | | | 525 | | | | 13,505 | |
| | Puregold Price Club Inc. | | | Food & Staples Retailing | | | | 6,060 | | | | 2,920 | |
| | San Miguel Corp. | | | Industrial Conglomerates | | | | 2,180 | | | | 3,642 | |
| | | | | | | | | | |
| | | | | | |
| 144 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Philippines (continued) | | | | | | | | | |
| | Semirara Mining and Power Corp. | | | Oil, Gas & Consumable Fuels | | | | 6,400 | | | $ | 4,258 | |
| | SM Prime Holdings Inc. | | | Real Estate Management & Development | | | | 60,000 | | | | 30,806 | |
| | Universal Robina Corp. | | | Food Products | | | | 5,160 | | | | 10,034 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 240,480 | |
| | | | | | | | | | | | | | |
| | | Singapore 3.7% | | | | | | | | | |
| | Ascendas REIT, A | | | Equity Real Estate Investment Trusts (REITs | ) | | | 19,600 | | | | 36,744 | |
| | Ascott Residence Trust, A | | | Equity Real Estate Investment Trusts (REITs | ) | | | 10,400 | | | | 7,103 | |
| b | | BOC Aviation Ltd., A, 144A | | | Trading Companies & Distributors | | | | 1,200 | | | | 8,522 | |
| | Capitaland Investment Ltd. | | | Real Estate Management & Development | | | | 14,400 | | | | 34,823 | |
| | CapitaLand Mall Trust, A | | | Equity Real Estate Investment Trusts (REITs | ) | | | 28,800 | | | | 38,537 | |
| | City Developments Ltd., H | | | Real Estate Management & Development | | | | 2,800 | | | | 14,830 | |
| | ComfortDelGro Corp. Ltd., H | | | Road & Rail | | | | 11,600 | | | | 10,671 | |
| | DBS Group Holdings Ltd., A | | | Banks | | | | 10,300 | | | | 239,680 | |
| | Frasers Logistics & Commercial Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 16,000 | | | | 13,715 | |
| | Genting Singapore Ltd. | | | Hotels, Restaurants & Leisure | | | | 32,800 | | | | 17,944 | |
| | Golden Agri-Resources Ltd. | | | Food Products | | | | 34,400 | | | | 6,353 | |
| | Jardine Cycle & Carriage Ltd. | | | Distributors | | | | 600 | | | | 14,129 | |
| | Keppel Corp. Ltd. | | | Industrial Conglomerates | | | | 8,000 | | | | 38,748 | |
| | Keppel DC REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 7,200 | | | | 8,530 | |
| | Keppel REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 9,600 | | | | 6,624 | |
| | Mapletree Commercial Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 12,400 | | | | 14,864 | |
| | Mapletree Industrial Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 10,800 | | | | 17,914 | |
| | Mapletree Logistics Trust | | | Equity Real Estate Investment Trusts (REITs | ) | | | 18,400 | | | | 20,004 | |
| c | | NetLink NBN Trust, Reg S | | | Diversified Telecommunication Services | | | | 16,000 | | | | 10,091 | |
| | Olam Group Ltd. | | | Food & Staples Retailing | | | | 4,500 | | | | 4,108 | |
| | Oversea-Chinese Banking Corp. Ltd. | | | Banks | | | | 19,600 | | | | 161,592 | |
| a | | SATS Ltd. | | | Transportation Infrastructure | | | | 3,700 | | | | 7,762 | |
| | SembCorp Industries Ltd. | | | Industrial Conglomerates | | | | 5,200 | | | | 11,162 | |
| a | | SembCorp Marine Ltd. | | | Machinery | | | | 90,000 | | | | 6,649 | |
| a | | SIA Engineering Co. Ltd. | | | Transportation Infrastructure | | | | 1,200 | | | | 1,873 | |
| a | | Singapore Airlines Ltd. | | | Airlines | | | | 7,200 | | | | 25,591 | |
| | Singapore Exchange Ltd. | | | Capital Markets | | | | 4,400 | | | | 29,008 | |
| | Singapore Post Ltd. | | | Air Freight & Logistics | | | | 8,800 | | | | 3,342 | |
| | Singapore Technologies Engineering Ltd. | | | Aerospace & Defense | | | | 8,600 | | | | 21,457 | |
| | Singapore Telecommunications Ltd. | | | Diversified Telecommunication Services | | | | 42,800 | | | | 79,342 | |
| | StarHub Ltd. | | | Wireless Telecommunication Services | | | | 3,200 | | | | 2,453 | |
| | Suntec REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 12,000 | | | | 12,795 | |
| | United Overseas Bank Ltd. | | | Banks | | | | 7,300 | | | | 133,088 | |
| | UOL Group Ltd. | | | Real Estate Management & Development | | | | 2,400 | | | | 11,123 | |
| | Venture Corp. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,500 | | | | 17,175 | |
| | Wilmar International Ltd. | | | Food Products | | | | 12,000 | | | | 32,114 | |
| a | | Yangzijiang Financial Holding Ltd. | | | Capital Markets | | | | 14,400 | | | | 3,763 | |
| | Yanlord Land Group Ltd. | | | Real Estate Management & Development | | | | 3,200 | | | | 2,130 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,126,353 | |
| | | | | | | | | | | | | | |
| | | South Korea 11.3% | | | | | | | | | |
| a | | Alteogen Inc., A | | | Biotechnology | | | | 160 | | | | 5,072 | |
| | Amorepacific Corp., H | | | Personal Products | | | | 164 | | | | 11,692 | |
| | AMOREPACIFIC Group, A | | | Personal Products | | | | 168 | | | | 3,153 | |
| | BGF retail Co. Ltd. | | | Food & Staples Retailing | | | | 36 | | | | 4,164 | |
| | BNK Financial Group Inc., H | | | Banks | | | | 1,692 | | | | 7,119 | |
| | Celltrion Healthcare Co. Ltd., A | | | Health Care Providers & Services | | | | 540 | | | | 25,590 | |
| | Celltrion Inc., A | | | Biotechnology | | | | 588 | | | | 72,128 | |
| a | | Celltrion Pharm Inc., A | | | Pharmaceuticals | | | | 109 | | | | 4,884 | |
| | Cheil Worldwide Inc., A | | | Media | | | | 408 | | | | 6,473 | |
| | CJ CheilJedang Corp., A | | | Food Products | | | | 44 | | | | 12,640 | |
| | CJ Corp., A | | | Industrial Conglomerates | | | | 68 | | | | 3,303 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 145 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | South Korea (continued) | | | | | | | | | |
| | CJ ENM Co. Ltd., A | | | Internet & Catalog Retail | | | | 62 | | | $ | 3,298 | |
| a | | CJ Logistics Corp., A | | | Road & Rail | | | | 48 | | | | 3,033 | |
| | Coway Co. Ltd. | | | Household Durables | | | | 320 | | | | 12,056 | |
| a | | Daewoo Engineering & Construction Co. Ltd., A | | | Construction & Engineering | | | | 976 | | | | 2,811 | |
| a | | Daewoo Shipbuilding & Marine Engineering Co. Ltd., A | | | Machinery | | | | 280 | | | | 3,709 | |
| | DB Insurance Co. Ltd., A | | | Insurance | | | | 248 | | | | 9,568 | |
| | DGB Financial Group Inc., A | | | Banks | | | | 892 | | | | 4,346 | |
| | DL E&C Co. Ltd., A | | | Construction & Engineering | | | | 176 | | | | 4,219 | |
| | DL Holdings Co. Ltd., A | | | Construction & Engineering | | | | 72 | | | | 2,884 | |
| | Dongsuh Cos. Inc., A | | | Food & Staples Retailing | | | | 176 | | | | 2,559 | |
| | Doosan Bobcat Inc., A | | | Machinery | | | | 124 | | | | 2,470 | |
| a | | Doosan Enerbility Co. Ltd., H | | | Electrical Equipment | | | | 2,212 | | | | 22,032 | |
| | Ecopro BM Co. Ltd. | | | Electrical Equipment | | | | 224 | | | | 13,794 | |
| | E-MART Inc., A | | | Food & Staples Retailing | | | | 116 | | | | 6,803 | |
| | F&F Co. Ltd. / New | | | Textiles, Apparel & Luxury Goods | | | | 90 | | | | 8,650 | |
| | Fila Holdings Corp. | | | Textiles, Apparel & Luxury Goods | | | | 280 | | | | 6,126 | |
| | Green Cross Corp. | | | Biotechnology | | | | 32 | | | | 2,762 | |
| | GS Engineering & Construction Corp. | | | Construction & Engineering | | | | 352 | | | | 5,548 | |
| | GS Holdings Corp. | | | Oil, Gas & Consumable Fuels | | | | 288 | | | | 8,394 | |
| | GS Retail Co. Ltd. | | | Food & Staples Retailing | | | | 216 | | | | 3,865 | |
| | Hana Financial Group Inc. | | | Banks | | | | 1,632 | | | | 40,438 | |
| a | | Hanjin Kal Corp. | | | Airlines | | | | 126 | | | | 3,289 | |
| | Hankook Tire & Technology Co. Ltd. | | | Auto Components | | | | 416 | | | | 10,250 | |
| | Hanmi Pharm Co. Ltd. | | | Pharmaceuticals | | | | 44 | | | | 7,043 | |
| | Hanmi Science Co. Ltd. | | | Pharmaceuticals | | | | 89 | | | | 1,963 | |
| | Hanon Systems | | | Auto Components | | | | 956 | | | | 5,559 | |
| | Hanssem Co. Ltd. | | | Household Durables | | | | 60 | | | | 1,793 | |
| | Hanwha Aerospace Co. Ltd. | | | Aerospace & Defense | | | | 192 | | | | 8,253 | |
| | Hanwha Corp. | | | Industrial Conglomerates | | | | 228 | | | | 3,896 | |
| | Hanwha Corp. | | | Industrial Conglomerates | | | | 100 | | | | 979 | |
| a | | Hanwha Life Insurance Co. Ltd. | | | Insurance | | | | 1,644 | | | | 2,402 | |
| a | | Hanwha Solutions Corp. | | | Chemicals | | | | 640 | | | | 21,114 | |
| | HD Hyundai Co. Ltd. | | | Machinery | | | | 280 | | | | 10,588 | |
| | Hite Jinro Co. Ltd. | | | Beverages | | | | 176 | | | | 3,260 | |
| | HL Mando Co. Ltd. | | | Auto Components | | | | 196 | | | | 6,076 | |
| a | | HLB Inc. | | | Leisure Products | | | | 508 | | | | 15,215 | |
| | HMM Co. Ltd. | | | Marine | | | | 1,632 | | | | 21,103 | |
| | Hotel Shilla Co. Ltd. | | | Specialty Retail | | | | 180 | | | | 9,046 | |
| a | | HYBE Co. Ltd. | | | Entertainment | | | | 104 | | | | 9,813 | |
| | Hyundai Department Store Co. Ltd. | | | Multiline Retail | | | | 84 | | | | 3,194 | |
| a | | Hyundai Doosan Infracore Co. Ltd. | | | Machinery | | | | 740 | | | | 2,302 | |
| | Hyundai Engineering & Construction Co. Ltd. | | | Construction & Engineering | | | | 408 | | | | 10,694 | |
| | Hyundai Glovis Co. Ltd. | | | Air Freight & Logistics | | | | 104 | | | | 11,812 | |
| a | | Hyundai Heavy Industries Co. Ltd. | | | Machinery | | | | 80 | | | | 6,430 | |
| | Hyundai Marine & Fire Insurance Co. Ltd. | | | Insurance | | | | 349 | | | | 7,147 | |
| a | | Hyundai Mipo Dockyard Co. Ltd. | | | Machinery | | | | 117 | | | | 8,423 | |
| | Hyundai Mobis Co. Ltd. | | | Auto Components | | | | 348 | | | | 46,458 | |
| | Hyundai Motor Co. | | | Automobiles | | | | 768 | | | | 94,745 | |
| | Hyundai Steel Co. | | | Metals & Mining | | | | 424 | | | | 8,328 | |
| | Hyundai Wia Corp. | | | Auto Components | | | | 96 | | | | 4,033 | |
| | Iljin Materials Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 100 | | | | 3,551 | |
| | Industrial Bank of Korea | | | Banks | | | | 1,456 | | | | 9,688 | |
| | Kakao Corp. | | | Interactive Media & Services | | | | 1,712 | | | | 68,327 | |
| a | | Kakao Games Corp. | | | Entertainment | | | | 156 | | | | 4,650 | |
| a | | KakaoBank Corp. | | | Banks | | | | 876 | | | | 12,276 | |
| a | | Kakaopay Corp. | | | IT Services | | | | 120 | | | | 4,118 | |
| a | | Kangwon Land Inc. | | | Hotels, Restaurants & Leisure | | | | 616 | | | | 10,140 | |
| | | | | | | | | | |
| | | | | | |
| 146 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | South Korea (continued) | | | | | | | | | |
| | KB Financial Group Inc. | | | Banks | | | | 2,200 | | | $ | 67,198 | |
| | KCC Corp. | | | Building Products | | | | 25 | | | | 4,045 | |
| | KEPCO Plant Service & Engineering Co. Ltd. | | | Commercial Services & Supplies | | | | 132 | | | | 3,201 | |
| | Kia Corp. | | | Automobiles | | | | 1,460 | | | | 73,372 | |
| | Korea Aerospace Industries Ltd. | | | Aerospace & Defense | | | | 400 | | | | 13,546 | |
| a | | Korea Electric Power Corp. | | | Electric Utilities | | | | 1,432 | | | | 20,118 | |
| | Korea Gas Corp. | | | Gas Utilities | | | | 152 | | | | 3,591 | |
| | Korea Investment Holdings Co. Ltd. | | | Capital Markets | | | | 208 | | | | 6,906 | |
| a | | Korea Shipbuilding & Offshore Engineering Co Ltd. | | | Machinery | | | | 244 | | | | 12,433 | |
| | Korea Zinc Co. Ltd. | | | Metals & Mining | | | | 56 | | | | 23,289 | |
| a | | Korean Air Lines Co. Ltd. | | | Airlines | | | | 1,000 | | | | 15,447 | |
| a | | Krafton Inc. | | | Entertainment | | | | 152 | | | | 22,311 | |
| | KT&G Corp. | | | Tobacco | | | | 604 | | | | 36,560 | |
| | Kumho Petrochemical Co. Ltd. | | | Chemicals | | | | 96 | | | | 7,750 | |
| a | | L&F Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 124 | | | | 15,401 | |
| | LG Chem Ltd. | | | Chemicals | | | | 258 | | | | 96,658 | |
| | LG Corp. | | | Industrial Conglomerates | | | | 496 | | | | 25,655 | |
| | LG Display Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,264 | | | | 10,602 | |
| | LG Electronics Inc. | | | Household Durables | | | | 608 | | | | 33,402 | |
| a | | LG Energy Solution Ltd. | | | Electrical Equipment | | | | 196 | | | | 58,429 | |
| | LG H&H Co. Ltd. | | | Personal Products | | | | 50 | | | | 22,122 | |
| | LG Innotek Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 80 | | | | 15,293 | |
| | LG Uplus Corp. | | | Diversified Telecommunication Services | | | | 1,204 | | | | 9,047 | |
| | Lotte Chemical Corp. | | | Chemicals | | | | 84 | | | | 8,455 | |
| | Lotte Chilsung Beverage Co. Ltd. | | | Beverages | | | | 20 | | | | 2,230 | |
| | Lotte Corp. | | | Industrial Conglomerates | | | | 152 | | | | 4,069 | |
| | LOTTE Fine Chemical Co. Ltd. | | | Chemicals | | | | 96 | | | | 3,778 | |
| | Lotte Shopping Co. Ltd. | | | Multiline Retail | | | | 64 | | | | 3,869 | |
| | LS Corp. | | | Electrical Equipment | | | | 92 | | | | 3,646 | |
| | Meritz Financial Group Inc. | | | Diversified Financial Services | | | | 156 | | | | 2,273 | |
| | Mirae Asset Securities Co. Ltd. | | | Capital Markets | | | | 1,496 | | | | 6,253 | |
| | Mirae Asset Securities Co. Ltd. | | | Capital Markets | | | | 824 | | | | 2,105 | |
| | NAVER Corp. | | | Interactive Media & Services | | | | 816 | | | | 110,363 | |
| | NCSoft Corp. | | | Entertainment | | | | 90 | | | | 21,766 | |
| b | | Netmarble Corp., 144A | | | Software | | | | 100 | | | | 3,586 | |
| | NH Investment & Securities Co. Ltd. | | | Capital Markets | | | | 740 | | | | 4,650 | |
| a | | NHN Corp. | | | Software | | | | 88 | | | | 1,322 | |
| | NongShim Co. Ltd. | | | Food Products | | | | 20 | | | | 4,166 | |
| | OCI Co. Ltd. | | | Chemicals | | | | 100 | | | | 6,361 | |
| | Orion Corp/Republic of Korea | | | Food Products | | | | 128 | | | | 9,215 | |
| | Ottogi Corp. | | | Food Products | | | | 8 | | | | 2,578 | |
| | Pan Ocean Co. Ltd. | | | Marine | | | | 1,132 | | | | 3,560 | |
| a | | Paradise Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 272 | | | | 2,928 | |
| a | | Pearl Abyss Corp. | | | Entertainment | | | | 172 | | | | 5,608 | |
| | POSCO Chemical Co. Ltd. | | | Construction Materials | | | | 152 | | | | 15,936 | |
| | POSCO Holdings Inc. | | | Metals & Mining | | | | 424 | | | | 62,532 | |
| | Posco International Corp. | | | Trading Companies & Distributors | | | | 296 | | | | 4,324 | |
| | S-1 Corp. | | | Commercial Services & Supplies | | | | 100 | | | | 4,047 | |
| a,b | | Samsung Biologics Co. Ltd., 144A | | | Life Sciences Tools & Services | | | | 104 | | | | 58,662 | |
| | Samsung C&T Corp. | | | Industrial Conglomerates | | | | 476 | | | | 34,435 | |
| | Samsung Card Co. Ltd. | | | Consumer Finance | | | | 176 | | | | 3,715 | |
| | Samsung Electro-Mechanics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 316 | | | | 24,738 | |
| | Samsung Electronics Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 26,740 | | | | 992,447 | |
| a | | Samsung Engineering Co. Ltd. | | | Construction & Engineering | | | | 896 | | | | 14,248 | |
| | Samsung Fire & Marine Insurance Co. Ltd. | | | Insurance | | | | 188 | | | | 24,178 | |
| a | | Samsung Heavy Industries Co. Ltd. | | | Machinery | | | | 3,422 | | | | 12,701 | |
| | Samsung Life Insurance Co. Ltd. | | | Insurance | | | | 368 | | | | 16,050 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 147 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | South Korea (continued) | | | | | | | | | |
| | Samsung SDI Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 298 | | | $ | 113,726 | |
| | Samsung SDS Co. Ltd. | | | IT Services | | | | 204 | | | | 16,398 | |
| | Samsung Securities Co. Ltd. | | | Capital Markets | | | | 368 | | | | 7,909 | |
| | SD Biosensor Inc. | | | Health Care Equipment & Supplies | | | | 196 | | | | 3,644 | |
| | Seegene Inc. | | | Biotechnology | | | | 168 | | | | 3,147 | |
| a | | Shin Poong Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 196 | | | | 2,726 | |
| | Shinhan Financial Group Co. Ltd. | | | Banks | | | | 2,824 | | | | 66,124 | |
| | Shinsegae Inc. | | | Multiline Retail | | | | 40 | | | | 6,458 | |
| a,d | | SillaJen Inc. | | | Biotechnology | | | | 196 | | | | — | |
| a | | SK Biopharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 144 | | | | 5,727 | |
| a | | SK Bioscience Co. Ltd. | | | Biotechnology | | | | 112 | | | | 6,286 | |
| | SK Chemicals Co. Ltd. | | | Chemicals | | | | 80 | | | | 5,088 | |
| | SK Hynix Inc. | | | Semiconductors & Semiconductor Equipment | | | | 3,024 | | | | 175,644 | |
| a,b | | SK IE Technology Co. Ltd., 144A | | | Chemicals | | | | 148 | | | | 5,421 | |
| | SK Inc. | | | Industrial Conglomerates | | | | 200 | | | | 26,840 | |
| a | | SK Innovation Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 292 | | | | 29,288 | |
| | SK Networks Co. Ltd. | | | Trading Companies & Distributors | | | | 832 | | | | 2,303 | |
| a | | SK Square Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 564 | | | | 14,251 | |
| | SK Telecom Co. Ltd. | | | Wireless Telecommunication Services | | | | 188 | | | | 6,675 | |
| | SKC Co. Ltd. | | | Chemicals | | | | 108 | | | | 6,333 | |
| | S-Oil Corp. | | | Oil, Gas & Consumable Fuels | | | | 232 | | | | 13,135 | |
| | Solus Advanced Materials Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 82 | | | | 1,714 | |
| | SSANGYONG C&E Co. Ltd. | | | Construction Materials | | | | 656 | | | | 2,691 | |
| | Wemade Co. Ltd. | | | Entertainment | | | | 96 | | | | 3,073 | |
| | Woori Financial Group Inc. | | | Banks | | | | 3,588 | | | | 26,834 | |
| | Yuhan Corp. | | | Pharmaceuticals | | | | 280 | | | | 10,627 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,422,773 | |
| | | | | | | | | | | | | | |
| | | Taiwan 15.3% | | | | | | | | | |
| | Accton Technology Corp. | | | Communications Equipment | | | | 3,000 | | | | 25,749 | |
| | Acer Inc., H | | | Technology Hardware, Storage & Peripherals | | | | 16,000 | | | | 11,037 | |
| | Advanced Energy Solution Holding Co. Ltd. | | | Electrical Equipment | | | | 120 | | | | 2,411 | |
| | Advantech Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 2,000 | | | | 18,489 | |
| | ASE Industrial Holding Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 19,000 | | | | 47,935 | |
| | Asia Cement Corp. | | | Construction Materials | | | | 14,330 | | | | 17,783 | |
| | ASMedia Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 200 | | | | 4,183 | |
| | ASPEED Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 176 | | | | 9,867 | |
| | Asustek Computer Inc. | | | Technology Hardware, Storage & Peripherals | | | | 4,000 | | | | 29,481 | |
| | AU Optronics Corp., H | | | Electronic Equipment, Instruments & Components | | | | 50,000 | | | | 23,150 | |
| | Capital Securities Corp., A | | | Capital Markets | | | | 12,000 | | | | 3,988 | |
| | Catcher Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 4,270 | | | | 23,200 | |
| | Cathay Financial Holding Co. Ltd., A | | | Insurance | | | | 47,000 | | | | 59,140 | |
| | Chailease Holding Co. Ltd., A | | | Diversified Financial Services | | | | 7,938 | | | | 45,629 | |
| | Chang Hwa Commercial Bank Ltd., A | | | Banks | | | | 37,673 | | | | 20,350 | |
| | Cheng Shin Rubber Industry Co. Ltd., A | | | Auto Components | | | | 10,000 | | | | 11,244 | |
| | Chicony Electronics Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 3,000 | | | | 7,786 | |
| | China Airlines Ltd., A | | | Airlines | | | | 16,000 | | | | 9,903 | |
| | China Development Financial Holding Corp., A | | | Banks | | | | 92,000 | | | | 34,773 | |
| | China Motor Corp., A | | | Automobiles | | | | 1,060 | | | | 1,357 | |
| | China Steel Corp., A | | | Metals & Mining | | | | 70,000 | | | | 58,868 | |
| | Chunghwa Telecom Co. Ltd. | | | Diversified Telecommunication Services | | | | 21,000 | | | | 75,404 | |
| | Compal Electronics Inc., H | | | Technology Hardware, Storage & Peripherals | | | | 24,000 | | | | 16,404 | |
| | CTBC Financial Holding Co. Ltd., A | | | Banks | | | | 103,000 | | | | 64,397 | |
| | Delta Electronics Inc., A | | | Electronic Equipment, Instruments & Components | | | | 12,000 | | | | 95,625 | |
| | E Ink Holdings Inc. | | | Electronic Equipment, Instruments & Components | | | | 5,000 | | | | 33,387 | |
| | E.Sun Financial Holding Co. Ltd., A | | | Banks | | | | 76,852 | | | | 62,331 | |
| | Eclat Textile Co. Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 1,160 | | | | 14,322 | |
| | eMemory Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 14,426 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Taiwan (continued) | | | | | | | | | |
| | ENNOSTAR Inc., H | | | Semiconductors & Semiconductor Equipment | | | | 3,330 | | | $ | 4,348 | |
| | Eternal Materials Co. Ltd., H | | | Chemicals | | | | 6,000 | | | | 5,726 | |
| | EVA Airways Corp., H | | | Airlines | | | | 14,000 | | | | 12,435 | |
| | Evergreen Marine Corp. Taiwan Ltd. | | | Marine | | | | 6,000 | | | | 27,591 | |
| | Far Eastern International Bank | | | Banks | | | | 13,770 | | | | 4,814 | |
| | Far Eastern New Century Corp. | | | Industrial Conglomerates | | | | 22,000 | | | | 22,416 | |
| | Far EasTone Telecommunications Co. Ltd. | | | Wireless Telecommunication Services | | | | 9,000 | | | | 20,523 | |
| | Feng Tay Enterprise Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 2,640 | | | | 13,138 | |
| | First Financial Holding Co. Ltd. | | | Banks | | | | 59,160 | | | | 48,448 | |
| a,b | | FIT Hon Teng Ltd., 144A | | | Electronic Equipment, Instruments & Components | | | | 8,000 | | | | 948 | |
| | Formosa Chemicals & Fibre Corp. | | | Chemicals | | | | 19,000 | | | | 41,353 | |
| | Formosa Petrochemical Corp. | | | Oil, Gas & Consumable Fuels | | | | 7,000 | | | | 18,278 | |
| | Formosa Plastics Corp. | | | Chemicals | | | | 21,000 | | | | 57,281 | |
| | Formosa Sumco Technology Corp. | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 1,726 | |
| | Formosa Taffeta Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 6,000 | | | | 5,112 | |
| | Foxconn Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 6,000 | | | | 8,665 | |
| | Fubon Financial Holding Co. Ltd. | | | Insurance | | | | 42,000 | | | | 66,012 | |
| | Genius Electronic Optical Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 520 | | | | 5,659 | |
| | Giant Manufacturing Co. Ltd. | | | Leisure Products | | | | 1,730 | | | | 11,198 | |
| | Globalwafers Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 1,200 | | | | 13,852 | |
| | Hiwin Technologies Corp. | | | Machinery | | | | 1,685 | | | | 9,394 | |
| | Hon Hai Precision Industry Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 67,000 | | | | 215,251 | |
| | Hotai Motor Co. Ltd. | | | Specialty Retail | | | | 1,800 | | | | 32,429 | |
| a | | HTC Corp. | | | Technology Hardware, Storage & Peripherals | | | | 4,000 | | | | 6,904 | |
| | Hua Nan Financial Holdings Co. Ltd. | | | Banks | | | | 57,904 | | | | 40,580 | |
| | Innolux Corp. | | | Electronic Equipment, Instruments & Components | | | | 52,000 | | | | 17,116 | |
| | Inventec Corp. | | | Technology Hardware, Storage & Peripherals | | | | 17,000 | | | | 12,262 | |
| | Largan Precision Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 580 | | | | 30,599 | |
| | Lite-On Technology Corp. | | | Technology Hardware, Storage & Peripherals | | | | 12,000 | | | | 24,114 | |
| | MediaTek Inc. | | | Semiconductors & Semiconductor Equipment | | | | 8,440 | | | | 146,475 | |
| | Mega Financial Holding Co. Ltd. | | | Banks | | | | 61,000 | | | | 59,849 | |
| | Micro-Star International Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 4,000 | | | | 13,544 | |
| | momo.com Inc. | | | Internet & Catalog Retail | | | | 336 | | | | 5,651 | |
| | Nan Ya Plastics Corp. | | | Chemicals | | | | 32,000 | | | | 67,429 | |
| | Nan Ya Printed Circuit Board Corp. | | | Electronic Equipment, Instruments & Components | | | | 1,330 | | | | 7,917 | |
| | Nanya Technology Corp. | | | Semiconductors & Semiconductor Equipment | | | | 4,330 | | | | 6,676 | |
| | Nien Made Enterprise Co. Ltd. | | | Household Durables | | | | 880 | | | | 6,971 | |
| | Novatek Microelectronics Corp. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 3,300 | | | | 22,763 | |
| a | | OBI Pharma Inc. | | | Biotechnology | | | | 1,000 | | | | 2,252 | |
| a | | Oneness Biotech Co. Ltd. | | | Pharmaceuticals | | | | 1,600 | | | | 12,725 | |
| | Pegatron Corp. | | | Technology Hardware, Storage & Peripherals | | | | 12,000 | | | | 22,111 | |
| | Pou Chen Corp. | | | Textiles, Apparel & Luxury Goods | | | | 15,000 | | | | 13,465 | |
| | Powerchip Semiconductor Manufacturing Corp. | | | Semiconductors & Semiconductor Equipment | | | | 16,000 | | | | 14,363 | |
| | Powertech Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 4,000 | | | | 9,714 | |
| | President Chain Store Corp. | | | Food & Staples Retailing | | | | 3,200 | | | | 28,473 | |
| | Quanta Computer Inc. | | | Technology Hardware, Storage & Peripherals | | | | 15,000 | | | | 36,379 | |
| | Realtek Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,708 | | | | 23,029 | |
| | Ruentex Development Co. Ltd. | | | Real Estate Management & Development | | | | 9,000 | | | | 14,571 | |
| | Shin Kong Financial Holding Co. Ltd. | | | Insurance | | | | 76,041 | | | | 19,664 | |
| | Sino-American Silicon Products Inc. | | | Semiconductors & Semiconductor Equipment | | | | 3,060 | | | | 12,626 | |
| | SinoPac Financial Holdings Co. Ltd. | | | Banks | | | | 60,600 | | | | 33,021 | |
| | Synnex Technology International Corp. | | | Electronic Equipment, Instruments & Components | | | | 8,000 | | | | 13,304 | |
| | Taishin Financial Holding Co. Ltd. | | | Banks | | | | 65,257 | | | | 28,159 | |
| | Taiwan Business Bank | | | Banks | | | | 31,110 | | | | 12,346 | |
| | Taiwan Cement Corp. | | | Construction Materials | | | | 34,097 | | | | 36,300 | |
| | Taiwan Cooperative Financial Holding Co. Ltd. | | | Banks | | | | 57,680 | | | | 47,690 | |
| | Taiwan Fertilizer Co. Ltd. | | | Chemicals | | | | 4,000 | | | | 6,942 | |
| | Taiwan Glass Industry Corp. | | | Building Products | | | | 9,000 | | | | 4,947 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 149 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Taiwan (continued) | | | | | | | | | |
| | Taiwan High Speed Rail Corp. | | | Transportation Infrastructure | | | | 12,000 | | | $ | 10,772 | |
| | Taiwan Mobile Co. Ltd. | | | Wireless Telecommunication Services | | | | 10,330 | | | | 31,105 | |
| | Taiwan Secom Co. Ltd. | | | Commercial Services & Supplies | | | | 1,330 | | | | 4,231 | |
| | Taiwan Semiconductor Manufacturing Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 135,720 | | | | 1,803,957 | |
| | Teco Electric & Machinery Co. Ltd. | | | Electrical Equipment | | | | 11,000 | | | | 9,753 | |
| | The Shanghai Commercial & Savings Bank Ltd. | | | Banks | | | | 19,000 | | | | 29,443 | |
| | Transcend Information Inc. | | | Technology Hardware, Storage & Peripherals | | | | 1,330 | | | | 2,702 | |
| | U-Ming Marine Transport Corp. | | | Marine | | | | 2,000 | | | | 2,299 | |
| | Unimicron Technology Corp. | | | Electronic Equipment, Instruments & Components | | | | 7,000 | | | | 25,906 | |
| | Uni-President Enterprises Corp. | | | Food Products | | | | 27,000 | | | | 57,233 | |
| | United Microelectronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 66,000 | | | | 74,317 | |
| | Vanguard International Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 5,000 | | | | 10,237 | |
| | Voltronic Power Technology Corp. | | | Electrical Equipment | | | | 370 | | | | 16,374 | |
| | Walsin Lihwa Corp. | | | Electrical Equipment | | | | 19,258 | | | | 24,566 | |
| | Walsin Technology Corp. | | | Electronic Equipment, Instruments & Components | | | | 2,800 | | | | 6,570 | |
| | Wan Hai Lines Ltd. | | | Marine | | | | 5,060 | | | | 10,646 | |
| | Win Semiconductors Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,000 | | | | 7,780 | |
| | Winbond Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 17,000 | | | | 10,575 | |
| | Wistron Corp. | | | Technology Hardware, Storage & Peripherals | | | | 16,000 | | | | 13,380 | |
| | Wiwynn Corp. | | | Technology Hardware, Storage & Peripherals | | | | 480 | | | | 12,216 | |
| | Yageo Corp. | | | Electronic Equipment, Instruments & Components | | | | 3,000 | | | | 25,418 | |
| | Yang Ming Marine Transport Corp. | | | Marine | | | | 10,000 | | | | 19,371 | |
| | Yuanta Financial Holding Co. Ltd. | | | Capital Markets | | | | 67,980 | | | | 41,860 | |
| | Yulon Motor Co. Ltd. | | | Automobiles | | | | 3,271 | | | | 4,229 | |
| | Zhen Ding Technology Holding Ltd. | | | Electronic Equipment, Instruments & Components | | | | 3,000 | | | | 10,016 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,615,103 | |
| | | | | | | | | | | | | | |
| | | Thailand 2.7% | | | | | | | | | |
| | Advanced Info Service PCL, NVDR | | | Wireless Telecommunication Services | | | | 6,400 | | | | 33,086 | |
| a | | Airports of Thailand Public Co. Ltd., H, NVDR | | | Transportation Infrastructure | | | | 24,400 | | | | 46,898 | |
| | Asset World Corp PCL, H, NVDR | | | Hotels, Restaurants & Leisure | | | | 42,400 | | | | 6,520 | |
| | B Grimm Power PCL, A, NVDR | | | Independent Power Producers & Energy Traders | | | | 4,400 | | | | 3,937 | |
| | Bangkok Bank PCL, A, fgn. | | | Banks | | | | 2,400 | | | | 8,685 | |
| | Bangkok Bank PCL, A, NVDR | | | Banks | | | | 1,200 | | | | 4,343 | |
| | Bangkok Dusit Medical Services PCL, A, NVDR | | | Health Care Providers & Services | | | | 50,400 | | | | 39,417 | |
| | Bangkok Expressway and Metro PCL, H, NVDR | | | Transportation Infrastructure | | | | 44,400 | | | | 10,829 | |
| | Bangkok Life Assurance PCL, A, NVDR | | | Insurance | | | | 2,800 | | | | 2,505 | |
| | Banpu PCL, A, NVDR | | | Oil, Gas & Consumable Fuels | | | | 32,000 | | | | 10,435 | |
| | Berli Jucker PCL, A, NVDR | | | Food & Staples Retailing | | | | 5,600 | | | | 4,862 | |
| | BTS Group Holdings PCL, A, NVDR | | | Road & Rail | | | | 48,000 | | | | 10,562 | |
| | Bumrungrad Hospital PCL, NVDR | | | Health Care Providers & Services | | | | 3,200 | | | | 19,258 | |
| | Carabao Group PCL, A, NVDR | | | Beverages | | | | 2,000 | | | | 4,520 | |
| | Central Pattana PCL, A, NVDR | | | Real Estate Management & Development | | | | 15,600 | | | | 26,986 | |
| | Central Retail Corp. PCL, A, NVDR | | | Multiline Retail | | | | 16,000 | | | | 16,755 | |
| | Charoen Pokphand Foods PCL, A, NVDR | | | Food Products | | | | 28,400 | | | | 18,823 | |
| | CP ALL PCL, B, NVDR | | | Food & Staples Retailing | | | | 34,000 | | | | 50,703 | |
| | Delta Electronics Thailand PCL, A, NVDR | | | Electronic Equipment, Instruments & Components | | | | 1,600 | | | | 27,741 | |
| | Digital Telecommunications Infrastructure Fund, A, fgn. | | | Diversified Financial Services | | | | 29,600 | | | | 10,594 | |
| | Electricity Generating PCL, A, NVDR | | | Independent Power Producers & Energy Traders | | | | 1,600 | | | | 6,999 | |
| | Energy Absolute PCL, A, NVDR | | | Oil, Gas & Consumable Fuels | | | | 9,600 | | | | 22,460 | |
| | Global Power Synergy PCL, NVDR | | | Independent Power Producers & Energy Traders | | | | 4,000 | | | | 6,760 | |
| | Gulf Energy Development PCL, NVDR | | | Independent Power Producers & Energy Traders | | | | 24,400 | | | | 33,961 | |
| | Home Product Center PCL, NVDR, NVDR | | | Specialty Retail | | | | 32,000 | | | | 11,453 | |
| | Indorama Ventures PCL, NVDR | | | Chemicals | | | | 10,000 | | | | 10,339 | |
| | Intouch Holdings PCL, NVDR | | | Wireless Telecommunication Services | | | | 8,000 | | | | 15,430 | |
| | IRPC PCL, NVDR | | | Oil, Gas & Consumable Fuels | | | | 55,600 | | | | 4,599 | |
| | Kasikornbank PCL, fgn. | | | Banks | | | | 6,000 | | | | 23,144 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | |
| | | Thailand (continued) | | | | | | | | | |
| | Kasikornbank PCL, NVDR | | | Banks | | | | 2,000 | | | $ | 7,635 | |
| | Krung Thai Bank PCL, NVDR | | | Banks | | | | 35,200 | | | | 15,584 | |
| | Krungthai Card PCL, NVDR | | | Consumer Finance | | | | 7,500 | | | | 11,433 | |
| | Land and Houses PCL, NVDR | | | Real Estate Management & Development | | | | 47,600 | | | | 11,231 | |
| a | | Minor International PCL, NVDR | | | Hotels, Restaurants & Leisure | | | | 22,800 | | | | 16,018 | |
| | Muangthai Capital PCL, NVDR | | | Consumer Finance | | | | 4,000 | | | | 3,844 | |
| | Osotspa PCL, NVDR | | | Beverages | | | | 7,600 | | | | 5,490 | |
| | PTT Exploration and Production PCL, NVDR | | | Oil, Gas & Consumable Fuels | | | | 8,000 | | | | 34,040 | |
| | PTT Global Chemical PCL, NVDR | | | Chemicals | | | | 11,200 | | | | 12,322 | |
| | PTT Oil & Retail Business PCL, NVDR | | | Specialty Retail | | | | 15,600 | | | | 10,650 | |
| | PTT PCL, NVDR | | | Oil, Gas & Consumable Fuels | | | | 81,200 | | | | 73,192 | |
| | Ratch Group PCL, NVDR | | | Independent Power Producers & Energy Traders | | | | 6,800 | | | | 7,391 | |
| | SCB X PCL | | | Banks | | | | 9,600 | | | | 26,469 | |
| | SCG Packaging PCL, NVDR | | | Containers & Packaging | | | | 6,800 | | | | 9,374 | |
| | Siam City Cement PCL, NVDR | | | Construction Materials | | | | 400 | | | | 1,623 | |
| | Siam Makro Public Company Ltd., NVDR | | | Food & Staples Retailing | | | | 8,000 | | | | 7,158 | |
| | Sri Trang Gloves Thailand PCL, NVDR | | | Health Care Equipment & Supplies | | | | 5,600 | | | | 1,692 | |
| | Srisawad Corp. PCL, NVDR | | | Consumer Finance | | | | 3,600 | | | | 4,104 | |
| | Thai Oil PCL, NVDR | | | Oil, Gas & Consumable Fuels | | | | 6,075 | | | | 8,254 | |
| | Thai Union Group PCL, NVDR | | | Food Products | | | | 16,400 | | | | 8,130 | |
| | The Siam Cement PCL, NVDR | | | Construction Materials | | | | 4,000 | | | | 34,571 | |
| | TMB Bank PCL, NVDR | | | Banks | | | | 240,000 | | | | 7,699 | |
| | Total Access Communication PCL, NVDR | | | Wireless Telecommunication Services | | | | 4,000 | | | | 4,825 | |
| | True Corporation PCL, NVDR | | | Diversified Telecommunication Services | | | | 62,000 | | | | 8,301 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 823,634 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 0.3% | | | | | | | | | |
| | CK Hutchison Holdings Ltd., A | | | Real Estate Management & Development | | | | 15,000 | | | | 82,931 | |
| | | | | | | | | | | | | | |
| | | United States 0.1% | | | | | | | | | |
| b | | JS Global Lifestyle Co. Ltd., 144A | | | Household Durables | | | | 6,000 | | | | 5,801 | |
| | Parade Technologies Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 400 | | | | 7,459 | |
| a,b | | Samsonite International SA, 144A | | | Textiles, Apparel & Luxury Goods | | | | 7,200 | | | | 17,445 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 30,705 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $37,725,806) | | | | | | | | | | | 30,144,540 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 0.6% | | | | | | | | | |
| | | South Korea 0.6% | | | | | | | | | |
| e | | Amorepacific Corp., 2.345%, pfd. | | | Personal Products | | | | 60 | | | | 1,761 | |
| e | | CJ CheilJedang Corp., 4.184%, pfd. | | | Food Products | | | | 8 | | | | 942 | |
| e | | Hyundai Motor Co., 6.093%, pfd. | | | Automobiles | | | | 196 | | | | 11,467 | |
| e | | Hyundai Motor Co., 6.005%, pfd. | | | Automobiles | | | | 128 | | | | 7,524 | |
| e | | LG Chem Ltd., 4.782%, pfd. | | | Chemicals | | | | 45 | | | | 7,926 | |
| e | | LG Electronics Inc., 2.436%, pfd. | | | Household Durables | | | | 88 | | | | 2,273 | |
| e | | LG H&H Co. Ltd., 3.657%, pfd. | | | Personal Products | | | | 12 | | | | 2,764 | |
| e | | Samsung Electronics Co. Ltd., 2.311%, pfd. | | | Technology Hardware, Storage & Peripherals | | | | 4,624 | | | | 151,580 | |
| e | | Samsung Fire & Marine Insurance Co. Ltd., 7.77%, pfd. | | | Insurance | | | | 16 | | | | 1,728 | |
| e | | Samsung SDI Co. Ltd., 0.387%, pfd. | | | Electronic Equipment, Instruments & Components | | | | 8 | | | | 1,515 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $272,013) | | | | | | | | | | | 189,480 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 151 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Asia ex Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Right 0.0%† | | | | | | | | | |
| | | Philippines 0.0%† | | | | | | | | | |
| a | | GLOBE TELECOM Inc. RIGHTS | | | Wireless Telecommunication Services | | | | 12 | | | $ | 72 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $0) | | | | | | | | | | | 72 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $37,997,819) 100.2% | | | | | | | | | | | 30,334,092 | |
| | Other Assets, less Liabilities (0.2)% | | | | | | | | | | | (48,316 | ) |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 30,285,776 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $1,743,205, representing 5.8% 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 September 30, 2022, the value of was $220,645, 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.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 152 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Australia ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 31.55 | | | $ | 29.12 | | | $ | 17.38 | | | $ | 24.63 | | | $ | 24.67 | | | $ | 25.23 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 1.06 | | | | 1.48 | | | | 0.81 | | | | 1.07 | | | | 1.29 | | | | 0.52 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (8.39 | ) | | | 2.47 | | | | 11.55 | | | | (7.18 | ) | | | (0.37 | ) | | | (1.03 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (7.33 | ) | | | 3.95 | | | | 12.36 | | | | (6.11 | ) | | | 0.92 | | | | (0.51 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.89 | ) | | | (1.52 | ) | | | (0.62 | ) | | | (1.14 | ) | | | (0.96 | ) | | | (0.05 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 23.33 | | | $ | 31.55 | | | $ | 29.12 | | | $ | 17.38 | | | $ | 24.63 | | | $ | 24.67 | |
| | | | |
| | | | | | |
Total returnd | | | (23.38)% | | | | 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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 7.72% | | | | 4.93% | | | | 3.25% | | | | 4.28% | | | | 5.30% | | | | 4.96% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $23,326 | | | | $29,968 | | | | $23,295 | | | | $7,820 | | | | $7,389 | | | | $2,467 | |
| | | | | | |
Portfolio turnover ratef | | | 3.13% | g | | | 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: | | | 3.13% | | | | 15.26% | | | | 6.98% | | | | 8.16% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 153 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Australia ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.2% | | | | | | | | | |
| | | Australia 95.4% | | | | | | | | | |
| | Adbri Ltd. | | | Construction Materials | | | | 9,580 | | | $ | 11,333 | |
| | AGL Energy Ltd. | | | Multi-Utilities | | | | 13,960 | | | | 61,393 | |
| a | | Allkem Ltd. | | | Metals & Mining | | | | 12,100 | | | | 107,749 | |
| | ALS Ltd. | | | Professional Services | | | | 9,980 | | | | 65,001 | |
| | Altium Ltd. | | | Software | | | | 2,260 | | | | 50,029 | |
| | Alumina Ltd. | | | Metals & Mining | | | | 52,220 | | | | 42,472 | |
| a | | AMP Ltd. | | | Diversified Financial Services | | | | 68,080 | | | | 47,930 | |
| | Ampol Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,880 | | | | 90,206 | |
| | Ansell Ltd. | | | Health Care Equipment & Supplies | | | | 2,660 | | | | 43,081 | |
| | Apa Group | | | Gas Utilities | | | | 24,400 | | | | 150,448 | |
| | Aristocrat Leisure Ltd. | | | Hotels, Restaurants & Leisure | | | | 13,820 | | | | 292,513 | |
| | Atlas Arteria Ltd. | | | Transportation Infrastructure | | | | 29,856 | | | | 119,591 | |
| | Aurizon Holdings Ltd. | | | Road & Rail | | | | 36,480 | | | | 80,919 | |
| | Australia & New Zealand Banking Group Ltd. | | | Banks | | | | 63,660 | | | | 933,208 | |
| | Australian Stock Exchange Ltd. | | | Capital Markets | | | | 4,000 | | | | 184,552 | |
| | Bank of Queensland Ltd. | | | Banks | | | | 13,340 | | | | 55,836 | |
| | Beach Energy Ltd. | | | Oil, Gas & Consumable Fuels | | | | 36,580 | | | | 34,926 | |
| | Bendigo and Adelaide Bank Ltd. | | | Banks | | | | 11,700 | | | | 58,600 | |
| | BHP Group Ltd. | | | Metals & Mining | | | | 103,940 | | | | 2,574,223 | |
| | BlueScope Steel Ltd. | | | Metals & Mining | | | | 9,700 | | | | 94,734 | |
| | Boral Ltd. | | | Construction Materials | | | | 6,840 | | | | 11,742 | |
| | Brambles Ltd. | | | Commercial Services & Supplies | | | | 28,660 | | | | 210,251 | |
| | carsales.com Ltd. | | | Interactive Media & Services | | | | 6,920 | | | | 83,690 | |
| | Challenger Ltd. | | | Diversified Financial Services | | | | 13,940 | | | | 52,432 | |
| | Charter Hall Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 9,780 | | | | 72,187 | |
| | Cleanaway Waste Management Ltd. | | | Commercial Services & Supplies | | | | 42,460 | | | | 73,982 | |
| | Cochlear Ltd. | | | Health Care Equipment & Supplies | | | | 1,320 | | | | 165,105 | |
| | Coles Group Ltd. | | | Food & Staples Retailing | | | | 26,240 | | | | 277,191 | |
| | Commonwealth Bank of Australia | | | Banks | | | | 35,280 | | | | 2,057,373 | |
| | Computershare Ltd. | | | IT Services | | | | 11,060 | | | | 176,069 | |
| | CSL Ltd. | | | Biotechnology | | | | 9,940 | | | | 1,821,541 | |
| | CSR Ltd. | | | Construction Materials | | | | 10,080 | | | | 28,840 | |
| | Deterra Royalties Ltd. | | | Metals & Mining | | | | 8,760 | | | | 22,529 | |
| | Dexus | | | Equity Real Estate Investment Trusts (REITs | ) | | | 22,220 | | | | 110,291 | |
| | Domain Holdings Australia Ltd. | | | Interactive Media & Services | | | | 5,200 | | | | 10,766 | |
| | Domino’s Pizza Enterprises Ltd. | | | Hotels, Restaurants & Leisure | | | | 1,260 | | | | 41,737 | |
| | Downer EDI Ltd. | | | Commercial Services & Supplies | | | | 14,020 | | | | 41,195 | |
| | Endeavour Group Ltd. | | | Food & Staples Retailing | | | | 26,240 | | | | 118,097 | |
| | Evolution Mining Ltd. | | | Metals & Mining | | | | 35,780 | | | | 47,160 | |
| a | | Flight Centre Travel Group Ltd. | | | Hotels, Restaurants & Leisure | | | | 3,000 | | | | 27,428 | |
| | Fortescue Metals Group Ltd. | | | Metals & Mining | | | | 32,880 | | | | 355,578 | |
| | Goodman Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 37,860 | | | | 384,118 | |
| | Harvey Norman Holdings Ltd. | | | Multiline Retail | | | | 12,280 | | | | 31,898 | |
| | IDP Education Ltd. | | | Diversified Consumer Services | | | | 3,720 | | | | 63,310 | |
| | IGO Ltd. | | | Metals & Mining | | | | 12,880 | | | | 113,452 | |
| | Iluka Resources Ltd. | | | Metals & Mining | | | | 8,720 | | | | 50,795 | |
| | Incitec Pivot Ltd. | | | Chemicals | | | | 40,240 | | | | 90,812 | |
| | Insignia Financial Ltd. | | | Capital Markets | | | | 13,300 | | | | 25,226 | |
| | Insurance Australia Group Ltd. | | | Insurance | | | | 50,960 | | | | 150,718 | |
| | JB Hi-Fi Ltd. | | | Specialty Retail | | | | 2,260 | | | | 55,158 | |
| | Lendlease Corp. Ltd. | | | Real Estate Management & Development | | | | 14,200 | | | | 81,439 | |
| a | | Lottery Corp. Ltd. | | | Hotels, Restaurants & Leisure | | | | 45,780 | | | | 123,035 | |
| a | | Lynas Rare Earths Ltd. | | | Metals & Mining | | | | 18,600 | | | | 90,409 | |
| | Macquarie Group Ltd. | | | Capital Markets | | | | 7,180 | | | | 705,106 | |
| | Magellan Financial Group Ltd. | | | Capital Markets | | | | 2,900 | | | | 20,995 | |
| | Medibank Private Ltd. | | | Insurance | | | | 56,960 | | | | 127,080 | |
| | Metcash Ltd. | | | Food & Staples Retailing | | | | 20,100 | | | | 50,013 | |
| | | | | | | | | | |
| | | | | | |
| 154 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Australia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Australia (continued) | | | | | | | | | |
| | Mineral Resources Ltd. | | | Metals & Mining | | | | 3,440 | | | $ | 145,422 | |
| | Mirvac Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 81,500 | | | | 101,919 | |
| | National Australia Bank Ltd. | | | Banks | | | | 65,620 | | | | 1,215,505 | |
| | Newcrest Mining Ltd. | | | Metals & Mining | | | | 18,400 | | | | 200,168 | |
| a | | NEXTDC Ltd. | | | IT Services | | | | 9,420 | | | | 53,419 | |
| | Northern Star Resources Ltd. | | | Metals & Mining | | | | 23,520 | | | | 118,407 | |
| | Nufarm Ltd. | | | Chemicals | | | | 7,800 | | | | 25,075 | |
| | Orica Ltd. | | | Chemicals | | | | 9,220 | | | | 78,368 | |
| | Origin Energy Ltd. | | | Oil, Gas & Consumable Fuels | | | | 35,480 | | | | 117,937 | |
| | Orora Ltd. | | | Containers & Packaging | | | | 17,640 | | | | 34,025 | |
| | OZ Minerals Ltd. | | | Metals & Mining | | | | 6,780 | | | | 112,380 | |
| | Perpetual Ltd. | | | Capital Markets | | | | 1,160 | | | | 17,594 | |
| a | | Pilbara Minerals Ltd. | | | Metals & Mining | | | | 54,260 | | | | 159,082 | |
| | Platinum Asset Management Ltd. | | | Capital Markets | | | | 10,920 | | | | 11,936 | |
| | Pro Medicus Ltd. | | | Health Care Technology | | | | 860 | | | | 27,752 | |
| a | | Qantas Airways Ltd. | | | Airlines | | | | 17,180 | | | | 55,450 | |
| | QBE Insurance Group Ltd. | | | Insurance | | | | 30,560 | | | | 226,548 | |
| | Qube Logistics Holdings Ltd. | | | Transportation Infrastructure | | | | 34,280 | | | | 54,660 | |
| | Ramsay Health Care Ltd. | | | Health Care Providers & Services | | | | 3,620 | | | | 133,318 | |
| | REA Group Ltd. | | | Media | | | | 1,040 | | | | 76,797 | |
| | Reece Ltd. | | | Trading Companies & Distributors | | | | 4,420 | | | | 39,843 | |
| | Rio Tinto Ltd. | | | Metals & Mining | | | | 7,680 | | | | 461,146 | |
| | Santos Ltd. | | | Oil, Gas & Consumable Fuels | | | | 63,480 | | | | 289,375 | |
| | Scentre Group | | | Real Estate Investment Trusts (REITs | ) | | | 106,900 | | | | 174,578 | |
| | SEEK Ltd. | | | Professional Services | | | | 7,220 | | | | 88,989 | |
| | Seven Group Holdings Ltd. | | | Trading Companies & Distributors | | | | 2,940 | | | | 32,040 | |
| | Shopping Centres Australasia Property Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 23,180 | | | | 35,023 | |
| a | | Sierra Rutile Holdings Ltd. | | | Metals & Mining | | | | 8,720 | | | | 1,177 | |
| | Sonic Healthcare Ltd. | | | Health Care Providers & Services | | | | 9,880 | | | | 194,255 | |
| | South32 Ltd. | | | Metals & Mining | | | | 95,920 | | | | 223,868 | |
| a | | Star Entertainment Grp Ltd. | | | Hotels, Restaurants & Leisure | | | | 17,820 | | | | 29,560 | |
| | Stockland | | | Real Estate Investment Trusts (REITs | ) | | | 49,340 | | | | 103,735 | |
| | Suncorp-Metway Ltd. | | | Insurance | | | | 26,000 | | | | 167,668 | |
| | Tabcorp Holdings Ltd. | | | Hotels, Restaurants & Leisure | | | | 45,700 | | | | 27,473 | |
| | Telstra Corp. Ltd. | | | Diversified Telecommunication Services | | | | 84,140 | | | | 208,277 | |
| | The GPT Group | | | Equity Real Estate Investment Trusts (REITs | ) | | | 39,800 | | | | 98,007 | |
| | TPG Telecom Limited | | | Diversified Telecommunication Services | | | | 7,620 | | | | 23,762 | |
| | Transurban Group | | | Transportation Infrastructure | | | | 63,480 | | | | 503,650 | |
| | Treasury Wine Estates Ltd. | | | Beverages | | | | 14,940 | | | | 120,743 | |
| | Vicinity Centres | | | Real Estate Investment Trusts (REITs | ) | | | 77,940 | | | | 86,943 | |
| | Washington H Soul Pattinson & Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 5,520 | | | | 95,080 | |
| | Wesfarmers Ltd. | | | Multiline Retail | | | | 23,400 | | | | 642,724 | |
| | Westpac Banking Corp. | | | Banks | | | | 71,980 | | | | 955,210 | |
| | Whitehaven Coal Ltd. | | | Oil, Gas & Consumable Fuels | | | | 16,540 | | | | 95,816 | |
| | WiseTech Global Ltd. | | | Software | | | | 3,260 | | | | 108,993 | |
| | Woodside Petroleum Ltd. | | | Oil, Gas & Consumable Fuels | | | | 39,080 | | | | 795,505 | |
| | Woolworths Group Ltd. | | | Food & Staples Retailing | | | | 25,080 | | | | 547,450 | |
| | Worley Ltd. | | | Energy Equipment & Services | | | | 7,780 | | | | 63,677 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 22,247,821 | |
| | | | | | | | | | | | | | |
| | | Ireland 0.8% | | | | | | | | | |
| | James Hardie Industries PLC | | | Construction Materials | | | | 9,120 | | | | 180,836 | |
| | | | | | | | | | | | | | |
| | | New Zealand 0.5% | | | | | | | | | |
| a | | Xero Ltd. | | | Software | | | | 2,620 | | | | 123,830 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 1.4% | | | | | | | | | |
| | Amcor PLC, IDR | | | Containers & Packaging | | | | 31,100 | | | | 332,729 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 155 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Australia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States 0.1% | | | | | | | | | |
| | Sims Ltd. | | | Metals & Mining | | | | 3,320 | | | $ | 28,561 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $25,399,172) 98.2% | | | | | | | | | | | 22,913,777 | |
| | Other Assets, less Liabilities 1.8% | | | | | | | | | | | 412,240 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 23,326,017 | |
| | | | | | | | | | | | | | |
aNon-income producing.
At September 30, 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 | | | | | | | | | | | | | | | |
SPI 200 Index | | | Long | | | | 4 | | | $ | 415,731 | | | | 12/15/22 | | | $ | (30,610 | ) |
*As of period end.
See 335 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 156 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Brazil ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 23.56 | | | $ | 20.70 | | | $ | 14.46 | | | $ | 25.72 | | | $ | 27.87 | | | $ | 24.37 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 1.45 | | | | 1.84 | | | | 0.46 | | | | 1.07 | | | | 0.80 | | | | 0.50 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (5.90 | ) | | | 2.55 | | | | 6.31 | | | | (11.33 | ) | | | (2.07 | ) | | | 3.11 | |
| | | | |
| | | | | | |
Total from investment operations | | | (4.45 | ) | | | 4.39 | | | | 6.77 | | | | (10.26 | ) | | | (1.27 | ) | | | 3.61 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (1.03 | ) | | | (1.53 | ) | | | (0.53 | ) | | | (1.00 | ) | | | (0.88 | ) | | | (0.11 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 18.08 | | | $ | 23.56 | | | $ | 20.70 | | | $ | 14.46 | | | $ | 25.72 | | | $ | 27.87 | |
| | | | |
| | | | | | |
Total returnd | | | (18.70)% | | | | 23.03% | | | | 46.83% | | | | (41.69)% | | | | (3.98)% | | | | 14.86% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total expenses | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.23% | | | | 0.19% | | | | 0.19% | |
| | | | | | |
Net investment income | | | 14.67% | | | | 8.87% | | | | 2.43% | | | | 4.26% | | | | 3.37% | | | | 4.53% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $280,200 | | | | $527,820 | | | | $107,656 | | | | $102,700 | | | | $20,579 | | | | $44,593 | |
| | | | | | |
Portfolio turnover ratef | | | 22.89% | g | | | 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.
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: | | | 8.63% | | | | 14.95% | | | | 9.31% | | | | 17.47% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 157 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Brazil ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 71.8% | | | | | | | | | |
| | | Brazil 70.1% | | | | | | | | | |
| | Ambev SA | | | Beverages | | | | 3,255,000 | | | $ | 9,351,840 | |
| | Americanas SA | | | Internet & Catalog Retail | | | | 496,000 | | | | 1,557,093 | |
| | Atacadao SA | | | Food & Staples Retailing | | | | 387,500 | | | | 1,384,837 | |
| | Auren Energia SA | | | Independent Power Producers & Energy Traders | | | | 263,543 | | | | 660,216 | |
| | B3 SA – Brasil Bolsa Balcao | | | Capital Markets | | | | 4,541,500 | | | | 10,957,334 | |
| | Banco Bradesco SA | | | Banks | | | | 1,131,500 | | | | 3,411,957 | |
| | Banco BTG Pactual SA | | | Capital Markets | | | | 868,000 | | | | 3,981,453 | |
| | Banco do Brasil SA | | | Banks | | | | 635,504 | | | | 4,525,844 | |
| | Banco Santander Brasil SA | | | Banks | | | | 279,000 | | | | 1,565,002 | |
| | BB Seguridade Participacoes SA | | | Insurance | | | | 496,000 | | | | 2,436,511 | |
| | BR Malls Participacoes SA | | | Real Estate Management & Development | | | | 620,000 | | | | 1,080,932 | |
| | Bradespar SA | | | Metals & Mining | | | | 24,630 | | | | 101,319 | |
| a | | BRF SA | | | Food Products | | | | 589,000 | | | | 1,402,575 | |
| | Caixa Seguridade Participacoes S/A | | | Insurance | | | | 341,000 | | | | 536,511 | |
| | CCR SA | | | Transportation Infrastructure | | | | 837,000 | | | | 1,938,972 | |
| | Centrais Eletricas Brasileiras SA | | | Electric Utilities | | | | 930,000 | | | | 7,388,280 | |
| | Cia de Saneamento Basico do Estado de Sao Paulo | | | Water Utilities | | | | 248,000 | | | | 2,274,199 | |
| | Cia Energetica de Minas Gerais | | | Electric Utilities | | | | 248,000 | | | | 742,783 | |
| | Cia Paranaense de Energia | | | Electric Utilities | | | | 232,500 | | | | 266,508 | |
| | Cia Siderurgica Nacional SA | | | Metals & Mining | | | | 465,000 | | | | 1,093,541 | |
| | Cielo SA | | | IT Services | | | | 852,500 | | | | 851,105 | |
| | Cosan SA | | | Oil, Gas & Consumable Fuels | | | | 899,000 | | | | 2,888,714 | |
| | CPFL Energia SA | | | Electric Utilities | | | | 139,500 | | | | 870,706 | |
| | CSN Mineracao SA | | | Metals & Mining | | | | 387,500 | | | | 237,135 | |
| | Dexco SA | | | Paper & Forest Products | | | | 232,500 | | | | 401,911 | |
| | Diagnosticos da America SA | | | Health Care Providers & Services | | | | 62,000 | | | | 216,186 | |
| | EDP – Energias do Brasil SA | | | Electric Utilities | | | | 201,500 | | | | 813,250 | |
| a | | Embraer SA | | | Aerospace & Defense | | | | 542,500 | | | | 1,168,479 | |
| | Energisa SA | | | Electric Utilities | | | | 186,080 | | | | 1,441,136 | |
| a | | Eneva SA | | | Independent Power Producers & Energy Traders | | | | 914,500 | | | | 2,392,408 | |
| | Engie Brasil Energia SA | | | Independent Power Producers & Energy Traders | | | | 139,500 | | | | 993,214 | |
| | Equatorial Energia SA | | | Electric Utilities | | | | 697,500 | | | | 3,468,898 | |
| b | | GPS Participacoes e Empreendimentos SA, 144A | | | Commercial Services & Supplies | | | | 310,000 | | | | 770,293 | |
| | Grendene SA | | | Textiles, Apparel & Luxury Goods | | | | 248,000 | | | | 324,165 | |
| | GRUPO DE MODA SOMA SA | | | Textiles, Apparel & Luxury Goods | | | | 325,500 | | | | 801,586 | |
| a | | Grupo Mateus SA | | | Food & Staples Retailing | | | | 305,600 | | | | 372,900 | |
| b | | Hapvida Participacoes e Investimentos S/A, 144A | | | Health Care Providers & Services | | | | 2,991,500 | | | | 4,186,778 | |
| | Hypera SA | | | Pharmaceuticals | | | | 294,500 | | | | 2,409,315 | |
| | Itau Unibanco Holding SA | | | Banks | | | | 341,000 | | | | 1,482,814 | |
| | Klabin SA | | | Containers & Packaging | | | | 573,500 | | | | 1,924,443 | |
| | Localiza Rent a Car SA | | | Road & Rail | | | | 580,949 | | | | 6,561,501 | |
| | Lojas Renner SA | | | Multiline Retail | | | | 728,500 | | | | 3,751,024 | |
| | M Dias Branco SA | | | Food Products | | | | 93,000 | | | | 753,271 | |
| a | | Magazine Luiza SA | | | Multiline Retail | | | | 2,278,500 | | | | 1,887,218 | |
| | Marfrig Global Foods SA | | | Food Products | | | | 263,500 | | | | 480,831 | |
| | Multiplan Empreendimentos Imobiliarios SA | | | Real Estate Management & Development | | | | 201,500 | | | | 900,423 | |
| | Natura & Co. Holding SA | | | Personal Products | | | | 713,016 | | | | 1,941,767 | |
| | Neoenergia SA | | | Electric Utilities | | | | 170,500 | | | | 482,293 | |
| | Odontoprev SA | | | Health Care Providers & Services | | | | 217,020 | | | | 353,084 | |
| a | | Petro Rio SA | | | Oil, Gas & Consumable Fuels | | | | 496,000 | | | | 2,524,544 | |
| | Petroleo Brasileiro SA | | | Oil, Gas & Consumable Fuels | | | | 2,774,500 | | | | 16,968,572 | |
| | Porto Seguro SA | | | Insurance | | | | 139,500 | | | | 544,965 | |
| | Raia Drogasil SA | | | Food & Staples Retailing | | | | 806,043 | | | | 3,387,293 | |
| b | | Rede D’Or Sao Luiz SA, 144A | | | Health Care Providers & Services | | | | 356,500 | | | | 1,958,860 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Brazil ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Brazil (continued) | | | | | | | | | |
| | Rumo SA | | | Road & Rail | | | | 930,000 | | | $ | 3,177,459 | |
| | Sao Martinho SA | | | Food Products | | | | 124,400 | | | | 586,943 | |
| | Sendas Distribuidora SA | | | Food & Staples Retailing | | | | 589,000 | | | | 1,911,118 | |
| | SIMPAR SA | | | Road & Rail | | | | 217,000 | | | | 387,554 | |
| | SLC Agricola SA | | | Food Products | | | | 77,500 | | | | 620,275 | |
| a | | Smartfit Escola de Ginastica e Danca SA | | | Hotels, Restaurants & Leisure | | | | 93,000 | | | | 261,349 | |
| | Sul America SA | | | Insurance | | | | 294,541 | | | | 1,201,286 | |
| | Suzano SA | | | Paper & Forest Products | | | | 542,500 | | | | 4,463,287 | |
| | Telefonica Brasil SA | | | Diversified Telecommunication Services | | | | 325,500 | | | | 2,436,654 | |
| | TIM SA | | | Wireless Telecommunication Services | | | | 604,500 | | | | 1,350,076 | |
| | Totvs SA | | | Software | | | | 341,000 | | | | 1,850,366 | |
| | Transmissora Alianca de Energia Eletrica SA | | | Electric Utilities | | | | 170,500 | | | | 1,227,798 | |
| | Ultrapar Participacoes SA | | | Oil, Gas & Consumable Fuels | | | | 620,000 | | | | 1,344,574 | |
| | Usinas Siderurgicas de Minas Gerais SA Usiminas . | | | Metals & Mining | | | | 124,000 | | | | 187,988 | |
| | Vale SA | | | Metals & Mining | | | | 2,903,989 | | | | 38,677,975 | |
| | Vamos Locacao de Caminhoes Maquinas e Equipamentos SA | | | Road & Rail | | | | 139,500 | | | | 352,564 | |
| | Vibra Energia SA | | | Specialty Retail | | | | 837,000 | | | | 2,669,375 | |
| | WEG SA | | | Machinery | | | | 1,116,000 | | | | 6,631,399 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 196,506,829 | |
| | | | | | | | | | | | | | |
| | | United States 1.7% | | | | | | | | | |
| | JBS SA | | | Food Products | | | | 1,007,500 | | | | 4,679,072 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $208,197,909) | | | | | | | | | | | 201,185,901 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 27.3% | | | | | | | | | |
| | | Brazil 27.3% | | | | | | | | | |
| | Alpargatas SA, 2.045%, pfd. | | | Textiles, Apparel & Luxury Goods | | | | 170,500 | | | | 670,482 | |
| | Banco Bradesco SA, 3.165%, pfd. | | | Banks | | | | 3,890,500 | | | | 14,270,597 | |
| | Bradespar SA, 32.075%, pfd. | | | Metals & Mining | | | | 186,084 | | | | 817,430 | |
| | Braskem SA, 35.194%, pfd., A | | | Chemicals | | | | 134,900 | | | | 654,442 | |
| | Centrais Eletricas Brasileiras SA, 3.575%, pfd., B | | | Electric Utilities | | | | 201,500 | | | | 1,682,007 | |
| | Cia de Transmissao de Energia Eletrica Paulista, 6.461%, pfd. | | | Electric Utilities | | | | 139,500 | | | | 592,421 | |
| | Cia Paranaense de Energia, 17.781%, pfd. | | | Electric Utilities | | | | 992,000 | | | | 1,206,793 | |
| | Companhia Energetica de Minas Gerais, 12.825%, pfd. | | | Electric Utilities | | | | 945,500 | | | | 1,880,914 | |
| | Gerdau SA, 14.894%, pfd. | | | Metals & Mining | | | | 790,500 | | | | 3,571,890 | |
| | Itau Unibanco Holding SA, 2.937%, pfd. | | | Banks | | | | 3,611,500 | | | | 18,735,718 | |
| | Itausa SA, 5.807%, pfd. | | | Banks | | | | 3,549,500 | | | | 6,385,208 | |
| | Metalurgica Gerdau SA, 21.719%, pfd. | | | Metals & Mining | | | | 542,500 | | | | 1,062,162 | |
| | Petroleo Brasileiro SA, 38.601%, pfd. | | | Oil, Gas & Consumable Fuels | | | | 4,185,000 | | | | 23,057,212 | |
| | Raizen SA, 1.575%, pfd. | | | Oil, Gas & Consumable Fuels | | | | 883,500 | | | | 684,409 | |
| | Unipar Carbocloro SA, 16.852%, pfd., B | | | Chemicals | | | | 34,540 | | | | 612,976 | |
| | Usinas Siderurgicas de Minas Gerais SA Usiminas, 10.931%, pfd., A | | | Metals & Mining | | | | 341,000 | | | | 474,097 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks
(Cost $75,710,982) | | | | | | | | | | | 76,358,758 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 159 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Brazil ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Right 0.0%† | | | | | | | | | |
| | | Brazil 0.0%† | | | | | | | | | |
| | Localiza Rent a Car SA | | | Road & Rail | | | | 1,782 | | | $ | 3,624 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $0) | | | | | | | | | | | 3,624 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $283,908,891) 99.1% | | | | | | | | | | | 277,548,283 | |
| | Other Assets, less Liabilities 0.9% | | | | | | | | | | | 2,652,215 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 280,200,498 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $6,915,931, representing 2.5% of net assets.
At September 30, 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 | | | | 115 | | | $ | 2,349,433 | | | | 10/13/22 | | | $ | (88,239 | ) |
*As of period end.
See 335 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 160 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Canada ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 36.07 | | | $ | 30.20 | | | $ | 19.50 | | | $ | 24.13 | | | $ | 23.77 | | | $ | 24.80 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.47 | | | | 0.80 | | | | 0.75 | | | | 0.69 | | | | 0.67 | | | | 0.24 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (8.35 | ) | | | 5.77 | | | | 10.63 | | | | (4.72 | ) | | | 0.33 | | | | (1.25 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (7.88 | ) | | | 6.57 | | | | 11.38 | | | | (4.03 | ) | | | 1.00 | | | | (1.01 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.05 | ) | | | (0.70 | ) | | | (0.68 | ) | | | (0.60 | ) | | | (0.64 | ) | | | (0.02 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 28.14 | | | $ | 36.07 | | | $ | 30.20 | | | $ | 19.50 | | | $ | 24.13 | | | $ | 23.77 | |
| | | | |
| | | | | | |
Total returnd | | | (21.85)% | | | | 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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 3.05% | | | | 2.37% | | | | 2.88% | | | | 2.73% | | | | 2.79% | | | | 2.39% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $258,861 | | | | $43,289 | | | | $24,160 | | | | $4,876 | | | | $4,827 | | | | $2,377 | |
| | | | | | |
Portfolio turnover ratef | | | 3.26% | g | | | 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: | | | 3.26% | | | | 5.63% | | | | 3.14% | | | | 4.57% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 161 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Canada ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.6% | | | | | | | | | |
| | | Canada 97.2% | | | | | | | | | |
| | Agnico Eagle Mines Ltd. | | | Metals & Mining | | | | 82,616 | | | $ | 3,508,948 | |
| | Alimentation Couche-Tard Inc. | | | Food & Staples Retailing | | | | 141,496 | | | | 5,726,569 | |
| | Bank of Montreal | | | Banks | | | | 122,176 | | | | 10,765,146 | |
| | Bank of Nova Scotia | | | Banks | | | | 218,040 | | | | 10,425,551 | |
| | Barrick Gold Corp. | | | Metals & Mining | | | | 321,264 | | | | 5,005,831 | |
| | BCE Inc. | | | Diversified Telecommunication Services | | | | 54,832 | | | | 2,311,320 | |
| | Brookfield Asset Management Inc., A | | | Capital Markets | | | | 241,040 | | | | 9,913,155 | |
| | Canadian Imperial Bank of Commerce | | | Banks | | | | 159,712 | | | | 7,027,537 | |
| | Canadian National Railway Co. | | | Road & Rail | | | | 111,136 | | | | 12,065,986 | |
| | Canadian Natural Resources Ltd. | | | Oil, Gas & Consumable Fuels | | | | 198,720 | | | | 9,299,295 | |
| | Canadian Pacific Railway Ltd. | | | Road & Rail | | | | 168,176 | | | | 11,285,986 | |
| | Canadian Tire Corp. Ltd., A | | | Multiline Retail | | | | 9,936 | | | | 1,063,345 | |
| | Canadian Utilities Ltd., A | | | Multi-Utilities | | | | 21,896 | | | | 572,558 | |
| | Cenovus Energy Inc. | | | Oil, Gas & Consumable Fuels | | | | 222,824 | | | | 3,441,160 | |
| a | | CGI Inc. | | | IT Services | | | | 38,272 | | | | 2,896,478 | |
| | Constellation Software Inc. | | | Software | | | | 3,466 | | | | 4,848,414 | |
| | Dollarama Inc. | | | Multiline Retail | | | | 50,048 | | | | 2,888,400 | |
| | Enbridge Inc. | | | Oil, Gas & Consumable Fuels | | | | 366,344 | | | | 13,656,082 | |
| | Fairfax Financial Holdings Ltd. | | | Insurance | | | | 3,874 | | | | 1,778,733 | |
| | Fortis Inc. | | | Electric Utilities | | | | 86,480 | | | | 3,302,988 | |
| | Franco-Nevada Corp. | | | Metals & Mining | | | | 34,408 | | | | 4,131,815 | |
| | George Weston Ltd. | | | Food & Staples Retailing | | | | 12,696 | | | | 1,336,358 | |
| | Great-West Lifeco Inc. | | | Insurance | | | | 48,944 | | | | 1,062,196 | |
| b | | Hydro One Ltd., 144A | | | Electric Utilities | | | | 57,224 | | | | 1,406,810 | |
| | IGM Financial Inc. | | | Capital Markets | | | | 14,720 | | | | 368,737 | |
| | Imperial Oil Ltd. | | | Oil, Gas & Consumable Fuels | | | | 34,960 | | | | 1,521,748 | |
| | Intact Financial Corp. | | | Insurance | | | | 31,832 | | | | 4,528,829 | |
| | Loblaw Companies Ltd. | | | Food & Staples Retailing | | | | 28,152 | | | | 2,241,014 | |
| | Magna International Inc. | | | Auto Components | | | | 48,760 | | | | 2,325,420 | |
| | Manulife Financial Corp. | | | Insurance | | | | 345,368 | | | | 5,449,276 | |
| | Metro Inc., A | | | Food & Staples Retailing | | | | 43,240 | | | | 2,176,712 | |
| | National Bank of Canada | | | Banks | | | | 60,904 | | | | 3,837,610 | |
| | Nutrien Ltd. | | | Chemicals | | | | 97,520 | | | | 8,176,052 | |
| | Pembina Pipeline Corp. | | | Oil, Gas & Consumable Fuels | | | | 99,728 | | | | 3,045,440 | |
| | Power Corp. of Canada | | | Insurance | | | | 97,336 | | | | 2,205,211 | |
| | Restaurant Brands International Inc. | | | Hotels, Restaurants & Leisure | | | | 54,648 | | | | 2,922,408 | |
| | Royal Bank of Canada | | | Banks | | | | 253,920 | | | | 22,983,174 | |
| | Saputo Inc. | | | Food Products | | | | 43,424 | | | | 1,040,684 | |
| | Shaw Communications Inc. | | | Media | | | | 77,280 | | | | 1,889,185 | |
| a | | Shopify Inc., A | | | IT Services | | | | 205,759 | | | | 5,569,067 | |
| | Sun Life Financial Inc. | | | Insurance | | | | 106,168 | | | | 4,244,247 | |
| | Suncor Energy Inc. | | | Oil, Gas & Consumable Fuels | | | | 247,112 | | | | 6,995,857 | |
| | TC Energy Corp. | | | Oil, Gas & Consumable Fuels | | | | 182,712 | | | | 7,398,636 | |
| a | | Teck Resources Ltd., B | | | Metals & Mining | | | | 83,536 | | | | 2,554,017 | |
| | TELUS Corp. | | | Diversified Telecommunication Services | | | | 85,192 | | | | 1,700,678 | |
| | The Toronto-Dominion Bank | | | Banks | | | | 329,176 | | | | 20,296,052 | |
| | Thomson Reuters Corp. | | | Professional Services | | | | 29,808 | | | | 3,076,143 | |
| | Tourmaline Oil Corp. | | | Oil, Gas & Consumable Fuels | | | | 51,152 | | | | 2,672,539 | |
| | Wheaton Precious Metals Corp. | | | Metals & Mining | | | | 81,328 | | | | 2,647,503 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 251,586,900 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 162 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Canada ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States 2.4% | | | | | | | | | |
| | Waste Connections Inc. | | | Commercial Services & Supplies | | | | 46,368 | | | $ | 6,298,597 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $300,579,922) 99.6% | | | | | | | | | | | 257,885,497 | |
| | Other Assets, less Liabilities 0.4% | | | | | | | | | | | 975,758 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 258,861,255 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $1,406,810, representing 0.5% of net assets.
At September 30, 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/TSX 60 Index | | | Long | | | | 5 | | | $ | 812,198 | | | | 12/15/22 | | | $ | (27,595 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 163 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE China ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
|
Per share operating performance
(for a share outstanding throughout the period) | |
| | | | | | |
Net asset value, beginning of period | | $ | 21.43 | | | $ | 31.78 | | | $ | 22.19 | | | $ | 24.01 | | | $ | 25.99 | | | $ | 24.95 | |
| | | | |
|
| Income from investment operationsb: | |
| | | | | | |
Net investment income (loss)c | | | 0.41 | | | | 0.49 | | | | 0.32 | | | | 0.45 | | | | 0.40 | | | | (0.01 | ) |
| | | | | | |
Net realized and unrealized gains (losses) | | | (4.76 | ) | | | (10.47 | ) | | | 9.56 | | | | (1.78 | ) | | | (1.99 | ) | | | 1.05 | |
| | | | |
| | | | | | |
Total from investment operations | | | (4.35 | ) | | | (9.98 | ) | | | 9.88 | | | | (1.33 | ) | | | (1.59 | ) | | | 1.04 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.14 | ) | | | (0.37 | ) | | | (0.29 | ) | | | (0.49 | ) | | | (0.39 | ) | | | — | d |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 16.94 | | | $ | 21.43 | | | $ | 31.78 | | | $ | 22.19 | | | $ | 24.01 | | | $ | 25.99 | |
| | | | |
| | | | | | |
Total returne | | | (20.42)% | | | | (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% | | | | 0.19% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | |
| | | | | | |
Net investment income (loss) | | | 4.11% | | | | 1.80% | | | | 1.06% | | | | 1.94% | | | | 1.70% | | | | (0.12)% | |
|
| Supplemental data | |
| | | | | | |
Net assets, end of period (000’s) | | | $91,484 | | | | $111,454 | | | | $120,782 | | | | $48,807 | | | | $43,220 | | | | $31,191 | |
| | | | | | |
Portfolio turnover rateg | | | 5.46% | h | | | 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”).
| | | | | | | | | | | | | | | | | | | | |
| h Portfolio turnover rate excluding cash creations was as follows: | | | 5.46% | | | | 12.00% | | | | 15.31% | | | 32.47% | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 164 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE China ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.9% | | | | | | | | | |
| | | China 95.3% | | | | | | | | | |
| | 360 DigiTech Inc. | | | Consumer Finance | | | | 6,480 | | | $ | 83,074 | |
| | 360 Security Technology Inc., A | | | Software | | | | 27,000 | | | | 24,617 | |
| | 3peak Inc., A | | | Semiconductors & Semiconductor Equipment | | | | 321 | | | | 10,502 | |
| a | | 3SBio Inc., A, 144A | | | Biotechnology | | | | 67,500 | | | | 47,896 | |
| | Addsino Co. Ltd., A | | | Communications Equipment | | | | 5,400 | | | | 7,537 | |
| b | | Advanced Micro-Fabrication Equipment Inc. China, A | | | Semiconductors & Semiconductor Equipment | | | | 2,040 | | | | 30,867 | |
| | AECC Aero-Engine Control Co. Ltd., A | | | Aerospace & Defense | | | | 5,400 | | | | 19,027 | |
| | AECC Aviation Power Co. Ltd., A | | | Aerospace & Defense | | | | 8,100 | | | | 47,663 | |
| | Agile Group Holdings Ltd. | | | Real Estate Management & Development | | | | 74,000 | | | | 17,345 | |
| | Agricultural Bank of China Ltd., A | | | Banks | | | | 332,100 | | | | 133,229 | |
| | Agricultural Bank of China Ltd., H | | | Banks | | | | 1,485,000 | | | | 444,560 | |
| | Aier Eye Hospital Group Co. Ltd., A | | | Health Care Providers & Services | | | | 22,741 | | | | 91,453 | |
| b | | Air China Ltd., A | | | Airlines | | | | 16,200 | | | | 23,792 | |
| b | | Air China Ltd., H | | | Airlines | | | | 78,000 | | | | 59,619 | |
| a,b | | Akeso Inc., 144A | | | Biotechnology | | | | 27,000 | | | | 74,638 | |
| b | | Alibaba Group Holding Ltd., A | | | Internet & Catalog Retail | | | | 738,717 | | | | 7,335,506 | |
| a | | A-Living Services Co. Ltd., H, 144A | | | Commercial Services & Supplies | | | | 33,750 | | | | 26,742 | |
| | Aluminum Corp. of China Ltd., A | | | Metals & Mining | | | | 45,900 | | | | 26,590 | |
| | Aluminum Corp. of China Ltd., H | | | Metals & Mining | | | | 216,000 | | | | 70,717 | |
| b | | Amlogic Shanghai Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 1,456 | | | | 13,273 | |
| | Angang Steel Co. Ltd., A | | | Metals & Mining | | | | 21,600 | | | | 8,120 | |
| | Angang Steel Co. Ltd., H | | | Metals & Mining | | | | 72,000 | | | | 17,794 | |
| | Angel Yeast Co. Ltd., A | | | Food Products | | | | 2,700 | | | | 15,747 | |
| a | | Angelalign Technology Inc., 144A | | | Health Care Equipment & Supplies | | | | 1,200 | | | | 11,519 | |
| | Anhui Anke Biotechnology Group Co. Ltd., A | | | Pharmaceuticals | | | | 6,516 | | | | 8,235 | |
| | Anhui Conch Cement Co. Ltd., A | | | Construction Materials | | | | 13,500 | | | | 54,556 | |
| | Anhui Conch Cement Co. Ltd., H | | | Construction Materials | | | | 59,400 | | | | 188,418 | |
| | Anhui Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 18,000 | | | | 11,442 | |
| | Anhui Gujing Distillery Co. Ltd., A | | | Beverages | | | | 1,500 | | | | 57,219 | |
| | Anhui Gujing Distillery Co. Ltd., B | | | Beverages | | | | 5,900 | | | | 87,186 | |
| | Anhui Zhongding Sealing Parts Co. Ltd., A | | | Auto Components | | | | 5,400 | | | | 10,612 | |
| | Anta Sports Products Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 57,110 | | | | 605,301 | |
| | Apeloa Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 12,437 | |
| | Asymchem Laboratories Tianjin Co. Ltd., A | | | Pharmaceuticals | | | | 700 | | | | 13,619 | |
| | Autohome Inc., ADR | | | Software | | | | 3,024 | | | | 86,970 | |
| | Avary Holding Shenzhen Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 2,700 | | | | 9,813 | |
| | Avic Capital Co. Ltd., A | | | Diversified Financial Services | | | | 35,100 | | | | 14,820 | |
| | AVIC Electromechanical Systems Co. Ltd., A | | | Aerospace & Defense | | | | 13,500 | | | | 21,474 | |
| | AviChina Industry & Technology Co. Ltd., H | | | Aerospace & Defense | | | | 108,000 | | | | 41,825 | |
| | AVICOPTER PLC, A | | | Aerospace & Defense | | | | 2,700 | | | | 15,032 | |
| a | | BAIC Motor Corp. Ltd., A, 144A | | | Automobiles | | | | 108,000 | | | | 23,664 | |
| b | | Baidu Inc. | | | Interactive Media & Services | | | | 109,538 | | | | 1,592,159 | |
| | Bank of Beijing Co. Ltd., A | | | Banks | | | | 75,600 | | | | 43,584 | |
| | Bank of Changsha Co. Ltd., A | | | Banks | | | | 13,500 | | | | 12,536 | |
| | Bank of Chengdu Co. Ltd., A | | | Banks | | | | 5,400 | | | | 12,392 | |
| | Bank of China Ltd., A | | | Banks | | | | 153,900 | | | | 66,705 | |
| | Bank of China Ltd., H | | | Banks | | | | 3,726,000 | | | | 1,219,865 | |
| | Bank of Communications Co. Ltd., A | | | Banks | | | | 135,000 | | | | 87,486 | |
| | Bank of Communications Co. Ltd., H | | | Banks | | | | 351,000 | | | | 185,116 | |
| | Bank of Guiyang Co. Ltd., A | | | Banks | | | | 13,500 | | | | 10,263 | |
| | Bank of Hangzhou Co. Ltd., A | | | Banks | | | | 21,600 | | | | 43,175 | |
| | Bank of Jiangsu Co. Ltd., A | | | Banks | | | | 19,700 | | | | 20,559 | |
| | Bank of Nanjing Co. Ltd., A | | | Banks | | | | 35,100 | | | | 51,795 | |
| | Bank of Ningbo Co. Ltd., A | | | Banks | | | | 21,620 | | | | 95,679 | |
| | Bank of Qingdao Co. Ltd., A | | | Banks | | | | 16,200 | | | | 7,703 | |
| | Bank of Shanghai Co. Ltd., A | | | Banks | | | | 51,300 | | | | 42,095 | |
| | Bank of Suzhou Co. Ltd., A | | | Banks | | | | 5,920 | | | | 5,539 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 165 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Bank of Zhengzhou Co. Ltd., A | | | Banks | | | | 20,580 | | | $ | 6,899 | |
| | Baoshan Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 64,800 | | | | 47,810 | |
| | BBMG Corp., A | | | Construction Materials | | | | 35,100 | | | | 12,259 | |
| | BBMG Corp., H | | | Construction Materials | | | | 108,000 | | | | 13,070 | |
| b | | BeiGene Ltd. | | | Biotechnology | | | | 29,700 | | | | 306,652 | |
| | Beijing Capital Co. Ltd., A | | | Water Utilities | | | | 27,000 | | | | 9,847 | |
| | Beijing Capital Development Co. Ltd., A | | | Real Estate Management & Development | | | | 8,100 | | | | 4,976 | |
| b | | Beijing Capital International Airport Co. Ltd., A | | | Transportation Infrastructure | | | | 108,000 | | | | 58,472 | |
| b | | Beijing Dabeinong Technology Group Co. Ltd., A | | | Food Products | | | | 13,500 | | | | 15,149 | |
| | Beijing Easpring Material Technology Co. Ltd. | | | Chemicals | | | | 2,700 | | | | 25,000 | |
| b | | Beijing E-Hualu Information Technology Co. Ltd., A | | | Software | | | | 2,700 | | | | 4,745 | |
| | Beijing Enlight Media Co. Ltd., H | | | Entertainment | | | | 10,800 | | | | 10,756 | |
| | Beijing Enterprises Holdings Ltd., H | | | Industrial Conglomerates | | | | 27,000 | | | | 75,842 | |
| b | | Beijing Jetsen Technology Co. Ltd., A | | | Software | | | | 8,100 | | | | 5,045 | |
| | Beijing Jingneng Clean Energy Co. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 54,000 | | | | 10,319 | |
| | Beijing Kingsoft Office Software Inc., A | | | Software | | | | 1,560 | | | | 44,007 | |
| | Beijing New Building Materials PLC, A | | | Building Products | | | | 5,400 | | | | 18,217 | |
| b | | Beijing Orient National Communication Science &Technology Co. Ltd., A | | | Software | | | | 5,400 | | | | 5,469 | |
| | Beijing Originwater Technology Co. Ltd., H | | | Commercial Services & Supplies | | | | 3,335 | | | | 2,208 | |
| | Beijing Roborock Technology Co. Ltd., A | | | Household Durables | | | | 280 | | | | 10,140 | |
| | Beijing Sanju Environmental Protection and New Material Co. Ltd., A | | | Chemicals | | | | 9,300 | | | | 5,348 | |
| | Beijing Shiji Information Technology Co. Ltd., A | | | Software | | | | 6,080 | | | | 10,550 | |
| | Beijing Shougang Co. Ltd., A | | | Metals & Mining | | | | 27,000 | | | | 13,521 | |
| | Beijing Shunxin Agriculture Co. Ltd., A | | | Beverages | | | | 2,700 | | | | 7,540 | |
| | Beijing Sinnet Technology Co. Ltd., A | | | IT Services | | | | 5,600 | | | | 6,276 | |
| | Beijing Tiantan Biological Products Corp. Ltd., A | | | Biotechnology | | | | 6,920 | | | | 19,598 | |
| | Beijing Tongrentang Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 34,502 | |
| | Beijing Ultrapower Software Co. Ltd., A | | | IT Services | | | | 8,100 | | | | 4,204 | |
| | Beijing United Information Technology Co. Ltd., A | | | Trading Companies & Distributors | | | | 1,740 | | | | 26,350 | |
| | Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., A | | | Biotechnology | | | | 1,015 | | | | 16,287 | |
| | Beijing Yanjing Brewery Co. Ltd., A | | | Beverages | | | | 10,800 | | | | 14,134 | |
| | Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 13,828 | |
| | Beijing Zhong Ke San Huan High-Tech Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 5,760 | | | | 11,182 | |
| | Beijing-Shanghai High Speed Railway Co. Ltd., A | | | Road & Rail | | | | 102,600 | | | | 65,050 | |
| b | | Bilibili Inc. | | | Entertainment | | | | 12,420 | | | | 189,229 | |
| | Bloomage Biotechnology Corp. Ltd., A | | | Biotechnology | | | | 1,118 | | | | 20,544 | |
| a | | Blue Moon Group Holdings Ltd., 144A | | | Household Products | | | | 40,500 | | | | 28,583 | |
| | Bluefocus Intelligent Communications Group Co. Ltd., A | | | Media | | | | 10,800 | | | | 6,787 | |
| | Bluestar Adisseo Co., A | | | Chemicals | | | | 2,700 | | | | 3,734 | |
| | BOC International China Co. Ltd., A | | | Capital Markets | | | | 2,700 | | | | 3,973 | |
| | BOE Technology Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 129,600 | | | | 59,445 | |
| | BOE Technology Group Co. Ltd., B | | | Electronic Equipment, Instruments & Components | | | | 51,300 | | | | 21,893 | |
| | Bright Dairy & Food Co. Ltd., A | | | Food Products | | | | 5,400 | | | | 7,931 | |
| | BTG Hotels Group Co. Ltd., A | | | Hotels, Restaurants & Leisure | | | | 5,400 | | | | 16,202 | |
| | BYD Co. Ltd., A | | | Automobiles | | | | 6,400 | | | | 226,235 | |
| | BYD Co. Ltd., H | | | Automobiles | | | | 40,738 | | | | 1,008,862 | |
| | BYD Electronic International Co. Ltd. | | | Communications Equipment | | | | 37,500 | | | | 90,574 | |
| | By-health Co. Ltd., A | | | Personal Products | | | | 5,400 | | | | 13,331 | |
| | C&S Paper Co. Ltd., A | | | Household Products | | | | 5,400 | | | | 7,711 | |
| | Caida Securities Co. Ltd., A | | | Capital Markets | | | | 5,400 | | | | 5,189 | |
| | Caitong Securities Co. Ltd., A | | | Capital Markets | | | | 16,260 | | | | 15,418 | |
| | | | | | | | | | |
| | | | | | |
| 166 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Camel Group Co. Ltd., A | | | Electrical Equipment | | | | 5,400 | | | $ | 6,385 | |
| | CanSino Biologics Inc., A | | | Pharmaceuticals | | | | 240 | | | | 4,073 | |
| a,c | | CanSino Biologics Inc., H, 144A, Reg S | | | Pharmaceuticals | | | | 3,200 | | | | 18,161 | |
| b | | CECEP Solar Energy Co. Ltd., H | | | Semiconductors & Semiconductor Equipment | | | | 10,800 | | | | 10,347 | |
| | CECEP Wind-Power Corp, A | | | Independent Power Producers & Energy Traders | | | | 18,900 | | | | 11,665 | |
| | Central China Securities Co. Ltd., A | | | Capital Markets | | | | 10,800 | | | | 5,287 | |
| | Central China Securities Co. Ltd., H | | | Capital Markets | | | | 54,000 | | | | 6,948 | |
| | CGN Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 29,700 | | | | 10,998 | |
| a | | CGN Power Co. Ltd., H, 144A | | | Independent Power Producers & Energy Traders | | | | 540,000 | | | | 116,944 | |
| | Changchun High & New Technology Industry Group Inc., A | | | Pharmaceuticals | | | | 1,500 | | | | 35,842 | |
| | Changjiang Securities Co. Ltd., A | | | Capital Markets | | | | 21,600 | | | | 15,785 | |
| | Changzhou Xingyu Automotive LightingSystems Co. Ltd., A | | | Auto Components | | | | 1,000 | | | | 21,376 | |
| | Chaozhou Three-Circle Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 19,724 | |
| | Chengdu Xingrong Environment Co. Ltd., A | | | Water Utilities | | | | 10,800 | | | | 7,529 | |
| | Chengxin Lithium Group Co. Ltd., A | | | Paper & Forest Products | | | | 2,700 | | | | 17,709 | |
| | China Baoan Group Co. Ltd., A | | | Industrial Conglomerates | | | | 8,100 | | | | 12,748 | |
| | China Cinda Asset Management Co. Ltd., H | | | Capital Markets | | | | 432,000 | | | | 47,878 | |
| | China CITIC Bank Corp. Ltd., A | | | Banks | | | | 35,100 | | | | 22,451 | |
| | China CITIC Bank Corp. Ltd., H | | | Banks | | | | 459,000 | | | | 182,433 | |
| | China Coal Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 18,900 | | | | 28,208 | |
| | China Coal Energy Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 108,000 | | | | 97,958 | |
| | China Communications Services Corp. Ltd., H | | | Diversified Telecommunication Services | | | | 118,000 | | | | 39,685 | |
| b | | China Conch Environment Protection Holdings Ltd. | | | Commercial Services & Supplies | | | | 67,120 | | | | 34,373 | |
| | China Conch Venture Holdings Ltd. | | | Construction & Engineering | | | | 73,410 | | | | 117,083 | |
| | China Construction Bank Corp., A | | | Banks | | | | 35,100 | | | | 27,177 | |
| | China Construction Bank Corp., H | | | Banks | | | | 4,590,000 | | | | 2,654,633 | |
| | China CSSC Holdings Ltd., A | | | Machinery | | | | 16,200 | | | | 51,469 | |
| a,c | | China East Education Holdings Ltd., A, 144A, Reg S | | | Diversified Consumer Services | | | | 27,000 | | | | 8,943 | |
| b | | China Eastern Airlines Corp. Ltd., A | | | Airlines | | | | 40,500 | | | | 27,723 | |
| b | | China Eastern Airlines Corp. Ltd., H | | | Airlines | | | | 54,000 | | | | 18,367 | |
| | China Energy Engineering Corp. Ltd. | | | Construction & Engineering | | | | 116,100 | | | | 36,479 | |
| | China Energy Engineering Corp. Ltd., H | | | Construction & Engineering | | | | 216,000 | | | | 22,563 | |
| | China Everbright Bank Co. Ltd., A | | | Banks | | | | 143,100 | | | | 56,604 | |
| | China Everbright Bank Co. Ltd., H | | | Banks | | | | 135,000 | | | | 37,147 | |
| b | | China Evergrande Group, A | | | Real Estate Management & Development | | | | 182,000 | | | | 15,314 | |
| a,c | | China Feihe Ltd., 144A, Reg S | | | Food Products | | | | 189,000 | | | | 132,422 | |
| | China Galaxy Securities Co. Ltd., A | | | Capital Markets | | | | 8,100 | | | | 10,226 | |
| | China Galaxy Securities Co. Ltd., H | | | Capital Markets | | | | 175,500 | | | | 81,156 | |
| | China Great Wall Securities Co. Ltd., A | | | Capital Markets | | | | 8,100 | | | | 9,294 | |
| | China Greatwall Technology Group Co. Ltd., A | | | Technology Hardware, Storage & Peripherals | | | | 10,800 | | | | 12,937 | |
| | China Hongqiao Group Ltd. | | | Metals & Mining | | | | 108,000 | | | | 89,428 | |
| | China International Capital Corp. Ltd., A | | | Capital Markets | | | | 2,700 | | | | 13,032 | |
| a | | China International Capital Corp. Ltd., H, 144A | | | Capital Markets | | | | 75,600 | | | | 109,983 | |
| | China International Marine Containers (Group) Co. Ltd., H | | | Machinery | | | | 35,100 | | | | 22,357 | |
| | China International Marine Containers Group Co. Ltd., A | | | Machinery | | | | 8,550 | | | | 8,287 | |
| | China Jushi Co. Ltd., A | | | Construction Materials | | | | 14,787 | | | | 27,337 | |
| | China Lesso Group Holdings Ltd. | | | Building Products | | | | 54,000 | | | | 50,286 | |
| | China Life Insurance Co. Ltd., H | | | Insurance | | | | 378,000 | | | | 484,424 | |
| a,b | | China Literature Ltd., A, 144A | | | Media | | | | 21,600 | | | | 61,224 | |
| | China Lodging Group Ltd., ADR | | | Hotels, Restaurants & Leisure | | | | 10,692 | | | | 358,610 | |
| | China Longyuan Power Group Corp., A | | | Independent Power Producers & Energy Traders | | | | 162,000 | | | | 203,276 | |
| | China Medical System Holdings Ltd. | | | Pharmaceuticals | | | | 61,000 | | | | 72,812 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 167 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | China Meheco Co. Ltd., A | | | Trading Companies & Distributors | | | | 5,440 | | | $ | 9,187 | |
| | China Meidong Auto Holdings Ltd. | | | Specialty Retail | | | | 22,000 | | | | 34,808 | |
| | China Merchants Bank Co. Ltd., A | | | Banks | | | | 70,200 | | | | 331,348 | |
| | China Merchants Bank Co. Ltd., H | | | Banks | | | | 186,000 | | | | 864,852 | |
| | China Merchants Energy Shipping Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 27,000 | | | | 26,890 | |
| | China Merchants Expressway Network & Technology Holdings Co. Ltd., A | | | Transportation Infrastructure | | | | 10,800 | | | | 11,483 | |
| | China Merchants Port Holdings Co. Ltd. | | | Transportation Infrastructure | | | | 71,980 | | | | 90,503 | |
| | China Merchants Property Operation & Service Co. Ltd., A | | | Real Estate Management & Development | | | | 2,700 | | | | 5,779 | |
| a | | China Merchants Securities Co. Ltd., A, 144A | | | Capital Markets | | | | 21,600 | | | | 18,711 | |
| | China Merchants Securities Co. Ltd., A | | | Capital Markets | | | | 27,000 | | | | 46,735 | |
| | China Merchants Shekou Industrial Zone Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 24,300 | | | | 55,696 | |
| b | | China Minmetals Rare Earth Co. Ltd., A | | | Metals & Mining | | | | 2,700 | | | | 9,968 | |
| | China Minsheng Banking Corp. Ltd., A | | | Banks | | | | 124,200 | | | | 59,059 | |
| | China Minsheng Banking Corp. Ltd., H | | | Banks | | | | 297,000 | | | | 85,128 | |
| | China Molybdenum Co. Ltd., A | | | Metals & Mining | | | | 35,100 | | | | 23,239 | |
| | China Molybdenum Co. Ltd., H | | | Metals & Mining | | | | 201,000 | | | | 78,609 | |
| | China National Building Material Co. Ltd., H | | | Construction Materials | | | | 216,000 | | | | 165,373 | |
| | China National Chemical Engineering Co. Ltd., A | | | Construction & Engineering | | | | 21,600 | | | | 24,269 | |
| | China National Nuclear Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 59,400 | | | | 48,742 | |
| | China National Software & Service Co. Ltd., A | | | Software | | | | 2,700 | | | | 16,308 | |
| | China Northern Rare Earth Group High-Tech Co. Ltd., A | | | Metals & Mining | | | | 10,800 | | | | 40,236 | |
| | China Oilfield Services Ltd., A | | | Energy Equipment & Services | | | | 5,400 | | | | 10,869 | |
| | China Oilfield Services Ltd., H | | | Energy Equipment & Services | | | | 90,000 | | | | 89,313 | |
| | China Orient Securities Co. Ltd., A | | | Capital Markets | | | | 24,924 | | | | 26,885 | |
| | China Pacific Insurance Group Co. Ltd., A | | | Insurance | | | | 24,300 | | | | 69,296 | |
| | China Pacific Insurance Group Co. Ltd., H | | | Insurance | | | | 124,200 | | | | 228,784 | |
| | China Petroleum & Chemical Corp., A | | | Oil, Gas & Consumable Fuels | | | | 118,800 | | | | 71,488 | |
| | China Petroleum & Chemical Corp., H | | | Oil, Gas & Consumable Fuels | | | | 1,242,000 | | | | 533,197 | |
| | China Railway Group Ltd., A | | | Construction & Engineering | | | | 72,900 | | | | 53,480 | |
| | China Railway Group Ltd., H | | | Construction & Engineering | | | | 189,000 | | | | 92,695 | |
| a,c | | China Railway Signal & Communication Corp. Ltd., 144A, Reg S | |
| Electronic Equipment, Instruments &
Components |
| | | 81,000 | | | | 22,288 | |
| | China Railway Signal & Communication Corp. Ltd., A | |
| Electronic Equipment, Instruments &
Components |
| | | 23,382 | | | | 13,611 | |
| | China Reinsurance Group Corp., H | | | Insurance | | | | 324,000 | | | | 20,018 | |
| | China Resources Cement Holdings Ltd. | | | Construction Materials | | | | 118,000 | | | | 54,717 | |
| | China Resources Double Crane Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 6,662 | |
| | China Resources Microelectronics Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 3,432 | | | | 22,924 | |
| a | | China Resources Mixc Lifestyle Services Ltd., 144A | | | Real Estate Management & Development | | | | 27,000 | | | | 103,702 | |
| a | | China Resources Pharmaceutical Group Ltd., A, 144A | | | Pharmaceuticals | | | | 81,000 | | | | 55,617 | |
| | China Resources Power Holdings Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 95,100 | | | | 147,801 | |
| | China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., B | | | Pharmaceuticals | | | | 2,700 | | | | 14,547 | |
| | China Shenhua Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 24,300 | | | | 107,846 | |
| | China Shenhua Energy Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 166,649 | | | | 497,830 | |
| | China Shipping Container Lines Co. Ltd., A | | | Marine | | | | 37,800 | | | | 13,096 | |
| b | | China Shipping Development Co. Ltd., A | | | Marine | | | | 10,800 | | | | 27,405 | |
| | China South Publishing & Media Group Co. Ltd., A | | | Media | | | | 8,100 | | | | 11,180 | |
| b | | China Southern Airlines Co. Ltd., A | | | Airlines | | | | 35,100 | | | | 32,692 | |
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SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | China Southern Airlines Co. Ltd., H | | | Airlines | | | | 74,000 | | | $ | 39,027 | |
| | China Southern Power Grid Energy Efficiency&Clean Energy Co. Ltd., A | | | Commercial Services & Supplies | | | | 10,800 | | | | 8,605 | |
| | China State Construction Engineering Corp. Ltd., A | | | Construction & Engineering | | | | 137,700 | | | | 99,473 | |
| | China Suntien Green Energy Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 81,000 | | | | 29,718 | |
| | China Taiping Insurance Holdings Co. Ltd. | | | Insurance | | | | 70,200 | | | | 59,112 | |
| | China Three Gorges Renewables Group Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 89,100 | | | | 70,364 | |
| | China Tourism Group Duty Free Corp. Ltd., A | | | Hotels, Restaurants & Leisure | | | | 7,100 | | | | 197,439 | |
| a,c | | China Tower Corp. Ltd., H, 144A, Reg S | | | Diversified Telecommunication Services | | | | 2,268,000 | | | | 242,694 | |
| b | | China TransInfo Technology Co. Ltd., A | | | IT Services | | | | 2,700 | | | | 3,147 | |
| | China United Network Communications Ltd., A | | | Wireless Telecommunication Services | | | | 97,200 | | | | 45,674 | |
| | China Vanke Co. Ltd., A | | | Real Estate Management & Development | | | | 32,400 | | | | 81,032 | |
| | China Vanke Co. Ltd., H | | | Real Estate Management & Development | | | | 94,500 | | | | 172,149 | |
| | China World Trade Center Co. Ltd., A | | | Real Estate Management & Development | | | | 2,700 | | | | 5,185 | |
| | China Yangtze Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 78,300 | | | | 249,755 | |
| | China Zhenhua Group Science & Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,800 | | | | 29,283 | |
| b | | China Zheshang Bank Co. Ltd., A | | | Banks | | | | 27,000 | | | | 11,286 | |
| | Chinalin Securities Co. Ltd., A | | | Capital Markets | | | | 2,700 | | | | 4,939 | |
| | Chinese Universe Publishing and Media Group Co. Ltd., A | | | Media | | | | 5,400 | | | | 6,355 | |
| | Chongqing Brewery Co. Ltd., A | | | Beverages | | | | 1,700 | | | | 26,755 | |
| | Chongqing Changan Automobile Co. Ltd., A | | | Automobiles | | | | 28,144 | | | | 49,584 | |
| | Chongqing Changan Automobile Co. Ltd., B | | | Automobiles | | | | 76,172 | | | | 35,030 | |
| | Chongqing Fuling Zhacai Group Co. Ltd., A | | | Food Products | | | | 2,700 | | | | 10,294 | |
| | Chongqing Rural Commercial Bank Co. Ltd., A | | | Banks | | | | 16,200 | | | | 8,112 | |
| | Chongqing Rural Commercial Bank Co. Ltd., H | | | Banks | | | | 108,000 | | | | 35,083 | |
| | Chongqing Water Group Co. Ltd., A | | | Water Utilities | | | | 8,100 | | | | 5,783 | |
| | Chongqing Zhifei Biological Products Co. Ltd., B | | | Biotechnology | | | | 5,400 | | | | 65,467 | |
| | CIFI Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 196,320 | | | | 20,007 | |
| | CITIC Ltd., B | | | Industrial Conglomerates | | | | 243,000 | | | | 229,073 | |
| | Citic Pacific Special Steel Group Co. Ltd., A | | | Metals & Mining | | | | 17,080 | | | | 42,214 | |
| | CITIC Securities Co. Ltd., A | | | Capital Markets | | | | 40,500 | | | | 98,961 | |
| | CITIC Securities Co. Ltd., H | | | Capital Markets | | | | 108,200 | | | | 183,873 | |
| | CMST Development Co. Ltd., A | | | Air Freight & Logistics | | | | 8,100 | | | | 5,522 | |
| | CNOOC Energy Technology & Services Ltd., A | | | Energy Equipment & Services | | | | 18,900 | | | | 7,635 | |
| | CNPC Capital Co. Ltd., A | | | Machinery | | | | 16,200 | | | | 10,180 | |
| b | | Contemporary Amperex Technology Co. Ltd., H | | | Electrical Equipment | | | | 8,300 | | | | 466,730 | |
| | COSCO SHIPPING Development Co. Ltd., H | | | Marine | | | | 189,000 | | | | 23,836 | |
| b | | COSCO SHIPPING Energy Transportation Co. Ltd., H | | | Marine | | | | 66,000 | | | | 54,903 | |
| | COSCO SHIPPING Holdings Co. Ltd., A | | | Marine | | | | 45,180 | | | | 69,838 | |
| | COSCO SHIPPING Holdings Co. Ltd., B | | | Marine | | | | 162,000 | | | | 190,069 | |
| | Country Garden Holdings Co. Ltd. | | | Real Estate Management & Development | | | | 486,000 | | | | 112,679 | |
| | Country Garden Services Holdings Co. Ltd. | | | Commercial Services & Supplies | | | | 91,300 | | | | 134,451 | |
| | CRRC Corp. Ltd., A | | | Machinery | | | | 78,300 | | | | 51,511 | |
| | CRRC Corp. Ltd., H | | | Machinery | | | | 189,000 | | | | 61,155 | |
| a | | CSC Financial Co. Ltd., A, 144A | | | Capital Markets | | | | 40,500 | | | | 30,956 | |
| | CSC Financial Co. Ltd., A | | | Capital Markets | | | | 16,200 | | | | 52,651 | |
| | CSG Holding Co. Ltd. | | | Construction Materials | | | | 56,700 | | | | 21,741 | |
| | CSG Holding Co. Ltd., A | | | Construction Materials | | | | 5,400 | | | | 5,257 | |
| | CSPC Pharmaceutical Group Ltd., A | | | Pharmaceuticals | | | | 432,000 | | | | 428,153 | |
| | Daan Gene Co. Ltd. | | | Biotechnology | | | | 3,940 | | | | 9,163 | |
| b | | Dada Nexus Ltd., A, ADR | | | Internet & Catalog Retail | | | | 3,510 | | | | 16,602 | |
| a | | Dali Foods Group Co. Ltd., 144A | | | Food Products | | | | 108,000 | | | | 46,502 | |
| | Daqin Railway Co. Ltd., A | | | Road & Rail | | | | 54,000 | | | | 51,280 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Daqo New Energy Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,754 | | | $ | 146,182 | |
| | DaShenLin Pharmaceutical Group Co. Ltd., A | | | Food & Staples Retailing | | | | 1,152 | | | | 4,896 | |
| b | | Datang International Power Generation Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 24,300 | | | | 11,316 | |
| b | | Datang International Power Generation Co. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 108,000 | | | | 20,637 | |
| | DHC Software Co. Ltd., A | | | IT Services | | | | 10,800 | | | | 8,074 | |
| | Dian Diagnostics Group Co. Ltd., A | | | Health Care Providers & Services | | | | 2,700 | | | | 10,991 | |
| | Do-Fluoride Chemicals Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 13,596 | |
| | Dong-E-E-Jiao Co. Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 12,267 | |
| | Dongfang Electric Corp. Ltd., A | | | Electrical Equipment | | | | 10,800 | | | | 30,965 | |
| | Dongfang Electric Corp. Ltd., H | | | Electrical Equipment | | | | 16,200 | | | | 22,082 | |
| | Dongfeng Motor Group Co. Ltd., H | | | Automobiles | | | | 143,300 | | | | 76,671 | |
| | Dongxing Securities Co. Ltd., A | | | Capital Markets | | | | 10,800 | | | | 11,210 | |
| | East Group Co. Ltd., A | | | Electrical Equipment | | | | 8,100 | | | | 7,385 | |
| | East Money Information Co. Ltd. | | | Capital Markets | | | | 45,280 | | | | 111,911 | |
| | Eastern Air Logistics Co. Ltd., A | | | Air Freight & Logistics | | | | 5,400 | | | | 12,028 | |
| | Ecovacs Robotics Co. Ltd., A | | | Household Durables | | | | 1,700 | | | | 15,905 | |
| | ENN Ecological Holdings Co. Ltd., A | | | Chemicals | | | | 8,100 | | | | 21,088 | |
| | ENN Energy Holdings Ltd. | | | Gas Utilities | | | | 38,300 | | | | 512,300 | |
| | Eternal Asia Supply Chain Management Ltd., A | | | Commercial Services & Supplies | | | | 10,800 | | | | 8,362 | |
| | Eve Energy Co. Ltd. | | | Electrical Equipment | | | | 6,900 | | | | 81,881 | |
| a | | Everbright Securities Co. Ltd., 144A | | | Capital Markets | | | | 16,200 | | | | 8,750 | |
| | Everbright Securities Co. Ltd., A | | | Capital Markets | | | | 13,500 | | | | 24,901 | |
| a,b | | Evergrande Property Services Group Ltd., 144A | | | Real Estate Management & Development | | | | 221,000 | | | | 23,348 | |
| b | | Fangda Carbon New Material Co. Ltd. | | | Electrical Equipment | | | | 13,500 | | | | 11,797 | |
| | Far East Horizon Ltd. | | | Diversified Financial Services | | | | 54,000 | | | | 36,459 | |
| | Faw Jiefang Group Co. Ltd. | | | Automobiles | | | | 10,800 | | | | 10,877 | |
| | Fiberhome Telecommunication Technologies Co. Ltd., A | | | Communications Equipment | | | | 5,400 | | | | 9,408 | |
| b | | FIH Mobile Ltd. | | | Electronic Equipment, Instruments & Components | | | | 135,000 | | | | 13,930 | |
| | Financial Street Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 10,800 | | | | 7,696 | |
| | First Capital Securities Co. Ltd. | | | Capital Markets | | | | 16,200 | | | | 12,384 | |
| b | | Flat Glass Group Co Ltd., H | | | Semiconductors & Semiconductor Equipment | | | | 27,000 | | | | 65,695 | |
| b | | Flat Glass Group Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 2,700 | | | | 12,384 | |
| | Focus Media Information Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 51,300 | | | | 39,721 | |
| | Foshan Haitian Flavouring & Food Co. Ltd. | | | Food Products | | | | 14,061 | | | | 163,348 | |
| | Fosun International Ltd. | | | Industrial Conglomerates | | | | 108,000 | | | | 67,002 | |
| | Founder Securities Co. Ltd., A | | | Capital Markets | | | | 29,700 | | | | 27,287 | |
| | Foxconn Industrial Internet Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 45,900 | | | | 54,855 | |
| | Fu Jian Anjoy Foods Co. Ltd., A | | | Food Products | | | | 700 | | | | 15,247 | |
| | Fujian Funeng Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 5,400 | | | | 8,097 | |
| | Fujian Sunner Development Co. Ltd. | | | Food Products | | | | 5,400 | | | | 14,664 | |
| b | | Full Truck Alliance Co. Ltd. | | | Road & Rail | | | | 30,915 | | | | 202,493 | |
| | Fuyao Glass Industry Group Co. Ltd., A | | | Auto Components | | | | 8,100 | | | | 40,687 | |
| a | | Fuyao Group Glass Industries Co. Ltd., 144A | | | Auto Components | | | | 32,400 | | | | 130,840 | |
| | Ganfeng Lithium Co. Ltd. | | | Metals & Mining | | | | 5,660 | | | | 59,417 | |
| a | | Ganfeng Lithium Co. Ltd., H, 144A | | | Metals & Mining | | | | 10,560 | | | | 70,289 | |
| | G-bits Network Technology Xiamen Co. Ltd., A | | | Entertainment | | | | 200 | | | | 6,972 | |
| b | | GCL System Integration Technology Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 21,600 | | | | 9,574 | |
| b | | GD Power Development Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 64,800 | | | | 36,994 | |
| b | | GDS Holdings Ltd. | | | IT Services | | | | 45,900 | | | | 100,572 | |
| | GEM Co. Ltd. | | | Metals & Mining | | | | 18,900 | | | | 19,565 | |
| | Gemdale Corp., A | | | Real Estate Management & Development | | | | 16,200 | | | | 26,109 | |
| b | | Genscript Biotech Corp. | | | Life Sciences Tools & Services | | | | 47,769 | | | | 104,424 | |
| | GF Securities Co. Ltd. | | | Capital Markets | | | | 21,600 | | | | 43,235 | |
| | GF Securities Co. Ltd., H | | | Capital Markets | | | | 54,000 | | | | 58,816 | |
| | Gigadevice Semiconductor Beijing Inc., A | | | Semiconductors & Semiconductor Equipment | | | | 2,248 | | | | 29,562 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Ginlong Technologies Co. Ltd., A | | | Electrical Equipment | | | | 1,350 | | | $ | 41,840 | |
| | Glarun Technology Co. Ltd., A | | | Communications Equipment | | | | 5,400 | | | | 10,157 | |
| | GoerTek Inc. | | | Electronic Equipment, Instruments & Components | | | | 10,800 | | | | 40,145 | |
| b | | GOME Retail Holdings Ltd. | | | Specialty Retail | | | | 621,000 | | | | 11,629 | |
| b | | Grandjoy Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 16,200 | | | | 7,612 | |
| | Great Wall Motor Co. Ltd., A | | | Automobiles | | | | 8,100 | | | | 31,586 | |
| | Great Wall Motor Co. Ltd., H | | | Automobiles | | | | 148,500 | | | | 170,635 | |
| | Greentown China Holdings Ltd. | | | Real Estate Management & Development | | | | 40,500 | | | | 76,151 | |
| | GRG Banking Equipment Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 8,100 | | | | 9,260 | |
| | Guangdong Baolihua New Energy Stock Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 8,100 | | | | 5,363 | |
| b | | Guangdong Electric Power Development Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 8,100 | | | | 5,067 | |
| b | | Guangdong Electric Power Development Co. Ltd., B | | | Independent Power Producers & Energy Traders | | | | 43,200 | | | | 11,612 | |
| | Guangdong Golden Dragon Development Inc. | | | Capital Markets | | | | 2,700 | | | | 5,120 | |
| | Guangdong Haid Group Co. Ltd. | | | Food Products | | | | 6,300 | | | | 53,269 | |
| b | | Guangdong HEC Technology Holding Co. Ltd., A | | | Metals & Mining | | | | 10,800 | | | | 13,331 | |
| | Guangdong Kinlong Hardware Products Co. Ltd. | | | Building Products | | | | 700 | | | | 8,693 | |
| b | | Guangdong LY Intelligent Manufacturing Co. Ltd. | | | Electrical Equipment | | | | 27,000 | | | | 16,853 | |
| | Guangdong Xinbao Electrical Appliances Holdings Co. Ltd. | | | Household Durables | | | | 2,700 | | | | 6,711 | |
| | Guanghui Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 24,300 | | | | 41,857 | |
| | Guangshen Railway Co. Ltd., A | | | Road & Rail | | | | 13,500 | | | | 3,693 | |
| b | | Guangshen Railway Co. Ltd., H | | | Road & Rail | | | | 108,000 | | | | 14,721 | |
| | Guangxi Guiguan Electric Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 13,500 | | | | 11,097 | |
| | Guangxi Liugong Machinery Co. Ltd. | | | Machinery | | | | 5,400 | | | | 4,280 | |
| | Guangzhou Automobile Group Co. Ltd., A | | | Automobiles | | | | 10,800 | | | | 18,376 | |
| | Guangzhou Automobile Group Co. Ltd., H | | | Automobiles | | | | 154,000 | | | | 109,861 | |
| | Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 19,663 | |
| | Guangzhou Baiyunshan Pharmceutical Holdings Co. Ltd. | | | Pharmaceuticals | | | | 9,900 | | | | 21,389 | |
| | Guangzhou Haige Communications Group Inc. Co. | | | Communications Equipment | | | | 8,100 | | | | 8,828 | |
| | Guangzhou Kingmed Diagnostics Group Co. Ltd. | | | Health Care Providers & Services | | | | 2,700 | | | | 24,004 | |
| | Guangzhou Shiyuan Electronic Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 700 | | | | 5,862 | |
| | Guangzhou TInc.i Materials Technology Co. Ltd. | | | Chemicals | | | | 7,060 | | | | 43,633 | |
| | Guangzhou Wondfo Biotech Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 1,300 | | | | 5,348 | |
| | Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A | | | Capital Markets | | | | 9,493 | | | | 7,563 | |
| | Guangzhou Zhujiang Brewery Co. Ltd. | | | Beverages | | | | 5,400 | | | | 5,734 | |
| b | | Guizhou Bailing Group Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 4,810 | |
| | Guizhou Panjiang Refined Coal Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 5,400 | | | | 6,423 | |
| | Guizhou Xinbang Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 8,100 | | | | 5,499 | |
| | Guolian Securities Co. Ltd., A | | | Capital Markets | | | | 8,100 | | | | 9,930 | |
| | Guosen Securities Co. Ltd. | | | Capital Markets | | | | 18,900 | | | | 22,799 | |
| b | | Guosheng Financial Holding Inc. | | | Electrical Equipment | | | | 8,100 | | | | 8,669 | |
| a | | Guotai Junan Securities Co. Ltd., 144A | | | Capital Markets | | | | 37,800 | | | | 40,160 | |
| | Guotai Junan Securities Co. Ltd., A | | | Capital Markets | | | | 24,300 | | | | 46,595 | |
| | Guoxuan High-Tech Co. Ltd. | | | Electrical Equipment | | | | 5,400 | | | | 23,125 | |
| | Guoyuan Securities Co. Ltd. | | | Capital Markets | | | | 16,200 | | | | 14,543 | |
| a,b,c | | Haidilao International Holding Ltd., 144A, Reg S | | | Hotels, Restaurants & Leisure | | | | 54,000 | | | | 105,938 | |
| | Haier Smart Home Co. Ltd., A | | | Household Durables | | | | 21,600 | | | | 75,048 | |
| | Haier Smart Home Co. Ltd., H | | | Household Durables | | | | 113,400 | | | | 347,427 | |
| | Haitian International Holdings Ltd. | | | Machinery | | | | 28,000 | | | | 53,219 | |
| | Haitong Securities Co. Ltd., A | | | Capital Markets | | | | 35,100 | | | | 42,637 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Haitong Securities Co. Ltd., H | | | Capital Markets | | | | 162,000 | | | $ | 85,851 | |
| b | | Hang Zhou Great Star Industrial Co. Ltd. | | | Household Durables | | | | 5,400 | | | | 14,392 | |
| | Hangzhou Binjiang Real Estate Group Co. Ltd. | | | Real Estate Management & Development | | | | 10,800 | | | | 15,861 | |
| | Hangzhou Chang Chuan Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 2,700 | | | | 21,595 | |
| | Hangzhou First Applied Material Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 2,440 | | | | 18,208 | |
| | Hangzhou Lion Electronics Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 2,700 | | | | 17,243 | |
| | Hangzhou Oxygen Plant Group Co. Ltd. | | | Machinery | | | | 2,700 | | | | 12,987 | |
| | Hangzhou Robam Appliances Co. Ltd., A | | | Household Durables | | | | 2,700 | | | | 8,684 | |
| | Hangzhou Silan Microelectronics Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 5,400 | | | | 24,276 | |
| | Hangzhou Tigermed Consulting Co. Ltd. | | | Life Sciences Tools & Services | | | | 2,700 | | | | 34,532 | |
| a,c | | Hangzhou Tigermed Consulting Co. Ltd., A, 144A, Reg S | | | Life Sciences Tools & Services | | | | 6,500 | | | | 52,704 | |
| | Han’s Laser Technology Industry Group Co. Ltd., A | | | Machinery | | | | 2,700 | | | | 9,870 | |
| a | | Hansoh Pharmaceutical Group Co. Ltd., 144A | | | Pharmaceuticals | | | | 54,000 | | | | 85,438 | |
| | Haohua Chemical Science & Technology Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 14,732 | |
| | Harbin Boshi Automation Co. Ltd. | | | Machinery | | | | 2,700 | | | | 5,408 | |
| | Hefei Meiya Optoelectronic Technology Inc. | | | Machinery | | | | 3,480 | | | | 11,169 | |
| | Heilongjiang Agriculture Co. Ltd., A | | | Food Products | | | | 5,400 | | | | 10,082 | |
| | Henan Shuanghui Investment & Development Co. Ltd. | | | Food Products | | | | 10,800 | | | | 37,055 | |
| | Hengan International Group Co. Ltd. | | | Personal Products | | | | 34,750 | | | | 155,381 | |
| | Hengdian Group DMEGC Magnetics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 14,990 | |
| | Hengli Petrochemical Co. Ltd., A | | | Chemicals | | | | 10,800 | | | | 25,632 | |
| b | | HengTen Networks Group Ltd. | | | Internet & Catalog Retail | | | | 108,000 | | | | 23,114 | |
| | Hengtong Optic-electric Co. Ltd. | | | Communications Equipment | | | | 8,100 | | | | 20,678 | |
| | Hengyi Petrochemical Co. Ltd., A | | | Chemicals | | | | 13,500 | | | | 14,600 | |
| | Hesteel Co. Ltd. | | | Metals & Mining | | | | 37,800 | | | | 11,930 | |
| | Hithink RoyalFlush Information Network Co. Ltd., A | | | Capital Markets | | | | 2,700 | | | | 29,344 | |
| b | | Holitech Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 10,800 | | | | 3,939 | |
| | Hongfa Technology Co. Ltd., A | | | Electrical Equipment | | | | 3,740 | | | | 18,272 | |
| | Hopson Development Holdings Ltd. | | | Real Estate Management & Development | | | | 36,544 | | | | 38,267 | |
| | Hoshine Silicon Industry Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 41,490 | |
| a,b | | Hua Hong Semiconductor Ltd., 144A | | | Semiconductors & Semiconductor Equipment | | | | 20,000 | | | | 45,759 | |
| | Huadian Power International Corp. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 24,300 | | | | 20,281 | |
| | Huadian Power International Corp. Ltd., H | | | Independent Power Producers & Energy Traders | | | | 54,000 | | | | 19,743 | |
| | Huadong Medicine Co. Ltd., A | | | Health Care Providers & Services | | | | 5,400 | | | | 30,389 | |
| | Huafa Industrial Co. Ltd. Zhuhai, A | | | Real Estate Management & Development | | | | 8,100 | | | | 11,191 | |
| | Huafon Chemical Co. Ltd. | | | Chemicals | | | | 13,500 | | | | 12,365 | |
| | Huagong Tech Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 2,700 | | | | 6,999 | |
| | Huaibei Mining Holdings Co. Ltd., A | | | Metals & Mining | | | | 8,100 | | | | 19,145 | |
| | Hualan Biological Engineering Inc. | | | Biotechnology | | | | 6,060 | | | | 15,437 | |
| | Huaneng Lancang River Hydropower Inc., A | | | Independent Power Producers & Energy Traders | | | | 21,600 | | | | 20,845 | |
| b | | Huaneng Power International Inc., A | | | Independent Power Producers & Energy Traders | | | | 27,000 | | | | 28,745 | |
| | Huaneng Power International Inc., H | | | Independent Power Producers & Energy Traders | | | | 216,000 | | | | 94,106 | |
| | Huapont Life Sciences Co. Ltd. | | | Chemicals | | | | 5,400 | | | | 4,030 | |
| a | | Huatai Securities Co. Ltd., 144A | | | Capital Markets | | | | 75,600 | | | | 83,209 | |
| | Huatai Securities Co. Ltd., A | | | Capital Markets | | | | 27,000 | | | | 45,902 | |
| | Huaxi Securities Co. Ltd. | | | Capital Markets | | | | 8,100 | | | | 8,328 | |
| | Huaxia Bank Co. Ltd., A | | | Banks | | | | 56,700 | | | | 40,005 | |
| | Huaxin Cement Co. Ltd., H | | | Construction Materials | | | | 17,400 | | | | 17,932 | |
| | Huaxin Cement Co. Ltd., A | | | Construction Materials | | | | 5,400 | | | | 12,687 | |
| | Huayu Automotive Systems Co. Ltd. | | | Auto Components | | | | 10,800 | | | | 25,026 | |
| | Hubei Biocause Pharmaceutical Co. Ltd. | | | Insurance | | | | 13,500 | | | | 5,738 | |
| | Hubei Energy Group Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 24,300 | | | | 14,963 | |
| | Hubei Xingfa Chemicals Group Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 12,680 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Hubei Xinyangfeng Fertilizer Co. Ltd. | | | Chemicals | | | | 5,400 | | | $ | 9,832 | |
| | Huizhou Desay Sv Automotive Co. Ltd. | | | Household Durables | | | | 1,700 | | | | 32,895 | |
| | Humanwell Healthcare Group Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 13,278 | |
| | Hunan Gold Corp. Ltd. | | | Metals & Mining | | | | 5,400 | | | | 9,097 | |
| | Hunan Valin Steel Co. Ltd., A | | | Metals & Mining | | | | 24,300 | | | | 13,907 | |
| | Hundsun Technologies Inc., A | | | Software | | | | 6,506 | | | | 30,928 | |
| | Huolinhe Opencut Coal Industry Corp. Ltd. of Inner Mongolia | | | Oil, Gas & Consumable Fuels | | | | 5,400 | | | | 9,900 | |
| a,b | | Hygeia Healthcare Holdings Co. Ltd., 144A | | | Health Care Providers & Services | | | | 16,200 | | | | 91,526 | |
| | Iflytek Co. Ltd. | | | Software | | | | 8,100 | | | | 37,289 | |
| | Imeik Technology Development Co. Ltd., A | | | Biotechnology | | | | 600 | | | | 41,266 | |
| | Industrial and Commercial Bank of China Ltd. | | | Banks | | | | 259,200 | | | | 158,156 | |
| | Industrial and Commercial Bank of China Ltd., H | | | Banks | | | | 3,861,000 | | | | 1,810,020 | |
| | Industrial Bank Co. Ltd., A | | | Banks | | | | 70,200 | | | | 163,951 | |
| b | | Industrial Securities Co. Ltd., A | | | Capital Markets | | | | 31,590 | | | | 24,150 | |
| | Ingenic Semiconductor Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 1,300 | | | | 13,488 | |
| | Inmyshow Digital Technology Group Co. Ltd. | | | Media | | | | 5,400 | | | | 4,499 | |
| | Inner Mongolia BaoTou Steel Union Co. Ltd., A | | | Metals & Mining | | | | 148,500 | | | | 38,327 | |
| | Inner Mongolia ERDOS Resources Co. Ltd. | | | Metals & Mining | | | | 5,400 | | | | 11,491 | |
| | Inner Mongolia ERDOS Resources Co. Ltd., B | | | Metals & Mining | | | | 18,900 | | | | 35,778 | |
| | Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., A | | | Chemicals | | | | 27,000 | | | | 14,884 | |
| | Inner Mongolia Yili Industrial Group Co. Ltd., A | | | Food Products | | | | 21,600 | | | | 99,923 | |
| | Inner Mongolia Yitai Coal Co. Ltd., B | | | Oil, Gas & Consumable Fuels | | | | 51,300 | | | | 77,309 | |
| | Inner Mongolia Yuan Xing Energy Co. Ltd. | | | Chemicals | | | | 13,500 | | | | 14,070 | |
| a,b | | Innovent Biologics Inc., B, 144A | | | Biotechnology | | | | 65,000 | | | | 202,455 | |
| | Inspur Electronic Information Industry Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 5,508 | | | | 15,259 | |
| | Intco Medical Technology Co. Ltd. | | | Health Care Equipment & Supplies | | | | 1,890 | | | | 5,284 | |
| b | | Iqiyi Inc., ADR | | | Entertainment | | | | 15,633 | | | | 42,365 | |
| | JA Solar Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 7,480 | | | | 67,192 | |
| | Jafron Biomedical Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 2,700 | | | | 18,361 | |
| | Jason Furniture Hangzhou Co. Ltd., A | | | Household Durables | | | | 3,480 | | | | 19,496 | |
| a,b | | JD Health International Inc., 144A | | | Internet & Catalog Retail | | | | 36,450 | | | | 209,416 | |
| a,b | | JD Logistics Inc., 144A | | | Air Freight & Logistics | | | | 81,000 | | | | 142,397 | |
| | JD.com Inc., A | | | Internet & Catalog Retail | | | | 115,910 | | | | 2,932,487 | |
| b | | Jiajiayue Group Co. Ltd., A | | | Food & Staples Retailing | | | | 2,700 | | | | 4,086 | |
| | Jiangsu Changjiang Electronics Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 5,400 | | | | 16,232 | |
| | Jiangsu Cnano Technology Co. Ltd., A | | | Chemicals | | | | 810 | | | | 13,085 | |
| | Jiangsu Eastern Shenghong Co. Ltd. | | | Chemicals | | | | 13,500 | | | | 32,987 | |
| | Jiangsu Expressway Co. Ltd., A | | | Transportation Infrastructure | | | | 8,100 | | | | 8,169 | |
| | Jiangsu Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 64,000 | | | | 48,021 | |
| | Jiangsu GoodWe Power Supply Technology Co. Ltd., A | | | Electrical Equipment | | | | 364 | | | | 14,451 | |
| | Jiangsu Hengli Hydraulic Co. Ltd., A | | | Machinery | | | | 3,980 | | | | 25,279 | |
| | Jiangsu Hengrui Medicine Co. Ltd., A | | | Pharmaceuticals | | | | 22,740 | | | | 111,959 | |
| | Jiangsu King’s Luck Brewery JSC Ltd | | | Beverages | | | | 5,400 | | | | 34,752 | |
| | Jiangsu Linyang Energy Co. Ltd., A | | | Electrical Equipment | | | | 8,100 | | | | 7,624 | |
| | Jiangsu Yanghe Brewery JST Co. Ltd., A | | | Beverages | | | | 5,400 | | | | 119,791 | |
| | Jiangsu Yangnong Chemical Co. Ltd., A | | | Chemicals | | | | 900 | | | | 12,625 | |
| | Jiangsu Yoke Technology Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 23,288 | |
| | Jiangsu Yuyue Medical Equipment & Supply Co. Ltd. | | | Health Care Equipment & Supplies | | | | 2,700 | | | | 10,911 | |
| b | | Jiangsu Zhongnan Construction Group Co. Ltd. | | | Real Estate Management & Development | | | | 16,200 | | | | 5,272 | |
| | Jiangsu Zhongtian Technology Co. Ltd., A | | | Electrical Equipment | | | | 10,800 | | | | 34,040 | |
| | Jiangxi Copper Co. Ltd., A | | | Metals & Mining | | | | 8,100 | | | | 17,315 | |
| | Jiangxi Copper Co. Ltd., H | | | Metals & Mining | | | | 54,000 | | | | 62,462 | |
| b | | Jiangxi Special Electric Motor Co. Ltd., A | | | Electrical Equipment | | | | 5,400 | | | | 14,869 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Jiangxi Zhengbang Technology Co. Ltd., A | | | Food Products | | | | 10,800 | | | $ | 6,772 | |
| | Jilin Aodong Pharmaceutical Group Co. Ltd. | | | Pharmaceuticals | | | | 5,400 | | | | 10,135 | |
| b | | Jinke Properties Group Co. Ltd. | | | Real Estate Management & Development | | | | 21,600 | | | | 6,332 | |
| | Jinke Smart Services Group Co. Ltd., H | | | Real Estate Management & Development | | | | 16,200 | | | | 24,558 | |
| a,c | | Jinxin Fertility Group Ltd., 144A, Reg S | | | Health Care Providers & Services | | | | 74,000 | | | | 36,293 | |
| | JiuGui Liquor Co. Ltd., A | | | Beverages | | | | 900 | | | | 15,862 | |
| a | | Jiumaojiu International Holdings Ltd., 144A | | | Hotels, Restaurants & Leisure | | | | 27,000 | | | | 44,301 | |
| | Jizhong Energy Resources Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 10,800 | | | | 10,983 | |
| | JoInc.are Pharmaceutical Group Industry Co. Ltd., A | | | Pharmaceuticals | | | | 8,100 | | | | 11,953 | |
| | Joinn Laboratories China Co. Ltd., A | | | Life Sciences Tools & Services | | | | 1,400 | | | | 11,097 | |
| a | | Joinn Laboratories China Co. Ltd., H, 144A | | | Life Sciences Tools & Services | | | | 3,780 | | | | 14,422 | |
| | Jointown Pharmaceutical Group Co. Ltd., A | | | Health Care Providers & Services | | | | 8,100 | | | | 12,998 | |
| | Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., A | | | Food Products | | | | 2,700 | | | | 12,074 | |
| | Joyoung Co. Ltd. | | | Household Durables | | | | 2,700 | | | | 5,594 | |
| | JOYY Inc., ADR | | | Interactive Media & Services | | | | 2,295 | | | | 59,670 | |
| b | | Juneyao Airlines Co. Ltd., A | | | Airlines | | | | 2,700 | | | | 5,734 | |
| b | | Kaishan Group Co. Ltd., A | | | Machinery | | | | 2,700 | | | | 7,041 | |
| b | | Kanzhun Ltd., ADR | | | Interactive Media & Services | | | | 6,453 | | | | 108,927 | |
| b | | KE Holdings Inc., ADR | | | Real Estate Management & Development | | | | 31,428 | | | | 550,619 | |
| | Keda Industrial Group Co. Ltd. | | | Machinery | | | | 5,400 | | | | 12,680 | |
| | Kingboard Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 40,500 | | | | 114,536 | |
| b | | Kingdee International Software Group Co. Ltd. | | | Software | | | | 126,000 | | | | 165,006 | |
| | Kingfa Sci & Tech Co. Ltd., A | | | Chemicals | | | | 10,800 | | | | 14,210 | |
| b | | Kingsoft Cloud Holdings Ltd., ADR | | | IT Services | | | | 4,914 | | | | 9,779 | |
| | Kingsoft Corp. Ltd. | | | Software | | | | 45,000 | | | | 119,810 | |
| a,b | | Kuaishou Technology, B, 144A | | | Interactive Media & Services | | | | 94,500 | | | | 613,355 | |
| b | | Kuang-Chi Technologies Co. Ltd. | | | Auto Components | | | | 8,100 | | | | 16,872 | |
| | Kunlun Tech Co. Ltd. | | | Entertainment | | | | 5,400 | | | | 9,377 | |
| | Kweichow Moutai Co. Ltd., A | | | Beverages | | | | 4,300 | | | | 1,129,412 | |
| | KWG Group Holdings Ltd. | | | Real Estate Management & Development | | | | 67,500 | | | | 8,341 | |
| b | | Lakala Payment Co. Ltd., A | | | IT Services | | | | 2,700 | | | | 5,181 | |
| | Lao Feng Xiang Co. Ltd., B | | | Textiles, Apparel & Luxury Goods | | | | 10,800 | | | | 31,212 | |
| | Lee & Man Paper Manufacturing Ltd. | | | Paper & Forest Products | | | | 54,000 | | | | 17,335 | |
| a | | Legend Holdings Corp., 144A | | | Technology Hardware, Storage & Peripherals | | | | 27,000 | | | | 23,458 | |
| | Lens Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 16,200 | | | | 20,974 | |
| b | | Leo Group Co. Ltd. | | | Media | | | | 29,700 | | | | 7,290 | |
| | Lepu Medical Technology Beijing Co. Ltd. | | | Health Care Equipment & Supplies | | | | 5,400 | | | | 16,005 | |
| | Levima Advanced Materials Corp., A | | | Chemicals | | | | 2,700 | | | | 15,141 | |
| | Leyard Optoelectronic Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 8,100 | | | | 6,260 | |
| b | | Li Auto Inc., ADR | | | Automobiles | | | | 25,704 | | | | 591,449 | |
| | Li Ning Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 111,500 | | | | 853,661 | |
| | LianChuang Electronic Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 3,360 | | | | 6,462 | |
| | Lianhe Chemical Technology Co. Ltd. | | | Chemicals | | | | 2,700 | | | | 6,779 | |
| | Liaoning Port Co. Ltd., A | | | Transportation Infrastructure | | | | 62,100 | | | | 13,937 | |
| | Livzon Pharmaceutical Group Inc. | | | Pharmaceuticals | | | | 2,700 | | | | 11,400 | |
| | Livzon Pharmaceutical Group Inc., H | | | Pharmaceuticals | | | | 8,100 | | | | 20,307 | |
| | Lomon Billions Group Co. Ltd. | | | Chemicals | | | | 8,100 | | | | 17,895 | |
| a,c | | Longfor Group Holdings Ltd., 144A, Reg S | | | Real Estate Management & Development | | | | 90,910 | | | | 261,152 | |
| | LONGi Green Energy Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 27,000 | | | | 181,448 | |
| | Longshine Technology Group Co. Ltd., A | | | Software | | | | 2,700 | | | | 8,120 | |
| | Luenmei Quantum Co. Ltd., A | | | Water Utilities | | | | 5,400 | | | | 5,363 | |
| | Lufax Holding Ltd., ADR | | | Consumer Finance | | | | 33,723 | | | | 85,656 | |
| | Luolai Lifestyle Technology Co. Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 2,700 | | | | 3,867 | |
| | Luxi Chemical Group Co. Ltd., A | | | Chemicals | | | | 5,400 | | | | 9,817 | |
| | Luxshare Precision Industry Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 24,399 | | | | 100,619 | |
| a,b | | Luye Pharma Group Ltd., 144A | | | Pharmaceuticals | | | | 94,500 | | | | 26,244 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Luzhou Laojiao Co. Ltd., A | | | Beverages | | | | 5,400 | | | $ | 174,714 | |
| | Maanshan Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 21,600 | | | | 8,150 | |
| | Maccura Biotechnology Co. Ltd. | | | Life Sciences Tools & Services | | | | 2,700 | | | | 6,344 | |
| | Mango Excellent Media Co. Ltd. | | | Entertainment | | | | 8,130 | | | | 28,430 | |
| | Maxscend Microelectronics Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,632 | | | | 20,239 | |
| b | | Meinian Onehealth Healthcare Holdings Co. Ltd. | | | Health Care Providers & Services | | | | 13,500 | | | | 8,086 | |
| a,b | | Meituan Dianping, B, 144A | | | Internet & Catalog Retail | | | | 201,615 | | | | 4,253,232 | |
| | Metallurgical Corp. of China Ltd. | | | Construction & Engineering | | | | 135,000 | | | | 22,013 | |
| | Metallurgical Corp. of China Ltd., A | | | Construction & Engineering | | | | 59,400 | | | | 24,913 | |
| b | | Microport Scientific Corp. | | | Health Care Equipment & Supplies | | | | 24,300 | | | | 41,852 | |
| | Ming Yang Smart Energy Group Ltd. | | | Electrical Equipment | | | | 8,100 | | | | 27,416 | |
| | Ming Yuan Cloud Group Holdings Ltd. | | | Software | | | | 27,000 | | | | 15,994 | |
| | MINISO Group Holding Ltd., ADR | | | Multiline Retail | | | | 3,834 | | | | 21,049 | |
| | Minth Group Ltd. | | | Auto Components | | | | 34,000 | | | | 75,277 | |
| | Montage Technology Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 4,025 | | | | 29,545 | |
| | Muyuan Foods Co. Ltd. | | | Food Products | | | | 18,360 | | | | 140,408 | |
| | NanJi E-Commerce Co. Ltd. | | | Media | | | | 10,800 | | | | 6,741 | |
| | Nanjing Hanrui Cobalt Co. Ltd., A | | | Metals & Mining | | | | 800 | | | | 4,921 | |
| | Nanjing Iron & Steel Co. Ltd., A | | | Metals & Mining | | | | 21,600 | | | | 8,271 | |
| | Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 4,845 | | | | 11,309 | |
| | Nanjing Securities Co. Ltd., A | | | Capital Markets | | | | 13,500 | | | | 14,448 | |
| | Nanyang Topsec Technologies Group Inc., A | | | Electrical Equipment | | | | 5,400 | | | | 6,969 | |
| | Nari Technology Development Co. Ltd., A | | | Electrical Equipment | | | | 22,640 | | | | 78,980 | |
| b | | National Silicon Industry Group Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 6,399 | | | | 16,022 | |
| | NAURA Technology Group Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,800 | | | | 70,292 | |
| | NavInfo Co. Ltd. | | | Household Durables | | | | 8,100 | | | | 13,112 | |
| | NetEase Inc. | | | Entertainment | | | | 89,100 | | | | 1,345,030 | |
| | New China Life Insurance Co. Ltd., A | | | Insurance | | | | 8,100 | | | | 30,609 | |
| | New China Life Insurance Co. Ltd., H | | | Insurance | | | | 45,900 | | | | 87,591 | |
| b | | New Hope Liuhe Co. Ltd. | | | Food Products | | | | 16,200 | | | | 31,586 | |
| b | | New Oriental Education & Technology Group Inc., Sponsored ADR | | | Diversified Consumer Services | | | | 6,868 | | | | 164,626 | |
| | Newland Digital Technology Co. Ltd. | | | Software | | | | 2,700 | | | | 4,586 | |
| | Nine Dragons Paper Holdings Ltd. | | | Paper & Forest Products | | | | 77,000 | | | | 47,868 | |
| | Ninestar Corp. | | | Technology Hardware, Storage & Peripherals | | | | 5,400 | | | | 32,684 | |
| | Ningbo Deye Technology Co. Ltd., A | | | Machinery | | | | 700 | | | | 41,260 | |
| b | | Ningbo Joyson Electronic Corp. | | | Auto Components | | | | 5,400 | | | | 10,014 | |
| | Ningbo Orient Wires & Cables Co. Ltd., A | | | Electrical Equipment | | | | 2,700 | | | | 26,409 | |
| | Ningbo Ronbay New Energy Technology Co. Ltd. | | | Electrical Equipment | | | | 1,586 | | | | 18,721 | |
| | Ningbo Sanxing Medical Electric Co. Ltd., A | | | Electrical Equipment | | | | 5,400 | | | | 8,665 | |
| | Ningbo Shanshan Co. Ltd., A | | | Chemicals | | | | 8,100 | | | | 23,689 | |
| | Ningbo Tuopu Group Co. Ltd., A | | | Auto Components | | | | 2,700 | | | | 27,950 | |
| | Ningbo Zhoushan Port Co. Ltd., A | | | Transportation Infrastructure | | | | 32,400 | | | | 16,497 | |
| | Ningxia Baofeng Energy Group Co. Ltd., A | | | Chemicals | | | | 10,800 | | | | 20,179 | |
| b | | NIO Inc., ADR | | | Automobiles | | | | 64,881 | | | | 1,023,173 | |
| a | | Nongfu Spring Co. Ltd., H, 144A | | | Beverages | | | | 86,400 | | | | 501,347 | |
| | North Huajin Chemical Industries Co. Ltd. | | | Chemicals | | | | 5,400 | | | | 5,393 | |
| | North Industries Group Red Arrow Co. Ltd., A | | | Machinery | | | | 2,700 | | | | 8,465 | |
| | Northeast Securities Co. Ltd. | | | Capital Markets | | | | 8,100 | | | | 7,328 | |
| | NSFOCUS Information Technology Co. Ltd. | | | Software | | | | 2,700 | | | | 3,087 | |
| b | | Offcn Education Technology Co. Ltd., A | | | Diversified Consumer Services | | | | 8,100 | | | | 4,602 | |
| | Offshore Oil Engineering Co. Ltd., A | | | Energy Equipment & Services | | | | 13,500 | | | | 8,427 | |
| b | | OFILM Group Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 10,800 | | | | 7,984 | |
| | Oppein Home Group Inc., A | | | Household Durables | | | | 900 | | | | 14,342 | |
| | ORG Technology Co. Ltd. | | | Containers & Packaging | | | | 8,100 | | | | 5,261 | |
| a | | Orient Securities Co. Ltd. of China, 144A | | | Capital Markets | | | | 43,200 | | | | 16,950 | |
| | Oriental Energy Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 5,400 | | | | 5,772 | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 175 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Ourpalm Co. Ltd. | | | Entertainment | | | | 13,500 | | | $ | 5,283 | |
| | Ovctek China Inc., A | | | Health Care Equipment & Supplies | | | | 3,420 | | | | 19,812 | |
| b | | Pangang Group Vanadium Titanium & Resources Co. Ltd., A | | | Metals & Mining | | | | 29,700 | | | | 19,247 | |
| | People.cn Co. Ltd. | | | Media | | | | 5,400 | | | | 7,817 | |
| | People’s Insurance Co. Group of China Ltd., A | | | Insurance | | | | 35,100 | | | | 24,666 | |
| | Perfect World Co. Ltd. | | | Entertainment | | | | 5,400 | | | | 9,408 | |
| | PetroChina Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 83,700 | | | | 60,229 | |
| | PetroChina Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 1,026,000 | | | | 420,861 | |
| | Pharmaron Beijing Co. Ltd., A | | | Life Sciences Tools & Services | | | | 1,500 | | | | 11,372 | |
| a,c | | Pharmaron Beijing Co. Ltd., H, 144A, Reg S | | | Life Sciences Tools & Services | | | | 9,400 | | | | 45,683 | |
| | PICC Property and Casualty Co. Ltd., H | | | Insurance | | | | 324,000 | | | | 335,974 | |
| b | | Pinduoduo Inc., ADR | | | Internet & Direct Marketing Retail | | | | 18,225 | | | | 1,140,520 | |
| | Ping An Bank Co. Ltd., A | | | Banks | | | | 67,500 | | | | 112,103 | |
| a,b,c | | Ping An Healthcare and Technology Co. Ltd., 144A, Reg S | | | Health Care Technology | | | | 18,900 | | | | 35,634 | |
| | Ping An Insurance Group Co. of China Ltd., A | | | Insurance | | | | 37,800 | | | | 220,464 | |
| | Ping An Insurance Group Co. of China Ltd., H | | | Insurance | | | | 297,000 | | | | 1,483,127 | |
| | Pingdingshan Tianan Coal Mining Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 8,100 | | | | 15,497 | |
| | Poly Developments and Holdings Group Co. Ltd., A | | | Real Estate Management & Development | | | | 40,500 | | | | 102,256 | |
| | Poly Property Services Co. Ltd., H | | | Real Estate Management & Development | | | | 6,400 | | | | 33,957 | |
| a | | Pop Mart International Group Ltd., 144A | | | Specialty Retail | | | | 32,400 | | | | 59,600 | |
| | Porton Pharma Solutions Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 17,649 | |
| a | | Postal Savings Bank of China Co. Ltd., 144A | | | Banks | | | | 459,000 | | | | 270,726 | |
| | Postal Savings Bank of China Co. Ltd. | | | Banks | | | | 75,600 | | | | 47,295 | |
| | Power Construction Corp. of China Ltd. | | | Construction & Engineering | | | | 37,800 | | | | 36,956 | |
| | Pylon Technologies Co. Ltd., A | | | Electrical Equipment | | | | 459 | | | | 25,753 | |
| | Qingdao TGOOD Electric Co. Ltd. | | | Electrical Equipment | | | | 2,700 | | | | 5,510 | |
| b | | Qinghai Salt Lake Industry Co. Ltd., A | | | Chemicals | | | | 18,900 | | | | 63,308 | |
| | Raytron Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,348 | | | | 7,189 | |
| a | | Red Star Macalline Group Corp. Ltd., 144A | | | Real Estate Management & Development | | | | 33,600 | | | | 9,203 | |
| a,b | | Remegen Co. Ltd., H, 144A | | | Biotechnology | | | | 7,500 | | | | 36,354 | |
| b | | RiseSun Real Estate Development Co. Ltd. | | | Real Estate Management & Development | | | | 13,500 | | | | 4,450 | |
| b | | RLX Technology Inc., ADR | | | Tobacco | | | | 36,450 | | | | 38,272 | |
| | Rongsheng Petro Chemical Co. Ltd. | | | Chemicals | | | | 10,800 | | | | 20,951 | |
| | SAIC Motor Corp Ltd. | | | Automobiles | | | | 32,400 | | | | 64,990 | |
| | Sailun Group Co. Ltd., A | | | Auto Components | | | | 10,800 | | | | 15,331 | |
| | Sangfor Technologies Inc. | | | Software | | | | 300 | | | | 4,208 | |
| | Sansteel Minguang Co. Ltd. | | | Metals & Mining | | | | 8,100 | | | | 5,556 | |
| | Sany Heavy Industry Co. Ltd., A | | | Machinery | | | | 29,700 | | | | 57,824 | |
| | SDIC Power Holdings Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 27,000 | | | | 40,675 | |
| | Sealand Securities Co. Ltd. | | | Capital Markets | | | | 22,640 | | | | 10,257 | |
| b | | Seazen Group Ltd. | | | Real Estate Management & Development | | | | 108,000 | | | | 25,315 | |
| b | | Seazen Holdings Co. Ltd., A | | | Real Estate Management & Development | | | | 8,100 | | | | 19,860 | |
| | SF Holding Co. Ltd. | | | Air Freight & Logistics | | | | 16,200 | | | | 107,301 | |
| | SG Micro Corp., A | | | Semiconductors & Semiconductor Equipment | | | | 1,275 | | | | 25,197 | |
| | Shaanxi Coal Industry Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 32,400 | | | | 103,483 | |
| | Shaanxi International Trust Co. Ltd. | | | Capital Markets | | | | 13,500 | | | | 5,473 | |
| b | | Shandong Chenming Paper Holdings Ltd., A | | | Paper & Forest Products | | | | 5,400 | | | | 3,545 | |
| b | | Shandong Chenming Paper Holdings Ltd., B | | | Paper & Forest Products | | | | 32,400 | | | | 9,617 | |
| b | | Shandong Chenming Paper Holdings Ltd., H | | | Paper & Forest Products | | | | 27,000 | | | | 7,464 | |
| | Shandong Denghai Seeds Co. Ltd. | | | Food Products | | | | 2,700 | | | | 7,230 | |
| a | | Shandong Gold Mining Co. Ltd., 144A | | | Metals & Mining | | | | 34,250 | | | | 54,452 | |
| | Shandong Gold Mining Co. Ltd., A | | | Metals & Mining | | | | 11,484 | | | | 27,594 | |
| | Shandong Himile Mechanical Science & Technology Co. Ltd. | | | Machinery | | | | 2,700 | | | | 8,749 | |
| | Shandong Hi-speed Co. Ltd., A | | | Transportation Infrastructure | | | | 10,800 | | | | 8,226 | |
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Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Shandong Hualu Hengsheng Chemical Co. Ltd., A | | | Chemicals | | | | 8,180 | | | $ | 33,470 | |
| | Shandong Humon Smelting Co. Ltd. | | | Metals & Mining | | | | 2,700 | | | | 3,443 | |
| | Shandong Linglong Tyre Co. Ltd., A | | | Auto Components | | | | 2,700 | | | | 6,893 | |
| | Shandong Nanshan Aluminum Co. Ltd., A | | | Metals & Mining | | | | 40,500 | | | | 17,100 | |
| | Shandong Pharmaceutical Glass Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 2,700 | | | | 10,972 | |
| | Shandong Sun Paper Industry JSC Ltd., A | | | Paper & Forest Products | | | | 8,100 | | | | 13,009 | |
| | Shandong Weigao Group Medical Polymer Co. Ltd., H | | | Health Care Equipment & Supplies | | | | 112,900 | | | | 151,878 | |
| | Shanghai AJ Group Co. Ltd., A | | | Diversified Financial Services | | | | 5,400 | | | | 4,022 | |
| | Shanghai Bailian Group Co. Ltd., B | | | Food & Staples Retailing | | | | 10,800 | | | | 7,236 | |
| | Shanghai Bairun Investment Holding Group Co. Ltd. | | | Beverages | | | | 3,740 | | | | 14,133 | |
| | Shanghai Baosight Software Co. Ltd., A | | | Software | | | | 3,080 | | | | 15,894 | |
| | Shanghai Baosight Software Co. Ltd., B | | | Software | | | | 22,990 | | | | 66,901 | |
| | Shanghai Construction Group Co. Ltd., A | | | Construction & Engineering | | | | 24,300 | | | | 8,624 | |
| b | | Shanghai Electric Group Co. Ltd., A | | | Electrical Equipment | | | | 32,400 | | | | 17,588 | |
| b | | Shanghai Electric Group Co. Ltd., H | | | Electrical Equipment | | | | 108,000 | | | | 21,463 | |
| b | | Shanghai Electric Power Co. Ltd., A | | | Independent Power Producers & Energy Traders | | | | 10,800 | | | | 13,619 | |
| | Shanghai Environment Group Co. Ltd., A | | | Commercial Services & Supplies | | | | 5,400 | | | | 6,741 | |
| | Shanghai Fosun Pharmaceutical Group Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 22,390 | |
| | Shanghai Fosun Pharmaceutical Group Co. Ltd., H | | | Pharmaceuticals | | | | 27,000 | | | | 65,489 | |
| | Shanghai Friendess Electronic Technology Corp. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 420 | | | | 11,164 | |
| | Shanghai Fudan Microelectronics Group Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 999 | | | | 10,546 | |
| | Shanghai Fudan Microelectronics Group Co. Ltd., H | | | Semiconductors & Semiconductor Equipment | | | | 14,000 | | | | 64,026 | |
| | Shanghai Huayi Group Co. Ltd., B | | | Chemicals | | | | 16,200 | | | | 9,542 | |
| b | | Shanghai International Airport Co. Ltd., A | | | Transportation Infrastructure | | | | 7,100 | | | | 57,544 | |
| | Shanghai International Port Group Co. Ltd., A | | | Transportation Infrastructure | | | | 37,800 | | | | 29,480 | |
| | Shanghai Jinjiang International Hotels Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 8,100 | | | | 15,042 | |
| | Shanghai Jinjiang International Hotels Co. Ltd., A | | | Hotels, Restaurants & Leisure | | | | 2,700 | | | | 21,834 | |
| | Shanghai Jinqiao Export Processing Zone Development Co. Ltd., A | | | Real Estate Management & Development | | | | 2,700 | | | | 4,030 | |
| | Shanghai Jinqiao Export Processing Zone Development Co. Ltd., B | | | Real Estate Management & Development | | | | 16,200 | | | | 14,418 | |
| b | | Shanghai Junshi Biosciences Co. Ltd., A | | | Biotechnology | | | | 866 | | | | 6,133 | |
| a,b | | Shanghai Junshi Biosciences Co. Ltd., H, 144A | | | Biotechnology | | | | 10,800 | | | | 34,327 | |
| | Shanghai Lingang Holdings Corp. Ltd. | | | Real Estate Management & Development | | | | 6,200 | | | | 10,279 | |
| | Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A | | | Real Estate Management & Development | | | | 5,400 | | | | 7,294 | |
| | Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B | | | Real Estate Management & Development | | | | 56,700 | | | | 44,396 | |
| | Shanghai M&G Stationery Inc., A | | | Commercial Services & Supplies | | | | 2,700 | | | | 17,077 | |
| | Shanghai Mechanical and Electrical Industry Co. Ltd., B | | | Machinery | | | | 10,800 | | | | 10,994 | |
| | Shanghai Pharmaceuticals Holding Co. Ltd., A | | | Health Care Providers & Services | | | | 8,100 | | | | 18,758 | |
| | Shanghai Pharmaceuticals Holding Co. Ltd., H | | | Health Care Providers & Services | | | | 43,200 | | | | 59,655 | |
| | Shanghai Pudong Development Bank Co. Ltd., A . | | | Banks | | | | 97,215 | | | | 95,999 | |
| | Shanghai Putailai New Energy Technology Co. Ltd., A | | | Chemicals | | | | 5,520 | | | | 43,205 | |
| | Shanghai RAAS Blood Products Co. Ltd., A | | | Biotechnology | | | | 24,300 | | | | 18,168 | |
| | Shanghai Rural Commercial Bank Co. Ltd., A | | | Banks | | | | 10,800 | | | | 8,044 | |
| | Shanghai Shibei Hi-Tech Co. Ltd., B | | | Real Estate Management & Development | | | | 29,700 | | | | 7,276 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Shanghai Shimao Co. Ltd., A | | | Real Estate Management & Development | | | | 10,800 | | | $ | 3,575 | |
| | Shanghai Tunnel Engineering Co. Ltd., A | | | Construction & Engineering | | | | 13,500 | | | | 9,336 | |
| | Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd. | | | Trading Companies & Distributors | | | | 10,800 | | | | 9,256 | |
| | Shanghai Yuyuan Tourist Mart Group Co. Ltd., A . | | | Specialty Retail | | | | 16,200 | | | | 15,157 | |
| | Shanghai Zhangjiang High-Tech Park Development Co. Ltd., A | | | Real Estate Management & Development | | | | 5,400 | | | | 7,870 | |
| | Shanghai Zhenhua Port Machinery Co. Ltd., B | | | Machinery | | | | 59,400 | | | | 14,375 | |
| | Shanxi Lu’an Environmental Energy Development Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 10,800 | | | | 25,572 | |
| | Shanxi Meijin Energy Co. Ltd., A | | | Metals & Mining | | | | 16,200 | | | | 21,837 | |
| | Shanxi Securities Co. Ltd. | | | Capital Markets | | | | 13,700 | | | | 9,724 | |
| | Shanxi Taigang Stainless Steel Co. Ltd., A | | | Metals & Mining | | | | 21,600 | | | | 13,543 | |
| | Shanxi Xinghuacun Fen Wine Factory Co. Ltd., A . | | | Beverages | | | | 4,220 | | | | 179,291 | |
| | Shanxi Xishan Coal & Electricity Power Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 13,500 | | | | 28,367 | |
| | Shanying International Holding Co. Ltd., A | | | Paper & Forest Products | | | | 16,200 | | | | 5,408 | |
| | Shenghe Resources Holding Co. Ltd., A | | | Metals & Mining | | | | 5,400 | | | | 11,468 | |
| | Shengyi Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 8,100 | | | | 14,884 | |
| | Shennan Circuits Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 600 | | | | 6,361 | |
| | Shenwan Hongyuan Group Co. Ltd. | | | Capital Markets | | | | 72,900 | | | | 39,471 | |
| a,c | | Shenwan Hongyuan Group Co. Ltd., 144A, Reg S | | | Capital Markets | | | | 86,400 | | | | 14,088 | |
| | Shenzhen Accord Pharmaceutical Co. Ltd., B | | | Health Care Providers & Services | | | | 2,700 | | | | 5,565 | |
| | Shenzhen Agricultural Products Group Co. Ltd. | | | Food & Staples Retailing | | | | 5,400 | | | | 3,931 | |
| | Shenzhen Airport Co. Ltd. | | | Transportation Infrastructure | | | | 10,800 | | | | 10,180 | |
| | Shenzhen Capchem Technology Co. Ltd., A | | | Chemicals | | | | 2,080 | | | | 12,219 | |
| | Shenzhen Dynanonic Co. Ltd., A | | | Chemicals | | | | 540 | | | | 21,345 | |
| | Shenzhen Energy Group Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 16,200 | | | | 12,748 | |
| b | | Shenzhen Everwin Precision Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 8,120 | |
| | Shenzhen Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 24,000 | | | | 17,549 | |
| | Shenzhen Gas Corporation Ltd., A | | | Gas Utilities | | | | 8,800 | | | | 8,394 | |
| | Shenzhen Hepalink Pharmaceutical Group Co. Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 5,696 | |
| | Shenzhen Huaqiang Industry Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 2,700 | | | | 4,518 | |
| b | | Shenzhen Infogem Technologies Co. Ltd., A | | | Software | | | | 2,700 | | | | 3,280 | |
| | Shenzhen Inovance Technology Co. Ltd. | | | Machinery | | | | 9,050 | | | | 73,005 | |
| | Shenzhen International Holdings Ltd. | | | Transportation Infrastructure | | | | 67,500 | | | | 51,593 | |
| | Shenzhen Investment Ltd. | | | Real Estate Management & Development | | | | 108,000 | | | | 16,372 | |
| | Shenzhen Jinjia Group Co. Ltd. | | | Containers & Packaging | | | | 5,400 | | | | 6,423 | |
| | Shenzhen Kaifa Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 5,400 | | | | 7,953 | |
| | Shenzhen Kangtai Biological Products Co. Ltd. | | | Biotechnology | | | | 4,260 | | | | 18,112 | |
| | Shenzhen Kedali Industry Co. Ltd., A | | | Auto Components | | | | 800 | | | | 10,794 | |
| | Shenzhen Kingdom Sci-Tech Co. Ltd., A | | | Software | | | | 2,700 | | | | 3,727 | |
| | Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A | | | Health Care Equipment & Supplies | | | | 4,300 | | | | 180,344 | |
| b | | Shenzhen MTC Co. Ltd. | | | Household Durables | | | | 18,900 | | | | 8,643 | |
| b | | Shenzhen Neptunus Bioengineering Co. Ltd. | | | Health Care Providers & Services | | | | 10,800 | | | | 4,893 | |
| | Shenzhen Overseas Chinese Town Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 29,700 | | | | 20,038 | |
| | Shenzhen Salubris Pharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 2,700 | | | | 9,252 | |
| | Shenzhen SC New Energy Technology Corp., A | | | Semiconductors & Semiconductor Equipment | | | | 1,100 | | | | 17,778 | |
| | Shenzhen Senior Technology Material Co. Ltd., A . | | | Chemicals | | | | 5,400 | | | | 15,164 | |
| | Shenzhen Sunway Communication Co. Ltd. | | | Communications Equipment | | | | 2,700 | | | | 5,359 | |
| | Shenzhen Transsion Holdings Co. Ltd., A | | | Technology Hardware, Storage & Peripherals | | | | 2,912 | | | | 23,756 | |
| | Shenzhen Yan Tian Port Holding Co. Ltd., A | | | Transportation Infrastructure | | | | 8,100 | | | | 5,795 | |
| | Shenzhen YUTO Packaging Technology Co. Ltd. | | | Containers & Packaging | | | | 2,700 | | | | 11,400 | |
| | Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., A | | | Metals & Mining | | | | 13,500 | | | | 7,802 | |
| | Shenzhou International Group Holdings Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 37,800 | | | | 295,422 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| b | | Shijiazhuang Changshan BeiMing Technology Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 5,400 | | | $ | 4,136 | |
| | Shijiazhuang Yiling Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 6,080 | | | | 18,515 | |
| a,b | | Shimao Services Holdings Ltd., Z, 144A | | | Real Estate Management & Development | | | | 27,000 | | | | 5,744 | |
| | Shui On Land Ltd. | | | Real Estate Management & Development | | | | 162,000 | | | | 16,510 | |
| b | | Siasun Robot & Automation Co. Ltd. | | | Machinery | | | | 5,400 | | | | 6,613 | |
| | Sichuan Chuantou Energy Co Ltd., A | | | Independent Power Producers & Energy Traders | | | | 16,200 | | | | 27,336 | |
| | Sichuan Hebang Biotechnology Co. Ltd., A | | | Chemicals | | | | 32,400 | | | | 14,634 | |
| | Sichuan Kelun Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 5,400 | | | | 16,694 | |
| b | | Sichuan New Energy Power Co. Ltd. | | | Trading Companies & Distributors | | | | 5,400 | | | | 14,263 | |
| | Sichuan Road & Bridge Co. Ltd., A | | | Construction & Engineering | | | | 16,200 | | | | 23,224 | |
| | Sichuan Swellfun Co. Ltd., A | | | Beverages | | | | 1,600 | | | | 14,076 | |
| | Sichuan Yahua Industrial Group Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 9,627 | |
| | Sieyuan Electric Co. Ltd. | | | Electrical Equipment | | | | 2,700 | | | | 14,475 | |
| | Sinolink Securities Co. Ltd., A | | | Capital Markets | | | | 10,800 | | | | 11,574 | |
| | Sinoma International Engineering Co. | | | Construction & Engineering | | | | 8,100 | | | | 9,328 | |
| | Sinoma Science & Technology Co. Ltd. | | | Chemicals | | | | 5,400 | | | | 15,088 | |
| | Sino-Ocean Land Holdings Ltd. | | | Real Estate Management & Development | | | | 108,000 | | | | 11,282 | |
| | Sinopec Engineering Group Co. Ltd. | | | Construction & Engineering | | | | 67,500 | | | | 27,086 | |
| b | | Sinopec Oilfield Service Corp. | | | Energy Equipment & Services | | | | 162,000 | | | | 9,390 | |
| b | | Sinopec Oilfield Service Corp., A | | | Energy Equipment & Services | | | | 24,300 | | | | 6,272 | |
| | Sinopec Shanghai Petrochemical Co. Ltd., A | | | Chemicals | | | | 21,600 | | | | 9,029 | |
| | Sinopec Shanghai Petrochemical Co. Ltd., H | | | Chemicals | | | | 162,000 | | | | 21,256 | |
| | Sinopharm Group Co. Ltd., H | | | Health Care Providers & Services | | | | 64,800 | | | | 129,932 | |
| | Sinotrans Ltd., A | | | Air Freight & Logistics | | | | 13,500 | | | | 6,722 | |
| | Sinotrans Ltd., H | | | Air Freight & Logistics | | | | 108,000 | | | | 27,241 | |
| | Sinotruk Hong Kong Ltd. | | | Machinery | | | | 27,000 | | | | 22,598 | |
| b | | Skshu Paint Co. Ltd., A | | | Chemicals | | | | 980 | | | | 12,040 | |
| | Skyworth Digital Co. Ltd., A | | | Communications Equipment | | | | 2,700 | | | | 6,052 | |
| a | | Smoore International Holdings Ltd., 144A | | | Tobacco | | | | 87,230 | | | | 104,344 | |
| | Songcheng Performance Development Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 8,760 | | | | 14,745 | |
| | SooChow Securities Co. Ltd., A | | | Capital Markets | | | | 19,104 | | | | 16,507 | |
| | Southwest Securities Co. Ltd., A | | | Capital Markets | | | | 24,300 | | | | 12,509 | |
| | StarPower Semiconductor Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 500 | | | | 22,724 | |
| b | | STO Express Co. Ltd. | | | Air Freight & Logistics | | | | 5,400 | | | | 9,658 | |
| | Sun Art Retail Group Ltd. | | | Food & Staples Retailing | | | | 94,500 | | | | 20,224 | |
| | Sunac China Holdings Ltd. | | | Real Estate Management & Development | | | | 160,000 | | | | 21,689 | |
| a | | Sunac Services Holdings Ltd., 144A | | | Real Estate Management & Development | | | | 28,898 | | | | 7,252 | |
| | Sungrow Power Supply Co. Ltd. | | | Electrical Equipment | | | | 5,400 | | | | 83,790 | |
| | Suning Universal Co. Ltd. | | | Real Estate Management & Development | | | | 13,500 | | | | 5,832 | |
| | Sunny Optical Technology Group Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 32,400 | | | | 310,177 | |
| | Sunwoda Electronic Co. Ltd., A | | | Electrical Equipment | | | | 5,400 | | | | 17,634 | |
| | Suofeiya Home Collection Co. Ltd. | | | Household Durables | | | | 2,700 | | | | 6,359 | |
| | Suzhou Anjie Technology Co. Ltd., A | | | Electrical Equipment | | | | 2,700 | | | | 4,704 | |
| | Suzhou Dongshan Precision Manufacturing Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 17,535 | |
| b | | Suzhou Gold Mantis Construction Decoration Co. Ltd. | | | Construction & Engineering | | | | 8,100 | | | | 5,136 | |
| | Suzhou Maxwell Technologies Co. Ltd. | | | Electrical Equipment | | | | 540 | | | | 36,658 | |
| | Suzhou TA&A Ultra Clean Technology Co.
Ltd., A . | | | Chemicals | | | | 2,700 | | | | 25,098 | |
| | Taiji Computer Corp. Ltd. | | | IT Services | | | | 2,700 | | | | 6,385 | |
| b | | TAL Education Group, ADR | | | Diversified Consumer Services | | | | 21,546 | | | | 106,437 | |
| | Tangshan Jidong Cement Co. Ltd. | | | Construction Materials | | | | 10,800 | | | | 12,665 | |
| | TangShan Port Group Co. Ltd., A | | | Transportation Infrastructure | | | | 18,900 | | | | 6,840 | |
| | Tangshan Sanyou Chemical Industries Co. Ltd., A | | | Chemicals | | | | 8,300 | | | | 7,137 | |
| | TBEA Co. Ltd., A | | | Electrical Equipment | | | | 13,500 | | | | 41,035 | |
| | TCL Corp. | | | Household Durables | | | | 51,300 | | | | 26,121 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Tencent Holdings Ltd. | | | Interactive Media & Services | | | | 294,626 | | | $ | 9,998,645 | |
| b | | Tencent Music Entertainment Group, ADR | | | Entertainment | | | | 29,484 | | | | 119,705 | |
| | The People’s Insurance Co. Group of China Ltd., H | | | Insurance | | | | 405,000 | | | | 117,632 | |
| | Thunder Software Technology Co. Ltd. | | | Software | | | | 1,200 | | | | 17,772 | |
| | Tian Di Science & Technology Co. Ltd., A | | | Machinery | | | | 13,500 | | | | 9,033 | |
| | Tianjin Chase Sun Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 10,800 | | | | 7,968 | |
| | Tianjin Guangyu Development Co. Ltd., A | | | Real Estate Management & Development | | | | 5,400 | | | | 9,408 | |
| | Tianjin Zhonghuan Semiconductor Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 10,800 | | | | 67,807 | |
| | Tianma Microelectronics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 8,100 | | | | 9,669 | |
| b | | Tianqi Lithium Corp., A | | | Chemicals | | | | 5,400 | | | | 76,048 | |
| | Tianshan Aluminum Group Co. Ltd., A | | | Machinery | | | | 8,100 | | | | 8,135 | |
| | Tianshui Huatian Technology Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 10,800 | | | | 12,271 | |
| b | | Tibet Summit Resources Co. Ltd., A | | | Metals & Mining | | | | 2,700 | | | | 8,446 | |
| | Tingyi Cayman Islands Holding Corp. | | | Food Products | | | | 92,000 | | | | 158,687 | |
| | Titan Wind Energy Suzhou Co. Ltd., A | | | Electrical Equipment | | | | 5,400 | | | | 9,582 | |
| b,c | | Tongcheng-Elong Holdings Ltd., Reg S | | | Internet & Catalog Retail | | | | 57,600 | | | | 113,000 | |
| b | | TongFu Microelectronics Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 5,400 | | | | 11,422 | |
| | Tongkun Group Co. Ltd., A | | | Chemicals | | | | 8,100 | | | | 15,338 | |
| | Tongling Nonferrous Metals Group Co. Ltd. | | | Metals & Mining | | | | 37,800 | | | | 13,839 | |
| | Tongwei Co. Ltd., A | | | Food Products | | | | 16,200 | | | | 106,710 | |
| b | | Topchoice Medical Investment Corp., A | | | Health Care Providers & Services | | | | 1,200 | | | | 21,545 | |
| a | | Topsports International Holdings Ltd., 144A | | | Specialty Retail | | | | 81,000 | | | | 57,062 | |
| | Towngas China Co. Ltd. | | | Gas Utilities | | | | 54,000 | | | | 20,706 | |
| | TravelSky Technology Ltd., H | | | IT Services | | | | 54,000 | | | | 82,686 | |
| | Trina Solar Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 7,479 | | | | 67,256 | |
| b | | Trip.com Group Ltd., ADR | | | Internet & Catalog Retail | | | | 26,109 | | | | 713,037 | |
| | Tsingtao Brewery Co. Ltd., A | | | Beverages | | | | 2,700 | | | | 40,221 | |
| | Tsingtao Brewery Co. Ltd., H | | | Beverages | | | | 29,492 | | | | 279,708 | |
| b | | Tuya Inc., ADR | | | Software | | | | 6,021 | | | | 5,598 | |
| | Unigroup Guoxin Microelectronics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 2,799 | | | | 56,536 | |
| | Uni-President China Holdings Ltd. | | | Food Products | | | | 54,000 | | | | 45,333 | |
| | Unisplendour Corp. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 12,013 | |
| | Universal Scientific Industrial Shanghai Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 2,700 | | | | 5,711 | |
| | Valiant Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 5,522 | |
| b | | Vipshop Holdings Ltd., ADR | | | Internet & Catalog Retail | | | | 19,980 | | | | 168,032 | |
| | Visual China Group Co. Ltd., A | | | Internet & Catalog Retail | | | | 2,700 | | | | 3,749 | |
| | Walvax Biotechnology Co. Ltd. | | | Biotechnology | | | | 5,400 | | | | 28,102 | |
| b | | Wanda Film Holding Co. Ltd., A | | | Entertainment | | | | 8,100 | | | | 11,850 | |
| | Wangsu Science & Technology Co. Ltd. | | | IT Services | | | | 8,100 | | | | 5,158 | |
| | Wanhua Chemical Group Co. Ltd., A | | | Chemicals | | | | 10,800 | | | | 139,523 | |
| | Wanxiang Qianchao Co. Ltd. | | | Auto Components | | | | 13,500 | | | | 9,317 | |
| b | | Weibo Corp., ADR | | | Interactive Media & Services | | | | 3,564 | | | | 60,944 | |
| | Weichai Power Co. Ltd., A | | | Machinery | | | | 24,300 | | | | 32,790 | |
| | Weichai Power Co. Ltd., H | | | Machinery | | | | 81,000 | | | | 76,874 | |
| | Weifu High-Technology Co. Ltd., B | | | Auto Components | | | | 8,100 | | | | 13,879 | |
| | Weifu High-Technology Group Co. Ltd., A | | | Auto Components | | | | 2,700 | | | | 6,533 | |
| | Weihai Guangwei Composites Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 31,400 | |
| b | | Wens Foodstuffs Group Co. Ltd. | | | Food Products | | | | 5,400 | | | | 15,535 | |
| | Western Mining Co. Ltd., A | | | Metals & Mining | | | | 8,100 | | | | 10,612 | |
| | Western Securities Co. Ltd. | | | Capital Markets | | | | 16,200 | | | | 13,248 | |
| | Western Superconducting Technologies Co. Ltd., A | | | Metals & Mining | | | | 1,488 | | | | 22,310 | |
| | Westone Information Industry Inc. | | | Electronic Equipment, Instruments & Components | | | | 2,700 | | | | 10,415 | |
| | Will Semiconductor Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 2,700 | | | | 30,347 | |
| | Wingtech Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 36,108 | |
| | Winning Health Technology Group Co. Ltd. | | | Health Care Technology | | | | 9,000 | | | | 8,887 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Wolong Electric Group Co. Ltd., A | | | Electrical Equipment | | | | 5,400 | | | $ | 8,786 | |
| | Wuchan Zhongda Group Co. Ltd., A | | | Distributors | | | | 21,600 | | | | 12,483 | |
| | Wuhan Guide Infrared Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 10,873 | | | | 17,722 | |
| | Wuhu Sanqi Interactive Entertainment | | | | | | | | | | | | |
| | NetworkTechnology Group Co. Ltd. | | | Entertainment | | | | 5,400 | | | | 13,195 | |
| | Wuliangye Yibin Co. Ltd., A | | | Beverages | | | | 13,400 | | | | 318,086 | |
| | WUS Printed Circuit Kunshan Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 5,440 | | | | 7,600 | |
| a | | WuXi AppTec Co. Ltd., 144A | | | Life Sciences Tools & Services | | | | 16,820 | | | | 135,954 | |
| | WuXi AppTec Co. Ltd., A | | | Life Sciences Tools & Services | | | | 8,960 | | | | 90,101 | |
| a,b | | WuXi Biologics (Cayman) Inc., 144A | | | Life Sciences Tools & Services | | | | 176,284 | | | | 1,064,455 | |
| | Wuxi Shangji Automation Co. Ltd., A | | | Machinery | | | | 1,260 | | | | 23,842 | |
| b | | XCMG Construction Machinery Co. Ltd. | | | Machinery | | | | 27,000 | | | | 16,967 | |
| | Xiamen C & D Inc., A | | | Trading Companies & Distributors | | | | 10,800 | | | | 20,981 | |
| | Xiamen Faratronic Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 800 | | | | 18,030 | |
| | Xiamen ITG Group Corp. Ltd., A | | | Trading Companies & Distributors | | | | 8,100 | | | | 7,249 | |
| | Xiamen Tungsten Co. Ltd., A | | | Metals & Mining | | | | 5,400 | | | | 17,141 | |
| | Xiangcai Co. Ltd., A | | | Real Estate Management & Development | | | | 5,400 | | | | 4,795 | |
| a,b | | Xiaomi Corp., B, 144A | | | Technology Hardware, Storage & Peripherals | | | | 718,200 | | | | 819,765 | |
| | Xinfengming Group Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 3,409 | |
| | Xinhua Winshare Publishing and Media Co. Ltd., H | | | Distributors | | | | 27,000 | | | | 17,163 | |
| | Xinjiang Goldwind Science & Technology Co. Ltd. | | | Electrical Equipment | | | | 13,500 | | | | 21,474 | |
| | Xinjiang Goldwind Science & Technology Co. Ltd., H | | | Electrical Equipment | | | | 32,400 | | | | 37,601 | |
| | Xinjiang Tianshan Cement Co. Ltd., A | | | Construction Materials | | | | 8,100 | | | | 10,101 | |
| | Xinjiang Zhongtai Chemical Co. Ltd., A | | | Chemicals | | | | 10,800 | | | | 10,104 | |
| | Xinxing Ductile Iron Pipes Co. Ltd. | | | Metals & Mining | | | | 13,500 | | | | 6,779 | |
| | Xinyi Solar Holdings Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 216,000 | | | | 228,660 | |
| b | | XPeng Inc., ADR | | | Automobiles | | | | 26,325 | | | | 314,584 | |
| | Xtep International Holdings Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 54,000 | | | | 57,440 | |
| | Xuji Electric Co. Ltd., A | | | Electrical Equipment | | | | 2,700 | | | | 6,306 | |
| a,c | | Yadea Group Holdings Ltd., 144A, Reg S | | | Automobiles | | | | 54,000 | | | | 86,676 | |
| | Yang Quan Coal Industry Group Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 8,100 | | | | 20,758 | |
| | Yangling Metron New Material Inc., A | | | Semiconductors & Semiconductor Equipment | | | | 2,700 | | | | 21,466 | |
| b | | Yango Group Co. Ltd. | | | Real Estate Management & Development | | | | 18,900 | | | | 5,170 | |
| a,c | | Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., 144A, Reg S | | | Communications Equipment | | | | 13,500 | | | | 30,681 | |
| | Yangzhou Yangjie Electronic Technology Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 2,700 | | | | 18,705 | |
| | Yangzijiang Shipbuilding Holdings Ltd. | | | Machinery | | | | 126,900 | | | | 91,091 | |
| | Yantai Changyu Pioneer Wine Co. Ltd., B | | | Beverages | | | | 10,800 | | | | 15,849 | |
| | Yantai Eddie Precision Machinery Co. Ltd., A | | | Machinery | | | | 3,460 | | | | 6,935 | |
| | Yantai Jereh Oilfield Services Group Co. Ltd. | | | Energy Equipment & Services | | | | 2,700 | | | | 12,358 | |
| | Yanzhou Coal Mining Co. Ltd., A | | | Oil, Gas & Consumable Fuels | | | | 5,400 | | | | 38,001 | |
| | Yanzhou Coal Mining Co. Ltd., H | | | Oil, Gas & Consumable Fuels | | | | 92,000 | | | | 334,603 | |
| b | | Yatsen Holding Ltd., ADR | | | Personal Products | | | | 14,823 | | | | 16,157 | |
| | Yealink Network Technology Corp. Ltd. | | | Communications Equipment | | | | 2,700 | | | | 23,860 | |
| b | | Yifan Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 5,400 | | | | 7,923 | |
| | Yifeng Pharmacy Chain Co. Ltd. | | | Food & Staples Retailing | | | | 1,690 | | | | 11,796 | |
| | Yihai International Holding Ltd. | | | Food Products | | | | 27,000 | | | | 57,096 | |
| | Yihai Kerry Arawana Holdings Co. Ltd., A | | | Food Products | | | | 8,100 | | | | 49,072 | |
| | Yintai Gold Co. Ltd. | | | Metals & Mining | | | | 11,000 | | | | 19,842 | |
| | YongXing Special Materials Technology Co. Ltd. | | | Metals & Mining | | | | 1,100 | | | | 19,164 | |
| | Yonyou Network Technology Co. Ltd., A | | | Software | | | | 11,790 | | | | 29,106 | |
| | Youngor Group Co. Ltd., A | | | Real Estate Management & Development | | | | 18,900 | | | | 16,755 | |
| b | | Youngy Co. Ltd., A | | | Metals & Mining | | | | 1,000 | | | | 15,789 | |
| | YTO Express Group Co. Ltd., A | | | Air Freight & Logistics | | | | 10,800 | | | | 31,434 | |
| b | | Yuan Longping High-tech Agriculture Co. Ltd. | | | Food Products | | | | 5,400 | | | | 10,460 | |
| | Yuexiu Property Co. Ltd. | | | Real Estate Management & Development | | | | 62,800 | | | | 75,841 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Yum China Holdings Inc. | | | Hotels, Restaurants & Leisure | | | | 20,600 | | | $ | 985,663 | |
| | Yunda Holding Co. Ltd., A | | | Air Freight & Logistics | | | | 5,700 | | | | 12,513 | |
| | Yunnan Aluminium Co. Ltd. | | | Metals & Mining | | | | 12,390 | | | | 16,006 | |
| | Yunnan Baiyao Group Co. Ltd. | | | Pharmaceuticals | | | | 5,780 | | | | 42,443 | |
| | Yunnan Botanee Bio-Technology Group Co. Ltd., A | | | Personal Products | | | | 700 | | | | 16,891 | |
| | Yunnan Copper Co. Ltd. | | | Metals & Mining | | | | 5,400 | | | | 7,446 | |
| | Yunnan Energy New Material Co. Ltd. | | | Containers & Packaging | | | | 2,700 | | | | 65,944 | |
| | Yunnan Hongxiang Yixintang Pharmaceutical Co. Ltd. | | | Food & Staples Retailing | | | | 2,700 | | | | 9,158 | |
| | Yunnan Tin Co. Ltd. | | | Metals & Mining | | | | 5,400 | | | | 9,332 | |
| b | | Yunnan Yuntianhua Co. Ltd., A | | | Chemicals | | | | 5,400 | | | | 17,974 | |
| b | | Zai Lab Ltd., ADR | | | Biotechnology | | | | 4,536 | | | | 155,131 | |
| | Zangge Mining Co. Ltd., A | | | Chemicals | | | | 5,400 | | | | 21,587 | |
| | Zhangzhou Pientzehuang Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 2,100 | | | | 78,590 | |
| b | | Zhaojin Mining Industry Co. Ltd., H | | | Metals & Mining | | | | 54,000 | | | | 36,872 | |
| | Zhefu Holding Group Co. Ltd. | | | Electrical Equipment | | | | 21,600 | | | | 11,847 | |
| b | | Zhejiang Century Huatong Group Co. Ltd., A | | | Entertainment | | | | 24,300 | | | | 12,714 | |
| | Zhejiang China Commodities City Group Co. Ltd., A | | | Real Estate Management & Development | | | | 18,900 | | | | 11,824 | |
| | Zhejiang Chint Electrics Co. Ltd., A | | | Electrical Equipment | | | | 2,700 | | | | 10,142 | |
| | Zhejiang Crystal-Optech Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 5,400 | | | | 8,082 | |
| | Zhejiang Dahua Technology Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 10,800 | | | | 19,467 | |
| | Zhejiang Dingli Machinery Co. Ltd. | | | Machinery | | | | 2,700 | | | | 13,744 | |
| | Zhejiang Expressway Co. Ltd., H | | | Transportation Infrastructure | | | | 72,692 | | | | 49,542 | |
| | Zhejiang Hailiang Co. Ltd. | | | Metals & Mining | | | | 5,400 | | | | 8,779 | |
| | Zhejiang HangKe Technology Inc. Co. | | | Electrical Equipment | | | | 1,196 | | | | 8,386 | |
| | Zhejiang Hisoar Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 5,400 | | | | 5,143 | |
| | Zhejiang Huace Film & TV Co. Ltd., A | | | Entertainment | | | | 8,100 | | | | 5,556 | |
| | Zhejiang Huahai Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 5,600 | | | | 15,074 | |
| | Zhejiang Huayou Cobalt Co. Ltd., A | | | Metals & Mining | | | | 4,260 | | | | 38,446 | |
| | Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 5,400 | | | | 51,219 | |
| | Zhejiang Jiuzhou Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 14,839 | |
| | Zhejiang Juhua Co. Ltd., A | | | Chemicals | | | | 10,800 | | | | 21,042 | |
| | Zhejiang Medicine Co. Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 5,132 | |
| | Zhejiang NHU Co. Ltd. | | | Pharmaceuticals | | | | 11,056 | | | | 34,413 | |
| | Zhejiang Sanhua Intelligent Controls Co. Ltd. | | | Machinery | | | | 2,700 | | | | 9,317 | |
| | Zhejiang Satellite Petrochemical Co. Ltd. | | | Chemicals | | | | 6,890 | | | | 20,556 | |
| | Zhejiang Supcon Technology Co. Ltd., A | | | Electronic Equipment, Instruments & Components | | | | 1,728 | | | | 18,935 | |
| | Zhejiang Supor Co. Ltd. | | | Household Durables | | | | 1,400 | | | | 9,059 | |
| b | | Zhejiang Wanfeng Auto Wheel Co. Ltd. | | | Auto Components | | | | 10,800 | | | | 8,044 | |
| b | | Zhejiang Wanliyang Co. Ltd. | | | Machinery | | | | 5,400 | | | | 6,007 | |
| | Zhejiang Weiming Environment Protection Co. Ltd., A | | | Commercial Services & Supplies | | | | 780 | | | | 2,559 | |
| | Zhejiang Weixing New Building Materials Co. Ltd., A | | | Building Products | | | | 5,400 | | | | 15,604 | |
| | Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., A | | | Pharmaceuticals | | | | 2,700 | | | | 18,455 | |
| | Zhejiang Yongtai Technology Co. Ltd., A | | | Chemicals | | | | 2,700 | | | | 8,696 | |
| | Zhengzhou Coal Mining Machinery Group Co. Ltd., A | | | Machinery | | | | 5,400 | | | | 9,839 | |
| | Zheshang Securities Co. Ltd., A | | | Capital Markets | | | | 5,400 | | | | 7,181 | |
| b | | Zhihu Inc., ADR | | | Interactive Media & Services | | | | 7,884 | | | | 8,357 | |
| a,b,c | | ZhongAn Online P & C Insurance Co. Ltd., 144A, Reg S | | | Insurance | | | | 35,100 | | | | 78,697 | |
| | Zhongji Innolight Co. Ltd. | | | Machinery | | | | 2,700 | | | | 9,877 | |
| | Zhongshan Public Utilities Group Co. Ltd., A | | | Water Utilities | | | | 5,400 | | | | 4,931 | |
| | Zhongsheng Group Holdings Ltd. | | | Specialty Retail | | | | 33,500 | | | | 133,788 | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | China (continued) | | | | | | | | | |
| | Zhongtai Securities Co. Ltd., A | | | Capital Markets | | | | 8,100 | | | $ | 7,499 | |
| | Zhuzhau CRRC Times Electric Co. Ltd., A | | | Electrical Equipment | | | | 2,002 | | | | 15,220 | |
| | Zhuzhou CRRC Times Electric Co. Ltd., H | | | Electrical Equipment | | | | 24,300 | | | | 102,154 | |
| | Zhuzhou Kibing Group Co. Ltd., A | | | Building Products | | | | 8,100 | | | | 10,964 | |
| | Zijin Mining Group Co. Ltd., A | | | Metals & Mining | | | | 72,900 | | | | 80,169 | |
| | Zijin Mining Group Co. Ltd., H | | | Metals & Mining | | | | 286,000 | | | | 278,717 | |
| | Zoomlion Heavy Industry Science and Technology Co. Ltd. | | | Machinery | | | | 27,000 | | | | 20,981 | |
| | Zoomlion Heavy Industry Science and Technology Co. Ltd., H | | | Machinery | | | | 75,600 | | | | 26,292 | |
| | ZTE Corp. | | | Communications Equipment | | | | 13,500 | | | | 40,524 | |
| | ZTE Corp., H | | | Communications Equipment | | | | 37,800 | | | | 67,800 | |
| | ZTO Express Cayman Inc. | | | Air Freight & Logistics | | | | 21,498 | | | | 515,685 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 87,179,005 | |
| | | | | | | | | | | | | | |
| | | Hong Kong 4.5% | | | | | | | | | |
| b | | Alibaba Health Information Technology Ltd., A | | | Health Care Technology | | | | 236,000 | | | | 108,231 | |
| b | | Alibaba Pictures Group Ltd., A | | | Media | | | | 540,000 | | | | 27,860 | |
| | Beijing Enterprises Water Group Ltd., A | | | Water Utilities | | | | 162,000 | | | | 37,353 | |
| | Bosideng International Holdings Ltd., A | | | Household Durables | | | | 135,000 | | | | 66,899 | |
| | China Everbright Environment Group Ltd., B | | | Commercial Services & Supplies | | | | 162,000 | | | | 67,277 | |
| | China Everbright Ltd., A | | | Capital Markets | | | | 42,000 | | | | 24,291 | |
| | China Gas Holdings Ltd., A | | | Gas Utilities | | | | 145,800 | | | | 174,776 | |
| | China Jinmao Holdings Group Ltd., A | | | Real Estate Management & Development | | | | 324,000 | | | | 66,039 | |
| | China Mengniu Dairy Co. Ltd., B | | | Food Products | | | | 152,000 | | | | 603,167 | |
| | China Overseas Land & Investment Ltd., A | | | Real Estate Management & Development | | | | 189,000 | | | | 492,369 | |
| | China Power International Development Ltd., H | | | Independent Power Producers & Energy Traders | | | | 270,000 | | | | 107,657 | |
| | China Resources Beer Holdings Co. Ltd., A | | | Beverages | | | | 75,884 | | | | 528,295 | |
| | China Resources Gas Group Ltd., A | | | Gas Utilities | | | | 43,600 | | | | 138,578 | |
| | China Resources Land Ltd., H | | | Real Estate Management & Development | | | | 138,500 | | | | 545,185 | |
| | China State Construction International Holdings Ltd., A | | | Construction & Engineering | | | | 78,000 | | | | 78,995 | |
| | China Traditional Chinese Medicine Co. Ltd. | | | Pharmaceuticals | | | | 108,000 | | | | 37,697 | |
| | COSCO SHIPPING Ports Ltd., B | | | Transportation Infrastructure | | | | 108,000 | | | | 68,103 | |
| | Geely Automobile Holdings Ltd. | | | Automobiles | | | | 273,000 | | | | 376,293 | |
| | Guangdong Investment Ltd. | | | Water Utilities | | | | 147,900 | | | | 118,510 | |
| | Kingboard Laminates Holdings Ltd. | | | Electronic Equipment, Instruments & Components | | | | 52,100 | | | | 46,924 | |
| | Kunlun Energy Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 162,000 | | | | 117,013 | |
| | Shanghai Industrial Holdings Ltd. | | | Industrial Conglomerates | | | | 27,000 | | | | 29,236 | |
| | Shimao Group Holdings Ltd. | | | Real Estate Management & Development | | | | 78,000 | | | | 18,405 | |
| | Shougang Fushan Resources Group Ltd. | | | Metals & Mining | | | | 54,000 | | | | 15,753 | |
| | Sino Biopharmaceutical Ltd. | | | Pharmaceuticals | | | | 459,000 | | | | 215,762 | |
| | Vinda International Holdings Ltd. | | | Household Products | | | | 13,000 | | | | 30,604 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,141,272 | |
| | | | | | | | | | | | | | |
| | | Singapore 0.1% | | | | | | | | | |
| b | | Yangzijiang Financial Holding Ltd. | | | Capital Markets | | | | 126,900 | | | | 33,165 | |
| | Yanlord Land Group Ltd. | | | Real Estate Management & Development | | | | 24,300 | | | | 16,173 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 49,338 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $138,328,688) 99.9% | | | | | | | | | | | 91,369,615 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 114,757 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 91,484,372 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $11,214,865, representing 12.3% of net assets.
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE China ETF (continued)
bNon-income producing.
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 September 30, 2022, the value of was $1,285,054, representing 1.4% of net assets.
At September 30, 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 China Future | | | Long | | | | 4 | | | $ | 85,300 | | | | 12/16/22 | | | $ | (10,265 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 184 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $27.18 | | | | $27.28 | | | | $19.03 | | | | $23.24 | | | | $24.98 | | | | $25.05 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.61 | | | | 0.85 | | | | 0.60 | | | | 0.76 | | | | 0.86 | | | | 0.24 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (6.97 | ) | | | 0.11 | | | | 8.14 | | | | (4.21 | ) | | | (1.79 | ) | | | (0.30 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (6.36 | ) | | | 0.96 | | | | 8.74 | | | | (3.45 | ) | | | (0.93 | ) | | | (0.06 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.51 | ) | | | (1.06 | ) | | | (0.49 | ) | | | (0.76 | ) | | | (0.81 | ) | | | (0.01 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | | $20.31 | | | | $27.18 | | | | $27.28 | | | | $19.03 | | | | $23.24 | | | | $24.98 | |
| | | | |
| | | | | | |
Total returnd | | | (23.57)% | | | | 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% | | | | 0.09% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 4.96% | | | | 2.96% | | | | 2.53% | | | | 3.23% | | | | 3.61% | | | | 2.35% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $36,555 | | | | $184,857 | | | | $229,126 | | | | $91,356 | | | | $74,359 | | | | $104,911 | |
| | | | | | |
Portfolio turnover ratef | | | 2.66% | g | | | 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: | | | 2.63% | | | | 5.47% | | | | 4.92% | | | | 4.47% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 185 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Europe ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.2% | | | | | | | | | |
| | | Australia 1.6% | | | | | | | | | |
| | Glencore PLC | | | Metals & Mining | | | | 59,328 | | | $ | 316,668 | |
| | Rio Tinto PLC | | | Metals & Mining | | | | 4,896 | | | | 267,586 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 584,254 | |
| | | | | | | | | | | | | | |
| | | Austria 0.3% | | | | | | | | | |
| | Andritz AG | | | Machinery | | | | 315 | | | | 13,467 | |
| | Erste Group Bank AG | | | Banks | | | | 1,458 | | | | 32,337 | |
| | OMV AG | | | Oil, Gas & Consumable Fuels | | | | 639 | | | | 23,393 | |
| | Raiffeisen Bank International AG | | | Banks | | | | 585 | | | | 6,998 | |
| | Telekom Austria AG | | | Diversified Telecommunication Services | | | | 648 | | | | 3,752 | |
| | Verbund AG | | | Electric Utilities | | | | 297 | | | | 25,444 | |
| | Voestalpine AG | | | Metals & Mining | | | | 513 | | | | 8,800 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 114,191 | |
| | | | | | | | | | | | | | |
| | | Belgium 1.3% | | | | | | | | | |
| | Ackermans & van Haaren NV | | | Diversified Financial Services | | | | 99 | | | | 12,618 | |
| | Ageas SA/NV | | | Insurance | | | | 846 | | | | 31,030 | |
| | Anheuser-Busch InBev SA/NV | | | Beverages | | | | 3,888 | | | | 178,046 | |
| | Colruyt SA | | | Food & Staples Retailing | | | | 234 | | | | 5,158 | |
| | D’ieteren Group | | | Distributors | | | | 108 | | | | 15,373 | |
| | Elia Group SA/NV | | | Electric Utilities | | | | 180 | | | | 21,231 | |
| | Groupe Bruxelles Lambert SA | | | Diversified Financial Services | | | | 441 | | | | 31,054 | |
| | KBC Groep NV | | | Banks | | | | 1,215 | | | | 57,919 | |
| | Proximus SADP | | | Diversified Telecommunication Services | | | | 639 | | | | 6,632 | |
| | Sofina SA | | | Diversified Financial Services | | | | 72 | | | | 12,520 | |
| | Solvay SA | | | Chemicals | | | | 315 | | | | 24,576 | |
| | UCB SA | | | Pharmaceuticals | | | | 549 | | | | 38,250 | |
| | Umicore SA | | | Chemicals | | | | 936 | | | | 27,628 | |
| | Warehouses De Pauw CVA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 630 | | | | 15,503 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 477,538 | |
| | | | | | | | | | | | | | |
| | | Bermuda 0.1% | | | | | | | | | |
| | Hiscox Ltd. | | | Insurance | | | | 1,512 | | | | 14,894 | |
| | | | | | | | | | | | | | |
| | | Chile 0.1% | | | | | | | | | |
| | Antofagasta PLC | | | Metals & Mining | | | | 1,557 | | | | 19,388 | |
| | | | | | | | | | | | | | |
| | | Denmark 4.0% | | | | | | | | | |
| | AP Moller-Maersk A/S, A | | | Marine | | | | 13 | | | | 23,089 | |
| | AP Moller-Maersk A/S, B | | | Marine | | | | 24 | | | | 43,842 | |
| | Carlsberg AS, B | | | Beverages | | | | 423 | | | | 49,813 | |
| | Chr. Hansen Holding AS | | | Chemicals | | | | 468 | | | | 23,111 | |
| | Coloplast AS, B | | | Health Care Equipment & Supplies | | | | 603 | | | | 61,636 | |
| | Danske Bank AS | | | Banks | | | | 2,979 | | | | 37,224 | |
| | DSV A/S | | | Air Freight & Logistics | | | | 855 | | | | 100,934 | |
| a | | Genmab A/S | | | Biotechnology | | | | 297 | | | | 96,301 | |
| | GN Store Nord AS | | | Health Care Equipment & Supplies | | | | 585 | | | | 10,336 | |
| | H Lundbeck A/S | | | Pharmaceuticals | | | | 1,116 | | | | 3,575 | |
| a | | H Lundbeck A/S, A | | | Pharmaceuticals | | | | 279 | | | | 832 | |
| | Novo Nordisk AS, B | | | Pharmaceuticals | | | | 7,083 | | | | 710,549 | |
| | Novozymes AS | | | Chemicals | | | | 891 | | | | 44,985 | |
| b | | Orsted AS, 144A | | | Electric Utilities | | | | 855 | | | | 68,435 | |
| | Pandora AS | | | Textiles, Apparel & Luxury Goods | | | | 414 | | | | 19,588 | |
| | Rockwool International AS, B | | | Building Products | | | | 27 | | | | 4,280 | |
| | Royal Unibrew A/S | | | Beverages | | | | 225 | | | | 14,671 | |
| | SimCorp A/S | | | Software | | | | 180 | | | | 10,195 | |
| | Tryg AS | | | Insurance | | | | 1,602 | | | | 33,117 | |
| | Vestas Wind Systems A/S | | | Electrical Equipment | | | | 4,527 | | | | 84,469 | |
| | | | | | | | | | |
| | | | | | |
| 186 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Denmark (continued) | | | | | | | | | |
| a | | William Demant Holding AS | | | Health Care Equipment & Supplies | | | | 432 | | | $ | 10,755 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,451,737 | |
| | | | | | | | | | | | | | |
| | | Finland 2.1% | | | | | | | | | |
| | Elisa OYJ | | | Diversified Telecommunication Services | | | | 648 | | | | 29,424 | |
| c | | Fortum OYJ, Reg S | | | Electric Utilities | | | | 1,881 | | | | 25,374 | |
| | Huhtamaki OYJ | | | Containers & Packaging | | | | 423 | | | | 13,534 | |
| | Kesko OYJ | | | Food & Staples Retailing | | | | 1,224 | | | | 22,957 | |
| | Kojamo Oyj | | | Real Estate Management & Development | | | | 891 | | | | 11,452 | |
| | Kone OYJ, B | | | Machinery | | | | 1,764 | | | | 68,450 | |
| | Metso Outotec Oyj | | | Machinery | | | | 2,763 | | | | 18,558 | |
| | Neste Oil OYJ | | | Oil, Gas & Consumable Fuels | | | | 1,863 | | | | 81,764 | |
| | Nokia OYJ | | | Communications Equipment | | | | 25,371 | | | | 109,870 | |
| | Nordea Bank Abp | | | Banks | | | | 16,263 | | | | 140,202 | |
| | Orion OYJ | | | Pharmaceuticals | | | | 495 | | | | 20,891 | |
| | Sampo OYJ, A | | | Insurance | | | | 2,205 | | | | 94,527 | |
| | Stora Enso OYJ, R | | | Paper & Forest Products | | | | 2,646 | | | | 33,931 | |
| | UPM-Kymmene OYJ | | | Paper & Forest Products | | | | 2,403 | | | | 76,696 | |
| | Valmet Oyj | | | Machinery | | | | 765 | | | | 15,611 | |
| | Wartsila OYJ ABP | | | Machinery | | | | 2,250 | | | | 14,508 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 777,749 | |
| | | | | | | | | | | | | | |
| | | France 16.2% | | | | | | | | | |
| a | | Accor SA | | | Hotels, Restaurants & Leisure | | | | 837 | | | | 17,720 | |
| a | | Aeroports de Paris SA | | | Transportation Infrastructure | | | | 126 | | | | 14,689 | |
| | Air Liquide SA | | | Chemicals | | | | 2,313 | | | | 266,383 | |
| | Airbus SE | | | Aerospace & Defense | | | | 2,529 | | | | 220,228 | |
| b | | ALD SA, 144A | | | Road & Rail | | | | 360 | | | | 3,336 | |
| | Alstom SA | | | Machinery | | | | 1,341 | | | | 21,998 | |
| b | | Amundi SA, 144A | | | Capital Markets | | | | 261 | | | | 10,984 | |
| | Arkema SA | | | Chemicals | | | | 297 | | | | 21,845 | |
| | AXA SA | | | Insurance | | | | 8,370 | | | | 184,288 | |
| | Biomerieux | | | Health Care Equipment & Supplies | | | | 198 | | | | 15,789 | |
| | BNP Paribas SA | | | Banks | | | | 4,833 | | | | 206,454 | |
| | Bollore | | | Entertainment | | | | 4,545 | | | | 21,025 | |
| | Bouygues SA | | | Construction & Engineering | | | | 963 | | | | 25,330 | |
| | Bureau Veritas SA | | | Professional Services | | | | 1,287 | | | | 28,973 | |
| | Capgemini SE | | | IT Services | | | | 720 | | | | 116,735 | |
| | Carrefour SA | | | Food & Staples Retailing | | | | 2,736 | | | | 38,101 | |
| | Cie Generale des Etablissements Michelin SCA | | | Auto Components | | | | 3,231 | | | | 73,291 | |
| | Compagnie de Saint-Gobain | | | Building Products | | | | 2,106 | | | | 76,439 | |
| | Covivio | | | Equity Real Estate Investment Trusts (REITs | ) | | | 225 | | | | 10,915 | |
| | Credit Agricole SA | | | Banks | | | | 5,373 | | | | 44,025 | |
| | Danone SA | | | Food Products | | | | 2,745 | | | | 130,611 | |
| | Dassault Aviation SA | | | Aerospace & Defense | | | | 99 | | | | 11,347 | |
| | Dassault Systemes SE | | | Software | | | | 3,078 | | | | 107,754 | |
| | Edenred | | | IT Services | | | | 1,125 | | | | 52,196 | |
| | EDF SA | | | Electric Utilities | | | | 2,772 | | | | 32,288 | |
| | Eiffage SA | | | Construction & Engineering | | | | 333 | | | | 26,920 | |
| | Engie SA | | | Multi-Utilities | | | | 7,524 | | | | 87,286 | |
| | EssilorLuxottica SA | | | Textiles, Apparel & Luxury Goods | | | | 1,359 | | | | 186,854 | |
| | Eurazeo SE | | | Diversified Financial Services | | | | 207 | | | | 10,920 | |
| a | | Euroapi SA | | | Pharmaceuticals | | | | 218 | | | | 3,639 | |
| a | | Faurecia SE | | | Auto Components | | | | 707 | | | | 7,778 | |
| | Gecina SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 234 | | | | 18,442 | |
| | Getlink SE | | | Transportation Infrastructure | | | | 2,070 | | | | 32,253 | |
| | Hermes International | | | Textiles, Apparel & Luxury Goods | | | | 139 | | | | 165,721 | |
| | ICADE | | | Equity Real Estate Investment Trusts (REITs | ) | | | 144 | | | | 5,389 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 187 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | France (continued) | | | | | | | | | |
| | Ipsen SA | | | Pharmaceuticals | | | | 153 | | | $ | 14,224 | |
| a | | JCDecaux SA | | | Media | | | | 342 | | | | 4,044 | |
| | Kering SA | | | Textiles, Apparel & Luxury Goods | | | | 333 | | | | 149,590 | |
| | Klepierre SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 846 | | | | 14,835 | |
| b | | La Francaise des Jeux SAEM, 144A | | | Hotels, Restaurants & Leisure | | | | 396 | | | | 11,821 | |
| | Legrand SA | | | Electrical Equipment | | | | 1,224 | | | | 79,931 | |
| | L’Oreal SA | | | Personal Products | | | | 1,116 | | | | 361,059 | |
| | LVMH Moet Hennessy Louis Vuitton SE | | | Textiles, Apparel & Luxury Goods | | | | 1,125 | | | | 672,726 | |
| b | | Neoen SA, 144A | | | Independent Power Producers & Energy Traders | | | | 198 | | | | 6,661 | |
| | Orange SA | | | Diversified Telecommunication Services | | | | 8,604 | | | | 77,951 | |
| | Pernod Ricard SA | | | Beverages | | | | 936 | | | | 173,166 | |
| | Publicis Groupe | | | Media | | | | 1,017 | | | | 48,719 | |
| | Remy Cointreau SA | | | Beverages | | | | 108 | | | | 18,082 | |
| a | | Renault SA | | | Automobiles | | | | 837 | | | | 22,935 | |
| | Rexel SA | | | Trading Companies & Distributors | | | | 1,080 | | | | 16,378 | |
| | Safran SA | | | Aerospace & Defense | | | | 1,575 | | | | 145,053 | |
| | Sanofi | | | Pharmaceuticals | | | | 4,932 | | | | 378,800 | |
| | Sartorius Stedim Biotech | | | Life Sciences Tools & Services | | | | 108 | | | | 33,550 | |
| | Schneider Electric SE | | | Electrical Equipment | | | | 2,412 | | | | 276,319 | |
| | SCOR SE | | | Insurance | | | | 720 | | | | 10,485 | |
| | SEB SA | | | Household Durables | | | | 135 | | | | 8,557 | |
| | Societe Generale SA | | | Banks | | | | 3,510 | | | | 70,198 | |
| | Sodexo SA | | | Hotels, Restaurants & Leisure | | | | 396 | | | | 29,934 | |
| a | | SOITEC | | | Semiconductors & Semiconductor Equipment | | | | 126 | | | | 14,646 | |
| | Somfy SA | | | Electrical Equipment | | | | 36 | | | | 3,354 | |
| | Teleperformance | | | Professional Services | | | | 261 | | | | 66,709 | |
| | Thales SA | | | Aerospace & Defense | | | | 459 | | | | 50,812 | |
| | TotalEnergies SE | | | Oil, Gas & Consumable Fuels | | | | 10,710 | | | | 506,504 | |
| a | | Ubisoft Entertainment SA | | | Entertainment | | | | 405 | | | | 11,236 | |
| a | | Unibail-Rodamco-Westfield | | | Equity Real Estate Investment Trusts (REITs | ) | | | 364 | | | | 15,292 | |
| a | | Unibail-Rodamco-Westfield | | | Equity Real Estate Investment Trusts (REITs | ) | | | 104 | | | | 4,369 | |
| | Valeo | | | Auto Components | | | | 1,098 | | | | 16,813 | |
| | Veolia Environnement SA | | | Multi-Utilities | | | | 2,781 | | | | 53,698 | |
| | Vinci SA | | | Construction & Engineering | | | | 2,241 | | | | 182,591 | |
| | Vivendi SA | | | Media | | | | 3,168 | | | | 24,741 | |
| | Wendel SE | | | Diversified Financial Services | | | | 126 | | | | 9,116 | |
| a,b,c | | Worldline SA, 144A, Reg S | | | IT Services | | | | 1,107 | | | | 44,116 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,926,961 | |
| | | | | | | | | | | | | | |
| | | Germany 11.1% | | | | | | | | | |
| | 1&1 Drillisch AG | | | Wireless Telecommunication Services | | | | 198 | | | | 2,632 | |
| | Adidas AG | | | Textiles, Apparel & Luxury Goods | | | | 756 | | | | 88,044 | |
| | Allianz SE | | | Insurance | | | | 1,845 | | | | 292,446 | |
| | Aroundtown SA | | | Real Estate Management & Development | | | | 5,247 | | | | 11,602 | |
| | BASF SE | | | Chemicals | | | | 4,122 | | | | 159,909 | |
| | Bayer AG | | | Pharmaceuticals | | | | 4,464 | | | | 207,353 | |
| | Bayerische Motoren Werke AG | | | Automobiles | | | | 1,458 | | | | 99,969 | |
| | Bechtle AG | | | IT Services | | | | 387 | | | | 14,077 | |
| | Beiersdorf AG | | | Personal Products | | | | 450 | | | | 44,503 | |
| | Brenntag AG | | | Trading Companies & Distributors | | | | 702 | | | | 42,900 | |
| | Carl Zeiss Meditec AG | | | Health Care Equipment & Supplies | | | | 180 | | | | 18,947 | |
| a | | Commerzbank AG | | | Banks | | | | 4,734 | | | | 34,050 | |
| | Continental AG | | | Auto Components | | | | 477 | | | | 21,472 | |
| b | | Covestro AG, 144A | | | Chemicals | | | | 819 | | | | 23,701 | |
| a | | CTS Eventim AG & Co. KGaA | | | Entertainment | | | | 261 | | | | 10,872 | |
| | Daimler AG | | | Automobiles | | | | 3,798 | | | | 194,779 | |
| a | | Daimler Truck Holding AG | | | Machinery | | | | 1,908 | | | | 43,645 | |
| a,b | | Delivery Hero SE, 144A | | | Internet & Direct Marketing Retail | | | | 882 | | | | 32,782 | |
| | | | | | | | | | |
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| 188 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Germany (continued) | | | | | | | | | |
| | Deutsche Bank AG | | | Capital Markets | | | | 9,126 | | | $ | 68,357 | |
| | Deutsche Boerse AG | | | Capital Markets | | | | 846 | | | | 139,443 | |
| a | | Deutsche Lufthansa AG | | | Airlines | | | | 2,700 | | | | 15,653 | |
| | Deutsche Post AG | | | Air Freight & Logistics | | | | 4,383 | | | | 133,602 | |
| | Deutsche Telekom AG | | | Diversified Telecommunication Services | | | | 15,336 | | | | 262,798 | |
| | Deutsche Wohnen AG | | | Real Estate Management & Development | | | | 198 | | | | 3,783 | |
| b | | DWS Group GmbH & Co. KGaA, 144A | | | Capital Markets | | | | 162 | | | | 3,898 | |
| | E.ON SE | | | Multi-Utilities | | | | 10,044 | | | | 77,694 | |
| | Evonik Industries AG | | | Chemicals | | | | 882 | | | | 14,905 | |
| a | | Evotec SE | | | Life Sciences Tools & Services | | | | 711 | | | | 12,506 | |
| | Fielmann AG | | | Specialty Retail | | | | 108 | | | | 3,487 | |
| a | | Fraport AG Frankfurt Airport Services Worldwide . | | | Transportation Infrastructure | | | | 162 | | | | 5,902 | |
| | Fresenius Medical Care AG & Co. KGaA | | | Health Care Providers & Services | | | | 954 | | | | 27,131 | |
| | Fresenius SE & Co. KGaA | | | Health Care Providers & Services | | | | 1,809 | | | | 38,900 | |
| | Fuchs Petrolub SE | | | Chemicals | | | | 153 | | | | 3,380 | |
| | GEA Group AG | | | Machinery | | | | 747 | | | | 24,398 | |
| | Hannover Rueck SE | | | Insurance | | | | 270 | | | | 40,787 | |
| | HeidelbergCement AG | | | Construction Materials | | | | 639 | | | | 25,572 | |
| | Hella GmbH & Co. KGaA | | | Auto Components | | | | 99 | | | | 6,605 | |
| a | | HelloFresh SE | | | Internet & Direct Marketing Retail | | | | 738 | | | | 15,725 | |
| | Henkel AG & Co. KGaA | | | Household Products | | | | 459 | | | | 26,215 | |
| | Hochtief AG | | | Construction & Engineering | | | | 90 | | | | 4,308 | |
| | Infineon Technologies AG | | | Semiconductors & Semiconductor Equipment | | | | 5,886 | | | | 130,951 | |
| | KION Group AG | | | Machinery | | | | 369 | | | | 7,163 | |
| | Knorr-Bremse AG | | | Machinery | | | | 297 | | | | 12,913 | |
| | Lanxess AG | | | Chemicals | | | | 378 | | | | 11,135 | |
| | LEG Immobilien AG | | | Real Estate Management & Development | | | | 324 | | | | 19,476 | |
| | Merck KGaA | | | Pharmaceuticals | | | | 585 | | | | 95,592 | |
| a | | METRO AG | | | Food & Staples Retailing | | | | 603 | | | | 4,230 | |
| | MTU Aero Engines AG | | | Aerospace & Defense | | | | 252 | | | | 38,080 | |
| | Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | | | Insurance | | | | 639 | | | | 154,934 | |
| | Nemetschek AG | | | Software | | | | 243 | | | | 11,719 | |
| | Puma SE | | | Textiles, Apparel & Luxury Goods | | | | 450 | | | | 21,147 | |
| | Rational AG | | | Machinery | | | | 18 | | | | 8,826 | |
| | Rheinmetall AG | | | Industrial Conglomerates | | | | 198 | | | | 30,686 | |
| | RWE AG | | | Multi-Utilities | | | | 2,853 | | | | 105,621 | |
| | SAP SE | | | Software | | | | 5,022 | | | | 413,854 | |
| | Sartorius AG | | | Health Care Equipment & Supplies | | | | 9 | | | | 2,724 | |
| b,c | | Scout24 AG, 144A, Reg S | | | Interactive Media & Services | | | | 342 | | | | 17,328 | |
| | Siemens AG | | | Industrial Conglomerates | | | | 3,420 | | | | 339,061 | |
| a | | Siemens Energy AG | | | Electrical Equipment | | | | 1,935 | | | | 21,582 | |
| b | | Siemens Healthineers AG, 144A | | | Health Care Equipment & Supplies | | | | 1,233 | | | | 53,486 | |
| | Sixt SE | | | Road & Rail | | | | 63 | | | | 5,064 | |
| | Symrise AG | | | Chemicals | | | | 585 | | | | 57,567 | |
| a | | Talanx AG | | | Insurance | | | | 234 | | | | 8,344 | |
| | Telefonica Deutschland Holding AG | | | Diversified Telecommunication Services | | | | 4,113 | | | | 8,353 | |
| a | | thyssenkrupp AG | | | Metals & Mining | | | | 2,250 | | | | 9,668 | |
| | Traton SE | | | Machinery | | | | 225 | | | | 2,698 | |
| a | | TUI AG | | | Hotels, Restaurants & Leisure | | | | 5,427 | | | | 6,552 | |
| | Uniper SE | | | Independent Power Producers & Energy Traders | | | | 396 | | | | 1,515 | |
| | United Internet AG | | | Diversified Telecommunication Services | | | | 495 | | | | 9,340 | |
| | Vantage Towers AG | | | Diversified Telecommunication Services | | | | 432 | | | | 11,232 | |
| | Varta AG | | | Electrical Equipment | | | | 63 | | | | 1,811 | |
| | Volkswagen AG | | | Automobiles | | | | 126 | | | | 20,818 | |
| | Vonovia SE | | | Real Estate Management & Development | | | | 3,645 | | | | 79,308 | |
| | Wacker Chemie AG | | | Chemicals | | | | 72 | | | | 7,487 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Germany (continued) | | | | | | | | | |
| a,b | | Zalando SE, 144A | | | Internet & Direct Marketing Retail | | | | 990 | | | $ | 19,620 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 4,048,617 | |
| | | | | | | | | | | | | | |
| | | Ireland 1.4% | | | | | | | | | |
| | AIB Group PLC | | | Banks | | | | 4,869 | | | | 11,858 | |
| | Bank of Ireland Group PLC | | | Banks | | | | 4,104 | | | | 26,479 | |
| | CRH PLC | | | Construction Materials | | | | 3,447 | | | | 111,973 | |
| | DCC PLC | | | Industrial Conglomerates | | | | 450 | | | | 23,555 | |
| | Experian PLC | | | Professional Services | | | | 4,140 | | | | 122,978 | |
| a | | Flutter Entertainment PLC | | | Hotels, Restaurants & Leisure | | | | 792 | | | | 87,863 | |
| | Glanbia PLC | | | Food Products | | | | 873 | | | | 10,075 | |
| | Kerry Group | | | Food Products | | | | 693 | | | | 61,915 | |
| | Kingspan Group PLC | | | Building Products | | | | 666 | | | | 30,234 | |
| | Smurfit Kappa Group PLC | | | Containers & Packaging | | | | 1,179 | | | | 33,982 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 520,912 | |
| | | | | | | | | | | | | | |
| | | Isle Of Man 0.1% | | | | | | | | | |
| | GVC Holdings PLC | | | Hotels, Restaurants & Leisure | | | | 2,637 | | | | 31,968 | |
| | | | | | | | | | | | | | |
| | | Italy 3.2% | | | | | | | | | |
| | A2A SpA | | | Multi-Utilities | | | | 7,029 | | | | 6,885 | |
| | Amplifon SpA | | | Health Care Providers & Services | | | | 603 | | | | 15,891 | |
| | Assicurazioni Generali SpA | | | Insurance | | | | 6,255 | | | | 85,910 | |
| | Atlantia SpA | | | Transportation Infrastructure | | | | 2,430 | | | | 53,824 | |
| | Banca Mediolanum SpA | | | Diversified Financial Services | | | | 1,044 | | | | 6,617 | |
| | Buzzi Unicem SpA | | | Construction Materials | | | | 387 | | | | 5,529 | |
| | Davide Campari-Milano NV | | | Beverages | | | | 2,250 | | | | 20,085 | |
| | De’ Longhi SpA | | | Household Durables | | | | 288 | | | | 4,252 | |
| | DiaSorin SpA | | | Health Care Equipment & Supplies | | | | 99 | | | | 11,134 | |
| | Enel SpA | | | Electric Utilities | | | | 35,127 | | | | 145,357 | |
| | Eni SpA | | | Oil, Gas & Consumable Fuels | | | | 11,115 | | | | 118,797 | |
| | Ferrari NV | | | Automobiles | | | | 549 | | | | 103,101 | |
| | FinecoBank Banca Fineco SpA | | | Banks | | | | 2,763 | | | | 34,471 | |
| | Hera SpA | | | Multi-Utilities | | | | 3,753 | | | | 8,037 | |
| b,c | | Infrastrutture Wireless Italiane SpA, 144A, Reg S | | | Diversified Telecommunication Services | | | | 1,494 | | | | 13,128 | |
| | Interpump Group SpA | | | Machinery | | | | 360 | | | | 11,786 | |
| | Intesa Sanpaolo SpA | | | Banks | | | | 74,988 | | | | 125,091 | |
| | Italgas Reti SpA | | | Gas Utilities | | | | 2,277 | | | | 10,654 | |
| | Leonardo SpA | | | Aerospace & Defense | | | | 1,827 | | | | 13,016 | |
| | Mediobanca Banca di Credito Finanziario SpA | | | Banks | | | | 2,952 | | | | 23,309 | |
| | Moncler SpA | | | Textiles, Apparel & Luxury Goods | | | | 918 | | | | 38,122 | |
| a,b | | Nexi SpA, 144A | | | IT Services | | | | 3,357 | | | | 27,434 | |
| b | | Pirelli & C SpA, 144A | | | Auto Components | | | | 2,115 | | | | 6,962 | |
| b,c | | Poste Italiane SpA, 144A, Reg S | | | Insurance | | | | 2,079 | | | | 15,866 | |
| | Prysmian SpA | | | Electrical Equipment | | | | 1,170 | | | | 33,950 | |
| | Recordati Industria Chimica e Farmaceutica SpA | | | Pharmaceuticals | | | | 432 | | | | 15,951 | |
| | Reply SpA | | | IT Services | | | | 99 | | | | 10,436 | |
| | Snam SpA | | | Gas Utilities | | | | 9,981 | | | | 40,539 | |
| a | | Telecom Italia SpA | | | Diversified Telecommunication Services | | | | 48,339 | | | | 9,012 | |
| a | | Telecom Italia SpA/Milano | | | Diversified Telecommunication Services | | | | 27,675 | | | | 5,016 | |
| | Tenaris SA | | | Energy Equipment & Services | | | | 2,124 | | | | 27,601 | |
| | Terna – Rete Elettrica Nazionale | | | Electric Utilities | | | | 6,408 | | | | 39,235 | |
| | UniCredit SpA | | | Banks | | | | 8,883 | | | | 91,008 | |
| | UnipolSai Assicurazioni SpA | | | Insurance | | | | 2,160 | | | | 4,507 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,182,513 | |
| | | | | | | | | | | | | | |
| | | Luxembourg 0.2% | | | | | | | | | |
| | ArcelorMittal SA | | | Metals & Mining | | | | 2,313 | | | | 46,826 | |
| | Eurofins Scientific SE | | | Life Sciences Tools & Services | | | | 549 | | | | 32,872 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Luxembourg (continued) | | | | | | | | | |
| a | | RTL Group SA | | | Media | | | | 171 | | | $ | 5,451 | |
| a | | SUSE SA | | | Software | | | | 162 | | | | 2,409 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 87,558 | |
| | | | | | | | | | | | | | |
| | | Mexico 0.0%† | | | | | | | | | |
| | Fresnillo PLC | | | Metals & Mining | | | | 855 | | | | 7,342 | |
| | | | | | | | | | | | | | |
| | | Netherlands 9.0% | | | | | | | | | |
| | Aalberts NV | | | Machinery | | | | 432 | | | | 14,292 | |
| b | | ABN AMRO Bank NV, 144A | | | Banks | | | | 1,881 | | | | 17,005 | |
| a,b | | Adyen NV, 144A | | | IT Services | | | | 135 | | | | 172,167 | |
| | Aegon NV | | | Insurance | | | | 7,983 | | | | 32,080 | |
| | Akzo Nobel NV | | | Chemicals | | | | 801 | | | | 45,764 | |
| a | | Argenx SE | | | Biotechnology | | | | 198 | | | | 71,478 | |
| a | | Argenx SE | | | Biotechnology | | | | 54 | | | | 19,494 | |
| | ASM International NV | | | Semiconductors & Semiconductor Equipment | | | | 207 | | | | 47,402 | |
| | ASML Holding NV | | | Semiconductors & Semiconductor Equipment | | | | 1,827 | | | | 776,066 | |
| | ASR Nederland NV | | | Insurance | | | | 576 | | | | 22,328 | |
| | BE Semiconductor Industries NV | | | Semiconductors & Semiconductor Equipment | | | | 333 | | | | 14,546 | |
| b | | CTP NV, 144A | | | Real Estate Management & Development | | | | 225 | | | | 2,328 | |
| b,c | | Euronext NV, 144A, Reg S | | | Capital Markets | | | | 369 | | | | 23,533 | |
| a | | EXOR NV | | | Diversified Financial Services | | | | 50 | | | | 3,207 | |
| a | | EXOR NV | | | Diversified Financial Services | | | | 400 | | | | 25,659 | |
| | Heineken Holding NV | | | Beverages | | | | 477 | | | | 32,944 | |
| | Heineken NV | | | Beverages | | | | 1,071 | | | | 94,282 | |
| | IMCD Group NV | | | Trading Companies & Distributors | | | | 270 | | | | 32,428 | |
| | ING Groep NV | | | Banks | | | | 17,091 | | | | 148,311 | |
| | JDE Peet’s BV | | | Food Products | | | | 369 | | | | 10,823 | |
| | Koninklijke Ahold Delhaize NV | | | Food & Staples Retailing | | | | 4,554 | | | | 116,597 | |
| | Koninklijke DSM NV | | | Chemicals | | | | 792 | | | | 91,127 | |
| | Koninklijke KPN NV | | | Diversified Telecommunication Services | | | | 14,535 | | | | 39,471 | |
| | Koninklijke Philips NV | | | Health Care Equipment & Supplies | | | | 3,996 | | | | 62,635 | |
| | Koninklijke Vopak NV | | | Oil, Gas & Consumable Fuels | | | | 297 | | | | 5,441 | |
| | NN Group NV | | | Insurance | | | | 1,350 | | | | 52,861 | |
| | OCI NV | | | Chemicals | | | | 432 | | | | 15,896 | |
| | Prosus NV | | | Internet & Direct Marketing Retail | | | | 3,888 | | | | 205,565 | |
| a | | QIAGEN NV | | | Life Sciences Tools & Services | | | | 999 | | | | 42,063 | |
| | Randstad NV | | | Professional Services | | | | 504 | | | | 22,011 | |
| | Shell PLC | | | Oil, Gas & Consumable Fuels | | | | 33,156 | | | | 831,475 | |
| b | | Signify NV, 144A | | | Electrical Equipment | | | | 567 | | | | 14,792 | |
| | Universal Music Group NV | | | Entertainment | | | | 3,420 | | | | 64,750 | |
| | Wolters Kluwer NV | | | Professional Services | | | | 1,161 | | | | 113,646 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 3,284,467 | |
| | | | | | | | | | | | | | |
| | | Nigeria 0.0%† | | | | | | | | | |
| b | | Airtel Africa PLC, 144A | | | Wireless Telecommunication Services | | | | 4,518 | | | | 6,516 | |
| | | | | | | | | | | | | | |
| | | Norway 1.3% | | | | | | | | | |
| a | | Adevinta ASA, B | | | Interactive Media & Services | | | | 1,305 | | | | 7,784 | |
| | Aker ASA | | | Diversified Financial Services | | | | 108 | | | | 6,997 | |
| | Aker BP ASA | | | Oil, Gas & Consumable Fuels | | | | 1,388 | | | | 39,816 | |
| a,b | | AutoStore Holdings Ltd., 144A | | | Machinery | | | | 2,673 | | | | 2,948 | |
| | DNB Bank ASA | | | Banks | | | | 4,608 | | | | 73,091 | |
| | Equinor ASA | | | Oil, Gas & Consumable Fuels | | | | 4,248 | | | | 139,596 | |
| | Gjensidige Forsikring ASA | | | Insurance | | | | 747 | | | | 12,819 | |
| | Kongsberg Gruppen ASA | | | Aerospace & Defense | | | | 333 | | | | 10,145 | |
| | Leroy Seafood Group ASA | | | Food Products | | | | 1,188 | | | | 4,664 | |
| | Mowi ASA | | | Food Products | | | | 2,007 | | | | 25,508 | |
| a | | Nordic Semiconductor ASA | | | Semiconductors & Semiconductor Equipment | | | | 702 | | | | 9,373 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Norway (continued) | | | | | | | | | |
| | Norsk Hydro ASA | | | Metals & Mining | | | | 6,057 | | | $ | 32,705 | |
| | Orkla ASA | | | Food Products | | | | 3,456 | | | | 25,118 | |
| | Salmar ASA | | | Food Products | | | | 243 | | | | 8,188 | |
| | Schibsted ASA, A | | | Media | | | | 351 | | | | 4,761 | |
| | Schibsted ASA, B | | | Media | | | | 450 | | | | 5,666 | |
| | Telenor ASA | | | Diversified Telecommunication Services | | | | 2,880 | | | | 26,339 | |
| | TOMRA Systems ASA | | | Commercial Services & Supplies | | | | 1,044 | | | | 18,431 | |
| | Var Energi ASA | | | Oil, Gas & Consumable Fuels | | | | 1,827 | | | | 5,950 | |
| | Yara International ASA | | | Chemicals | | | | 711 | | | | 25,009 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 484,908 | |
| | | | | | | | | | | | | | |
| | | Poland 0.3% | | | | | | | | | |
| a,b | | Allegro.eu, 144A | | | Internet & Direct Marketing Retail | | | | 1,773 | | | | 7,734 | |
| | Bank Pekao SA | | | Banks | | | | 711 | | | | 8,738 | |
| a,b | | Dino Polska SA, 144A | | | Food & Staples Retailing | | | | 216 | | | | 13,207 | |
| a | | InPost SA | | | Air Freight & Logistics | | | | 909 | | | | 5,355 | |
| | KGHM Polska Miedz SA | | | Metals & Mining | | | | 621 | | | | 11,022 | |
| | LPP SA | | | Textiles, Apparel & Luxury Goods | | | | 5 | | | | 7,891 | |
| | Polski Koncern Naftowy Orlen SA | | | Oil, Gas & Consumable Fuels | | | | 1,854 | | | | 20,098 | |
| a | | Polskie Gornictwo Naftowe i Gazownictwo SA | | | Oil, Gas & Consumable Fuels | | | | 7,965 | | | | 7,867 | |
| | Powszechna Kasa Oszczednosci Bank Polski SA | | | Banks | | | | 3,879 | | | | 17,153 | |
| | Powszechny Zaklad Ubezpieczen SA | | | Insurance | | | | 2,520 | | | | 11,817 | |
| | Santander Bank Polska SA | | | Banks | | | | 135 | | | | 5,382 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 116,264 | |
| | | | | | | | | | | | | | |
| | | Portugal 0.3% | | | | | | | | | |
| | EDP – Energias de Portugal SA | | | Electric Utilities | | | | 12,654 | | | | 55,040 | |
| | Galp Energia SGPS SA, B | | | Oil, Gas & Consumable Fuels | | | | 2,340 | | | | 22,520 | |
| | Jeronimo Martins SGPS SA | | | Food & Staples Retailing | | | | 1,215 | | | | 22,675 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 100,235 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| d | | Evraz PLC | | | Metals & Mining | | | | 10,404 | | | | — | |
| | | | | | | | | | | | | | |
| | | Spain 3.7% | | | | | | | | | |
| | Acciona SA | | | Electric Utilities | | | | 108 | | | | 19,108 | |
| | ACS Actividades de Construccion y Servicios SA | | | Construction & Engineering | | | | 982 | | | | 22,251 | |
| a,b | | Aena SME SA, 144A | | | Transportation Infrastructure | | | | 306 | | | | 32,046 | |
| a | | Amadeus IT Group SA | | | IT Services | | | | 1,917 | | | | 89,974 | |
| | Banco Bilbao Vizcaya Argentaria SA | | | Banks | | | | 27,441 | | | | 124,211 | |
| | Banco Santander SA | | | Banks | | | | 75,042 | | | | 176,252 | |
| | Bankinter SA | | | Banks | | | | 3,114 | | | | 17,590 | |
| | CaixaBank SA | | | Banks | | | | 19,980 | | | | 64,807 | |
| a | | Cellnex Telecom SA, 144A | | | Diversified Telecommunication Services | | | | 2,718 | | | | 84,647 | |
| | Corp. ACCIONA Energias Renovables SA | | | Independent Power Producers & Energy Traders | | | | 225 | | | | 8,455 | |
| | Corporacion Mapfre SA | | | Insurance | | | | 4,365 | | | | 6,799 | |
| | EDP Renovaveis SA | | | Independent Power Producers & Energy Traders | | | | 1,080 | | | | 22,261 | |
| | Enagas SA | | | Gas Utilities | | | | 1,125 | | | | 17,457 | |
| | Endesa SA | | | Electric Utilities | | | | 1,440 | | | | 21,753 | |
| | Ferrovial SA | | | Construction & Engineering | | | | 2,178 | | | | 49,907 | |
| | Fluidra SA | | | Machinery | | | | 486 | | | | 7,389 | |
| a | | Grifols SA | | | Biotechnology | | | | 1,503 | | | | 13,078 | |
| | Iberdrola SA | | | Electric Utilities | | | | 26,937 | | | | 252,858 | |
| | Industria de Diseno Textil SA | | | Specialty Retail | | | | 4,779 | | | | 99,628 | |
| | Inmobiliaria Colonial SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,503 | | | | 7,268 | |
| | Merlin Properties Socimi SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,512 | | | | 11,709 | |
| | Naturgy Energy Group SA | | | Gas Utilities | | | | 666 | | | | 15,483 | |
| | Red Electrica Corp. SA | | | Electric Utilities | | | | 1,962 | | | | 30,196 | |
| | Repsol SA | | | Oil, Gas & Consumable Fuels | | | | 5,562 | | | | 64,323 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Spain (continued) | | | | | | | | | |
| a | | Siemens Gamesa Renewable Energy SA | | | Electrical Equipment | | | | 1,026 | | | $ | 18,017 | |
| | Telefonica SA | | | Diversified Telecommunication Services | | | | 23,427 | | | | 77,480 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,354,947 | |
| | | | | | | | | | | | | | |
| | | Sweden 5.0% | | | | | | | | | |
| | Alfa Laval AB | | | Machinery | | | | 1,368 | | | | 34,319 | |
| a | | Alleima AB | | | Metals & Mining | | | | 967 | | | | 3,032 | |
| | Assa Abloy AB, B | | | Building Products | | | | 4,086 | | | | 77,210 | |
| | Atlas Copco AB, A | | | Machinery | | | | 11,385 | | | | 107,515 | |
| | Atlas Copco AB, B | | | Machinery | | | | 7,047 | | | | 59,221 | |
| | Axfood AB | | | Food & Staples Retailing | | | | 486 | | | | 11,163 | |
| | Beijer Ref AB | | | Trading Companies & Distributors | | | | 1,107 | | | | 13,716 | |
| | Boliden AB | | | Metals & Mining | | | | 1,242 | | | | 38,785 | |
| | Castellum AB | | | Real Estate Management & Development | | | | 1,134 | | | | 12,788 | |
| | Electrolux AB, B | | | Household Durables | | | | 1,035 | | | | 10,839 | |
| | Epiroc AB, A | | | Machinery | | | | 2,826 | | | | 40,782 | |
| | Epiroc AB, B | | | Machinery | | | | 1,719 | | | | 21,841 | |
| | EQT AB | | | Capital Markets | | | | 1,323 | | | | 26,120 | |
| | Ericsson, B | | | Communications Equipment | | | | 13,500 | | | | 79,668 | |
| | Essity AB, B | | | Household Products | | | | 2,700 | | | | 53,720 | |
| b,c | | Evolution Gaming Group AB, 144A, Reg S | | | Hotels, Restaurants & Leisure | | | | 711 | | | | 56,816 | |
| a | | Fastighets AB Balder, B | | | Real Estate Management & Development | | | | 2,700 | | | | 10,889 | |
| | Getinge AB, B | | | Health Care Equipment & Supplies | | | | 1,017 | | | | 17,568 | |
| | Hennes & Mauritz AB, B | | | Specialty Retail | | | | 3,987 | | | | 37,170 | |
| | Hexagon AB, B | | | Electronic Equipment, Instruments & Components | | | | 8,433 | | | | 79,562 | |
| | Holmen AB, B | | | Paper & Forest Products | | | | 432 | | | | 16,525 | |
| | Husqvarna AB, A | | | Household Durables | | | | 117 | | | | 654 | |
| | Husqvarna AB, B | | | Household Durables | | | | 1,926 | | | | 10,778 | |
| | Industrivarden AB, A | | | Diversified Financial Services | | | | 972 | | | | 19,768 | |
| | Industrivarden AB, C | | | Diversified Financial Services | | | | 801 | | | | 16,117 | |
| | Indutrade AB | | | Machinery | | | | 1,269 | | | | 20,857 | |
| | Investment AB Latour, B | | | Industrial Conglomerates | | | | 639 | | | | 10,687 | |
| | Investor AB, A | | | Diversified Financial Services | | | | 2,412 | | | | 37,286 | |
| | Investor AB, B | | | Diversified Financial Services | | | | 8,208 | | | | 120,988 | |
| a | | Kinnevik AB, B | | | Diversified Financial Services | | | | 1,089 | | | | 14,484 | |
| | L E Lundbergforetagen AB, B | | | Diversified Financial Services | | | | 342 | | | | 12,463 | |
| | Lifco AB, B | | | Industrial Conglomerates | | | | 1,035 | | | | 14,568 | |
| | Nibe Industrier AB, B | | | Building Products | | | | 6,534 | | | | 58,937 | |
| | Saab AB, B | | | Aerospace & Defense | | | | 414 | | | | 12,967 | |
| | Sagax AB, B | | | Real Estate Management & Development | | | | 774 | | | | 12,847 | |
| | Sagax AB, D | | | Real Estate Management & Development | | | | 540 | | | | 1,216 | |
| | Sandvik AB | | | Machinery | | | | 4,842 | | | | 66,560 | |
| | Securitas AB, B | | | Commercial Services & Supplies | | | | 1,483 | | | | 10,370 | |
| | Skandinaviska Enskilda Banken AB, A | | | Banks | | | | 6,435 | | | | 61,929 | |
| | Skandinaviska Enskilda Banken AB, C | | | Banks | | | | 99 | | | | 1,053 | |
| | Skanska AB, B | | | Construction & Engineering | | | | 1,629 | | | | 20,477 | |
| | SKF AB, B | | | Machinery | | | | 1,737 | | | | 23,517 | |
| | Svenska Cellulosa AB, A | | | Paper & Forest Products | | | | 108 | | | | 1,388 | |
| | Svenska Cellulosa AB, B | | | Paper & Forest Products | | | | 2,691 | | | | 34,433 | |
| | Svenska Handelsbanken AB, A | | | Banks | | | | 6,876 | | | | 56,768 | |
| | Svenska Handelsbanken AB, B | | | Banks | | | | 171 | | | | 1,680 | |
| | Sweco AB, B | | | Construction & Engineering | | | | 900 | | | | 7,591 | |
| | Swedbank AB, A | | | Banks | | | | 4,554 | | | | 60,262 | |
| | Swedish Match AB | | | Tobacco | | | | 6,876 | | | | 68,156 | |
| a | | Swedish Orphan Biovitrum AB | | | Biotechnology | | | | 810 | | | | 15,736 | |
| | Tele2 AB, B | | | Wireless Telecommunication Services | | | | 2,475 | | | | 21,410 | |
| | Telefonaktiebolaget LM Ericsson, A | | | Communications Equipment | | | | 171 | | | | 1,032 | |
| | Telia Co. AB | | | Diversified Telecommunication Services | | | | 11,682 | | | | 33,717 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 193 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Sweden (continued) | | | | | | | | | |
| | Trelleborg AB, B | | | Machinery | | | | 1,098 | | | $ | 20,768 | |
| | Vitrolife AB | | | Biotechnology | | | | 297 | | | | 4,255 | |
| | Volvo AB, A | | | Machinery | | | | 936 | | | | 13,900 | |
| | Volvo AB, B | | | Machinery | | | | 6,858 | | | | 97,690 | |
| a | | Volvo Car AB, B | | | Automobiles | | | | 2,457 | | | | 10,789 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,807,347 | |
| | | | | | | | | | | | | | |
| | | Switzerland 16.4% | | | | | | | | | |
| | ABB Ltd. | | | Electrical Equipment | | | | 6,876 | | | | 180,240 | |
| | Adecco Group AG | | | Professional Services | | | | 729 | | | | 20,302 | |
| | Alcon Inc. | | | Health Care Equipment & Supplies | | | | 2,115 | | | | 124,934 | |
| | Bachem Holding AG | | | Life Sciences Tools & Services | | | | 144 | | | | 9,188 | |
| | Baloise Holding AG | | | Insurance | | | | 207 | | | | 26,647 | |
| | Banque Cantonale Vaudoise | | | Banks | | | | 126 | | | | 11,995 | |
| | Barry Callebaut AG | | | Food Products | | | | 18 | | | | 34,180 | |
| | Belimo Holding AG | | | Building Products | | | | 45 | | | | 16,802 | |
| | BKW AG | | | Electric Utilities | | | | 81 | | | | 9,719 | |
| | Chocoladefabriken Lindt & Spruengli AG | | | Food Products | | | | 9 | | | | 87,417 | |
| | Cie Financiere Richemont SA | | | Textiles, Apparel & Luxury Goods | | | | 2,322 | | | | 222,421 | |
| | Clariant AG | | | Chemicals | | | | 1,035 | | | | 16,720 | |
| | Coca-Cola HBC AG | | | Beverages | | | | 891 | | | | 18,838 | |
| | Credit Suisse Group AG | | | Capital Markets | | | | 11,826 | | | | 47,773 | |
| | DKSH Holding AG | | | Professional Services | | | | 162 | | | | 11,818 | |
| | Emmi AG | | | Food Products | | | | 9 | | | | 7,032 | |
| | EMS-Chemie Holding AG | | | Chemicals | | | | 36 | | | | 22,988 | |
| a | | Flughafen Zurich AG | | | Transportation Infrastructure | | | | 90 | | | | 13,433 | |
| | Geberit AG | | | Building Products | | | | 153 | | | | 66,454 | |
| | Georg Fischer AG | | | Machinery | | | | 360 | | | | 17,410 | |
| | Givaudan AG | | | Chemicals | | | | 42 | | | | 128,144 | |
| | Helvetia Holding AG | | | Insurance | | | | 162 | | | | 15,291 | |
| | Holcim Ltd., B | | | Construction Materials | | | | 2,475 | | | | 103,048 | |
| | Julius Baer Group Ltd. | | | Capital Markets | | | | 972 | | | | 42,959 | |
| | Kuehne + Nagel International AG | | | Marine | | | | 225 | | | | 46,177 | |
| | Logitech International SA | | | Technology Hardware, Storage & Peripherals | | | | 666 | | | | 31,092 | |
| | Lonza Group AG | | | Life Sciences Tools & Services | | | | 333 | | | | 164,529 | |
| | Nestle SA | | | Food Products | | | | 12,213 | | | | 1,328,695 | |
| | Novartis AG | | | Pharmaceuticals | | | | 9,288 | | | | 712,748 | |
| | Partners Group Holding AG | | | Capital Markets | | | | 99 | | | | 80,930 | |
| | PSP Swiss Property AG | | | Real Estate Management & Development | | | | 198 | | | | 19,916 | |
| | Roche Holding AG, Bearer | | | Pharmaceuticals | | | | 117 | | | | 46,099 | |
| | Roche Holding AG, Non-Voting | | | Pharmaceuticals | | | | 3,141 | | | | 1,032,214 | |
| | Schindler Holding AG, PC | | | Machinery | | | | 189 | | | | 29,697 | |
| | Schindler Holding AG | | | Machinery | | | | 90 | | | | 13,716 | |
| | SGS SA | | | Professional Services | | | | 27 | | | | 58,293 | |
| | SIG Combibloc Group AG | | | Containers & Packaging | | | | 1,710 | | | | 35,060 | |
| | Sika AG | | | Chemicals | | | | 693 | | | | 141,311 | |
| | Sonova Holding AG | | | Health Care Equipment & Supplies | | | | 234 | | | | 52,304 | |
| | STMicroelectronics NV | | | Semiconductors & Semiconductor Equipment | | | | 2,844 | | | | 89,838 | |
| | Straumann Holding AG | | | Health Care Equipment & Supplies | | | | 477 | | | | 44,509 | |
| | Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 207 | | | | 8,783 | |
| | Swiss Life Holding AG | | | Insurance | | | | 135 | | | | 60,145 | |
| | Swiss Prime Site AG | | | Real Estate Management & Development | | | | 342 | | | | 27,450 | |
| | Swiss Re AG | | | Insurance | | | | 1,305 | | | | 97,002 | |
| | Swisscom AG | | | Diversified Telecommunication Services | | | | 117 | | | | 55,097 | |
| | Tecan Group AG | | | Life Sciences Tools & Services | | | | 54 | | | | 18,818 | |
| | Temenos AG | | | Software | | | | 279 | | | | 19,117 | |
| | The Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 135 | | | | 30,792 | |
| | UBS Group AG | | | Capital Markets | | | | 13,743 | | | | 202,113 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Switzerland (continued) | | | | | | | | | |
| b,c | | VAT Group AG, 144A | | | Machinery | | | | 117 | | | $ | 24,226 | |
| | Zurich Insurance Group AG | | | Insurance | | | | 675 | | | | 270,891 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 5,997,315 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 20.2% | | | | | | | | | |
| | 3i Group PLC | | | Capital Markets | | | | 4,365 | | | | 53,258 | |
| | Abrdn PLC | | | Capital Markets | | | | 9,702 | | | | 15,065 | |
| | Admiral Group PLC | | | Insurance | | | | 1,287 | | | | 27,505 | |
| | Allfunds Group PLC | | | Capital Markets | | | | 1,098 | | | | 8,148 | |
| | Anglo American PLC | | | Metals & Mining | | | | 5,463 | | | | 166,820 | |
| | Ashtead Group PLC | | | Trading Companies & Distributors | | | | 1,989 | | | | 90,722 | |
| | Associated British Foods PLC | | | Food Products | | | | 1,584 | | | | 22,306 | |
| | AstraZeneca PLC | | | Pharmaceuticals | | | | 6,696 | | | | 743,288 | |
| b | | Auto Trader Group PLC, 144A | | | Interactive Media & Services | | | | 4,077 | | | | 23,438 | |
| | AVEVA Group PLC | | | Software | | | | 531 | | | | 18,624 | |
| | Aviva PLC | | | Insurance | | | | 12,816 | | | | 55,538 | |
| | B&M European Value Retail SA | | | Multiline Retail | | | | 4,014 | | | | 13,716 | |
| | BAE Systems PLC | | | Aerospace & Defense | | | | 14,202 | | | | 125,212 | |
| | Barclays PLC | | | Banks | | | | 73,854 | | | | 118,966 | |
| | Barratt Developments PLC | | | Household Durables | | | | 4,446 | | | | 16,984 | |
| | Bellway PLC | | | Household Durables | | | | 558 | | | | 10,608 | |
| | Berkeley Group Holdings PLC | | | Household Durables | | | | 450 | | | | 16,562 | |
| | BP PLC | | | Oil, Gas & Consumable Fuels | | | | 84,294 | | | | 407,536 | |
| | British American Tobacco PLC | | | Tobacco | | | | 10,152 | | | | 365,649 | |
| | British Land Co. PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 4,176 | | | | 16,348 | |
| | BT Group PLC | | | Diversified Telecommunication Services | | | | 31,428 | | | | 42,573 | |
| | Bunzl PLC | | | Trading Companies & Distributors | | | | 1,530 | | | | 47,139 | |
| | Burberry Group PLC | | | Textiles, Apparel & Luxury Goods | | | | 1,728 | | | | 34,876 | |
| a | | Centrica PLC | | | Multi-Utilities | | | | 26,883 | | | | 21,259 | |
| | CNH Industrial NV | | | Machinery | | | | 4,500 | | | | 51,270 | |
| | Compass Group PLC | | | Hotels, Restaurants & Leisure | | | | 8,028 | | | | 161,758 | |
| b | | ConvaTec Group PLC, 144A | | | Health Care Equipment & Supplies | | | | 7,299 | | | | 16,752 | |
| | Croda International PLC | | | Chemicals | | | | 612 | | | | 44,037 | |
| | Dechra Pharmaceuticals PLC | | | Pharmaceuticals | | | | 477 | | | | 13,962 | |
| | Derwent London PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 450 | | | | 10,147 | |
| | Diageo PLC | | | Beverages | | | | 10,206 | | | | 432,647 | |
| | Direct Line Insurance Group PLC | | | Insurance | | | | 5,652 | | | | 11,704 | |
| | Dr. Martens PLC | | | Textiles, Apparel & Luxury Goods | | | | 2,529 | | | | 6,290 | |
| | DS Smith PLC | | | Containers & Packaging | | | | 5,805 | | | | 16,647 | |
| a | | easyJet PLC | | | Airlines | | | | 1,705 | | | | 5,641 | |
| | Electrocomponents PLC | | | Trading Companies & Distributors | | | | 2,124 | | | | 22,975 | |
| | Endeavour Mining PLC | | | Metals & Mining | | | | 828 | | | | 15,168 | |
| | Ferguson PLC | | | Trading Companies & Distributors | | | | 972 | | | | 102,037 | |
| | GSK PLC | | | Pharmaceuticals | | | | 18,054 | | | | 263,167 | |
| a | | Haleon PLC | | | Personal Products | | | | 22,491 | | | | 70,110 | |
| | Halma PLC | | | Electronic Equipment, Instruments & Components | | | | 1,719 | | | | 39,242 | |
| | Hargreaves Lansdown PLC | | | Capital Markets | | | | 1,719 | | | | 16,641 | |
| | Hikma Pharmaceuticals PLC | | | Pharmaceuticals | | | | 765 | | | | 11,644 | |
| | HomeServe PLC | | | Commercial Services & Supplies | | | | 1,233 | | | | 16,297 | |
| | Howden Joinery Group PLC | | | Trading Companies & Distributors | | | | 2,592 | | | | 14,618 | |
| | HSBC Holdings PLC | | | Banks | | | | 91,242 | | | | 475,961 | |
| | IMI PLC | | | Machinery | | | | 1,161 | | | | 14,503 | |
| | Imperial Brands PLC | | | Tobacco | | | | 4,284 | | | | 88,710 | |
| | Informa PLC | | | Media | | | | 6,642 | | | | 38,496 | |
| | InterContinental Hotels Group PLC | | | Hotels, Restaurants & Leisure | | | | 837 | | | | 40,821 | |
| | Intermediate Capital Group PLC | | | Capital Markets | | | | 1,260 | | | | 13,823 | |
| a | | International Consolidated Airlines Group SA | | | Airlines | | | | 5,151 | | | | 5,444 | |
| | Intertek Group PLC | | | Professional Services | | | | 729 | | | | 30,167 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 195 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United Kingdom (continued) | | | | | | | | | |
| | ITV PLC | | | Media | | | | 17,073 | | | $ | 10,917 | |
| | J Sainsbury PLC | | | Food & Staples Retailing | | | | 7,659 | | | | 14,902 | |
| | JD Sports Fashion PLC | | | Specialty Retail | | | | 11,583 | | | | 12,956 | |
| | Johnson Matthey PLC | | | Chemicals | | | | 810 | | | | 16,570 | |
| a,b,c | | Just Eat Takeaway.com NV, 144A, Reg S | | | Internet & Direct Marketing Retail | | | | 819 | | | | 12,979 | |
| | Kingfisher PLC | | | Specialty Retail | | | | 8,973 | | | | 22,076 | |
| | Land Securities Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3,240 | | | | 18,873 | |
| | Legal & General Group PLC | | | Insurance | | | | 26,856 | | | | 64,905 | |
| | Lloyds Banking Group PLC | | | Banks | | | | 308,025 | | | | 142,319 | |
| | London Stock Exchange Group PLC | | | Capital Markets | | | | 1,647 | | | | 140,244 | |
| | M&G PLC | | | Diversified Financial Services | | | | 11,826 | | | | 21,987 | |
| | Melrose Industries PLC | | | Industrial Conglomerates | | | | 17,289 | | | | 19,724 | |
| | Mondi PLC | | | Paper & Forest Products | | | | 2,223 | | | | 34,593 | |
| | National Grid PLC | | | Multi-Utilities | | | | 16,434 | | | | 170,794 | |
| | NatWest Group PLC | | | Banks | | | | 23,040 | | | | 58,100 | |
| | Next PLC | | | Multiline Retail | | | | 549 | | | | 29,423 | |
| a | | NMC Health PLC | | | Health Care Providers & Services | | | | 1,159 | | | | — | |
| a | | Ocado Group PLC | | | Food & Staples Retailing | | | | 2,817 | | | | 14,858 | |
| | Pearson PLC | | | Media | | | | 3,411 | | | | 33,005 | |
| | Pennon Group PLC | | | Water Utilities | | | | 1,125 | | | | 9,883 | |
| a,b | | Pepco Group NV, 144A | | | Multiline Retail | | | | 486 | | | | 2,942 | |
| | Persimmon PLC | | | Household Durables | | | | 1,440 | | | | 19,892 | |
| | Phoenix Group Holdings PLC | | | Insurance | | | | 3,195 | | | | 18,789 | |
| | Prudential PLC | | | Insurance | | | | 12,429 | | | | 124,010 | |
| | Reckitt Benckiser Group PLC | | | Household Products | | | | 3,240 | | | | 216,141 | |
| | RELX PLC | | | Professional Services | | | | 8,397 | | | | 206,406 | |
| | Renishaw PLC | | | Electronic Equipment, Instruments & Components | | | | 153 | | | | 6,005 | |
| | Rentokil Initial PLC | | | Commercial Services & Supplies | | | | 8,442 | | | | 44,999 | |
| | Rightmove PLC | | | Interactive Media & Services | | | | 3,726 | | | | 20,056 | |
| a | | Rolls-Royce Holdings PLC | | | Aerospace & Defense | | | | 37,872 | | | | 29,420 | |
| | Royal Mail PLC | | | Air Freight & Logistics | | | | 4,320 | | | | 8,895 | |
| | Schroders PLC | | | Capital Markets | | | | 3,017 | | | | 13,111 | |
| | Segro PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 5,508 | | | | 46,299 | |
| | Severn Trent PLC | | | Water Utilities | | | | 1,197 | | | | 31,468 | |
| | Smith & Nephew PLC | | | Health Care Equipment & Supplies | | | | 3,915 | | | | 45,910 | |
| | Smiths Group PLC | | | Industrial Conglomerates | | | | 1,701 | | | | 28,672 | |
| | Spirax-Sarco Engineering PLC | | | Machinery | | | | 333 | | | | 38,660 | |
| | SSE PLC | | | Electric Utilities | | | | 4,833 | | | | 82,410 | |
| | St. James’s Place Capital PLC | | | Capital Markets | | | | 2,403 | | | | 27,790 | |
| | Standard Chartered PLC | | | Banks | | | | 11,097 | | | | 70,213 | |
| | Tate & Lyle PLC | | | Food Products | | | | 1,828 | | | | 13,876 | |
| | Taylor Wimpey PLC | | | Household Durables | | | | 16,461 | | | | 16,225 | |
| | Tesco PLC | | | Food & Staples Retailing | | | | 33,867 | | | | 78,182 | |
| | The Sage Group PLC | | | Software | | | | 4,761 | | | | 37,054 | |
| | Unilever PLC | | | Personal Products | | | | 11,475 | | | | 508,411 | |
| | UNITE Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,449 | | | | 13,886 | |
| | United Utilities Group PLC | | | Water Utilities | | | | 3,105 | | | | 30,807 | |
| | Vodafone Group PLC | | | Wireless Telecommunication Services | | | | 113,328 | | | | 127,925 | |
| | Weir Group PLC | | | Machinery | | | | 1,188 | | | | 18,653 | |
| | Whitbread PLC | | | Hotels, Restaurants & Leisure | | | | 918 | | | | 23,590 | |
| a | | Wise PLC, A | | | IT Services | | | | 2,025 | | | | 14,933 | |
| | WPP PLC | | | Media | | | | 4,923 | | | | 41,217 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 7,368,774 | |
| | | | | | | | | | | | | | |
| | | United States 0.3% | | | | | | | | | |
| | Stellantis NV | | | Automobiles | | | | 9,297 | | | | 111,771 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $51,342,130) | | | | | | | | | | | 35,878,166 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 196 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | Preferred Stocks 0.6% | | | | | | | | | | | | |
| | | Germany 0.6% | | | | | | | | | |
| e | | Bayerische Motoren Werke AG, 8.700%, pfd. | | | Automobiles | | | | 261 | | | $ | 17,106 | |
| e | | Fuchs Petrolub SE, 3.962%, pfd. | | | Chemicals | | | | 315 | | | | 8,023 | |
| e | | Henkel AG & Co. KGaA, 3.032%, pfd. | | | Household Products | | | | 792 | | | | 47,344 | |
| e | | Sartorius AG, 0.353%, pfd. | | | Health Care Equipment & Supplies | | | | 108 | | | | 37,782 | |
| e | | Sixt SE, 9.740%, pfd. | | | Road & Rail | | | | 72 | | | | 3,305 | |
| e | | Volkswagen AG, 5.981%, pfd. | | | Automobiles | | | | 909 | | | | 112,559 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 226,119 | |
| | | | | | | | | | | | | | |
| | | Spain 0.0%† | | | | | | | | | |
| a | | Grifols SA, pfd., B | | | Biotechnology | | | | 1,170 | | | | 7,393 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $364,977) | | | | | | | | | | | 233,512 | |
| | | | | | | | | | | | | | |
| | | Right 0.0%† | | | | | | | | | |
| | | Sweden 0.0%† | | | | | | | | | |
| a | | Securitas AB, rts., 10/11/2022 | | | Commercial Services & Supplies | | | | 4,960 | | | | 2,069 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $3,371) | | | | | | | | | | | 2,069 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $51,710,478) 98.8% | | | | | | | | | | | 36,113,747 | |
| | Other Assets, less Liabilities 1.2% | | | | | | | | | | | 441,377 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 36,555,124 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $873,635, representing 2.4% 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 September 30, 2022, the value of was $233,367, 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 September 30, 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 | | | | 10 | | | $ | 324,754 | | | | 12/16/22 | | | $ | (22,195 | ) |
FTSE 100 Index | | | Long | | | | 2 | | | | 154,373 | | | | 12/16/22 | | | | (10,808 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Futures Contracts | | | | | | | | | | | | | | | | | | $ | (33,003 | ) |
| | | | | | | | | | | | | | | | | | | | |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 197 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe Hedged ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Net asset value, beginning of period | | $ | 27.12 | | | $ | 25.72 | | | $ | 19.15 | | | $ | 22.81 | | | $ | 23.88 | | | $ | 25.05 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.54 | | | | 0.76 | | | | 0.59 | | | | 0.73 | | | | 0.79 | | | | 0.25 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (3.75 | ) | | | 1.51 | | | | 6.45 | | | | (2.92 | ) | | | 0.62 | | | | (1.40 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (3.21 | ) | | | 2.27 | | | | 7.04 | | | | (2.19 | ) | | | 1.41 | | | | (1.15 | ) |
| | | | |
| | | | | | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | (0.24 | ) | | | (0.87 | ) | | | (0.47 | ) | | | (1.47 | ) | | | (0.38 | ) | | | (0.02 | ) |
| | | | | | |
Net realized gains | | | — | | | | — | | | | — | | | | — | | | | (2.10 | ) | | | — | d |
| | | | |
| | | | | | |
| Total Distributions | | | (0.24 | ) | | | (0.87 | ) | | | (0.47 | ) | | | (1.47 | ) | | | (2.48 | ) | | | (0.02 | ) |
| | | | |
| | | | | | |
| Net asset value, end of period | | $ | 23.67 | | | $ | 27.12 | | | $ | 25.72 | | | $ | 19.15 | | | $ | 22.81 | | | $ | 23.88 | |
| | | | |
| | | | | | |
Total return | | | (11.84)% | | | | 8.75% | | | | 36.92% | | | | (10.67)% | | | | 6.98% | | | | (4.61)% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.09% | | | | 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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 4.19% | | | | 2.77% | | | | 2.58% | | | | 3.10% | | | | 3.28% | | | | 2.47% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $14,204 | | | | $21,695 | | | | $15,429 | | | | $3,831 | | | | $4,563 | | | | $33,428 | |
| | | | | | |
Portfolio turnover ratef | | | 3.56% | g | | | 11.67% | g | | | 12.87% | g | | | 14.81% | g | | | 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.
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: | | | 1.47% | | | | 11.67% | | | | 12.87% | | | | 14.81% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 198 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Europe Hedged ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.9% | | | | | | | | | |
| | | Australia 1.6% | | | | | | | | | |
| | Glencore PLC | | | Metals & Mining | | | | 23,208 | | | $ | 123,875 | |
| | Rio Tinto PLC | | | Metals & Mining | | | | 1,929 | | | | 105,427 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 229,302 | |
| | | | | | | | | | | | | | |
| | | Austria 0.3% | | | | | | | | | |
| | Andritz AG | | | Machinery | | | | 123 | | | | 5,259 | |
| | Erste Group Bank AG | | | Banks | | | | 579 | | | | 12,842 | |
| | OMV AG | | | Oil, Gas & Consumable Fuels | | | | 252 | | | | 9,226 | |
| | Raiffeisen Bank International AG | | | Banks | | | | 222 | | | | 2,655 | |
| | Telekom Austria AG | | | Diversified Telecommunication Services | | | | 240 | | | | 1,390 | |
| | Verbund AG | | | Electric Utilities | | | | 117 | | | | 10,023 | |
| | Voestalpine AG | | | Metals & Mining | | | | 210 | | | | 3,602 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 44,997 | |
| | | | | | | | | | | | | | |
| | | Belgium 1.3% | | | | | | | | | |
| | Ackermans & van Haaren NV | | | Diversified Financial Services | | | | 39 | | | | 4,971 | |
| | Ageas SA/NV | | | Insurance | | | | 324 | | | | 11,884 | |
| | Anheuser-Busch InBev SA/NV | | | Beverages | | | | 1,533 | | | | 70,202 | |
| | Colruyt SA | | | Food & Staples Retailing | | | | 87 | | | | 1,918 | |
| | D’ieteren Group | | | Distributors | | | | 42 | | | | 5,978 | |
| | Elia Group SA/NV | | | Electric Utilities | | | | 66 | | | | 7,785 | |
| | Groupe Bruxelles Lambert SA | | | Diversified Financial Services | | | | 177 | | | | 12,464 | |
| | KBC Groep NV | | | Banks | | | | 486 | | | | 23,167 | |
| | Proximus SADP | | | Diversified Telecommunication Services | | | | 240 | | | | 2,491 | |
| | Sofina SA | | | Diversified Financial Services | | | | 27 | | | | 4,695 | |
| | Solvay SA | | | Chemicals | | | | 123 | | | | 9,596 | |
| | UCB SA | | | Pharmaceuticals | | | | 213 | | | | 14,840 | |
| | Umicore SA | | | Chemicals | | | | 363 | | | | 10,715 | |
| | Warehouses De Pauw CVA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 252 | | | | 6,201 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 186,907 | |
| | | | | | | | | | | | | | |
| | | Bermuda 0.0%† | | | | | | | | | |
| | Hiscox Ltd. | | | Insurance | | | | 594 | | | | 5,851 | |
| | | | | | | | | | | | | | |
| | | Chile 0.1% | | | | | | | | | |
| | Antofagasta PLC | | | Metals & Mining | | | | 618 | | | | 7,695 | |
| | | | | | | | | | | | | | |
| | | Denmark 4.0% | | | | | | | | | |
| | AP Moller-Maersk A/S, A | | | Marine | | | | 5 | | | | 8,880 | |
| | AP Moller-Maersk A/S, B | | | Marine | | | | 9 | | | | 16,441 | |
| | Carlsberg AS, B | | | Beverages | | | | 165 | | | | 19,431 | |
| | Chr. Hansen Holding AS | | | Chemicals | | | | 183 | | | | 9,037 | |
| | Coloplast AS, B | | | Health Care Equipment & Supplies | | | | 237 | | | | 24,225 | |
| | Danske Bank AS | | | Banks | | | | 1,167 | | | | 14,582 | |
| | DSV A/S | | | Air Freight & Logistics | | | | 333 | | | | 39,311 | |
| a | | Genmab A/S | | | Biotechnology | | | | 117 | | | | 37,937 | |
| | GN Store Nord AS | | | Health Care Equipment & Supplies | | | | 228 | | | | 4,028 | |
| | H Lundbeck A/S | | | Pharmaceuticals | | | | 408 | | | | 1,307 | |
| a | | H Lundbeck A/S, A | | | Pharmaceuticals | | | | 102 | | | | 304 | |
| | Novo Nordisk AS, B | | | Pharmaceuticals | | | | 2,772 | | | | 278,080 | |
| | Novozymes AS | | | Chemicals | | | | 351 | | | | 17,721 | |
| b | | Orsted AS, 144A | | | Electric Utilities | | | | 333 | | | | 26,654 | |
| | Pandora AS | | | Textiles, Apparel & Luxury Goods | | | | 159 | | | | 7,523 | |
| | Rockwool International AS, B | | | Building Products | | | | 12 | | | | 1,902 | |
| | Royal Unibrew A/S | | | Beverages | | | | 87 | | | | 5,673 | |
| | SimCorp A/S | | | Software | | | | 66 | | | | 3,738 | |
| | Tryg AS | | | Insurance | | | | 636 | | | | 13,148 | |
| | Vestas Wind Systems A/S | | | Electrical Equipment | | | | 1,782 | | | | 33,250 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 199 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Denmark (continued) | | | | | | | | | |
| a | | William Demant Holding AS | | | Health Care Equipment & Supplies | | | | 177 | | | $ | 4,407 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 567,579 | |
| | | | | | | | | | | | | | |
| | | Finland 2.2% | | | | | | | | | |
| | Elisa OYJ | | | Diversified Telecommunication Services | | | | 255 | | | | 11,579 | |
| c | | Fortum OYJ, Reg S | | | Electric Utilities | | | | 765 | | | | 10,320 | |
| | Huhtamaki OYJ | | | Containers & Packaging | | | | 168 | | | | 5,375 | |
| | Kesko OYJ | | | Food & Staples Retailing | | | | 480 | | | | 9,002 | |
| | Kojamo Oyj | | | Real Estate Management & Development | | | | 333 | | | | 4,280 | |
| | Kone OYJ, B | | | Machinery | | | | 696 | | | | 27,007 | |
| | Metso Outotec Oyj | | | Machinery | | | | 1,077 | | | | 7,234 | |
| | Neste Oil OYJ | | | Oil, Gas & Consumable Fuels | | | | 738 | | | | 32,389 | |
| | Nokia OYJ | | | Communications Equipment | | | | 9,999 | | | | 43,301 | |
| | Nordea Bank Abp | | | Banks | | | | 6,366 | | | | 54,881 | |
| | Orion OYJ | | | Pharmaceuticals | | | | 180 | | | | 7,597 | |
| | Sampo OYJ, A | | | Insurance | | | | 870 | | | | 37,296 | |
| | Stora Enso OYJ, R | | | Paper & Forest Products | | | | 1,017 | | | | 13,042 | |
| | UPM-Kymmene OYJ | | | Paper & Forest Products | | | | 945 | | | | 30,161 | |
| | Valmet Oyj | | | Machinery | | | | 297 | | | | 6,061 | |
| | Wartsila OYJ ABP | | | Machinery | | | | 870 | | | | 5,610 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 305,135 | |
| | | | | | | | | | | | | | |
| | | France 16.3% | | | | | | | | | |
| a | | Accor SA | | | Hotels, Restaurants & Leisure | | | | 327 | | | | 6,923 | |
| a | | Aeroports de Paris SA | | | Transportation Infrastructure | | | | 51 | | | | 5,945 | |
| | Air Liquide SA | | | Chemicals | | | | 906 | | | | 104,342 | |
| | Airbus SE | | | Aerospace & Defense | | | | 990 | | | | 86,210 | |
| b | | ALD SA, 144A | | | Road & Rail | | | | 147 | | | | 1,362 | |
| | Alstom SA | | | Machinery | | | | 537 | | | | 8,809 | |
| b | | Amundi SA, 144A | | | Capital Markets | | | | 99 | | | | 4,166 | |
| | Arkema SA | | | Chemicals | | | | 117 | | | | 8,606 | |
| | AXA SA | | | Insurance | | | | 3,279 | | | | 72,196 | |
| | Biomerieux | | | Health Care Equipment & Supplies | | | | 78 | | | | 6,220 | |
| | BNP Paribas SA | | | Banks | | | | 1,896 | | | | 80,993 | |
| | Bollore | | | Entertainment | | | | 1,752 | | | | 8,105 | |
| | Bouygues SA | | | Construction & Engineering | | | | 378 | | | | 9,943 | |
| | Bureau Veritas SA | | | Professional Services | | | | 504 | | | | 11,346 | |
| | Capgemini SE | | | IT Services | | | | 285 | | | | 46,208 | |
| | Carrefour SA | | | Food & Staples Retailing | | | | 1,047 | | | | 14,580 | |
| | Cie Generale des Etablissements Michelin SCA | | | Auto Components | | | | 1,242 | | | | 28,173 | |
| | Compagnie de Saint-Gobain | | | Building Products | | | | 813 | | | | 29,509 | |
| | Covivio | | | Equity Real Estate Investment Trusts (REITs | ) | | | 90 | | | | 4,366 | |
| | Credit Agricole SA | | | Banks | | | | 2,148 | | | | 17,600 | |
| | Danone SA | | | Food Products | | | | 1,080 | | | | 51,388 | |
| | Dassault Aviation SA | | | Aerospace & Defense | | | | 42 | | | | 4,814 | |
| | Dassault Systemes SE | | | Software | | | | 1,185 | | | | 41,484 | |
| | Edenred | | | IT Services | | | | 441 | | | | 20,461 | |
| | EDF SA | | | Electric Utilities | | | | 1,119 | | | | 13,034 | |
| | Eiffage SA | | | Construction & Engineering | | | | 132 | | | | 10,671 | |
| | Engie SA | | | Multi-Utilities | | | | 2,946 | | | | 34,177 | |
| | EssilorLuxottica SA | | | Textiles, Apparel & Luxury Goods | | | | 528 | | | | 72,597 | |
| | Eurazeo SE | | | Diversified Financial Services | | | | 84 | | | | 4,431 | |
| a | | Euroapi SA | | | Pharmaceuticals | | | | 75 | | | | 1,252 | |
| a | | Faurecia SE | | | Auto Components | | | | 270 | | | | 2,970 | |
| | Gecina SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 93 | | | | 7,330 | |
| | Getlink SE | | | Transportation Infrastructure | | | | 810 | | | | 12,621 | |
| | Hermes International | | | Textiles, Apparel & Luxury Goods | | | | 55 | | | | 65,573 | |
| | ICADE | | | Equity Real Estate Investment Trusts (REITs | ) | | | 57 | | | | 2,133 | |
| | | | | | | | | | |
| | | | | | |
| 200 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | France (continued) | | | | | | | | | |
| | Ipsen SA | | | Pharmaceuticals | | | | 60 | | | $ | 5,578 | |
| a | | JCDecaux SA | | | Media | | | | 129 | | | | 1,525 | |
| | Kering SA | | | Textiles, Apparel & Luxury Goods | | | | 129 | | | | 57,949 | |
| | Klepierre SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 333 | | | | 5,839 | |
| b | | La Francaise des Jeux SAEM, 144A | | | Hotels, Restaurants & Leisure | | | | 156 | | | | 4,657 | |
| | Legrand SA | | | Electrical Equipment | | | | 474 | | | | 30,954 | |
| | L’Oreal SA | | | Personal Products | | | | 438 | | | | 141,706 | |
| | LVMH Moet Hennessy Louis Vuitton SE | | | Textiles, Apparel & Luxury Goods | | | | 442 | | | | 264,306 | |
| b | | Neoen SA, 144A | | | Independent Power Producers & Energy Traders | | | | 75 | | | | 2,523 | |
| | Orange SA | | | Diversified Telecommunication Services | | | | 3,399 | | | | 30,794 | |
| | Pernod Ricard SA | | | Beverages | | | | 363 | | | | 67,158 | |
| | Publicis Groupe | | | Media | | | | 402 | | | | 19,258 | |
| | Remy Cointreau SA | | | Beverages | | | | 45 | | | | 7,534 | |
| a | | Renault SA | | | Automobiles | | | | 339 | | | | 9,289 | |
| | Rexel SA | | | Trading Companies & Distributors | | | | 429 | | | | 6,506 | |
| | Safran SA | | | Aerospace & Defense | | | | 618 | | | | 56,916 | |
| | Sanofi | | | Pharmaceuticals | | | | 1,932 | | | | 148,386 | |
| | Sartorius Stedim Biotech | | | Life Sciences Tools & Services | | | | 42 | | | | 13,047 | |
| | Schneider Electric SE | | | Electrical Equipment | | | | 942 | | | | 107,916 | |
| | SCOR SE | | | Insurance | | | | 273 | | | | 3,976 | |
| | SEB SA | | | Household Durables | | | | 51 | | | | 3,233 | |
| | Societe Generale SA | | | Banks | | | | 1,344 | | | | 26,879 | |
| | Sodexo SA | | | Hotels, Restaurants & Leisure | | | | 156 | | | | 11,792 | |
| a | | SOITEC | | | Semiconductors & Semiconductor Equipment | | | | 45 | | | | 5,231 | |
| | Somfy SA | | | Electrical Equipment | | | | 15 | | | | 1,397 | |
| | Teleperformance | | | Professional Services | | | | 102 | | | | 26,070 | |
| | Thales SA | | | Aerospace & Defense | | | | 177 | | | | 19,594 | |
| | TotalEnergies SE | | | Oil, Gas & Consumable Fuels | | | | 4,194 | | | | 198,345 | |
| a | | Ubisoft Entertainment SA | | | Entertainment | | | | 171 | | | | 4,744 | |
| a | | Unibail-Rodamco-Westfield | | | Equity Real Estate Investment Trusts (REITs | ) | | | 186 | | | | 7,814 | |
| | Valeo | | | Auto Components | | | | 429 | | | | 6,569 | |
| | Veolia Environnement SA | | | Multi-Utilities | | | | 1,104 | | | | 21,317 | |
| | Vinci SA | | | Construction & Engineering | | | | 882 | | | | 71,863 | |
| | Vivendi SA | | | Media | | | | 1,218 | | | | 9,512 | |
| | Wendel SE | | | Diversified Financial Services | | | | 45 | | | | 3,256 | |
| a,b,c | | Worldline SA, 144A, Reg S | | | IT Services | | | | 432 | | | | 17,216 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,321,187 | |
| | | | | | | | | | | | | | |
| | | Germany 11.2% | | | | | | | | | |
| | 1&1 Drillisch AG | | | Wireless Telecommunication Services | | | | 84 | | | | 1,117 | |
| | Adidas AG | | | Textiles, Apparel & Luxury Goods | | | | 297 | | | | 34,589 | |
| | Allianz SE | | | Insurance | | | | 723 | | | | 114,601 | |
| | Aroundtown SA | | | Real Estate Management & Development | | | | 1,926 | | | | 4,259 | |
| | BASF SE | | | Chemicals | | | | 1,623 | | | | 62,963 | |
| | Bayer AG | | | Pharmaceuticals | | | | 1,734 | | | | 80,544 | |
| | Bayerische Motoren Werke AG | | | Automobiles | | | | 570 | | | | 39,082 | |
| | Bechtle AG | | | IT Services | | | | 147 | | | | 5,347 | |
| | Beiersdorf AG | | | Personal Products | | | | 177 | | | | 17,505 | |
| | Brenntag AG | | | Trading Companies & Distributors | | | | 273 | | | | 16,683 | |
| | Carl Zeiss Meditec AG | | | Health Care Equipment & Supplies | | | | 66 | | | | 6,947 | |
| a | | Commerzbank AG | | | Banks | | | | 1,845 | | | | 13,270 | |
| | Continental AG | | | Auto Components | | | | 192 | | | | 8,643 | |
| b | | Covestro AG, 144A | | | Chemicals | | | | 318 | | | | 9,203 | |
| a | | CTS Eventim AG & Co. KGaA | | | Entertainment | | | | 102 | | | | 4,249 | |
| | Daimler AG | | | Automobiles | | | | 1,491 | | | | 76,465 | |
| a | | Daimler Truck Holding AG | | | Machinery | | | | 744 | | | | 17,019 | |
| a,b | | Delivery Hero SE, 144A | | | Internet & Direct Marketing Retail | | | | 339 | | | | 12,600 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Germany (continued) | | | | | | | | | |
| | Deutsche Bank AG | | | Capital Markets | | | | 3,591 | | | $ | 26,898 | |
| | Deutsche Boerse AG | | | Capital Markets | | | | 327 | | | | 53,898 | |
| a | | Deutsche Lufthansa AG | | | Airlines | | | | 1,062 | | | | 6,157 | |
| | Deutsche Post AG | | | Air Freight & Logistics | | | | 1,716 | | | | 52,307 | |
| | Deutsche Telekom AG | | | Diversified Telecommunication Services | | | | 6,003 | | | | 102,868 | |
| | Deutsche Wohnen AG | | | Real Estate Management & Development | | | | 87 | | | | 1,662 | |
| b | | DWS Group GmbH & Co. KGaA, 144A | | | Capital Markets | | | | 63 | | | | 1,516 | |
| | E.ON SE | | | Multi-Utilities | | | | 3,927 | | | | 30,377 | |
| | Evonik Industries AG | | | Chemicals | | | | 339 | | | | 5,729 | |
| a | | Evotec SE | | | Life Sciences Tools & Services | | | | 285 | | | | 5,013 | |
| | Fielmann AG | | | Specialty Retail | | | | 39 | | | | 1,259 | |
| a | | Fraport AG Frankfurt Airport Services Worldwide | | | Transportation Infrastructure | | | | 63 | | | | 2,295 | |
| | Fresenius Medical Care AG & Co. KGaA | | | Health Care Providers & Services | | | | 360 | | | | 10,238 | |
| | Fresenius SE & Co. KGaA | | | Health Care Providers & Services | | | | 723 | | | | 15,547 | |
| | Fuchs Petrolub SE | | | Chemicals | | | | 60 | | | | 1,325 | |
| | GEA Group AG | | | Machinery | | | | 291 | | | | 9,505 | |
| | Hannover Rueck SE | | | Insurance | | �� | | 105 | | | | 15,862 | |
| | HeidelbergCement AG | | | Construction Materials | | | | 261 | | | | 10,445 | |
| | Hella GmbH & Co. KGaA | | | Auto Components | | | | 39 | | | | 2,602 | |
| a | | HelloFresh SE | | | Internet & Direct Marketing Retail | | | | 279 | | | | 5,945 | |
| | Henkel AG & Co. KGaA | | | Household Products | | | | 180 | | | | 10,280 | |
| | Hochtief AG | | | Construction & Engineering | | | | 39 | | | | 1,867 | |
| | Infineon Technologies AG | | | Semiconductors & Semiconductor Equipment | | | | 2,310 | | | | 51,393 | |
| | KION Group AG | | | Machinery | | | | 135 | | | | 2,621 | |
| | Knorr-Bremse AG | | | Machinery | | | | 117 | | | | 5,087 | |
| | Lanxess AG | | | Chemicals | | | | 156 | | | | 4,595 | |
| | LEG Immobilien AG | | | Real Estate Management & Development | | | | 132 | | | | 7,935 | |
| | Merck KGaA | | | Pharmaceuticals | | | | 228 | | | | 37,256 | |
| a | | METRO AG | | | Food & Staples Retailing | | | | 240 | | | | 1,683 | |
| | MTU Aero Engines AG | | | Aerospace & Defense | | | | 96 | | | | 14,507 | |
| | Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | | | Insurance | | | | 249 | | | | 60,373 | |
| | Nemetschek AG | | | Software | | | | 93 | | | | 4,485 | |
| | Puma SE | | | Textiles, Apparel & Luxury Goods | | | | 177 | | | | 8,318 | |
| | Rational AG | | | Machinery | | | | 9 | | | | 4,413 | |
| | Rheinmetall AG | | | Industrial Conglomerates | | | | 78 | | | | 12,089 | |
| | RWE AG | | | Multi-Utilities | | | | 1,116 | | | | 41,315 | |
| | SAP SE | | | Software | | | | 1,968 | | | | 162,179 | |
| | Sartorius AG | | | Health Care Equipment & Supplies | | | | 4 | | | | 1,211 | |
| b,c | | Scout24 AG, 144A, Reg S | | | Interactive Media & Services | | | | 138 | | | | 6,992 | |
| | Siemens AG | | | Industrial Conglomerates | | | | 1,338 | | | | 132,650 | |
| a | | Siemens Energy AG | | | Electrical Equipment | | | | 759 | | | | 8,465 | |
| b | | Siemens Healthineers AG, 144A | | | Health Care Equipment & Supplies | | | | 492 | | | | 21,342 | |
| | Sixt SE | | | Road & Rail | | | | 21 | | | | 1,688 | |
| | Symrise AG | | | Chemicals | | | | 231 | | | | 22,732 | |
| a | | Talanx AG | | | Insurance | | | | 90 | | | | 3,209 | |
| | Telefonica Deutschland Holding AG | | | Diversified Telecommunication Services | | | | 1,638 | | | | 3,326 | |
| a | | thyssenkrupp AG | | | Metals & Mining | | | | 897 | | | | 3,854 | |
| | Traton SE | | | Machinery | | | | 93 | | | | 1,115 | |
| a | | TUI AG | | | Hotels, Restaurants & Leisure | | | | 2,076 | | | | 2,506 | |
| | Uniper SE | | | Independent Power Producers & Energy Traders | | | | 135 | | | | 517 | |
| | United Internet AG | | | Diversified Telecommunication Services | | | | 180 | | | | 3,396 | |
| | Vantage Towers AG | | | Diversified Telecommunication Services | | | | 159 | | | | 4,134 | |
| | Varta AG | | | Electrical Equipment | | | | 24 | | | | 690 | |
| | Volkswagen AG | | | Automobiles | | | | 51 | | | | 8,426 | |
| | Vonovia SE | | | Real Estate Management & Development | | | | 1,413 | | | | 30,744 | |
| | Wacker Chemie AG | | | Chemicals | | | | 27 | | | | 2,808 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Germany (continued) | | | | | | | | | |
| a,b | | Zalando SE, 144A | | | Internet & Direct Marketing Retail | | | | 393 | | | $ | 7,789 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,584,524 | |
| | | | | | | | | | | | | | |
| | | Ireland 1.4% | | | | | | | | | |
| | AIB Group PLC | | | Banks | | | | 1,656 | | | | 4,033 | |
| | Bank of Ireland Group PLC | | | Banks | | | | 1,623 | | | | 10,471 | |
| | CRH PLC | | | Construction Materials | | | | 1,356 | | | | 44,049 | |
| | DCC PLC | | | Industrial Conglomerates | | | | 177 | | | | 9,265 | |
| | Experian PLC | | | Professional Services | | | | 1,632 | | | | 48,478 | |
| a | | Flutter Entertainment PLC | | | Hotels, Restaurants & Leisure | | | | 312 | | | | 34,613 | |
| | Glanbia PLC | | | Food Products | | | | 318 | | | | 3,670 | |
| | Kerry Group | | | Food Products | | | | 273 | | | | 24,391 | |
| | Kingspan Group PLC | | | Building Products | | | | 267 | | | | 12,121 | |
| | Smurfit Kappa Group PLC | | | Containers & Packaging | | | | 462 | | | | 13,316 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 204,407 | |
| | | | | | | | | | | | | | |
| | | Isle Of Man 0.1% | | | | | | | | | |
| | GVC Holdings PLC | | | Hotels, Restaurants & Leisure | | | | 1,038 | | | | 12,584 | |
| | | | | | | | | | | | | | |
| | | Italy 3.3% | | | | | | | | | |
| | A2A SpA | | | Multi-Utilities | | | | 2,658 | | | | 2,603 | |
| | Amplifon SpA | | | Health Care Providers & Services | | | | 231 | | | | 6,087 | |
| | Assicurazioni Generali SpA | | | Insurance | | | | 2,445 | | | | 33,581 | |
| | Atlantia SpA | | | Transportation Infrastructure | | | | 951 | | | | 21,065 | |
| | Banca Mediolanum SpA | | | Diversified Financial Services | | | | 417 | | | | 2,643 | |
| | Buzzi Unicem SpA | | | Construction Materials | | | | 159 | | | | 2,272 | |
| | Davide Campari-Milano NV | | | Beverages | | | | 882 | | | | 7,873 | |
| | De’ Longhi SpA | | | Household Durables | | | | 126 | | | | 1,860 | |
| | DiaSorin SpA | | | Health Care Equipment & Supplies | | | | 39 | | | | 4,386 | |
| | Enel SpA | | | Electric Utilities | | | | 13,782 | | | | 57,030 | |
| | Eni SpA | | | Oil, Gas & Consumable Fuels | | | | 4,323 | | | | 46,204 | |
| | Ferrari NV | | | Automobiles | | | | 213 | | | | 40,001 | |
| | FinecoBank Banca Fineco SpA | | | Banks | | | | 1,083 | | | | 13,511 | |
| | Hera SpA | | | Multi-Utilities | | | | 1,344 | | | | 2,878 | |
| b,c | | Infrastrutture Wireless Italiane SpA, 144A, Reg S | | | Diversified Telecommunication Services | | | | 624 | | | | 5,483 | |
| | Interpump Group SpA | | | Machinery | | | | 144 | | | | 4,715 | |
| | Intesa Sanpaolo SpA | | | Banks | | | | 29,445 | | | | 49,119 | |
| | Italgas Reti SpA | | | Gas Utilities | | | | 882 | | | | 4,127 | |
| | Leonardo SpA | | | Aerospace & Defense | | | | 708 | | | | 5,044 | |
| | Mediobanca Banca di Credito Finanziario SpA | | | Banks | | | | 1,140 | | | | 9,001 | |
| | Moncler SpA | | | Textiles, Apparel & Luxury Goods | | | | 360 | | | | 14,950 | |
| a,b | | Nexi SpA, 144A | | | IT Services | | | | 1,344 | | | | 10,984 | |
| b | | Pirelli & C SpA, 144A | | | Auto Components | | | | 843 | | | | 2,775 | |
| b,c | | Poste Italiane SpA, 144A, Reg S | | | Insurance | | | | 825 | | | | 6,296 | |
| | Prysmian SpA | | | Electrical Equipment | | | | 468 | | | | 13,580 | |
| | Recordati Industria Chimica e Farmaceutica SpA | | | Pharmaceuticals | | | | 174 | | | | 6,425 | |
| | Reply SpA | | | IT Services | | | | 39 | | | | 4,111 | |
| | Snam SpA | | | Gas Utilities | | | | 3,951 | | | | 16,048 | |
| a | | Telecom Italia SpA | | | Diversified Telecommunication Services | | | | 19,608 | | | | 3,655 | |
| a | | Telecom Italia SpA/Milano | | | Diversified Telecommunication Services | | | | 10,329 | | | | 1,872 | |
| | Tenaris SA | | | Energy Equipment & Services | | | | 828 | | | | 10,760 | |
| | Terna - Rete Elettrica Nazionale | | | Electric Utilities | | | | 2,499 | | | | 15,301 | |
| | UniCredit SpA | | | Banks | | | | 3,477 | | | | 35,622 | |
| | UnipolSai Assicurazioni SpA | | | Insurance | | | | 756 | | | | 1,578 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 463,440 | |
| | | | | | | | | | | | | | |
| | | Luxembourg 0.3% | | | | | | | | | |
| | ArcelorMittal SA | | | Metals & Mining | | | | 927 | | | | 18,767 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Luxembourg (continued) | | | | | | | | | |
| | Eurofins Scientific SE | | | Life Sciences Tools & Services | | | | 216 | | | $ | 12,933 | |
| a | | RTL Group SA | | | Media | | | | 66 | | | | 2,104 | |
| a | | SUSE SA | | | Software | | | | 63 | | | | 937 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 34,741 | |
| | | | | | | | | | | | | | |
| | | Mexico 0.0%† | | | | | | | | | |
| | Fresnillo PLC | | | Metals & Mining | | | | 336 | | | | 2,885 | |
| | | | | | | | | | | | | | |
| | | Netherlands 9.1% | | | | | | | | | |
| | Aalberts NV | | | Machinery | | | | 171 | | | | 5,657 | |
| b | | ABN AMRO Bank NV, 144A | | | Banks | | | | 735 | | | | 6,645 | |
| a,b | | Adyen NV, 144A | | | IT Services | | | | 52 | | | | 66,316 | |
| | Aegon NV | | | Insurance | | | | 3,141 | | | | 12,622 | |
| | Akzo Nobel NV | | | Chemicals | | | | 312 | | | | 17,826 | |
| a | | Argenx SE | | | Biotechnology | | | | 96 | | | | 34,656 | |
| | ASM International NV | | | Semiconductors & Semiconductor Equipment | | | | 81 | | | | 18,549 | |
| | ASML Holding NV | | | Semiconductors & Semiconductor Equipment | | | | 714 | | | | 303,290 | |
| | ASR Nederland NV | | | Insurance | | | | 234 | | | | 9,071 | |
| | BE Semiconductor Industries NV | | | Semiconductors & Semiconductor Equipment | | | | 147 | | | | 6,421 | |
| b | | CTP NV, 144A | | | Real Estate Management & Development | | | | 111 | | | | 1,148 | |
| b,c | | Euronext NV, 144A, Reg S | | | Capital Markets | | | | 144 | | | | 9,184 | |
| a | | EXOR NV | | | Diversified Financial Services | | | | 183 | | | | 11,739 | |
| | Heineken Holding NV | | | Beverages | | | | 186 | | | | 12,846 | |
| | Heineken NV | | | Beverages | | | | 423 | | | | 37,237 | |
| | IMCD Group NV | | | Trading Companies & Distributors | | | | 102 | | | | 12,251 | |
| | ING Groep NV | | | Banks | | | | 6,708 | | | | 58,210 | |
| | JDE Peet’s BV | | | Food Products | | | | 144 | | | | 4,224 | |
| | Koninklijke Ahold Delhaize NV | | | Food & Staples Retailing | | | | 1,794 | | | | 45,932 | |
| | Koninklijke DSM NV | | | Chemicals | | | | 309 | | | | 35,554 | |
| | Koninklijke KPN NV | | | Diversified Telecommunication Services | | | | 5,790 | | | | 15,723 | |
| | Koninklijke Philips NV | | | Health Care Equipment & Supplies | | | | 1,572 | | | | 24,640 | |
| | Koninklijke Vopak NV | | | Oil, Gas & Consumable Fuels | | | | 114 | | | | 2,088 | |
| | NN Group NV | | | Insurance | | | | 528 | | | | 20,675 | |
| | OCI NV | | | Chemicals | | | | 174 | | | | 6,402 | |
| | Prosus NV | | | Internet & Direct Marketing Retail | | | | 1,512 | | | | 79,942 | |
| a | | QIAGEN NV | | | Life Sciences Tools & Services | | | | 390 | | | | 16,421 | |
| | Randstad NV | | | Professional Services | | | | 195 | | | | 8,516 | |
| | Shell PLC | | | Oil, Gas & Consumable Fuels | | | | 12,981 | | | | 325,533 | |
| b | | Signify NV, 144A | | | Electrical Equipment | | | | 225 | | | | 5,870 | |
| | Universal Music Group NV | | | Entertainment | | | | 1,323 | | | | 25,048 | |
| | Wolters Kluwer NV | | | Professional Services | | | | 459 | | | | 44,930 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,285,166 | |
| | | | | | | | | | | | | | |
| | | Nigeria 0.0%† | | | | | | | | | |
| | Airtel Africa PLC, 144A | | | Wireless Telecommunication Services | | | | 2,001 | | | | 2,886 | |
| | | | | | | | | | | | | | |
| | | Norway 1.3% | | | | | | | | | |
| a | | Adevinta ASA, B | | | Interactive Media & Services | | | | 468 | | | | 2,791 | |
| | Aker ASA | | | Diversified Financial Services | | | | 42 | | | | 2,721 | |
| | Aker BP ASA | | | Oil, Gas & Consumable Fuels | | | | 543 | | | | 15,577 | |
| a,b | | AutoStore Holdings Ltd., 144A | | | Machinery | | | | 1,041 | | | | 1,148 | |
| | DNB Bank ASA | | | Banks | | | | 1,815 | | | | 28,789 | |
| | Equinor ASA | | | Oil, Gas & Consumable Fuels | | | | 1,659 | | | | 54,517 | |
| | Gjensidige Forsikring ASA | | | Insurance | | | | 294 | | | | 5,045 | |
| | Kongsberg Gruppen ASA | | | Aerospace & Defense | | | | 135 | | | | 4,113 | |
| | Leroy Seafood Group ASA | | | Food Products | | | | 438 | | | | 1,719 | |
| | Mowi ASA | | | Food Products | | | | 759 | | | | 9,647 | |
| a | | Nordic Semiconductor ASA | | | Semiconductors & Semiconductor Equipment | | | | 270 | | | | 3,605 | |
| | Norsk Hydro ASA | | | Metals & Mining | | | | 2,373 | | | | 12,813 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Norway (continued) | | | | | | | | | |
| | Orkla ASA | | | Food Products | | | | 1,350 | | | $ | 9,812 | |
| | Salmar ASA | | | Food Products | | | | 93 | | | | 3,134 | |
| | Schibsted ASA, A | | | Media | | | | 132 | | | | 1,790 | |
| | Schibsted ASA, B | | | Media | | | | 162 | | | | 2,040 | |
| | Telenor ASA | | | Diversified Telecommunication Services | | | | 1,125 | | | | 10,289 | |
| | TOMRA Systems ASA | | | Commercial Services & Supplies | | | | 414 | | | | 7,309 | |
| | Var Energi ASA | | | Oil, Gas & Consumable Fuels | | | | 690 | | | | 2,247 | |
| | Yara International ASA | | | Chemicals | | | | 288 | | | | 10,130 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 189,236 | |
| | | | | | | | | | | | | | |
| | | Poland 0.3% | | | | | | | | | |
| a,b | | Allegro.eu, 144A | | | Internet & Direct Marketing Retail | | | | 708 | | | | 3,088 | |
| | Bank Pekao SA | | | Banks | | | | 285 | | | | 3,503 | |
| a,b | | Dino Polska SA, 144A | | | Food & Staples Retailing | | | | 84 | | | | 5,136 | |
| a | | InPost SA | | | Air Freight & Logistics | | | | 381 | | | | 2,245 | |
| | KGHM Polska Miedz SA | | | Metals & Mining | | | | 246 | | | | 4,366 | |
| | LPP SA | | | Textiles, Apparel & Luxury Goods | | | | 2 | | | | 3,157 | |
| | Polski Koncern Naftowy Orlen SA | | | Oil, Gas & Consumable Fuels | | | | 738 | | | | 8,000 | |
| a | | Polskie Gornictwo Naftowe i Gazownictwo SA | | | Oil, Gas & Consumable Fuels | | | | 2,973 | | | | 2,936 | |
| | Powszechna Kasa Oszczednosci Bank Polski SA | | | Banks | | | | 1,518 | | | | 6,713 | |
| | Powszechny Zaklad Ubezpieczen SA | | | Insurance | | | | 969 | | | | 4,544 | |
| | Santander Bank Polska SA | | | Banks | | | | 51 | | | | 2,033 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 45,721 | |
| | | | | | | | | | | | | | |
| | | Portugal 0.3% | | | | | | | | | |
| | EDP- Energias de Portugal SA | | | Electric Utilities | | | | 5,013 | | | | 21,805 | |
| | Galp Energia SGPS SA, B | | | Oil, Gas & Consumable Fuels | | | | 912 | | | | 8,777 | |
| | Jeronimo Martins SGPS SA | | | Food & Staples Retailing | | | | 489 | | | | 9,126 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 39,708 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| d | | Evraz PLC | | | Metals & Mining | | | | 1,168 | | | | — | |
| | | | | | | | | | | | | | |
| | | Spain 3.7% | | | | | | | | | |
| | Acciona SA | | | Electric Utilities | | | | 42 | | | | 7,431 | |
| | ACS Actividades de Construccion y Servicios SA | | | Construction & Engineering | | | | 385 | | | | 8,724 | |
| a,b | | Aena SME SA, 144A | | | Transportation Infrastructure | | | | 126 | | | | 13,195 | |
| a | | Amadeus IT Group SA | | | IT Services | | | | 753 | | | | 35,342 | |
| | Banco Bilbao Vizcaya Argentaria SA | | | Banks | | | | 10,833 | | | | 49,035 | |
| | Banco Santander SA | | | Banks | | | | 29,445 | | | | 69,158 | |
| | Bankinter SA | | | Banks | | | | 1,215 | | | | 6,863 | |
| | CaixaBank SA | | | Banks | | | | 7,629 | | | | 24,746 | |
| b | | Cellnex Telecom SA, 144A | | | Diversified Telecommunication Services | | | | 1,065 | | | | 33,167 | |
| | Corp. ACCIONA Energias Renovables SA | | | Independent Power Producers & Energy Traders | | | | 105 | | | | 3,946 | |
| | Corporacion Mapfre SA | | | Insurance | | | | 1,707 | | | | 2,659 | |
| | EDP Renovaveis SA | | | Independent Power Producers & Energy Traders | | | | 426 | | | | 8,781 | |
| | Enagas SA | | | Gas Utilities | | | | 447 | | | | 6,936 | |
| | Endesa SA | | | Electric Utilities | | | | 561 | | | | 8,475 | |
| | Ferrovial SA | | | Construction & Engineering | | | | 831 | | | | 19,041 | |
| | Fluidra SA | | | Machinery | | | | 195 | | | | 2,965 | |
| a | | Grifols SA | | | Biotechnology | | | | 564 | | | | 4,907 | |
| | Iberdrola SA | | | Electric Utilities | | | | 10,569 | | | | 99,211 | |
| | Industria de Diseno Textil SA | | | Specialty Retail | | | | 1,863 | | | | 38,838 | |
| | Inmobiliaria Colonial SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 585 | | | | 2,829 | |
| | Merlin Properties Socimi SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 576 | | | | 4,461 | |
| | Naturgy Energy Group SA | | | Gas Utilities | | | | 255 | | | | 5,928 | |
| | Red Electrica Corp. SA | | | Electric Utilities | | | | 765 | | | | 11,774 | |
| | Repsol SA | | | Oil, Gas & Consumable Fuels | | | | 2,220 | | | | 25,674 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 205 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Spain (continued) | | | | | | | | | |
| a | | Siemens Gamesa Renewable Energy SA | | | Electrical Equipment | | | | 399 | | | $ | 7,006 | |
| | Telefonica SA | | | Diversified Telecommunication Services | | | | 9,027 | | | | 29,855 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 530,947 | |
| | | | | | | | | | | | | | |
| | | Sweden 5.0% | | | | �� | | | | | |
| | Alfa Laval AB | | | Machinery | | | | 549 | | | | 13,773 | |
| a | | Alleima AB | | | Metals & Mining | | | | 356 | | | | 1,116 | |
| | Assa Abloy AB, B | | | Building Products | | | | 1,626 | | | | 30,725 | |
| | Atlas Copco AB, A | | | Machinery | | | | 4,488 | | | | 42,383 | |
| | Atlas Copco AB, B | | | Machinery | | | | 2,679 | | | | 22,513 | |
| | Axfood AB | | | Food & Staples Retailing | | | | 189 | | | | 4,341 | |
| | Beijer Ref AB | | | Trading Companies & Distributors | | | | 423 | | | | 5,241 | |
| | Boliden AB | | | Metals & Mining | | | | 486 | | | | 15,177 | |
| | Castellum AB | | | Real Estate Management & Development | | | | 444 | | | | 5,007 | |
| | Electrolux AB, B | | | Household Durables | | | | 378 | | | | 3,959 | |
| | Epiroc AB, A | | | Machinery | | | | 1,107 | | | | 15,975 | |
| | Epiroc AB, B | | | Machinery | | | | 669 | | | | 8,500 | |
| | EQT AB | | | Capital Markets | | | | 504 | | | | 9,951 | |
| | Ericsson, B | | | Communications Equipment | | | | 5,337 | | | | 31,495 | |
| | Essity AB, B | | | Household Products | | | | 1,080 | | | | 21,488 | |
| b,c | | Evolution Gaming Group AB, 144A, Reg S | | | Hotels, Restaurants & Leisure | | | | 285 | | | | 22,774 | |
| a | | Fastighets AB Balder, B | | | Real Estate Management & Development | | | | 1,086 | | | | 4,380 | |
| | Getinge AB, B | | | Health Care Equipment & Supplies | | | | 402 | | | | 6,944 | |
| | Hennes & Mauritz AB, B | | | Specialty Retail | | | | 1,554 | | | | 14,488 | |
| | Hexagon AB, B | | | Electronic Equipment, Instruments & Components | | | | 3,321 | | | | 31,332 | |
| | Holmen AB, B | | | Paper & Forest Products | | | | 171 | | | | 6,541 | |
| | Husqvarna AB, A | | | Household Durables | | | | 36 | | | | 201 | |
| | Husqvarna AB, B | | | Household Durables | | | | 738 | | | | 4,130 | |
| | Industrivarden AB, A | | | Diversified Financial Services | | | | 399 | | | | 8,115 | |
| | Industrivarden AB, C | | | Diversified Financial Services | | | | 306 | | | | 6,157 | |
| | Indutrade AB | | | Machinery | | | | 498 | | | | 8,185 | |
| | Investment AB Latour, B | | | Industrial Conglomerates | | | | 249 | | | | 4,164 | |
| | Investor AB, A | | | Diversified Financial Services | | | | 942 | | | | 14,562 | |
| | Investor AB, B | | | Diversified Financial Services | | | | 3,225 | | | | 47,537 | |
| a | | Kinnevik AB, B | | | Diversified Financial Services | | | | 426 | | | | 5,666 | |
| | L E Lundbergforetagen AB, B | | | Diversified Financial Services | | | | 132 | | | | 4,810 | |
| | Lifco AB, B | | | Industrial Conglomerates | | | | 411 | | | | 5,785 | |
| | Nibe Industrier AB, B | | | Building Products | | | | 2,577 | | | | 23,245 | |
| | Saab AB, B | | | Aerospace & Defense | | | | 159 | | | | 4,980 | |
| | Sagax AB, B | | | Real Estate Management & Development | | | | 300 | | | | 4,980 | |
| | Sagax AB, D | | | Real Estate Management & Development | | | | 165 | | | | 372 | |
| | Sandvik AB | | | Machinery | | | | 1,908 | | | | 26,228 | |
| | Securitas AB, B | | | Commercial Services & Supplies | | | | 562 | | | | 3,930 | |
| | Skandinaviska Enskilda Banken AB, A | | | Banks | | | | 2,523 | | | | 24,281 | |
| | Skandinaviska Enskilda Banken AB, C | | | Banks | | | | 30 | | | | 319 | |
| | Skanska AB, B | | | Construction & Engineering | | | | 636 | | | | 7,995 | |
| | SKF AB, B | | | Machinery | | | | 684 | | | | 9,261 | |
| | Svenska Cellulosa AB, A | | | Paper & Forest Products | | | | 36 | | | | 463 | |
| | Svenska Cellulosa AB, B | | | Paper & Forest Products | | | | 1,053 | | | | 13,474 | |
| | Svenska Handelsbanken AB, A | | | Banks | | | | 2,634 | | | | 21,746 | |
| | Svenska Handelsbanken AB, B | | | Banks | | | | 60 | | | | 589 | |
| | Sweco AB, B | | | Construction & Engineering | | | | 351 | | | | 2,960 | |
| | Swedbank AB, A | | | Banks | | | | 1,782 | | | | 23,581 | |
| | Swedish Match AB | | | Tobacco | | | | 2,619 | | | | 25,960 | |
| a | | Swedish Orphan Biovitrum AB | | | Biotechnology | | | | 315 | | | | 6,120 | |
| | Tele2 AB, B | | | Wireless Telecommunication Services | | | | 978 | | | | 8,460 | |
| | Telefonaktiebolaget LM Ericsson, A | | | Communications Equipment | | | | 72 | | | | 435 | |
| | Telia Co. AB | | | Diversified Telecommunication Services | | | | 4,551 | | | | 13,135 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Sweden (continued) | | | | | | | | | |
| | Trelleborg AB, B | | | Machinery | | | | 414 | | | $ | 7,830 | |
| | Vitrolife AB | | | Biotechnology | | | | 111 | | | | 1,590 | |
| | Volvo AB, A | | | Machinery | | | | 357 | | | | 5,302 | |
| | Volvo AB, B | | | Machinery | | | | 2,676 | | | | 38,119 | |
| a | | Volvo Car AB, B | | | Automobiles | | | | 957 | | | | 4,202 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 706,972 | |
| | | | | | | | | | | | | | |
| | | Switzerland 16.5% | | | | | | | | | |
| | ABB Ltd. | | | Electrical Equipment | | | | 2,697 | | | | 70,696 | |
| | Adecco Group AG | | | Professional Services | | | | 282 | | | | 7,853 | |
| | Alcon Inc. | | | Health Care Equipment & Supplies | | | | 816 | | | | 48,201 | |
| | Bachem Holding AG | | | Life Sciences Tools & Services | | | | 57 | | | | 3,637 | |
| | Baloise Holding AG | | | Insurance | | | | 81 | | | | 10,427 | |
| | Banque Cantonale Vaudoise | | | Banks | | | | 51 | | | | 4,855 | |
| | Barry Callebaut AG | | | Food Products | | | | 6 | | | | 11,393 | |
| | Belimo Holding AG | | | Building Products | | | | 15 | | | | 5,601 | |
| | BKW AG | | | Electric Utilities | | | | 33 | | | | 3,960 | |
| | Chocoladefabriken Lindt & Spruengli AG | | | Food Products | | | | 4 | | | | 38,852 | |
| | Cie Financiere Richemont SA | | | Textiles, Apparel & Luxury Goods | | | | 906 | | | | 86,785 | |
| a | | Clariant AG | | | Chemicals | | | | 402 | | | | 6,494 | |
| | Coca-Cola HBC AG | | | Beverages | | | | 330 | | | | 6,977 | |
| | Credit Suisse Group AG | | | Capital Markets | | | | 4,632 | | | | 18,712 | |
| | DKSH Holding AG | | | Professional Services | | | | 66 | | | | 4,815 | |
| | Emmi AG | | | Food Products | | | | 3 | | | | 2,344 | |
| | EMS-Chemie Holding AG | | | Chemicals | | | | 13 | | | | 8,301 | |
| a | | Flughafen Zurich AG | | | Transportation Infrastructure | | | | 33 | | | | 4,925 | |
| | Geberit AG | | | Building Products | | | | 63 | | | | 27,363 | |
| | Georg Fischer AG | | | Machinery | | | | 145 | | | | 7,012 | |
| | Givaudan AG | | | Chemicals | | | | 16 | | | | 48,817 | |
| | Helvetia Holding AG | | | Insurance | | | | 63 | | | | 5,946 | |
| | Holcim Ltd., B | | | Construction Materials | | | | 966 | | | | 40,220 | |
| | Julius Baer Group Ltd. | | | Capital Markets | | | | 375 | | | | 16,573 | |
| | Kuehne + Nagel International AG | | | Marine | | | | 90 | | | | 18,471 | |
| | Logitech International SA | | | Technology Hardware, Storage & Peripherals | | | | 258 | | | | 12,045 | |
| | Lonza Group AG | | | Life Sciences Tools & Services | | | | 132 | | | | 65,219 | |
| | Nestle SA | | | Food Products | | | | 4,782 | | | | 520,250 | |
| | Novartis AG | | | Pharmaceuticals | | | | 3,636 | | | | 279,022 | |
| | Partners Group Holding AG | | | Capital Markets | | | | 39 | | | | 31,881 | |
| | PSP Swiss Property AG | | | Real Estate Management & Development | | | | 75 | | | | 7,544 | |
| | Roche Holding AG, Bearer | | | Pharmaceuticals | | | | 48 | | | | 18,912 | |
| | Roche Holding AG, Non-Voting | | | Pharmaceuticals | | | | 1,233 | | | | 405,196 | |
| | Schindler Holding AG, PC | | | Machinery | | | | 72 | | | | 11,313 | |
| | Schindler Holding AG | | | Machinery | | | | 33 | | | | 5,029 | |
| | SGS SA | | | Professional Services | | | | 10 | | | | 21,590 | |
| | SIG Combibloc Group AG | | | Containers & Packaging | | | | 675 | | | | 13,839 | |
| | Sika AG | | | Chemicals | | | | 270 | | | | 55,056 | |
| | Sonova Holding AG | | | Health Care Equipment & Supplies | | | | 90 | | | | 20,117 | |
| | STMicroelectronics NV | | | Semiconductors & Semiconductor Equipment | | | | 1,122 | | | | 35,443 | |
| | Straumann Holding AG | | | Health Care Equipment & Supplies | | | | 189 | | | | 17,635 | |
| | Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 81 | | | | 3,437 | |
| | Swiss Life Holding AG | | | Insurance | | | | 54 | | | | 24,058 | |
| | Swiss Prime Site AG | | | Real Estate Management & Development | | | | 135 | | | | 10,836 | |
| | Swiss Re AG | | | Insurance | | | | 513 | | | | 38,132 | |
| | Swisscom AG | | | Diversified Telecommunication Services | | | | 45 | | | | 21,191 | |
| | Tecan Group AG | | | Life Sciences Tools & Services | | | | 22 | | | | 7,667 | |
| | Temenos AG | | | Software | | | | 108 | | | | 7,400 | |
| | The Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 51 | | | | 11,633 | |
| | UBS Group AG | | | Capital Markets | | | | 5,403 | | | | 79,460 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Switzerland (continued) | | | | | | | | | |
| b,c | | VAT Group AG, 144A | | | Machinery | | | | 45 | | | $ | 9,318 | |
| | Zurich Insurance Group AG | | | Insurance | | | | 264 | | | | 105,949 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,348,402 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 20.3% | | | | | | | | | |
| | 3i Group PLC | | | Capital Markets | | | | 1,689 | | | | 20,608 | |
| | Abrdn PLC | | | Capital Markets | | | | 3,885 | | | | 6,033 | |
| | Admiral Group PLC | | | Insurance | | | | 507 | | | | 10,835 | |
| | Allfunds Group PLC | | | Capital Markets | | | | 417 | | | | 3,095 | |
| | Anglo American PLC | | | Metals & Mining | | | | 2,139 | | | | 65,317 | |
| | Ashtead Group PLC | | | Trading Companies & Distributors | | | | 783 | | | | 35,714 | |
| | Associated British Foods PLC | | | Food Products | | | | 615 | | | | 8,661 | |
| | AstraZeneca PLC | | | Pharmaceuticals | | | | 2,622 | | | | 291,055 | |
| b | | Auto Trader Group PLC, 144A | | | Interactive Media & Services | | | | 1,635 | | | | 9,400 | |
| | AVEVA Group PLC | | | Software | | | | 210 | | | | 7,366 | |
| | Aviva PLC | | | Insurance | | | | 4,956 | | | | 21,477 | |
| | B&M European Value Retail SA | | | Multiline Retail | | | | 1,653 | | | | 5,648 | |
| | BAE Systems PLC | | | Aerospace & Defense | | | | 5,595 | | | | 49,328 | |
| | Barclays PLC | | | Banks | | | | 28,632 | | | | 46,121 | |
| | Barratt Developments PLC | | | Household Durables | | | | 1,803 | | | | 6,887 | |
| | Bellway PLC | | | Household Durables | | | | 225 | | | | 4,277 | |
| | Berkeley Group Holdings PLC | | | Household Durables | | | | 183 | | | | 6,735 | |
| | BP PLC | | | Oil, Gas & Consumable Fuels | | | | 32,916 | | | | 159,139 | |
| | British American Tobacco PLC | | | Tobacco | | | | 3,975 | | | | 143,169 | |
| | British Land Co. PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,644 | | | | 6,436 | |
| | BT Group PLC | | | Diversified Telecommunication Services | | | | 12,327 | | | | 16,699 | |
| | Bunzl PLC | | | Trading Companies & Distributors | | | | 597 | | | | 18,393 | |
| | Burberry Group PLC | | | Textiles, Apparel & Luxury Goods | | | | 699 | | | | 14,108 | |
| a | | Centrica PLC | | | Multi-Utilities | | | | 10,473 | | | | 8,282 | |
| | CNH Industrial NV | | | Machinery | | | | 1,752 | | | | 19,961 | |
| | Compass Group PLC | | | Hotels, Restaurants & Leisure | | | | 3,162 | | | | 63,712 | |
| b | | ConvaTec Group PLC, 144A | | | Health Care Equipment & Supplies | | | | 2,904 | | | | 6,665 | |
| | Croda International PLC | | | Chemicals | | | | 240 | | | | 17,270 | |
| | Dechra Pharmaceuticals PLC | | | Pharmaceuticals | | | | 204 | | | | 5,971 | |
| | Derwent London PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 207 | | | | 4,668 | |
| | Diageo PLC | | | Beverages | | | | 4,002 | | | | 169,651 | |
| | Direct Line Insurance Group PLC | | | Insurance | | | | 2,346 | | | | 4,858 | |
| | Dr. Martens PLC | | | Textiles, Apparel & Luxury Goods | | | | 996 | | | | 2,477 | |
| | DS Smith PLC | | | Containers & Packaging | | | | 2,298 | | | | 6,590 | |
| a | | easyJet PLC | | | Airlines | | | | 642 | | | | 2,124 | |
| | Electrocomponents PLC | | | Trading Companies & Distributors | | | | 834 | | | | 9,021 | |
| | Endeavour Mining PLC | | | Metals & Mining | | | | 327 | | | | 5,990 | |
| | Ferguson PLC | | | Trading Companies & Distributors | | | | 375 | | | | 39,366 | |
| | GSK PLC | | | Pharmaceuticals | | | | 7,089 | | | | 103,334 | |
| a | | Haleon PLC | | | Personal Products | | | | 8,859 | | | | 27,616 | |
| | Halma PLC | | | Electronic Equipment, Instruments & Components | | | | 672 | | | | 15,341 | |
| | Hargreaves Lansdown PLC | | | Capital Markets | | | | 672 | | | | 6,505 | |
| | Hikma Pharmaceuticals PLC | | | Pharmaceuticals | | | | 288 | | | | 4,384 | |
| | HomeServe PLC | | | Commercial Services & Supplies | | | | 489 | | | | 6,463 | |
| | Howden Joinery Group PLC | | | Trading Companies & Distributors | | | | 924 | | | | 5,211 | |
| | HSBC Holdings PLC | | | Banks | | | | 35,706 | | | | 186,259 | |
| | IMI PLC | | | Machinery | | | | 462 | | | | 5,771 | |
| | Imperial Brands PLC | | | Tobacco | | | | 1,677 | | | | 34,726 | |
| | Informa PLC | | | Media | | | | 2,553 | | | | 14,797 | |
| | InterContinental Hotels Group PLC | | | Hotels, Restaurants & Leisure | | | | 327 | | | | 15,948 | |
| | Intermediate Capital Group PLC | | | Capital Markets | | | | 501 | | | | 5,496 | |
| a | | International Consolidated Airlines Group SA | | | Airlines | | | | 2,019 | | | | 2,134 | |
| | Intertek Group PLC | | | Professional Services | | | | 285 | | | | 11,794 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United Kingdom (continued) | | | | | | | | | |
| | ITV PLC | | | Media | | | | 6,606 | | | $ | 4,224 | |
| | J Sainsbury PLC | | | Food & Staples Retailing | | | | 3,051 | | | | 5,936 | |
| | JD Sports Fashion PLC | | | Specialty Retail | | | | 4,374 | | | | 4,892 | |
| | Johnson Matthey PLC | | | Chemicals | | | | 321 | | | | 6,566 | |
| a,b,c | | Just Eat Takeaway.com NV, 144A, Reg S | | | Internet & Direct Marketing Retail | | | | 327 | | | | 5,182 | |
| | Kingfisher PLC | | | Specialty Retail | | | | 3,513 | | | | 8,643 | |
| | Land Securities Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,263 | | | | 7,357 | |
| | Legal & General Group PLC | | | Insurance | | | | 10,515 | | | | 25,413 | |
| | Lloyds Banking Group PLC | | | Banks | | | | 121,242 | | | | 56,018 | |
| | London Stock Exchange Group PLC | | | Capital Markets | | | | 648 | | | | 55,178 | |
| | M&G PLC | | | Diversified Financial Services | | | | 4,554 | | | | 8,467 | |
| | Melrose Industries PLC | | | Industrial Conglomerates | | | | 7,119 | | | | 8,122 | |
| | Mondi PLC | | | Paper & Forest Products | | | | 858 | | | | 13,352 | |
| | National Grid PLC | | | Multi-Utilities | | | | 6,462 | | | | 67,158 | |
| | NatWest Group PLC | | | Banks | | | | 9,015 | | | | 22,733 | |
| | Next PLC | | | Multiline Retail | | | | 219 | | | | 11,737 | |
| a,d | | NMC Health PLC | | | Health Care Providers & Services | | | | 60 | | | | — | |
| a | | Ocado Group PLC | | | Food & Staples Retailing | | | | 975 | | | | 5,143 | |
| | Pearson PLC | | | Media | | | | 1,302 | | | | 12,598 | |
| | Pennon Group PLC | | | Water Utilities | | | | 474 | | | | 4,164 | |
| a,b | | Pepco Group NV, 144A | | | Multiline Retail | | | | 204 | | | | 1,235 | |
| | Persimmon PLC | | | Household Durables | | | | 564 | | | | 7,791 | |
| | Phoenix Group Holdings PLC | | | Insurance | | | | 1,302 | | | | 7,657 | |
| | Prudential PLC | | | Insurance | | | | 4,875 | | | | 48,640 | |
| | Reckitt Benckiser Group PLC | | | Household Products | | | | 1,269 | | | | 84,655 | |
| | RELX PLC | | | Professional Services | | | | 3,288 | | | | 80,822 | |
| | Renishaw PLC | | | Electronic Equipment, Instruments & Components | | | | 60 | | | | 2,355 | |
| | Rentokil Initial PLC | | | Commercial Services & Supplies | | | | 3,309 | | | | 17,638 | |
| | Rightmove PLC | | | Interactive Media & Services | | | | 1,479 | | | | 7,961 | |
| a | | Rolls-Royce Holdings PLC | | | Aerospace & Defense | | | | 14,850 | | | | 11,536 | |
| | Royal Mail PLC | | | Air Freight & Logistics | | | | 1,614 | | | | 3,323 | |
| | Schroders PLC | | | Capital Markets | | | | 1,170 | | | | 5,085 | |
| | Segro PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 2,130 | | | | 17,904 | |
| | Severn Trent PLC | | | Water Utilities | | | | 444 | | | | 11,672 | |
| | Smith & Nephew PLC | | | Health Care Equipment & Supplies | | | | 1,548 | | | | 18,153 | |
| | Smiths Group PLC | | | Industrial Conglomerates | | | | 645 | | | | 10,872 | |
| | Spirax-Sarco Engineering PLC | | | Machinery | | | | 129 | | | | 14,976 | |
| | SSE PLC | | | Electric Utilities | | | | 1,893 | | | | 32,278 | |
| | St. James’s Place Capital PLC | | | Capital Markets | | | | 948 | | | | 10,963 | |
| | Standard Chartered PLC | | | Banks | | | | 4,332 | | | | 27,409 | |
| | Tate & Lyle PLC | | | Food Products | | | | 708 | | | | 5,374 | |
| | Taylor Wimpey PLC | | | Household Durables | | | | 6,324 | | | | 6,234 | |
| | Tesco PLC | | | Food & Staples Retailing | | | | 13,119 | | | | 30,285 | |
| | The Sage Group PLC | | | Software | | | | 1,806 | | | | 14,056 | |
| | Unilever PLC | | | Personal Products | | | | 4,497 | | | | 199,244 | |
| | UNITE Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 555 | | | | 5,319 | |
| | United Utilities Group PLC | | | Water Utilities | | | | 1,209 | | | | 11,995 | |
| | Vodafone Group PLC | | | Wireless Telecommunication Services | | | | 44,514 | | | | 50,247 | |
| | Weir Group PLC | | | Machinery | | | | 459 | | | | 7,207 | |
| | Whitbread PLC | | | Hotels, Restaurants & Leisure | | | | 357 | | | | 9,174 | |
| a | | Wise PLC, A | | | IT Services | | | | 810 | | | | 5,973 | |
| | WPP PLC | | | Media | | | | 1,893 | | | | 15,849 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,885,651 | |
| | | | | | | | | | | | | | |
| | | United States 0.3% | | | | | | | | | |
| | Stellantis NV | | | Automobiles | | | | 3,591 | | | | 43,172 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $19,579,782) | | | | | | | | | | | 14,049,095 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 209 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Preferred Stocks 0.7% | | | | | | | | | |
| | | Germany 0.7% | | | | | | | | | |
| e | | ayerische Motoren Werke AG, 8.700%, pfd. | | | Automobiles | | | | 108 | | | $ | 7,078 | |
| e | | Fuchs Petrolub SE, 3.962%, pfd. | | | Chemicals | | | | 126 | | | | 3,209 | |
| e | | Henkel AG & Co. KGaA, 3.032%, pfd. | | | Household Products | | | | 297 | | | | 17,754 | |
| e | | Sartorius AG, 0.353%, pfd. | | | Health Care Equipment & Supplies | | | | 44 | | | | 15,393 | |
| e | | Sixt SE, 9.740%, pfd. | | | Road & Rail | | | | 27 | | | | 1,239 | |
| e | | Volkswagen AG, 5.981%, pfd. | | | Automobiles | | | | 357 | | | | 44,207 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 88,880 | |
| | | | | | | | | | | | | | |
| | | Spain 0.0%† | | | | | | | | | |
| a,e | | Grifols SA, pfd., B | | | Biotechnology | | | | 435 | | | | 2,749 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks
(Cost $149,593) | | | | | | | | | | | 91,629 | |
| | | | | | | | | | | | | | |
| | | Right 0.0%† | | | | | | | | | |
| | | Sweden 0.0%† | | | | | | | | | |
| a | | Securitas AB, rts., 10/11/2022 | | | Commercial Services & Supplies | | | | 2,100 | | | | 876 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $1,416) | | | | | | | | | | | 876 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $19,730,791) 99.6% | | | | | | | | | | | 14,141,600 | |
| | Other Assets, less Liabilities 0.4% | | | | | | | | | | | 62,297 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 14,203,897 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $343,915, representing 2.4% 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 September 30, 2022, the value of was $92,765, 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 September 30, 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 | | | | 130,263 | | | $ | 17,408 | | | | 10/04/22 | | | $ | — | | | $ | (245 | ) |
Danish Krone | | | BOFA | | | | Buy | | | | 4,540,337 | | | | 598,220 | | | | 10/04/22 | | | | — | | | | (12 | ) |
Danish Krone | | | BOFA | | | | Sell | | | | 4,670,600 | | | | 632,753 | | | | 10/04/22 | | | | 17,383 | | | | — | |
Euro | | | BOFA | | | | Buy | | | | 66,570 | | | | 66,160 | | | | 10/04/22 | | | | — | | | | (945 | ) |
Euro | | | HSBK | | | | Buy | | | | 66,570 | | | | 66,160 | | | | 10/04/22 | | | | — | | | | (945 | ) |
Euro | | | UBSW | | | | Buy | | | | 66,570 | | | | 66,159 | | | | 10/04/22 | | | | — | | | | (944 | ) |
Euro | | | BOFA | | | | Buy | | | | 2,320,297 | | | | 2,273,125 | | | | 10/04/22 | | | | — | | | | (47 | ) |
Euro | | | HSBK | | | | Buy | | | | 2,320,297 | | | | 2,273,114 | | | | 10/04/22 | | | | — | | | | (35 | ) |
Euro | | | UBSW | | | | Buy | | | | 2,320,297 | | | | 2,273,102 | | | | 10/04/22 | | | | — | | | | (24 | ) |
Euro | | | UBSW | | | | Sell | | | | 2,386,867 | | | | 2,405,129 | | | | 10/04/22 | | | | 66,835 | | | | — | |
Euro | | | HSBK | | | | Sell | | | | 2,386,867 | | | | 2,405,150 | | | | 10/04/22 | | | | 66,857 | | | | — | |
Euro | | | BOFA | | | | Sell | | | | 2,386,867 | | | | 2,405,200 | | | | 10/04/22 | | | | 66,906 | | | | — | |
Great British Pound | | | DBAB | | | | Buy | | | | 94,185 | | | | 108,427 | | | | 10/04/22 | | | | — | | | | (3,288 | ) |
Great British Pound | | | DBAB | | | | Buy | | | | 3,282,815 | | | | 3,663,622 | | | | 10/04/22 | | | | 983 | | | | — | |
Great British Pound | | | DBAB | | | | Sell | | | | 3,377,000 | | | | 3,931,470 | | | | 10/04/22 | | | | 161,726 | | | | — | |
Norwegian Krone | | | BOFA | | | | Buy | | | | 62,513 | | | | 6,280 | | | | 10/04/22 | | | | — | | | | (543 | ) |
Norwegian Krone | | | BOFA | | | | Buy | | | | 2,178,887 | | | | 199,952 | | | | 10/04/22 | | | | — | | | | (4 | ) |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Europe Hedged ETF (continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Forward Exchange Contracts (continued) | | | | |
| | | | | | | |
| Currency | | Counterpartya | | | Type | | | Quantity | | | Contract
Amount | | | Settlement
Date | | | Unrealized
Appreciation | | | Unrealized
Depreciation | |
| OTC Forward Exchange Contracts (continued) | | | | | | | | | | | | | | | | | | | |
Norwegian Krone | | | BOFA | | | | Sell | | | | 2,241,400 | | | $ | 225,971 | | | | 10/04/22 | | | $ | 20,286 | | | $ | — | |
Polish Zloty | | | BOFA | | | | Buy | | | | 7,171 | | | | 1,501 | | | | 10/04/22 | | | | — | | | | (49 | ) |
Polish Zloty | | | BOFA | | | | Buy | | | | 249,929 | | | | 50,604 | | | | 10/04/22 | | | | — | | | | (1 | ) |
Polish Zloty | | | BOFA | | | | Sell | | | | 257,100 | | | | 54,493 | | | | 10/04/22 | | | | 2,437 | | | | — | |
Swedish Krona | | | BOFA | | | | Buy | | | | 226,046 | | | | 20,964 | | | | 10/04/22 | | | | — | | | | (595 | ) |
Swedish Krona | | | BOFA | | | | Buy | | | | 7,878,854 | | | | 709,981 | | | | 10/04/22 | | | | — | | | | (14 | ) |
Swedish Krona | | | BOFA | | | | Sell | | | | 8,104,900 | | | | 763,401 | | | | 10/04/22 | | | | 33,066 | | | | — | |
Swiss Franc | | | MSCO | | | | Buy | | | | 66,233 | | | | 67,627 | | | | 10/04/22 | | | | — | | | | (334 | ) |
Swiss Franc | | | MSCO | | | | Buy | | | | 2,308,567 | | | | 2,345,452 | | | | 10/04/22 | | | | 57 | | | | — | |
Swiss Franc | | | MSCO | | | | Sell | | | | 2,374,800 | | | | 2,439,573 | | | | 10/04/22 | | | | 26,772 | | | | — | |
Danish Krone | | | BOFA | | | | Sell | | | | 4,389,700 | | | | 579,519 | | | | 11/02/22 | | | | — | | | | (15 | ) |
Euro | | | UBSW | | | | Sell | | | | 2,312,527 | | | | 2,270,002 | | | | 11/02/22 | | | | 29 | | | | — | |
Euro | | | HSBK | | | | Sell | | | | 2,312,527 | | | | 2,270,011 | | | | 11/02/22 | | | | 38 | | | | — | |
Euro | | | BOFA | | | | Sell | | | | 2,312,527 | | | | 2,270,061 | | | | 11/02/22 | | | | 88 | | | | — | |
Great British Pound | | | DBAB | | | | Sell | | | | 3,275,900 | | | | 3,657,870 | | | | 11/02/22 | | | | — | | | | (1,304 | ) |
Norwegian Krone | | | BOFA | | | | Sell | | | | 2,102,800 | | | | 192,990 | | | | 11/02/22 | | | | — | | | | (13 | ) |
Swedish Krona | | | BOFA | | | | Sell | | | | 7,833,100 | | | | 706,733 | | | | 11/02/22 | | | | — | | | | (16 | ) |
Swiss Franc | | | MSCO | | | | Sell | | | | 2,286,100 | | | | 2,328,452 | | | | 11/02/22 | | | | — | | | | (163 | ) |
Polish Zloty | | | BOFA | | | | Sell | | | | 225,500 | | | | 45,421 | | | | 11/03/22 | | | | — | | | | (15 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Forward Exchange Contracts | | | $ | 463,463 | | | $ | (9,551 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized appreciation (depreciation) | | | | | | | $ | 453,912 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
At September 30, 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 | | | | 1 | | | $ | 32,475 | | | | 12/16/22 | | | $ | (2,661 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 211 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE France ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $28.82 | | | $ | 28.44 | | | $ | 19.34 | | | $ | 23.86 | | | $ | 25.33 | | | $ | 25.32 | |
| | | | | | | | |
| | | | | | |
Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.57 | | | | 0.85 | | | | 0.40 | | | | 0.52 | | | | 0.70 | | | | 0.08 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (6.98 | ) | | | 0.41 | | | | 9.10 | | | | (4.47 | ) | | | (1.48 | ) | | | (0.01 | ) |
| | | | | | | | |
| | | | | | |
Total from investment operations | | | (6.41 | ) | | | 1.26 | | | | 9.50 | | | | (3.95 | ) | | | (0.78 | ) | | | 0.07 | |
| | | | | | | | |
| | | | | | |
Less distributions from net investment income | | | (0.45 | ) | | | (0.88 | ) | | | (0.40 | ) | | | (0.57 | ) | | | (0.69 | ) | | | (0.06 | ) |
| | | | | | | | |
| | | | | | |
Net asset value, end of period | | | $21.96 | | | $ | 28.82 | | | $ | 28.44 | | | $ | 19.34 | | | $ | 23.86 | | | $ | 25.33 | |
| | | | |
| | | | | | |
Total returnd | | | (22.36)% | | | | 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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 4.43% | | | | 2.77% | | | | 1.68% | | | | 2.14% | | | | 2.90% | | | | 0.78% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $6,587 | | | $ | 10,088 | | | $ | 7,111 | | | $ | 8,702 | | | $ | 2,386 | | | $ | 2,533 | |
| | | | | | |
Portfolio turnover ratef | | | 2.48% | g | | | 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: | | | 2.87% | | | | 5.94% | | | | 4.56% | | | | 2.60% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 212 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE France ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.9% | | | | | | | | | |
| | | France 97.5% | | | | | | | | | |
| a | | Accor SA | | | Hotels, Restaurants & Leisure | | | | 906 | | | $ | 19,180 | |
| a | | Aeroports de Paris SA | | | Transportation Infrastructure | | | | 138 | | | | 16,088 | |
| | Air Liquide SA | | | Chemicals | | | | 2,514 | | | | 289,531 | |
| | Airbus SE | | | Aerospace & Defense | | | | 2,742 | | | | 238,776 | |
| b | | ALD SA, 144A | | | Road & Rail | | | | 396 | | | | 3,670 | |
| | Alstom SA | | | Machinery | | | | 1,488 | | | | 24,409 | |
| b | | Amundi SA, 144A | | | Capital Markets | | | | 276 | | | | 11,616 | |
| | Arkema SA | | | Chemicals | | | | 318 | | | | 23,390 | |
| | AXA SA | | | Insurance | | | | 9,108 | | | | 200,537 | |
| | Biomerieux | | | Health Care Equipment & Supplies | | | | 210 | | | | 16,746 | |
| | BNP Paribas SA | | | Banks | | | | 5,268 | | | | 225,036 | |
| | Bollore | | | Entertainment | | | | 4,884 | | | | 22,593 | |
| | Bouygues SA | | | Construction & Engineering | | | | 1,044 | | | | 27,461 | |
| | Bureau Veritas SA | | | Professional Services | | | | 1,410 | | | | 31,742 | |
| | Capgemini SE | | | IT Services | | | | 786 | | | | 127,436 | |
| | Carrefour SA | | | Food & Staples Retailing | | | | 2,904 | | | | 40,440 | |
| | Cie de L’Odet SE | | | Air Freight & Logistics | | | | 2 | | | | 2,257 | |
| | Cie Generale des Etablissements Michelin SCA | | | Auto Components | | | | 3,444 | | | | 78,123 | |
| | Compagnie de Saint-Gobain | | | Building Products | | | | 2,262 | | | | 82,102 | |
| | Covivio | | | Equity Real Estate Investment Trusts (REITs | ) | | | 246 | | | | 11,934 | |
| | Credit Agricole SA | | | Banks | | | | 5,952 | | | | 48,769 | |
| | Danone SA | | | Food Products | | | | 3,000 | | | | 142,745 | |
| | Dassault Aviation SA | | | Aerospace & Defense | | | | 114 | | | | 13,067 | |
| | Dassault Systemes SE | | | Software | | | | 3,294 | | | | 115,316 | |
| | Edenred | | | IT Services | | | | 1,230 | | | | 57,067 | |
| | EDF SA | | | Electric Utilities | | | | 3,084 | | | | 35,923 | |
| | Eiffage SA | | | Construction & Engineering | | | | 360 | | | | 29,103 | |
| | Engie SA | | | Multi-Utilities | | | | 8,166 | | | | 94,734 | |
| | EssilorLuxottica SA | | | Textiles, Apparel & Luxury Goods | | | | 1,464 | | | | 201,291 | |
| | Eurazeo SE | | | Diversified Financial Services | | | | 240 | | | | 12,661 | |
| a | | Euroapi SA | | | Pharmaceuticals | | | | 233 | | | | 3,889 | |
| a | | Faurecia SE | | | Auto Components | | | | 780 | | | | 8,581 | |
| | Gecina SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 252 | | | | 19,861 | |
| | Getlink SE | | | Transportation Infrastructure | | | | 2,250 | | | | 35,058 | |
| | Hermes International | | | Textiles, Apparel & Luxury Goods | | | | 153 | | | | 182,412 | |
| | ICADE | | | Equity Real Estate Investment Trusts (REITs | ) | | | 156 | | | | 5,838 | |
| | Ipsen SA | | | Pharmaceuticals | | | | 168 | | | | 15,619 | |
| a | | JCDecaux SA | | | Media | | | | 354 | | | | 4,186 | |
| | Kering SA | | | Textiles, Apparel & Luxury Goods | | | | 359 | | | | 161,269 | |
| | Klepierre SA | | | Equity Real Estate Investment Trusts (REITs | ) | | | 936 | | | | 16,413 | |
| b | | La Francaise des Jeux SAEM, 144A | | | Hotels, Restaurants & Leisure | | | | 432 | | | | 12,895 | |
| | Legrand SA | | | Electrical Equipment | | | | 1,320 | | | | 86,201 | |
| | L’Oreal SA | | | Personal Products | | | | 1,212 | | | | 392,117 | |
| | LVMH Moet Hennessy Louis Vuitton SE | | | Textiles, Apparel & Luxury Goods | | | | 1,226 | | | | 733,121 | |
| b | | Neoen SA, 144A | | | Independent Power Producers & Energy Traders | | | | 216 | | | | 7,266 | |
| | Orange SA | | | Diversified Telecommunication Services | | | | 9,426 | | | | 85,398 | |
| | Pernod Ricard SA | | | Beverages | | | | 1,008 | | | | 186,487 | |
| | Publicis Groupe | | | Media | | | | 1,110 | | | | 53,174 | |
| | Remy Cointreau SA | | | Beverages | | | | 124 | | | | 20,760 | |
| a | | Renault SA | | | Automobiles | | | | 942 | | | | 25,812 | |
| | Rexel SA | | | Trading Companies & Distributors | | | | 1,182 | | | | 17,925 | |
| | Safran SA | | | Aerospace & Defense | | | | 1,716 | | | | 158,038 | |
| | Sanofi | | | Pharmaceuticals | | | | 5,358 | | | | 411,519 | |
| | Sartorius Stedim Biotech | | | Life Sciences Tools & Services | | | | 119 | | | | 36,967 | |
| | Schneider Electric SE | | | Electrical Equipment | | | | 2,616 | | | | 299,690 | |
| | SCOR SE | | | Insurance | | | | 732 | | | | 10,660 | |
| | SEB SA | | | Household Durables | | | | 150 | | | | 9,507 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 213 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE France ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | France (continued) | | | | | | | | | |
| | Societe Generale SA | | | Banks | | | | 3,726 | | | $ | 74,518 | |
| | Sodexo SA | | | Hotels, Restaurants & Leisure | | | | 432 | | | | 32,655 | |
| a | | SOITEC | | | Semiconductors & Semiconductor Equipment | | | | 120 | | | | 13,948 | |
| | Somfy SA | | | Electrical Equipment | | | | 36 | | | | 3,354 | |
| | Teleperformance | | | Professional Services | | | | 286 | | | | 73,099 | |
| | Thales SA | | | Aerospace & Defense | | | | 492 | | | | 54,465 | |
| | TotalEnergies SE | | | Oil, Gas & Consumable Fuels | | | | 11,640 | | | | 550,486 | |
| a | | Ubisoft Entertainment SA | | | Entertainment | | | | 468 | | | | 12,984 | |
| | Valeo | | | Auto Components | | | | 1,200 | | | | 18,374 | |
| | Veolia Environnement SA | | | Multi-Utilities | | | | 3,066 | | | | 59,201 | |
| | Vinci SA | | | Construction & Engineering | | | | 2,442 | | | | 198,968 | |
| | Vivendi SA | | | Media | | | | 3,420 | | | | 26,709 | |
| | Wendel SE | | | Diversified Financial Services | | | | 132 | | | | 9,550 | |
| a,b,c | | Worldline SA, 144A, Reg S | | | IT Services | | | | 1,200 | | | | 47,823 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 6,420,540 | |
| | | | | | | | | | | | | | |
| | | Luxembourg 0.5% | | | | | | | | | |
| | Eurofins Scientific SE | | | Life Sciences Tools & Services | | | | 606 | | | | 36,285 | |
| | | | | | | | | | | | | | |
| | | Netherlands 0.4% | | | | | | | | | |
| b,c | | Euronext NV, 144A, Reg S | | | Capital Markets | | | | 402 | | | | 25,638 | |
| | | | | | | | | | | | | | |
| | | Switzerland 1.5% | | | | | | | | | |
| | STMicroelectronics NV | | | Semiconductors & Semiconductor Equipment | | | | 3,114 | | | | 98,368 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $ 8,467,663) 99.9% | | | | | | | | | | | 6,580,831 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 6,492 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 6,587,323 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $108,908, representing 1.7% 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 September 30, 2022, the value of was $73,461, representing 1.1% of net assets.
See Note 8 regarding other derivative information.
See Abbreviations on page 332
| | | | | | | | | | |
| | | | | | |
| 214 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Germany ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $22.37 | | | $ | 25.98 | | | $ | 16.73 | | | $ | 20.70 | | | $ | 24.60 | | | $ | 25.55 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.52 | | | | 0.70 | | | | 0.61 | | | | 0.52 | | | | 0.53 | | | | 0.05 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (6.81 | ) | | | (3.63 | ) | | | 9.29 | | | | (3.92 | ) | | | (3.83 | ) | | | (1.00 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (6.29 | ) | | | (2.93 | ) | | | 9.90 | | | | (3.40 | ) | | | (3.30 | ) | | | (0.95 | ) |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.59 | ) | | | (0.68 | ) | | | (0.65 | ) | | | (0.57 | ) | | | (0.60 | ) | | | — | |
| | | | |
| | | | | | |
Net asset value, end of period | | | $15.49 | | | $ | 22.37 | | | $ | 25.98 | | | $ | 16.73 | | | $ | 20.70 | | | $ | 24.60 | |
| | | | |
| | | | | | |
Total returnd | | | (28.52)% | | | | (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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 5.47% | | | | 2.73% | | | | 2.66% | | | | 2.46% | | | | 2.44% | | | | 0.52% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $13,167 | | | | $16,775 | | | | $9,093 | | | | $4,182 | | | | $4,140 | | | | $2,460 | |
| | | | | | |
Portfolio turnover ratef | | | 2.93% | g | | | 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: | | | 2.93% | | | | 6.70% | | | | 5.79% | | | | 5.74% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 215 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Germany ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | | | | | | | | | | |
| | | Common Stocks 94.7% | | | | | | | | | |
| | | Germany 93.5% | | | | | | | | | |
| | 1&1 Drillisch AG | | | Wireless Telecommunication Services | | | | 629 | | | $ | 8,362 | |
| | Adidas AG | | | Textiles, Apparel & Luxury Goods | | | | 2,312 | | | | 269,257 | |
| | Allianz SE | | | Insurance | | | | 5,610 | | | | 889,226 | |
| | Aroundtown SA | | | Real Estate Management & Development | | | | 14,858 | | | | 32,852 | |
| | BASF SE | | | Chemicals | | | | 12,631 | | | | 490,009 | |
| | Bayer AG | | | Pharmaceuticals | | | | 13,566 | | | | 630,142 | |
| | Bayerische Motoren Werke AG | | | Automobiles | | | | 4,420 | | | | 303,060 | |
| | Bechtle AG | | | IT Services | | | | 1,122 | | | | 40,812 | |
| | Beiersdorf AG | | | Personal Products | | | | 1,377 | | | | 136,179 | |
| | Brenntag AG | | | Trading Companies & Distributors | | | | 2,142 | | | | 130,899 | |
| | Carl Zeiss Meditec AG | | | Health Care Equipment & Supplies | | | | 510 | | | | 53,684 | |
| a | | Commerzbank AG | | | Banks | | | | 14,382 | | | | 103,444 | |
| | Continental AG | | | Auto Components | | | | 1,479 | | | | 66,577 | |
| b | | Covestro AG, 144A | | | Chemicals | | | | 2,465 | | | | 71,334 | |
| a | | CTS Eventim AG & Co. KGaA | | | Entertainment | | | | 816 | | | | 33,990 | |
| | Daimler AG | | | Automobiles | | | | 11,628 | | | | 596,338 | |
| a | | Daimler Truck Holding AG | | | Machinery | | | | 5,814 | | | | 132,994 | |
| a,b | | Delivery Hero SE, 144A | | | Internet & Direct Marketing Retail | | | | 2,635 | | | | 97,937 | |
| | Deutsche Bank AG | | | Capital Markets | | | | 27,965 | | | | 209,469 | |
| | Deutsche Boerse AG | | | Capital Markets | | | | 2,533 | | | | 417,504 | |
| a | | Deutsche Lufthansa AG | | | Airlines | | | | 8,262 | | | | 47,900 | |
| | Deutsche Post AG | | | Air Freight & Logistics | | | | 13,362 | | | | 407,298 | |
| | Deutsche Telekom AG | | | Diversified Telecommunication Services | | | | 46,716 | | | | 800,527 | |
| | Deutsche Wohnen AG | | | Real Estate Management & Development | | | | 663 | | | | 12,669 | |
| b | | DWS Group GmbH & Co. KGaA, 144A | | | Capital Markets | | | | 476 | | | | 11,453 | |
| | E.ON SE | | | Multi-Utilities | | | | 30,566 | | | | 236,438 | |
| | Evonik Industries AG | | | Chemicals | | | | 2,618 | | | | 44,241 | |
| a | | Evotec SE | | | Life Sciences Tools & Services | | | | 2,193 | | | | 38,574 | |
| | Fielmann AG | | | Specialty Retail | | | | 340 | | | | 10,978 | |
| a | | Fraport AG Frankfurt Airport Services Worldwide | | | Transportation Infrastructure | | | | 493 | | | | 17,962 | |
| | Fresenius Medical Care AG & Co. KGaA | | | Health Care Providers & Services | | | | 2,805 | | | | 79,772 | |
| | Fresenius SE & Co. KGaA | | | Health Care Providers & Services | | | | 5,627 | | | | 120,999 | |
| | Fuchs Petrolub SE | | | Chemicals | | | | 459 | | | | 10,140 | |
| | GEA Group AG | | | Machinery | | | | 2,261 | | | | 73,848 | |
| | Hannover Rueck SE | | | Insurance | | | | 833 | | | | 125,835 | |
| | HeidelbergCement AG | | | Construction Materials | | | | 2,006 | | | | 80,278 | |
| | Hella GmbH & Co. KGaA | | | Auto Components | | | | 306 | | | | 20,415 | |
| a | | HelloFresh SE | | | Internet & Direct Marketing Retail | | | | 2,261 | | | | 48,176 | |
| | Henkel AG & Co. KGaA | | | Household Products | | | | 1,411 | | | | 80,587 | |
| | Hochtief AG | | | Construction & Engineering | | | | 272 | | | | 13,019 | |
| | Infineon Technologies AG | |
| Semiconductors &Semiconductor
Equipment |
| | | 18,003 | | | | 400,528 | |
| | KION Group AG | | | Machinery | | | | 1,071 | | | | 20,790 | |
| | Knorr-Bremse AG | | | Machinery | | | | 901 | | | | 39,173 | |
| | Lanxess AG | | | Chemicals | | | | 1,173 | | | | 34,554 | |
| | LEG Immobilien AG | | | Real Estate Management & Development | | | | 1,020 | | | | 61,314 | |
| | Merck KGaA | | | Pharmaceuticals | | | | 1,785 | | | | 291,679 | |
| a | | METRO AG | | | Food & Staples Retailing | | | | 1,836 | | | | 12,878 | |
| | MTU Aero Engines AG | | | Aerospace & Defense | | | | 737 | | | | 111,369 | |
| | Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen | | | Insurance | | | | 1,938 | | | | 469,894 | |
| | Nemetschek AG | | | Software | | | | 748 | | | | 36,075 | |
| | Puma SE | | | Textiles, Apparel & Luxury Goods | | | | 1,377 | | | | 64,710 | |
| | Rational AG | | | Machinery | | | | 68 | | | | 33,341 | |
| | Rheinmetall AG | | | Industrial Conglomerates | | | | 595 | | | | 92,213 | |
| | RWE AG | | | Multi-Utilities | | | | 8,704 | | | | 322,231 | |
| | SAP SE | | | Software | | | | 15,300 | | | | 1,260,845 | |
| | Sartorius AG | | | Health Care Equipment & Supplies | | | | 34 | | | | 10,292 | |
| | | | | | | | | | |
| | | | | | |
| 216 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Germany ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Germany (continued) | | | | | | | | | |
| b | | Scout24 AG, 144A, Reg S | | | Interactive Media & Services | | | | 1,071 | | | $ | 54,265 | |
| | Siemens AG | | | Industrial Conglomerates | | | | 10,421 | | | | 1,033,144 | |
| a | | Siemens Energy AG | | | Electrical Equipment | | | | 5,916 | | | | 65,983 | |
| b | | Siemens Healthineers AG, 144A | | | Health Care Equipment & Supplies | | | | 3,791 | | | | 164,449 | |
| | Sixt SE | | | Road & Rail | | | | 187 | | | | 15,031 | |
| | Symrise AG | | | Chemicals | | | | 1,802 | | | | 177,327 | |
| a | | Talanx AG | | | Insurance | | | | 731 | | | | 26,067 | |
| | Telefonica Deutschland Holding AG | | | Diversified Telecommunication Services | | | | 12,461 | | | | 25,306 | |
| a | | thyssenkrupp AG | | | Metals & Mining | | | | 6,817 | | | | 29,291 | |
| | Traton SE | | | Machinery | | | | 697 | | | | 8,358 | |
| | Uniper SE | | | Independent Power Producers & Energy Traders | | | | 1,207 | | | | 4,619 | |
| | United Internet AG | | | Diversified Telecommunication Services | | | | 1,513 | | | | 28,547 | |
| | Vantage Towers AG | | | Diversified Telecommunication Services | | | | 1,275 | | | | 33,150 | |
| | Varta AG | | | Electrical Equipment | | | | 187 | | | | 5,377 | |
| | Volkswagen AG | | | Automobiles | | | | 391 | | | | 64,600 | |
| | Vonovia SE | | | Real Estate Management & Development | | | | 11,016 | | | | 239,686 | |
| | Wacker Chemie AG | | | Chemicals | | | | 204 | | | | 21,214 | |
| a,b | | Zalando SE, 144A | | | Internet & Direct Marketing Retail | | | | 3,026 | | | | 59,970 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 12,313,448 | |
| | | | | | | | | | | | | | |
| | | Luxembourg 0.2% | | | | | | | | | |
| | RTL Group SA | | | Media | | | | 527 | | | | 16,799 | |
| a | | SUSE SA | | | Software | | | | 544 | | | | 8,090 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 24,889 | |
| | | | | | | | | | | | | | |
| | | Netherlands 1.0% | | | | | | | | | |
| | | | |
| a | | QIAGEN NV | | | Life Sciences Tools & Services | | | | 3,026 | | | | 127,411 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $18,662,856) | | | | | | | | | | | 12,465,748 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 5.2% | | | | | | | | | |
| | | Germany 5.2% | | | | | | | | | |
| c | | Bayerische Motoren Werke AG, 8.700%, pfd. | | | Automobiles | | | | 816 | | | | 53,479 | |
| c | | Fuchs Petrolub SE, 3.962%, pfd. | | | Chemicals | | | | 969 | | | | 24,681 | |
| c | | Henkel AG & Co. KGaA, 3.032%, pfd. | | | Household Products | | | | 2,329 | | | | 139,224 | |
| c | | Sartorius AG, 0.353%, pfd. | | | Health Care Equipment & Supplies | | | | 340 | | | | 118,943 | |
| c | | Sixt SE, 9.740%, pfd. | | | Road & Rail | | | | 221 | | | | 10,143 | |
| c | | Volkswagen AG, 5.981%, pfd. | | | Automobiles | | | | 2,788 | | | | 345,232 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks
(Cost $1,046,007) | | | | | | | | | | | 691,702 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $19,708,863) 99.9% | | | | | | | | | | | 13,157,450 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 9,397 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 13,166,847 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $459,409, representing 3.5% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 217 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Hong Kong ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
| Per share operating performance | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $23.43 | | | $ | 28.10 | | | $ | 20.58 | | | $ | 26.82 | | | $ | 26.17 | | | $ | 25.30 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Net investment incomec | | | 0.58 | | | | 0.74 | | | | 0.72 | | | | 0.77 | | | | 0.66 | | | | 0.16 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (4.83 | ) | | | (4.72 | ) | | | 7.61 | | | | (6.25 | ) | | | 0.59 | | | | 0.78 | |
| | | | |
| | | | | | |
Total from investment operations | | | (4.25 | ) | | | (3.98 | ) | | | 8.33 | | | | (5.48 | ) | | | 1.25 | | | | 0.94 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.42 | ) | | | (0.69 | ) | | | (0.81 | ) | | | (0.76 | ) | | | (0.60 | ) | | | (0.07 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | | $18.76 | | | $ | 23.43 | | | $ | 28.10 | | | $ | 20.58 | | | $ | 26.82 | | | $ | 26.17 | |
| | | | |
| | | | | | |
Total returnd | | | (18.38)% | | | | (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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 5.27% | | | | 2.79% | | | | 2.99% | | | | 3.10% | | | | 2.67% | | | | 1.49% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $11,254 | | | | $17,573 | | | | $16,862 | | | | $15,433 | | | | $20,118 | | | | $7,852 | |
| | | | | | |
Portfolio turnover ratef | | | 5.10% | g | | | 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: | | | 5.10% | | | | 9.74% | | | | 14.84% | | | | 5.99% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 218 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Hong Kong ETF
| | | | | | | | | | | | |
| | | | |
| | | | | Industry | | Shares | | | Value | |
| | | Common Stocks 99.3% | | | | | | | | |
| | | Cambodia 0.2% | | | | | | | | |
| a | | NagaCorp Ltd. | | Hotels, Restaurants & Leisure | | | 40,372 | | | $ | 26,538 | |
| | | | | | | | | | | | |
| | | China 10.1% | | | | | | | | |
| a | | AAC Technologies Holdings Inc., H | | Electronic Equipment, Instruments & Components | | | 20,000 | | | | 31,287 | |
| | BOC Hong Kong (Holdings) Ltd. | | Banks | | | 103,000 | | | | 343,119 | |
| b | | Budweiser Brewing Co. APAC Ltd., H, 144A | | Beverages | | | 48,800 | | | | 127,752 | |
| a | | China Travel International Investment Hong Kong Ltd., A | | Hotels, Restaurants & Leisure | | | 80,000 | | | | 14,064 | |
| | Chow Tai Fook Jewellery Co. Ltd., A | | Specialty Retail | | | 50,400 | | | | 94,895 | |
| a,b | | ESR Cayman Ltd., H, 144A | | Real Estate Management & Development | | | 58,400 | | | | 147,304 | |
| a | | HUTCHMED China Ltd. | | Pharmaceuticals | | | 14,000 | | | | 23,577 | |
| | Kerry Logistics Network Ltd. | | Air Freight & Logistics | | | 8,000 | | | | 12,861 | |
| | Lenovo Group Ltd. | | Technology Hardware, Storage & Peripherals | | | 216,000 | | | | 150,239 | |
| a | | MMG Ltd. | | Metals & Mining | | | 68,000 | | | | 16,286 | |
| | Nexteer Automotive Group Ltd. | | Auto Components | | | 24,000 | | | | 13,024 | |
| a | | Shangri-La Asia Ltd. | | Hotels, Restaurants & Leisure | | | 32,000 | | | | 22,217 | |
| | SITC International Holdings Co. Ltd. | | Marine | | | 33,000 | | | | 61,040 | |
| | Want Want China Holdings Ltd. | | Food Products | | | 124,000 | | | | 81,035 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,138,700 | |
| | | | | | | | | | | | |
| | | Hong Kong 77.5% | | | | | | | | |
| | AIA Group Ltd., A | | Insurance | | | 260,200 | | | | 2,169,466 | |
| �� | ASM Pacific Technology Ltd., A | | Semiconductors & Semiconductor Equipment | | | 8,800 | | | | 53,585 | |
| | Cafe de Coral Holdings Ltd., A | | Hotels, Restaurants & Leisure | | | 8,000 | | | | 9,957 | |
| a | | Cathay Pacific Airways Ltd., A | | Airlines | | | 28,000 | | | | 29,534 | |
| | Champion REIT, A | | Equity Real Estate Investment Trusts (REITs) | | | 56,000 | | | | 19,761 | |
| | CK Asset Holdings Ltd. | | Real Estate Management & Development | | | 57,000 | | | | 342,731 | |
| | CK Infrastructure Holdings Ltd., A | | Electric Utilities | | | 17,000 | | | | 86,734 | |
| | CLP Holdings Ltd. | | Electric Utilities | | | 47,000 | | | | 355,349 | |
| | Dah Sing Banking Group Ltd., A | | Banks | | | 9,600 | | | | 6,359 | |
| | Dah Sing Financial Group, H | | Banks | | | 4,000 | | | | 9,111 | |
| | Dairy Farm International Holdings Ltd., A | | Food & Staples Retailing | | | 8,800 | | | | 20,328 | |
| | Guotai Junan International Holdings Ltd. | | Capital Markets | | | 76,000 | | | | 5,615 | |
| a | | Haitong International Securities Group Ltd. | | Capital Markets | | | 84,000 | | | | 7,170 | |
| | Hang Lung Group Ltd. | | Real Estate Management & Development | | | 24,000 | | | | 38,767 | |
| | Hang Lung Properties Ltd. | | Real Estate Management & Development | | | 52,000 | | | | 85,321 | |
| | Hang Seng Bank Ltd. | | Banks | | | 20,800 | | | | 315,846 | |
| | Henderson Land Development Co. Ltd. | | Real Estate Management & Development | | | 37,000 | | | | 103,696 | |
| | Hong Kong and China Gas Co. Ltd. | | Gas Utilities | | | 312,000 | | | | 275,040 | |
| | Hong Kong Exchanges and Clearing Ltd. | | Capital Markets | | | 36,500 | | | | 1,253,570 | |
| | Hongkong Land Holdings Ltd. | | Real Estate Management & Development | | | 32,000 | | | | 141,440 | |
| | Huabao International Holdings Ltd. | | Chemicals | | | 28,000 | | | | 12,984 | |
| | Hutchison Telecommunications Hong Kong Holdings Ltd. | | Diversified Telecommunication Services | | | 32,000 | | | | 4,688 | |
| | Hysan Development Co. Ltd. | | Real Estate Management & Development | | | 17,000 | | | | 42,836 | |
| | Jardine Matheson Holdings Ltd. | | Industrial Conglomerates | | | 5,700 | | | | 288,648 | |
| | Johnson Electric Holdings Ltd. | | Electrical Equipment | | | 10,000 | | | | 10,038 | |
| b | | JS Global Lifestyle Co. Ltd., 144A | | Household Durables | | | 36,000 | | | | 34,808 | |
| | Kerry Properties Ltd. | | Real Estate Management & Development | | | 18,000 | | | | 34,166 | |
| | Link REIT | | Equity Real Estate Investment Trusts (REITs) | | | 60,800 | | | | 425,218 | |
| | Man Wah Holdings Ltd. | | Household Durables | | | 44,800 | | | | 28,535 | |
| a | | Melco International Development Ltd. | | Hotels, Restaurants & Leisure | | | 24,000 | | | | 18,650 | |
| | MTR Corp. Ltd. | | Road & Rail | | | 41,500 | | | | 190,585 | |
| | New World Development Co. Ltd. | | Real Estate Management & Development | | | 40,000 | | | | 113,632 | |
| | NWS Holdings Ltd. | | Industrial Conglomerates | | | 40,000 | | | | 36,179 | |
| | Orient Overseas International Ltd. | | Marine | | | 3,800 | | | | 66,561 | |
| | PCCW Ltd. | | Diversified Telecommunication Services | | | 120,000 | | | | 54,268 | |
| | Power Assets Holdings Ltd. | | Electric Utilities | | | 39,500 | | | | 198,257 | |
| | Sino Land Co. Ltd. | | Real Estate Management & Development | | | 104,000 | | | | 137,520 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
��
Franklin FTSE Hong Kong ETF (continued)
| | | | | | | | | | | | |
| | | | |
| | | | | Industry | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | |
| | | Hong Kong (continued) | | | | | | | | |
| | Sun Hung Kai Properties Ltd. | | Real Estate Management & Development | | | 41,000 | | | $ | 453,617 | |
| | Swire Pacific Ltd., A | | Real Estate Management & Development | | | 14,500 | | | | 108,521 | |
| | Swire Pacific Ltd., B | | Real Estate Management & Development | | | 27,500 | | | | 32,125 | |
| | Swire Properties Ltd. | | Real Estate Management & Development | | | 30,400 | | | | 65,448 | |
| | Techtronic Industries Co. Ltd. | | Household Durables | | | 37,500 | | | | 362,345 | |
| | The Bank of East Asia Ltd., A | | Banks | | | 27,200 | | | | 29,799 | |
| | The Wharf Holdings Ltd. | | Real Estate Management & Development | | | 35,000 | | | | 112,135 | |
| | United Energy Group Ltd. | | Oil, Gas & Consumable Fuels | | | 216,000 | | | | 24,765 | |
| a | | Vitasoy International Holdings Ltd. | | Food Products | | | 22,600 | | | | 28,128 | |
| | VTech Holdings Ltd. | | Communications Equipment | | | 4,800 | | | | 27,547 | |
| b | | WH Group Ltd., 144A, Reg S | | Food Products | | | 225,748 | | | | 142,353 | |
| | Wharf Real Estate Investment Co. Ltd. | | Real Estate Management & Development | | | 44,060 | | | | 200,377 | |
| | Xinyi Glass Holdings Ltd. | | Auto Components | | | 58,400 | | | | 84,960 | |
| | Yue Yuen Industrial Holdings Ltd. | | Textiles, Apparel & Luxury Goods | | | 20,000 | | | | 25,580 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 8,724,653 | |
| | | | | | | | | | | | |
| | | Indonesia 0.2% | | | | | | | | |
| | First Pacific Co. Ltd. | | Diversified Financial Services | | | 64,000 | | | | 19,486 | |
| | | | | | | | | | | | |
| | | Italy 0.6% | | | | | | | | |
| | Prada SpA | | Textiles, Apparel & Luxury Goods | | | 14,800 | | | | 68,628 | |
| | | | | | | | | | | | |
| | | Luxembourg 0.3% | | | | | | | | |
| | L’Occitane International SA | | Specialty Retail | | | 13,000 | | | | 39,497 | |
| | | | | | | | | | | | |
| | | Macau 5.4% | | | | | | | | |
| | Galaxy Entertainment Group Ltd. | | Hotels, Restaurants & Leisure | | | 62,000 | | | | 366,476 | |
| a | | MGM China Holdings Ltd. | | Hotels, Restaurants & Leisure | | | 20,800 | | | | 11,500 | |
| a | | Sands China Ltd. | | Hotels, Restaurants & Leisure | | | 68,800 | | | | 172,660 | |
| a | | SJM Holdings Ltd. | | Hotels, Restaurants & Leisure | | | 68,000 | | | | 25,468 | |
| a | | Wynn Macau Ltd. | | Hotels, Restaurants & Leisure | | | 43,200 | | | | 27,736 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 603,840 | |
| | | | | | | | | | | | |
| | | Singapore 0.4% | | | | | | | | |
| b | | BOC Aviation Ltd., A, 144A | | Trading Companies & Distributors | | | 6,000 | | | | 42,612 | |
| | | | | | | | | | | | |
| | | Taiwan 0.0%† | | | | | | | | |
| a,b | | FIT Hon Teng Ltd., 144A | | Electronic Equipment, Instruments & Components | | | 28,000 | | | | 3,317 | |
| | | | | | | | | | | | |
| | | United Kingdom 3.8% | | | | | | | | |
| | CK Hutchison Holdings Ltd., A | | Real Estate Management & Development | | | 76,500 | | | | 422,948 | |
| | | | | | | | | | | | |
| | | United States 0.8% | | | | | | | | |
| a,b | | Samsonite International SA, 144A | | Textiles, Apparel & Luxury Goods | | | 37,200 | | | | 90,134 | |
| | | | | | | | | | | | |
| | Total Investments
(Cost $15,063,230) 99.3% | | | | | | | | | 11,180,353 | |
| | Other Assets, less Liabilities 0.7% | | | | | | | | | 73,894 | |
| | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | $ | 11,254,247 | |
| | | | | | | | | | | | |
†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 September 30, 2022, the value of was $588,280, representing 5.2% of net assets.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Hong Kong ETF (continued)
At September 30, 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 | | | | 3 | | | $ | 65,772 | | | | 10/28/22 | | | | $(2,203) | |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 221 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE India ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 31.34 | | | $ | 27.70 | | | $ | 15.98 | | | $ | 23.36 | | | $ | 22.74 | | | $ | 23.72 | |
| | | | |
| | | | | | |
Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.19 | | | | 0.27 | | | | 0.20 | | | | 0.26 | | | | 0.29 | | | | 0.09 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (2.71 | ) | | | 4.09 | | | | 11.70 | | | | (7.43 | ) | | | 0.53 | | | | (1.07 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (2.52 | ) | | | 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 period | | $ | 28.82 | | | $ | 31.34 | | | $ | 27.70 | | | $ | 15.98 | | | $ | 23.36 | | | $ | 22.74 | |
| | | | |
| | | | | | |
Total returnd | | | (8.04)% | | | | 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% | | | | 0.19% | |
| | | | | | |
Net investment income | | | 1.28% | | | | 0.86% | | | | 0.89% | | | | 1.20% | | | | 1.33% | | | | 2.78% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $53,325 | | | | $50,140 | | | | $23,544 | | | | $8,790 | | | | $7,007 | | | | $2,274 | |
| | | | | | |
Portfolio turnover ratef | | | 2.41% | g | | | 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: | | | 2.41% | | | | 8.16% | | | | 16.91% | | | | 6.83% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 222 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE India ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 101.3% | | | | | | | | | |
| | | India 101.3% | | | | | | | | | |
| a | | 3M India Ltd. | | | Industrial Conglomerates | | | | 148 | | | $ | 44,766 | |
| | Aarti Industries Ltd. | | | Chemicals | | | | 9,842 | | | | 90,137 | |
| | ABB India Ltd. | | | Electrical Equipment | | | | 2,849 | | | | 108,159 | |
| | ACC Ltd. | | | Construction Materials | | | | 4,514 | | | | 134,039 | |
| | Adani Enterprises Ltd. | | | Trading Companies & Distributors | | | | 14,541 | | | | 617,693 | |
| a | | Adani Green Energy Ltd. | | | Independent Power Producers & Energy Traders | | | | 21,201 | | | | 589,189 | |
| | Adani Ports & Special Economic Zone Ltd. | | | Transportation Infrastructure | | | | 42,291 | | | | 426,620 | |
| a | | Adani Power Ltd. | | | Independent Power Producers & Energy Traders | | | | 51,171 | | | | 234,936 | |
| | Adani Total Gas Ltd. | | | Gas Utilities | | | | 14,800 | | | | 607,609 | |
| a | | Adani Transmission Ltd. | | | Electric Utilities | | | | 13,542 | | | | 547,631 | |
| a | | Adani Wilmar Ltd. | | | Food Products | | | | 8,436 | | | | 78,344 | |
| a | | Aditya Birla Capital Ltd. | | | Diversified Financial Services | | | | 23,199 | | | | 31,882 | |
| | Alkem Laboratories Ltd. | | | Pharmaceuticals | | | | 1,332 | | | | 53,659 | |
| | Ambuja Cements Ltd. | | | Construction Materials | | | | 36,667 | | | | 232,394 | |
| | Apollo Hospitals Enterprise Ltd. | | | Health Care Providers & Services | | | | 5,291 | | | | 285,092 | |
| | Ashok Leyland Ltd. | | | Machinery | | | | 76,146 | | | | 142,883 | |
| | Asian Paints Ltd. | | | Chemicals | | | | 24,087 | | | | 989,654 | |
| | Astral Ltd. | | | Building Products | | | | 4,736 | | | | 129,966 | |
| b | | AU Small Finance Bank Ltd., 144A | | | Banks | | | | 17,390 | | | | 132,363 | |
| | Aurobindo Pharma Ltd. | | | Pharmaceuticals | | | | 13,875 | | | | 87,086 | |
| a,b | | Avenue Supermarts Ltd., 144A | | | Food & Staples Retailing | | | | 7,955 | | | | 428,942 | |
| | Axis Bank Ltd. | | | Banks | | | | 121,397 | | | | 1,094,123 | |
| | Bajaj Auto Ltd. | | | Automobiles | | | | 3,700 | | | | 160,448 | |
| | Bajaj Finance Ltd. | | | Consumer Finance | | | | 12,580 | | | | 1,134,386 | |
| | Bajaj Finserv Ltd. | | | Diversified Financial Services | | | | 20,387 | | | | 420,602 | |
| | Bajaj Holdings & Investment Ltd. | | | Diversified Financial Services | | | | 1,443 | | | | 113,358 | |
| | Balkrishna Industries Ltd. | | | Auto Components | | | | 4,292 | | | | 99,379 | |
| a,b | | Bandhan Bank Ltd, 144A | | | Banks | | | | 42,365 | | | | 138,836 | |
| | Bank of Baroda | | | Banks | | | | 54,168 | | | | 88,159 | |
| | Bank of India | | | Banks | | | | 26,344 | | | | 15,609 | |
| | Bata India Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 3,256 | | | | 72,904 | |
| | Bayer CropScience Ltd. | | | Chemicals | | | | 703 | | | | 42,197 | |
| | Berger Paints India Ltd. | | | Chemicals | | | | 12,839 | | | | 97,376 | |
| | Bharat Electronics Ltd. | | | Aerospace & Defense | | | | 176,490 | | | | 219,009 | |
| | Bharat Forge Ltd. | | | Auto Components | | | | 13,320 | | | | 113,877 | |
| a | | Bharat Heavy Electricals Ltd. | | | Electrical Equipment | | | | 65,934 | | | | 48,548 | |
| | Bharat Petroleum Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 52,947 | | | | 198,377 | |
| | Bharti Airtel Ltd. | | | Wireless Telecommunication Services | | | | 7,585 | | | | 37,486 | |
| | Bharti Airtel Ltd. | | | Wireless Telecommunication Services | | | | 123,432 | | | | 1,213,666 | |
| | Bharti Infratel Ltd. | | | Diversified Telecommunication Services | | | | 47,101 | | | | 114,320 | |
| | Biocon Ltd. | | | Biotechnology | | | | 24,605 | | | | 87,999 | |
| | Bosch Ltd. | | | Auto Components | | | | 444 | | | | 86,315 | |
| | Britannia Industries Ltd. | | | Food Products | | | | 6,364 | | | | 300,637 | |
| | Canara Bank Ltd. | | | Banks | | | | 19,573 | | | | 55,037 | |
| | Castrol India Ltd. | | | Chemicals | | | | 26,159 | | | | 36,239 | |
| a | | CG Power & Industrial Solutions Ltd. | | | Electrical Equipment | | | | 37,333 | | | | 108,165 | |
| | Cholamandalam Investment and Finance Co. Ltd. | | | Consumer Finance | | | | 21,275 | | | | 191,485 | |
| | Cipla Ltd. | | | Pharmaceuticals | | | | 27,343 | | | | 374,746 | |
| | Coal India Ltd. | | | Oil, Gas & Consumable Fuels | | | | 100,640 | | | | 262,575 | |
| | Coforge Ltd. | | | IT Services | | | | 1,924 | | | | 79,512 | |
| | Colgate-Palmolive India Ltd. | | | Personal Products | | | | 7,067 | | | | 141,546 | |
| | Container Corp. Of India Ltd. | | | Road & Rail | | | | 14,578 | | | | 127,526 | |
| | Coromandel International Ltd. | | | Chemicals | | | | 5,772 | | | | 70,540 | |
| | Cummins India Ltd. | | | Machinery | | | | 7,104 | | | | 104,428 | |
| | Dabur India Ltd. | | | Personal Products | | | | 31,043 | | | | 218,633 | |
| | Dalmia Bharat Ltd. | | | Construction Materials | | | | 4,440 | | | | 87,216 | |
| | Deepak Nitrite Ltd. | | | Chemicals | | | | 3,885 | | | | 97,231 | |
| | Divi’s Laboratories Ltd. | | | Life Sciences Tools & Services | | | | 6,808 | | | | 310,075 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE India ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | India (continued) | | | | | | | | | |
| | Dixon Technologies India Ltd. | | | Household Durables | | | | 1,887 | | | $ | 101,402 | |
| | DLF Ltd. | | | Real Estate Management & Development | | | | 33,115 | | | | 145,199 | |
| b | | Dr Lal PathLabs Ltd., 144A | | | Health Care Providers & Services | | | | 1,887 | | | | 58,424 | |
| | Dr Reddy’s Laboratories Ltd. | | | Pharmaceuticals | | | | 6,438 | | | | 343,120 | |
| | Eicher Motors Ltd. | | | Automobiles | | | | 7,400 | | | | 333,982 | |
| | Emami Ltd. | | | Personal Products | | | | 11,285 | | | | 69,956 | |
| | Embassy Office Parks REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 32,523 | | | | 138,262 | |
| | Exide Industries Ltd. | | | Auto Components | | | | 24,346 | | | | 46,970 | |
| | Federal Bank Ltd. | | | Banks | | | | 83,102 | | | | 121,306 | |
| a | | FSN E-Commerce Ventures Ltd. | | | Internet & Catalog Retail | | | | 3,219 | | | | 50,336 | |
| | GAIL India Ltd. | | | Gas Utilities | | | | 140,655 | | | | 150,508 | |
| b | | General Insurance Corp. of India, 144A | | | Insurance | | | | 5,624 | | | | 8,500 | |
| | Gillette India Ltd. | | | Personal Products | | | | 370 | | | | 23,532 | |
| | GlaxoSmithKline Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 2,257 | | | | 39,518 | |
| | Glenmark Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 7,992 | | | | 38,181 | |
| a | | GMR Infrastructure Ltd. | | | Construction & Engineering | | | | 132,275 | | | | 57,803 | |
| a | | Godrej Consumer Products Ltd. | | | Personal Products | | | | 19,351 | | | | 216,569 | |
| a | | Godrej Industries Ltd. | | | Chemicals | | | | 4,736 | | | | 25,557 | |
| a | | Godrej Properties Ltd. | | | Real Estate Management & Development | | | | 4,773 | | | | 70,048 | |
| | Grasim Industries Ltd. | | | Construction Materials | | | | 20,498 | | | | 422,010 | |
| | Gujarat Fluorochemicals Ltd. | | | Chemicals | | | | 1,850 | | | | 89,720 | |
| | Gujarat Gas Ltd. | | | Gas Utilities | | | | 10,397 | | | | 64,317 | |
| | Havells India Ltd. | | | Electrical Equipment | | | | 12,765 | | | | 211,604 | |
| | HCL Technologies Ltd. | | | IT Services | | | | 57,942 | | | | 664,061 | |
| b | | HDFC Asset Management Co. Ltd., 144A | | | Capital Markets | | | | 3,663 | | | | 85,083 | |
| b | | HDFC Life Insurance Co. Ltd., 144A | | | Insurance | | | | 51,726 | | | | 337,279 | |
| | Hero MotoCorp Ltd. | | | Automobiles | | | | 6,956 | | | | 217,971 | |
| | Hindalco Industries Ltd. | | | Metals & Mining | | | | 75,295 | | | | 361,475 | |
| | Hindustan Aeronautics Ltd. | | | Aerospace & Defense | | | | 4,440 | | | | 127,978 | |
| | Hindustan Petroleum Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 37,481 | | | | 99,656 | |
| | Hindustan Unilever Ltd. | | | Household Products | | | | 47,323 | | | | 1,568,557 | |
| | Hindustan Zinc Ltd. | | | Metals & Mining | | | | 12,358 | | | | 40,590 | |
| | Honeywell Automation India Ltd. | | | Electronic Equipment, Instruments & Components | | | | 119 | | | | 58,518 | |
| | Housing Development Finance Corp. Ltd. | | | Thrifts & Mortgage Finance | | | | 93,573 | | | | 2,631,449 | |
| | ICICI Bank Ltd. | | | Banks | | | | 83,546 | | | | 885,256 | |
| b,c | | ICICI Lombard General Insurance Co. Ltd., 144A, Reg S | | | Insurance | | | | 12,728 | | | | 180,106 | |
| b,c | | ICICI Prudential Life Insurance Co. Ltd., 144A, Reg S | | | Insurance | | | | 20,572 | | | | 133,002 | |
| a | | IDFC First Bank Ltd. | | | Banks | | | | 164,354 | | | | 100,712 | |
| | Indian Hotels Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 44,215 | | | | 180,281 | |
| | Indian Oil Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 216,820 | | | | 178,437 | |
| | Indian Railway Catering and Tourism Corp. Ltd. | | | Commercial Services & Supplies | | | | 14,060 | | | | 122,019 | |
| b | | Indian Railway Finance Corp. Ltd., 144A | | | Diversified Financial Services | | | | 92,685 | | | | 24,211 | |
| | Indraprastha Gas Ltd. | | | Gas Utilities | | | | 18,352 | | | | 89,514 | |
| | Info Edge India Ltd. | | | Interactive Media & Services | | | | 4,070 | | | | 193,146 | |
| | Infosys Ltd. | | | IT Services | | | | 189,588 | | | | 3,294,026 | |
| a,b,c | | InterGlobe Aviation Ltd., 144A, Reg S | | | Airlines | | | | 5,698 | | | | 129,949 | |
| | Ipca Laboratories Ltd. | | | Pharmaceuticals | | | | 7,400 | | | | 83,232 | |
| | ITC Ltd. | | | Tobacco | | | | 157,842 | | | | 644,552 | |
| | Jindal Steel & Power Ltd. | | | Metals & Mining | | | | 20,868 | | | | 109,943 | |
| | JSW Energy Ltd. | | | Independent Power Producers & Energy Traders | | | | 20,646 | | | | 76,225 | |
| | JSW Steel Ltd. | | | Metals & Mining | | | | 53,502 | | | | 415,415 | |
| | Jubilant Foodworks Ltd. | | | Hotels, Restaurants & Leisure | | | | 19,388 | | | | 148,405 | |
| | Kansai Nerolac Paints Ltd. | | | Chemicals | | | | 6,882 | | | | 41,422 | |
| | L&T Finance Holdings Ltd. | | | Diversified Financial Services | | | | 45,769 | | | | 42,027 | |
| b | | L&T Technology Services Ltd., 144A | | | Professional Services | | | | 1,406 | | | | 62,074 | |
| b,c | | Larsen & Toubro Infotech Ltd.,, 144A, Reg S | | | IT Services | | | | 2,368 | | | | 129,761 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE India ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | India (continued) | | | | | | | | | |
| | Larsen & Toubro Ltd. | | | Construction & Engineering | | | | 36,778 | | | $ | 835,325 | |
| b | | Laurus Labs Ltd., 144A | | | Pharmaceuticals | | | | 19,166 | | | | 120,861 | |
| | LIC Housing Finance Ltd. | | | Thrifts & Mortgage Finance | | | | 17,723 | | | | 90,160 | |
| | Linde India Ltd. | | | Chemicals | | | | 1,147 | | | | 46,694 | |
| | Lupin Ltd. | | | Pharmaceuticals | | | | 12,913 | | | | 107,914 | |
| a | | Macrotech Developers Ltd. | | | Real Estate Management & Development | | | | 4,144 | | | | 47,078 | |
| | Mahindra & Mahindra Financial Services Ltd. | | | Consumer Finance | | | | 31,339 | | | | 71,364 | |
| | Mahindra & Mahindra Ltd. | | | Automobiles | | | | 49,136 | | | | 765,990 | |
| a | | Mangalore Refinery & Petrochemicals Ltd. | | | Oil, Gas & Consumable Fuels | | | | 11,544 | | | | 8,422 | |
| | Marico Ltd. | | | Personal Products | | | | 27,528 | | | | 182,000 | |
| | Maruti Suzuki India Ltd. | | | Automobiles | | | | 7,067 | | | | 766,903 | |
| a | | Max Financial Services Ltd. | | | Insurance | | | | 12,987 | | | | 121,742 | |
| a | | Max Healthcare Institute Ltd. | | | Health Care Providers & Services | | | | 39,146 | | | | 196,280 | |
| | Minda Industries Ltd. | | | Auto Components | | | | 8,917 | | | | 61,284 | |
| | Mindtree Ltd. | | | IT Services | | | | 2,331 | | | | 90,521 | |
| | Mphasis Ltd. | | | IT Services | | | | 4,810 | | | | 123,435 | |
| | MRF Ltd. | | | Auto Components | | | | 148 | | | | 148,552 | |
| | Muthoot Finance Ltd. | | | Consumer Finance | | | | 5,735 | | | | 73,320 | |
| | Nestle India Ltd. | | | Food Products | | | | 1,924 | | | | 452,785 | |
| | NHPC Ltd. | | | Independent Power Producers & Energy Traders | | | | 119,473 | | | | 52,429 | |
| b | | Nippon Life India Asset Management Ltd., 144A | | | Capital Markets | | | | 8,473 | | | | 27,981 | |
| | NMDC Ltd. | | | Metals & Mining | | | | 61,383 | | | | 96,393 | |
| | NTPC Ltd. | | | Independent Power Producers & Energy Traders | | | | 236,948 | | | | 465,005 | |
| | Oberoi Realty Ltd. | | | Real Estate Management & Development | | | | 6,179 | | | | 69,711 | |
| | Oil & Natural Gas Corp. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 196,581 | | | | 306,406 | |
| | Oil India Ltd. | | | Oil, Gas & Consumable Fuels | | | | 17,649 | | | | 37,847 | |
| a | | One 97 Communications Ltd. | | | IT Services | | | | 4,921 | | | | 38,590 | |
| | Oracle Financial Services Software Ltd. | | | Software | | | | 1,221 | | | | 44,764 | |
| | Page Industries Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 306 | | | | 190,579 | |
| a | | PB Fintech Ltd. | | | Insurance | | | | 8,510 | | | | 49,433 | |
| | Persistent Systems Ltd. | | | IT Services | | | | 2,553 | | | | 101,717 | |
| | Petronet LNG Ltd. | | | Oil, Gas & Consumable Fuels | | | | 40,552 | | | | 99,646 | |
| | PI Industries Ltd. | | | Chemicals | | | | 3,848 | | | | 141,825 | |
| | Pidilite Industries Ltd. | | | Chemicals | | | | 8,103 | | | | 267,968 | |
| | Piramal Enterprises Ltd. | | | Pharmaceuticals | | | | 6,707 | | | | 71,253 | |
| a | | Piramal Pharma Ltd. | | | Pharmaceuticals | | | | 27,528 | | | | 74,149 | |
| | Polycab India Ltd. | | | Electrical Equipment | | | | 1,369 | | | | 43,093 | |
| | Power Finance Corp. Ltd. | | | Diversified Financial Services | | | | 62,900 | | | | 80,876 | |
| | Power Grid Corp. of India Ltd. | | | Electric Utilities | | | | 167,980 | | | | 438,166 | |
| | Punjab National Bank | | | Banks | | | | 58,386 | | | | 26,232 | |
| | Rajesh Exports Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 7,326 | | | | 52,123 | |
| a,b,c | | RBL Bank Ltd., 144A, Reg S | | | Banks | | | | 24,309 | | | | 33,990 | |
| | REC Ltd. | | | Diversified Financial Services | | | | 67,093 | | | | 77,525 | |
| | Relaxo Footwears Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 3,922 | | | | 48,541 | |
| | Reliance Industries Ltd. | | | Oil, Gas & Consumable Fuels | | | | 179,413 | | | | 5,243,918 | |
| | Samvardhana Motherson International Ltd. | | | Auto Components | | | | 76,960 | | | | 103,116 | |
| | SBI Cards & Payment Services Ltd. | | | Consumer Finance | | | | 15,392 | | | | 172,838 | |
| b | | SBI Life Insurance Co. Ltd., 144A | | | Insurance | | | | 22,422 | | | | 344,649 | |
| | Schaeffler India Ltd. | | | Machinery | | | | 2,146 | | | | 84,740 | |
| | Shree Cement Ltd. | | | Construction Materials | | | | 740 | | | | 191,325 | |
| | Shriram Transport Finance Co. Ltd. | | | Consumer Finance | | | | 10,545 | | | | 155,230 | |
| | Siemens Ltd. | | | Industrial Conglomerates | | | | 4,736 | | | | 161,307 | |
| b | | Sona Blw Precision Forgings Ltd., 144A | | | Auto Components | | | | 13,986 | | | | 79,728 | |
| | SRF Ltd. | | | Chemicals | | | | 7,511 | | | | 231,139 | |
| a | | Star Health & Allied Insurance Co. Ltd. | | | Insurance | | | | 4,403 | | | | 38,225 | |
| | State Bank of India | | | Banks | | | | 95,386 | | | | 622,139 | |
| | Steel Authority of India Ltd. | | | Metals & Mining | | | | 78,033 | | | | 73,619 | |
| | Sun Pharmaceutical Industries Ltd. | | | Pharmaceuticals | | | | 58,016 | | | | 676,534 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 225 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE India ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | India (continued) | | | | | | | | | |
| | Sun TV Network Ltd. | | | Media | | | | 5,143 | | | $ | 32,169 | |
| | Tata Communications Ltd. | | | Diversified Telecommunication Services | | | | 6,179 | | | | 87,409 | |
| | Tata Consultancy Services Ltd. | | | IT Services | | | | 54,501 | | | | 2,012,888 | |
| | Tata Consumer Products Ltd. | | | Food Products | | | | 32,227 | | | | 318,046 | |
| | Tata Elxsi Ltd. | | | Software | | | | 1,813 | | | | 190,690 | |
| a | | Tata Motors Ltd. | | | Automobiles | | | | 20,387 | | | | 49,031 | |
| a | | Tata Motors Ltd., A | | | Automobiles | | | | 98,050 | | | | 487,651 | |
| | Tata Power Co. Ltd. | | | Electric Utilities | | | | 88,430 | | | | 235,339 | |
| | Tata Steel Ltd. | | | Metals & Mining | | | | 435,268 | | | | 531,302 | |
| a | | Tata Teleservices Maharashtra Ltd. | | | Diversified Telecommunication Services | | | | 27,380 | | | | 34,801 | |
| | Tech Mahindra Ltd. | | | IT Services | | | | 32,301 | | | | 400,471 | |
| | Titan Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 22,200 | | | | 711,412 | |
| | Torrent Pharmaceuticals Ltd. | | | Pharmaceuticals | | | | 5,106 | | | | 97,904 | |
| | Torrent Power Ltd. | | | Electric Utilities | | | | 11,729 | | | | 70,200 | |
| | Trent Ltd. | | | Multiline Retail | | | | 9,731 | | | | 169,856 | |
| | Tube Investments of India Ltd. | | | Auto Components | | | | 5,217 | | | | 175,993 | |
| | TVS Motor Co. Ltd. | | | Automobiles | | | | 10,730 | | | | 136,151 | |
| | UltraTech Cement Ltd. | | | Construction Materials | | | | 6,105 | | | | 469,414 | |
| | Union Bank of India Ltd. | | | Banks | | | | 60,458 | | | | 33,183 | |
| | United Breweries Ltd. | | | Beverages | | | | 3,737 | | | | 78,409 | |
| a | | United Spirits Ltd. | | | Beverages | | | | 15,392 | | | | 159,367 | |
| | UPL Ltd. | | | Chemicals | | | | 28,194 | | | | 232,913 | |
| | Varun Beverages Ltd. | | | Beverages | | | | 10,748 | | | | 137,958 | |
| | Vedanta Ltd. | | | Metals & Mining | | | | 66,082 | | | | 219,363 | |
| a | | Vodafone Idea Ltd. | | | Wireless Telecommunication Services | | | | 432,604 | | | | 46,796 | |
| | Voltas Ltd. | | | Construction & Engineering | | | | 12,210 | | | | 136,049 | |
| | Whirlpool of India Ltd. | | | Household Durables | | | | 1,665 | | | | 33,453 | |
| | Wipro Ltd. | | | IT Services | | | | 67,303 | | | | 326,168 | |
| a | | Yes Bank Ltd. | | | Banks | | | | 661,100 | | | | 127,180 | |
| | Zee Entertainment Enterprises Ltd. | | | Media | | | | 44,326 | | | | 140,659 | |
| a | | Zomato Ltd. | | | Internet & Catalog Retail | | | | 243,497 | | | | 186,623 | |
| | Zydus Lifesciences Ltd. | | | Pharmaceuticals | | | | 13,690 | | | | 65,109 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $49,608,914) 101.3% | | | | | | | | | | | 53,998,101 | |
| | Other Assets, less Liabilities (1.3)% | | | | | | | | | | | (673,174 | ) |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 53,324,927 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $2,455,739, representing 4.6% 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 September 30, 2022, the value of was $606,808, representing 1.1% of net assets.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 226 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Italy ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 24.65 | | | $ | 26.50 | | | $ | 17.61 | | | $ | 23.13 | | | $ | 26.27 | | | $ | 25.51 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.63 | | | | 0.85 | | | | 0.67 | | | | 0.90 | | | | 0.46 | | | | 0.11 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (6.84 | ) | | | (1.59 | ) | | | 8.80 | | | | (5.52 | ) | | | (2.99 | ) | | | 0.70 | |
| | | | |
| | | | | | |
Total from investment operations | | | (6.21 | ) | | | (0.74 | ) | | | 9.47 | | | | (4.62 | ) | | | (2.53 | ) | | | 0.81 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.57 | ) | | | (1.11 | ) | | | (0.58 | ) | | | (0.90 | ) | | | (0.61 | ) | | | (0.05 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 17.87 | | | $ | 24.65 | | | $ | 26.50 | | | $ | 17.61 | | | $ | 23.13 | | | $ | 26.27 | |
| | | | |
| | | | | | |
Total returnd | | | (25.44)% | | | | (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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 5.99% | | | | 3.15% | | | | 3.04% | | | | 3.85% | | | | 2.05% | | | | 1.01% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $2,681 | | | | $3,698 | | | | $3,974 | | | | $2,641 | | | | $10,410 | | | | $2,627 | |
| | | | | | |
Portfolio turnover ratef | | | 5.49% | g | | | 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: | | | 5.49% | | | | 12.75% | | | | 17.45% | | | | 9.89% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 227 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Italy ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.9% | | | | | | | | | |
| | | Italy 88.8% | | | | | | | | | |
| | A2A SpA | | | Multi-Utilities | | | | 16,890 | | | $ | 16,543 | |
| | Amplifon SpA | | | Health Care Providers & Services | | | | 1,428 | | | | 37,632 | |
| | Assicurazioni Generali SpA | | | Insurance | | | | 11,868 | | | | 163,003 | |
| | Atlantia SpA | | | Transportation Infrastructure | | | | 4,503 | | | | 99,741 | |
| | Banca Mediolanum SpA | | | Diversified Financial Services | | | | 2,664 | | | | 16,885 | |
| | Buzzi Unicem SpA | | | Construction Materials | | | | 954 | | | | 13,631 | |
| | Davide Campari-Milano NV | | | Beverages | | | | 5,526 | | | | 49,328 | |
| | De’ Longhi SpA | | | Household Durables | | | | 765 | | | | 11,294 | |
| | DiaSorin SpA | | | Health Care Equipment & Supplies | | | | 248 | | | | 27,891 | |
| | Enel SpA | | | Electric Utilities | | | | 63,438 | | | | 262,509 | |
| | Eni SpA | | | Oil, Gas & Consumable Fuels | | | | 20,319 | | | | 217,169 | |
| | Ferrari NV | | | Automobiles | | | | 1,022 | | | | 191,930 | |
| | FinecoBank Banca Fineco SpA | | | Banks | | | | 6,780 | | | | 84,586 | |
| | Hera SpA | | | Multi-Utilities | | | | 8,706 | | | | 18,644 | |
| a,b | | Infrastrutture Wireless Italiane SpA, 144A, Reg S | | | Diversified Telecommunication Services | | | | 3,912 | | | | 34,377 | |
| | Interpump Group SpA | | | Machinery | | | | 885 | | | | 28,975 | |
| | Intesa Sanpaolo SpA | | | Banks | | | | 137,676 | | | | 229,664 | |
| | Italgas Reti SpA | | | Gas Utilities | | | | 5,460 | | | | 25,546 | |
| | Leonardo SpA | | | Aerospace & Defense | | | | 4,431 | | | | 31,567 | |
| | Mediobanca Banca di Credito Finanziario SpA | | | Banks | | | | 7,203 | | | | 56,875 | |
| | Moncler SpA | | | Textiles, Apparel & Luxury Goods | | | | 2,043 | | | | 84,840 | |
| a,c | | Nexi SpA, 144A | | | IT Services | | | | 8,415 | | | | 68,769 | |
| a | | Pirelli & C SpA, 144A | | | Auto Components | | | | 5,421 | | | | 17,844 | |
| a,b | | Poste Italiane SpA, 144A, Reg S | | | Insurance | | | | 5,067 | | | | 38,669 | |
| | Prysmian SpA | | | Electrical Equipment | | | | 2,763 | | | | 80,175 | |
| | Recordati Industria Chimica e Farmaceutica SpA | | | Pharmaceuticals | | | | 1,077 | | | | 39,766 | |
| | Reply SpA | | | IT Services | | | | 251 | | | | 26,458 | |
| | Snam SpA | | | Gas Utilities | | | | 20,376 | | | | 82,760 | |
| c | | Telecom Italia SpA | | | Diversified Telecommunication Services | | | | 118,872 | | | | 22,161 | |
| c | | Telecom Italia SpA/Milano | | | Diversified Telecommunication Services | | | | 67,173 | | | | 12,174 | |
| | Tenaris SA | | | Energy Equipment & Services | | | | 5,190 | | | | 67,444 | |
| | Terna - Rete Elettrica Nazionale | | | Electric Utilities | | | | 13,365 | | | | 81,831 | |
| | UniCredit SpA | | | Banks | | | | 12,660 | | | | 129,704 | |
| | UnipolSai Assicurazioni SpA | | | Insurance | | | | 4,719 | | | | 9,847 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,380,232 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 3.5% | | | | | | | | | |
| | CNH Industrial NV | | | Machinery | | | | 8,307 | | | | 94,644 | |
| | | | | | | | | | | | | | |
| | | United States 7.6% | | | | | | | | | |
| | Stellantis NV | | | Automobiles | | | | 16,971 | | | | 204,030 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $ 3,322,879) 99.9% | | | | | | | | | | | 2,678,906 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 2,131 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 2,681,037 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $159,659, representing 6.0% 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 September 30, 2022, the value of was $73,046, representing 2.7% of net assets.
cNon-income producing.
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| 228 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 27.42 | | | $ | 30.25 | | | $ | 21.93 | | | $ | 24.18 | | | $ | 26.69 | | | $ | 25.91 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | 0.29 | | | | 0.63 | | | | 0.53 | | | | 0.56 | | | | 0.59 | | | | 0.44 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (5.84 | ) | | | (2.76 | ) | | | 8.24 | | | | (2.22 | ) | | | (2.76 | ) | | | 0.37 | |
| | | | |
| | | | | | |
Total from investment operations | | | (5.55 | ) | | | (2.13 | ) | | | 8.77 | | | | (1.66 | ) | | | (2.17 | ) | | | 0.81 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.26 | ) | | | (0.70 | ) | | | (0.45 | ) | | | (0.59 | ) | | | (0.34 | ) | | | (0.03 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 21.61 | | | $ | 27.42 | | | $ | 30.25 | | | $ | 21.93 | | | $ | 24.18 | | | $ | 26.69 | |
| | | | |
| | | | | | |
Total returnc | | | (20.31)% | | | | 7.21% | | | | 40.23% | | | | (7.15)% | | | | (8.10)% | | | | 3.11% | |
| | | | | | |
| Ratios to average net assetsd | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.09% | | | | 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% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 2.40% | | | | 2.14% | | | | 1.98% | | | | 2.30% | | | | 2.39% | | | | 4.07% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $777,972 | | | | $789,637 | | | | $598,934 | | | | $315,851 | | | | $290,205 | | | | $96,082 | |
| | | | | | |
Portfolio turnover ratee | | | 1.68% | f | | | 2.95% | f | | | 5.76% | f | | | 4.59% | f | | | 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.
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: | | | 1.68% | | | | 2.80% | | | | 5.76% | | | | 4.51% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 229 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Japan ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.9% | | | | | | | | | |
| | | Japan 98.9% | | | | | | | | | |
| | ABC-Mart Inc. | | | Specialty Retail | | | | 6,000 | | | $ | 258,247 | |
| | Acom Co. Ltd. | | | Consumer Finance | | | | 90,000 | | | | 193,375 | |
| | Activia Properties Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 180 | | | | 526,029 | |
| | Advance Residence Investment | | | Equity Real Estate Investment Trusts (REITs | ) | | | 300 | | | | 734,740 | |
| | Advantest Corp. | | | Semiconductors & Semiconductor Equipment | | | | 48,000 | | | | 2,221,838 | |
| | AEON Co. Ltd. | | | Food & Staples Retailing | | | | 168,000 | | | | 3,137,849 | |
| | AEON Financial Service Co. Ltd. | | | Consumer Finance | | | | 30,000 | | | | 296,798 | |
| | AEON Mall Co. Ltd. | | | Real Estate Management & Development | | | | 30,000 | | | | 333,690 | |
| | AEON REIT Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 420 | | | | 452,658 | |
| | AGC Inc. | | | Building Products | | | | 42,000 | | | | 1,302,843 | |
| | Aica Kogyo Co. Ltd. | | | Building Products | | | | 12,000 | | | | 259,491 | |
| | AIN Holdings Inc. | | | Food & Staples Retailing | | | | 6,000 | | | | 259,076 | |
| | Air Water Inc. | | | Chemicals | | | | 42,000 | | | | 495,603 | |
| | Aisin Seiki Co. Ltd. | | | Auto Components | | | | 42,000 | | | | 1,076,514 | |
| | Ajinomoto Co. Inc. | | | Food Products | | | | 114,000 | | | | 3,120,439 | |
| | Alfresa Holdings Corp. | | | Health Care Providers & Services | | | | 36,000 | | | | 420,325 | |
| | Alps Alpine Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 48,000 | | | | 346,872 | |
| | Amada Co. Ltd. | | | Machinery | | | | 72,000 | | | | 487,975 | |
| | Amano Corp. | | | Electronic Equipment, Instruments & Components | | | | 18,000 | | | | 302,187 | |
| a | | ANA Holdings Inc. | | | Airlines | | | | 36,000 | | | | 676,003 | |
| | Anritsu Corp. | | | Electronic Equipment, Instruments & Components | | | | 30,000 | | | | 327,265 | |
| | Aozora Bank Ltd. | | | Banks | | | | 30,000 | | | | 535,148 | |
| | Ariake Japan Co. Ltd. | | | Food Products | | | | 6,000 | | | | 208,090 | |
| | As One Corp. | | | Health Care Providers & Services | | | | 6,000 | | | | 248,299 | |
| | Asahi Group Holdings Ltd. | | | Beverages | | | | 114,000 | | | | 3,531,562 | |
| | Asahi Intecc Co. Ltd. | | | Health Care Equipment & Supplies | | | | 48,000 | | | | 768,358 | |
| | Asahi Kasei Corp. | | | Chemicals | | | | 294,000 | | | | 1,940,772 | |
| | Asics Corp. | | | Textiles, Apparel & Luxury Goods | | | | 42,000 | | | | 667,381 | |
| | ASKUL Corp. | | | Internet & Direct Marketing Retail | | | | 12,000 | | | | 123,859 | |
| | Astellas Pharma Inc. | | | Pharmaceuticals | | | | 438,000 | | | | 5,800,864 | |
| | Azbil Corp. | | | Electronic Equipment, Instruments & Components | | | | 30,000 | | | | 781,374 | |
| | Bandai Namco Holdings Inc. | | | Leisure Products | | | | 46,240 | | | | 3,013,451 | |
| | BayCurrent Consulting Inc. | | | Professional Services | | | | 2,841 | | | | 738,980 | |
| | Benefit One Inc. | | | Professional Services | | | | 12,000 | | | | 168,545 | |
| | Benesse Holdings Inc. | | | Diversified Consumer Services | | | | 18,000 | | | | 267,989 | |
| | BIC CAMERA Inc. | | | Specialty Retail | | | | 36,000 | | | | 307,658 | |
| | Bridgestone Corp. | | | Auto Components | | | | 138,000 | | | | 4,451,428 | |
| | Brother Industries Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 54,000 | | | | 929,317 | |
| | Calbee Inc. | | | Food Products | | | | 18,000 | | | | 385,506 | |
| | CANON Inc. | | | Technology Hardware, Storage & Peripherals | | | | 234,000 | | | | 5,127,970 | |
| | Canon Marketing Japan Inc. | | | Electronic Equipment, Instruments & Components | | | | 12,000 | | | | 265,294 | |
| | Capcom Co. Ltd. | | | Entertainment | | | | 42,000 | | | | 1,056,202 | |
| | Casio Computer Co. Ltd. | | | Household Durables | | | | 48,000 | | | | 420,823 | |
| | Central Japan Railway Co. | | | Road & Rail | | | | 43,260 | | | | 5,061,371 | |
| | Chubu Electric Power Co. Inc. | | | Electric Utilities | | | | 168,000 | | | | 1,513,503 | |
| | Chugai Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 154,900 | | | | 3,880,392 | |
| | Chuo Mitsui Trust Holdings Inc. | | | Banks | | | | 84,000 | | | | 2,378,776 | |
| | Coca-Cola Bottlers Japan Holdings Inc. | | | Beverages | | | | 30,000 | | | | 290,995 | |
| | COMSYS Holdings Corp. | | | Construction & Engineering | | | | 24,000 | | | | 408,221 | |
| | Concordia Financial Group Ltd. | | | Banks | | | | 264,000 | | | | 815,282 | |
| | Cosmo Energy Holdings Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 18,000 | | | | 461,363 | |
| | Cosmos Pharmaceutical Corp. | | | Food & Staples Retailing | | | | 4,200 | | | | 416,387 | |
| | Credit Saison Co. Ltd. | | | Consumer Finance | | | | 36,000 | | | | 420,823 | |
| | CyberAgent Inc. | | | Media | | | | 102,000 | | | | 858,309 | |
| | Dai Nippon Printing Co. Ltd. | | | Commercial Services & Supplies | | | | 60,000 | | | | 1,202,114 | |
| | Daicel Corp. | | | Chemicals | | | | 60,000 | | | | 352,758 | |
| | Daido Steel Co. Ltd. | | | Metals & Mining | | | | 8,200 | | | | 199,413 | |
| | | | | | | | | | |
| | | | | | |
| 230 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Daifuku Co. Ltd. | | | Machinery | | | | 24,000 | | | $ | 1,129,158 | |
| | Dai-ichi Life Holdings Inc. | | | Insurance | | | | 234,000 | | | | 3,705,330 | |
| | Daiichi Sankyo Co. Ltd. | | | Pharmaceuticals | | | | 450,000 | | | | 12,566,237 | |
| | Daiichikosho Co. Ltd. | | | Entertainment | | | | 12,000 | | | | 337,421 | |
| | Daikin Industries Ltd. | | | Building Products | | | | 63,480 | | | | 9,777,793 | |
| | Daio Paper Corp. | | | Paper & Forest Products | | | | 18,000 | | | | 144,254 | |
| | Daito Trust Construction Co. Ltd. | | | Real Estate Management & Development | | | | 15,430 | | | | 1,446,579 | |
| | Daiwa House Industry Co. Ltd. | | | Real Estate Management & Development | | | | 150,000 | | | | 3,050,364 | |
| | Daiwa House Residential Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 480 | | | | 998,169 | |
| | Daiwa Office Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 60 | | | | 278,559 | |
| | Daiwa Securities Group Inc. | | | Capital Markets | | | | 348,000 | | | | 1,361,755 | |
| | Daiwa Securities Living Investments Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 480 | | | | 380,697 | |
| | DeNA Co. Ltd. | | | Entertainment | | | | 18,000 | | | | 227,448 | |
| | Denka Co. Ltd. | | | Chemicals | | | | 18,000 | | | | 394,832 | |
| | Denso Corp. | | | Auto Components | | | | 108,000 | | | | 4,914,076 | |
| | Dentsu Group Inc. | | | Media | | | | 48,000 | | | | 1,362,949 | |
| | Descente Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 12,000 | | | | 275,657 | |
| | DIC Corp. | | | Chemicals | | | | 18,000 | | | | 299,326 | |
| | Disco Corp. | | | Semiconductors & Semiconductor Equipment | | | | 6,720 | | | | 1,485,647 | |
| | DMG Mori Co. Ltd. | | | Machinery | | | | 24,000 | | | | 273,585 | |
| | Dowa Holdings Co. Ltd. | | | Metals & Mining | | | | 12,000 | | | | 430,274 | |
| | East Japan Railway Co. | | | Road & Rail | | | | 87,100 | | | | 4,465,571 | |
| | EBARA Corp. | | | Machinery | | | | 24,000 | | | | 785,105 | |
| | Eisai Co. Ltd. | | | Pharmaceuticals | | | | 62,740 | | | | 3,358,819 | |
| | Electric Power Development Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 42,000 | | | | 594,259 | |
| | ENEOS Holdings Inc. | | | Oil, Gas & Consumable Fuels | | | | 690,000 | | | | 2,217,134 | |
| | Ezaki Glico Co. Ltd. | | | Food Products | | | | 12,000 | | | | 295,554 | |
| | Fancl Corp. | | | Personal Products | | | | 18,000 | | | | 357,650 | |
| | FANUC Corp. | | | Machinery | | | | 45,800 | | | | 6,410,639 | |
| | Fast Retailing Co. Ltd. | | | Specialty Retail | | | | 12,200 | | | | 6,465,591 | |
| | FP Corp. | | | Containers & Packaging | | | | 12,000 | | | | 294,725 | |
| | Frontier Real Estate Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 120 | | | | 441,881 | |
| | Fuji Electric Co. Ltd. | | | Electrical Equipment | | | | 30,000 | | | | 1,096,411 | |
| | Fuji Kyuko Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 6,000 | | | | 177,415 | |
| | Fuji Media Holdings Inc. | | | Media | | | | 12,000 | | | | 88,044 | |
| | Fuji Oil Holdings Inc. | | | Food Products | | | | 12,000 | | | | 199,468 | |
| | FUJIFILM Holdings Corp. | | | Technology Hardware, Storage & Peripherals | | | | 84,000 | | | | 3,835,407 | |
| | Fujitsu General Ltd. | | | Household Durables | | | | 12,000 | | | | 249,128 | |
| | Fujitsu Ltd. | | | IT Services | | | | 44,050 | | | | 4,803,822 | |
| | Fukuoka Financial Group Inc. | | | Banks | | | | 36,000 | | | | 638,198 | |
| | Furukawa Electric Co. Ltd. | | | Electrical Equipment | | | | 18,000 | | | | 285,150 | |
| | Fuyo General Lease Co. Ltd. | | | Diversified Financial Services | | | | 6,000 | | | | 327,058 | |
| | GLP J-Reit | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,020 | | | | 1,128,205 | |
| | GMO internet Inc. | | | IT Services | | | | 12,000 | | | | 211,240 | |
| | GMO Payment Gateway Inc. | | | IT Services | | | | 9,700 | | | | 666,793 | |
| | Goldwin Inc. | | | Textiles, Apparel & Luxury Goods | | | | 8,400 | | | | 444,534 | |
| | GS Yuasa Corp. | | | Electrical Equipment | | | | 18,000 | | | | 280,797 | |
| | GungHo Online Entertainment Inc. | | | Entertainment | | | | 6,000 | | | | 92,231 | |
| | Hachijuni Bank Ltd. | | | Banks | | | | 108,000 | | | | 357,401 | |
| | Hakuhodo DY Holdings Inc. | | | Media | | | | 54,000 | | | | 379,785 | |
| | Hamamatsu Photonics K.K. | | | Electronic Equipment, Instruments & Components | | | | 30,000 | | | | 1,285,018 | |
| | Hankyu Hanshin Holdings Inc. | | | Road & Rail | | | | 54,000 | | | | 1,622,854 | |
| | Haseko Corp. | | | Household Durables | | | | 60,000 | | | | 651,214 | |
| | Heiwa Corp. | | | Leisure Products | | | | 12,000 | | | | 185,540 | |
| | Hikari Tsushin Inc. | | | Specialty Retail | | | | 5,400 | | | | 635,711 | |
| | Hino Motors Ltd. | | | Machinery | | | | 66,000 | | | | 271,761 | |
| | Hirogin Holdings Inc. | | | Banks | | | | 72,000 | | | | 302,435 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 231 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Hirose Electric Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 7,800 | | | $ | 1,022,792 | |
| | Hisamitsu Pharmaceutical Co. Inc. | | | Pharmaceuticals | | | | 18,000 | | | | 422,191 | |
| | Hitachi Construction Machinery Co. Ltd. | | | Machinery | | | | 24,000 | | | | 443,704 | |
| | Hitachi Ltd. | | | Industrial Conglomerates | | | | 216,000 | | | | 9,123,797 | |
| a | | Hitachi Metals Ltd. | | | Metals & Mining | | | | 48,000 | | | | 721,268 | |
| | Hitachi Transport System Ltd. | | | Road & Rail | | | | 6,000 | | | | 358,976 | |
| | Honda Motor Co. Ltd. | | | Automobiles | | | | 402,000 | | | | 8,712,384 | |
| | HORIBA Ltd. | |
| Electronic Equipment, Instruments &
Components |
| | | 9,100 | | | | 352,696 | |
| | Hoshizaki Corp. | | | Machinery | | | | 24,000 | | | | 669,039 | |
| | House Foods Group Inc. | | | Food Products | | | | 18,000 | | | | 359,018 | |
| | Hoya Corp. | | | Health Care Equipment & Supplies | | | | 83,700 | | | | 8,026,225 | |
| | Hulic Co. Ltd. | | | Real Estate Management & Development | | | | 96,000 | | | | 705,019 | |
| | Ibiden Co. Ltd. | |
| Electronic Equipment, Instruments &
Components |
| | | 24,000 | | | | 656,603 | |
| | Idemitsu Kosan Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 54,000 | | | | 1,169,574 | |
| | IHI Corp. | | | Machinery | | | | 30,000 | | | | 642,509 | |
| | Iida Group Holdings Co. Ltd. | | | Household Durables | | | | 30,000 | | | | 406,853 | |
| | Industrial & Infrastructure Fund Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 480 | | | | 544,185 | |
| | Information Services International-Dentsu Ltd. | | | IT Services | | | | 6,000 | | | | 183,633 | |
| | INFRONEER Holdings Inc. | | | Construction & Engineering | | | | 54,000 | | | | 367,101 | |
| | INPEX Corp. | | | Oil, Gas & Consumable Fuels | | | | 234,000 | | | | 2,197,009 | |
| | Internet Initiative Japan Inc. | | | Diversified Telecommunication Services | | | | 24,000 | | | | 368,261 | |
| | Isetan Mitsukoshi Holdings Ltd. | | | Multiline Retail | | | | 84,000 | | | | 712,066 | |
| | Isuzu Motors Ltd. | | | Automobiles | | | | 126,000 | | | | 1,390,183 | |
| | Ito En Ltd. | | | Beverages | | | | 12,000 | | | | 485,820 | |
| | ITOCHU Corp. | | | Trading Companies & Distributors | | | | 318,000 | | | | 7,691,582 | |
| | ITOCHU Techno-Solutions Corp. | | | IT Services | | | | 24,000 | | | | 562,092 | |
| | Itoham Yonekyu Holdings Inc. | | | Food Products | | | | 30,000 | | | | 138,036 | |
| | Iwatani Corp. | | | Oil, Gas & Consumable Fuels | | | | 12,000 | | | | 451,829 | |
| | Izumi Co. Ltd. | | | Multiline Retail | | | | 12,000 | | | | 257,418 | |
| | J Front Retailing Co. Ltd. | | | Multiline Retail | | | | 60,000 | | | | 487,478 | |
| a | | Japan Airlines Co. Ltd. | | | Airlines | | | | 36,000 | | | | 642,178 | |
| a | | Japan Airport Terminal Co. Ltd. | | | Transportation Infrastructure | | | | 12,000 | | | | 501,572 | |
| | Japan Aviatn Elect | | | Electronic Equipment, Instruments & Components | | | | 12,000 | | | | 175,757 | |
| | Japan Exchange Group Inc. | | | Capital Markets | | | | 126,000 | | | | 1,699,644 | |
| | Japan Hotel REIT Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,080 | | | | 537,967 | |
| | Japan Logistics Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 240 | | | | 514,836 | |
| | Japan Post Bank Co. Ltd. | | | Banks | | | | 96,000 | | | | 669,204 | |
| | Japan Post Holdings Co. Ltd. | | | Insurance | | | | 516,000 | | | | 3,414,095 | |
| | Japan Post Insurance Co. Ltd. | | | Insurance | | | | 48,000 | | | | 671,857 | |
| | Japan Prime Realty Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 240 | | | | 651,629 | |
| | Japan Real Estate Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 300 | | | | 1,237,348 | |
| | Japan Retail Fund Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,620 | | | | 1,217,700 | |
| | Japan Tobacco Inc. | | | Tobacco | | | | 282,000 | | | | 4,625,155 | |
| | JCR Pharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 12,000 | | | | 179,488 | |
| | Jeol Ltd. | | | Health Care Equipment & Supplies | | | | 12,000 | | | | 394,211 | |
| | JFE Holdings Inc. | | | Metals & Mining | | | | 120,000 | | | | 1,111,748 | |
| | JGC Holdings Corp. | | | Construction & Engineering | | | | 54,000 | | | | 674,883 | |
| | JMDC Inc. | | | Health Care Technology | | | | 6,000 | | | | 197,520 | |
| | JSR Corp. | | | Chemicals | | | | 42,000 | | | | 797,955 | |
| | JTEKT Corp. | | | Auto Components | | | | 54,000 | | | | 341,732 | |
| | Justsystems Corp. | | | Software | | | | 6,000 | | | | 138,658 | |
| | Kadokawa Corp. | | | Media | | | | 24,000 | | | | 441,383 | |
| | Kagome Co. Ltd. | | | Food Products | | | | 18,000 | | | | 374,935 | |
| | Kajima Corp. | | | Construction & Engineering | | | | 102,000 | | | | 967,536 | |
| | Kakaku.com Inc. | | | Interactive Media & Services | | | | 30,000 | | | | 510,277 | |
| | Kaken Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 6,000 | | | | 158,140 | |
| | | | | | | | | | |
| | | | | | |
| 232 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Kamigumi Co. Ltd. | | | Transportation Infrastructure | | | | 24,000 | | | $ | 443,373 | |
| | Kandenko Co. Ltd. | | | Construction & Engineering | | | | 24,000 | | | | 137,953 | |
| | Kaneka Corp. | | | Chemicals | | | | 12,000 | | | | 299,285 | |
| | Kansai Paint Co. Ltd. | | | Chemicals | | | | 42,000 | | | | 593,969 | |
| | KAO Corp. | | | Personal Products | | | | 108,000 | | | | 4,400,732 | |
| | Katitas Co. Ltd. | | | Real Estate Management & Development | | | | 12,000 | | | | 266,538 | |
| | Kawasaki Heavy Industries Ltd. | | | Machinery | | | | 36,000 | | | | 543,936 | |
| | Kawasaki Kisen Kaisha Ltd. | | | Marine | | | | 54,000 | | | | 758,078 | |
| | KDDI Corp. | | | Wireless Telecommunication Services | | | | 390,074 | | | | 11,434,481 | |
| | Keihan Holdings Co. Ltd. | | | Industrial Conglomerates | | | | 24,000 | | | | 622,612 | |
| | Keikyu Corp. | | | Road & Rail | | | | 60,000 | | | | 607,689 | |
| | Keio Corp. | | | Road & Rail | | | | 27,600 | | | | 1,004,884 | |
| | Keisei Electric Railway Co. Ltd. | | | Road & Rail | | | | 30,000 | | | | 816,609 | |
| | Kenedix Office Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 85 | | | | 399,910 | |
| | Kewpie Corp. | | | Food Products | | | | 24,000 | | | | 394,625 | |
| | Keyence Corp. | | | Electronic Equipment, Instruments & Components | | | | 46,422 | | | | 15,362,284 | |
| | Kikkoman Corp. | | | Food Products | | | | 42,000 | | | | 2,379,357 | |
| | Kinden Corp. | | | Construction & Engineering | | | | 30,000 | | | | 316,695 | |
| | Kintetsu Group Holdings Co. Ltd. | | | Road & Rail | | | | 42,000 | | | | 1,398,598 | |
| | Kirin Holdings Co. Ltd. | | | Beverages | | | | 180,000 | | | | 2,769,422 | |
| | Kobayashi Pharmaceutical Co. Ltd. | | | Personal Products | | | | 14,400 | | | | 843,635 | |
| | Kobe Bussan Co. Ltd. | | | Food & Staples Retailing | | | | 36,000 | | | | 869,253 | |
| | Kobe Steel Ltd. | | | Metals & Mining | | | | 78,000 | | | | 312,550 | |
| | Koei Tecmo Holdings Co. Ltd. | | | Entertainment | | | | 36,000 | | | | 590,694 | |
| | Koito Manufacturing Co. Ltd. | | | Auto Components | | | | 55,200 | | | | 751,661 | |
| | Kokuyo Co. Ltd. | | | Commercial Services & Supplies | | | | 18,000 | | | | 228,319 | |
| | Komatsu Ltd. | | | Machinery | | | | 216,000 | | | | 3,896,342 | |
| | Konami Holdings Corp. | | | Entertainment | | | | 24,000 | | | | 1,107,603 | |
| | Konica Minolta Inc. | | | Technology Hardware, Storage & Peripherals | | | | 108,000 | | | | 332,778 | |
| | Kose Corp. | | | Personal Products | | | | 6,860 | | | | 706,166 | |
| | Kotobuki Spirits Co. Ltd. | | | Food Products | | | | 6,000 | | | | 346,126 | |
| | K’s Holdings Corp. | | | Specialty Retail | | | | 36,000 | | | | 297,212 | |
| | Kubota Corp. | | | Machinery | | | | 258,000 | | | | 3,572,020 | |
| | Kuraray Co. Ltd. | | | Chemicals | | | | 78,000 | | | | 544,806 | |
| | Kurita Water Industries Ltd. | | | Machinery | | | | 24,000 | | | | 855,574 | |
| | Kusuri no Aoki Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 3,900 | | | | 183,488 | |
| | Kyocera Corp. | | | Electronic Equipment, Instruments & Components | | | | 72,700 | | | | 3,666,517 | |
| | Kyowa Exeo Corp. | | | Construction & Engineering | | | | 24,000 | | | | 346,706 | |
| | Kyowa Kirin Co. Ltd. | | | Pharmaceuticals | | | | 60,000 | | | | 1,374,141 | |
| | Kyudenko Corp. | | | Construction & Engineering | | | | 12,000 | | | | 227,987 | |
| | Kyushu Electric Power Co. Inc. | | | Electric Utilities | | | | 108,000 | | | | 576,020 | |
| | Kyushu Financial Group Inc. | | | Banks | | | | 90,000 | | | | 237,521 | |
| | Kyushu Railway Co. | | | Road & Rail | | | | 36,000 | | | | 777,229 | |
| | LaSalle Logiport REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 420 | | | | 469,778 | |
| | Lasertec Corp. | | | Semiconductors & Semiconductor Equipment | | | | 18,000 | | | | 1,827,421 | |
| | Lawson Inc. | | | Food & Staples Retailing | | | | 12,000 | | | | 392,967 | |
| | LINTEC Corp. | | | Chemicals | | | | 12,000 | | | | 184,131 | |
| | Lion Corp. | | | Household Products | | | | 60,000 | | | | 678,158 | |
| | LIXIL Group Corp. | | | Building Products | | | | 60,000 | | | | 878,372 | |
| | M3 Inc. | | | Health Care Technology | | | | 100,580 | | | | 2,814,948 | |
| | Mabuchi Motor Co. Ltd. | | | Electrical Equipment | | | | 12,000 | | | | 325,814 | |
| | Makita Corp. | | | Machinery | | | | 60,000 | | | | 1,160,247 | |
| | Mani Inc. | | | Health Care Equipment & Supplies | | | | 12,000 | | | | 145,746 | |
| | Marubeni Corp. | | | Trading Companies & Distributors | | | | 366,000 | | | | 3,206,245 | |
| | Marui Group Co. Ltd. | | | Multiline Retail | | | | 42,000 | | | | 695,817 | |
| | Maruichi Steel Tube Ltd. | | | Metals & Mining | | | | 12,000 | | | | 245,314 | |
| | Maruwa Unyu Kikan Co. Ltd. | | | Air Freight & Logistics | | | | 12,000 | | | | 120,294 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Matsui Securities Co. Ltd. | | | Capital Markets | | | | 24,000 | | | $ | 129,331 | |
| | Matsumotokiyoshi Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 30,000 | | | | 1,291,236 | |
| | Mazda Motor Corp. | | | Automobiles | | | | 138,000 | | | | 911,451 | |
| | Mebuki Financial Group Inc. | | | Banks | | | | 240,000 | | | | 467,581 | |
| | Medipal Holdings Corp. | | | Health Care Providers & Services | | | | 36,000 | | | | 458,379 | |
| | Meiji Holdings Co. Ltd. | | | Food Products | | | | 30,000 | | | | 1,332,689 | |
| | Menicon Co. Ltd. | | | Health Care Equipment & Supplies | | | | 12,000 | | | | 246,475 | |
| | Minebea Mitsumi Inc. | | | Machinery | | | | 96,000 | | | | 1,418,660 | |
| | Miraca Holdings Inc. | | | Health Care Providers & Services | | | | 12,000 | | | | 218,868 | |
| | MISUMI Group Inc. | | | Machinery | | | | 66,000 | | | | 1,422,640 | |
| | Mitsubishi Chemical Holdings Corp. | | | Chemicals | | | | 306,000 | | | | 1,398,664 | |
| | Mitsubishi Corp. | | | Trading Companies & Distributors | | | | 282,000 | | | | 7,730,671 | |
| | Mitsubishi Electric Corp. | | | Electrical Equipment | | | | 462,000 | | | | 4,163,729 | |
| | Mitsubishi Estate Co. Ltd. | | | Real Estate Management & Development | | | | 270,000 | | | | 3,537,635 | |
| | Mitsubishi Gas Chemical Co. Inc. | | | Chemicals | | | | 42,000 | | | | 550,154 | |
| | Mitsubishi Heavy Industries Ltd. | | | Machinery | | | | 66,000 | | | | 2,191,412 | |
| | Mitsubishi Logistics Corp. | | | Transportation Infrastructure | | | | 12,000 | | | | 282,704 | |
| | Mitsubishi Materials Corp. | | | Metals & Mining | | | | 30,000 | | | | 412,242 | |
| a | | Mitsubishi Motors Corp. | | | Automobiles | | | | 150,000 | | | | 536,806 | |
| | Mitsubishi UFJ Financial Group Inc. | | | Banks | | | | 2,856,000 | | | | 12,854,910 | |
| | Mitsubishi UFJ Lease & Finance Co. Ltd. | | | Diversified Financial Services | | | | 150,660 | | | | 647,418 | |
| | Mitsui & Co. Ltd. | | | Trading Companies & Distributors | | | | 372,000 | | | | 7,938,844 | |
| | Mitsui Chemicals Inc. | | | Chemicals | | | | 42,000 | | | | 817,976 | |
| | Mitsui Fudosan Co. Ltd. | | | Real Estate Management & Development | | | | 216,000 | | | | 4,110,484 | |
| | Mitsui Fudosan Logistics Park Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 120 | | | | 410,377 | |
| | Mitsui High-Tec Inc. | | | Semiconductors & Semiconductor Equipment | | | | 6,000 | | | | 282,290 | |
| | Mitsui Mining and Smelting Co. Ltd. | | | Metals & Mining | | | | 12,000 | | | | 252,029 | |
| | Mitsui OSK Lines Ltd. | | | Marine | | | | 78,000 | | | | 1,402,162 | |
| | Miura Co. Ltd. | | | Machinery | | | | 24,000 | | | | 488,473 | |
| | Mizuho Financial Group Inc. | | | Banks | | | | 606,000 | | | | 6,541,677 | |
| a | | Money Forward Inc. | | | Software | | | | 12,000 | | | | 255,346 | |
| | MonotaRO Co. Ltd. | | | Trading Companies & Distributors | | | | 56,400 | | | | 865,804 | |
| | Mori Hills REIT Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 360 | | | | 388,739 | |
| | Morinaga & Co. Ltd. | | | Food Products | | | | 6,000 | | | | 164,773 | |
| | Morinaga Milk Industry Co. Ltd. | | | Food Products | | | | 6,000 | | | | 176,379 | |
| | MS&AD Insurance Group Holdings Inc. | | | Insurance | | | | 109,900 | | | | 2,912,546 | |
| | Murata Manufacturing Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 134,830 | | | | 6,177,710 | |
| | Nabtesco Corp. | | | Machinery | | | | 24,000 | | | | 489,965 | |
| | Nagase & Co. Ltd. | | | Trading Companies & Distributors | | | | 24,000 | | | | 326,809 | |
| | Nagoya Railroad Co. Ltd. | | | Road & Rail | | | | 48,000 | | | | 737,518 | |
| | Nankai Electric Railway Co. Ltd. | | | Road & Rail | | | | 24,000 | | | | 490,131 | |
| | NEC Corp. | | | IT Services | | | | 60,000 | | | | 1,917,165 | |
| | NEC System Integration & Construction Ltd. | | | IT Services | | | | 18,000 | | | | 195,613 | |
| | Net One Systems Co. Ltd. | | | IT Services | | | | 18,000 | | | | 350,437 | |
| | Nexon Co. Ltd. | | | Entertainment | | | | 96,000 | | | | 1,692,577 | |
| | NGK Insulators Ltd. | | | Machinery | | | | 60,000 | | | | 746,140 | |
| | NGK Spark Plug Co. Ltd. | | | Auto Components | | | | 48,000 | | | | 849,604 | |
| | NH Foods Ltd. | | | Food Products | | | | 24,000 | | | | 631,732 | |
| | NHK Spring Co. Ltd. | | | Auto Components | | | | 36,000 | | | | 211,655 | |
| | Nichirei Corp. | | | Food Products | | | | 24,000 | | | | 395,454 | |
| | Nidec Corp. | | | Electrical Equipment | | | | 108,730 | | | | 6,107,119 | |
| | Nifco Inc. | | | Auto Components | | | | 18,000 | | | | 373,692 | |
| | Nihon Kohden Corp. | | | Health Care Equipment & Supplies | | | | 18,000 | | | | 383,018 | |
| | Nihon M&A Center Inc. | | | Professional Services | | | | 62,300 | | | | 715,775 | |
| | Nihon Unisys Ltd. | | | IT Services | | | | 18,000 | | | | 390,480 | |
| | Nikon Corp. | | | Household Durables | | | | 78,000 | | | | 736,647 | |
| | Nintendo Co. Ltd. | | | Entertainment | | | | 248,020 | | | | 10,030,806 | |
| | | | | | | | | | |
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| 234 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Nippon Accommodations Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 120 | | | $ | 543,853 | |
| | Nippon Building Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 360 | | | | 1,581,816 | |
| | Nippon Electric Glass Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 18,000 | | | | 310,021 | |
| | Nippon Express Co. Ltd. | | | Road & Rail | | | | 18,000 | | | | 915,265 | |
| | Nippon Kayaku Co. Ltd. | | | Chemicals | | | | 36,000 | | | | 288,010 | |
| | Nippon Paint Holdings Co. Ltd. | | | Chemicals | | | | 240,000 | | | | 1,623,269 | |
| | Nippon Prologis REIT Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 540 | | | | 1,180,766 | |
| | Nippon Sanso Holdings Corp. | | | Chemicals | | | | 36,000 | | | | 567,315 | |
| | Nippon Shinyaku Co. Ltd. | | | Pharmaceuticals | | | | 12,000 | | | | 613,493 | |
| | Nippon Shobukai Co. Ltd. | | | Chemicals | | | | 6,000 | | | | 223,842 | |
| | Nippon Steel Corp. | | | Metals & Mining | | | | 198,000 | | | | 2,744,737 | |
| | Nippon Telegraph & Telephone Corp. | | | Diversified Telecommunication Services | | | | 282,000 | | | | 7,609,879 | |
| | Nippon Television Holdings Inc. | | | Media | | | | 6,000 | | | | 47,960 | |
| | Nippon Yusen KK | | | Marine | | | | 114,750 | | | | 1,955,772 | |
| | Nipro Corp. | | | Health Care Equipment & Supplies | | | | 24,000 | | | | 180,400 | |
| | Nishi-Nippon Railroad Co. Ltd. | | | Road & Rail | | | | 18,000 | | | | 358,645 | |
| | Nissan Chemical Corp. | | | Chemicals | | | | 32,000 | | | | 1,425,956 | |
| | Nissan Motor Co. Ltd. | | | Automobiles | | | | 456,000 | | | | 1,449,799 | |
| | Nisshin Seifun Group Inc. | | | Food Products | | | | 60,000 | | | | 608,518 | |
| | Nissin Foods Holdings Co. Ltd. | | | Food Products | | | | 18,000 | | | | 1,252,271 | |
| | Nitori Holdings Co. Ltd. | | | Specialty Retail | | | | 18,000 | | | | 1,515,907 | |
| | Nitto Denko Corp. | | | Chemicals | | | | 36,000 | | | | 1,947,425 | |
| | Noevir Holdings Co. Ltd. | | | Personal Products | | | | 6,000 | | | | 235,449 | |
| | NOF Corp. | | | Chemicals | | | | 18,000 | | | | 649,142 | |
| | NOK Corp. | | | Auto Components | | | | 24,000 | | | | 186,867 | |
| | Nomura Holdings Inc. | | | Capital Markets | | | | 708,000 | | | | 2,340,027 | |
| | Nomura Real Estate Holdings Inc. | | | Real Estate Management & Development | | | | 24,000 | | | | 543,024 | |
| | Nomura Real Estate Master Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 1,080 | | | | 1,191,585 | |
| | Nomura Research Institute Ltd. | | | IT Services | | | | 90,000 | | | | 2,207,330 | |
| | NS Solutions Corp. | | | IT Services | | | | 6,000 | | | | 144,875 | |
| | NSK Ltd. | | | Machinery | | | | 102,000 | | | | 498,214 | |
| | NTT Data Corp. | | | IT Services | | | | 150,000 | | | | 1,933,746 | |
| | Obayashi Corp. | | | Construction & Engineering | | | | 162,000 | | | | 1,038,627 | |
| | OBIC Business Consultants Co. Ltd. | | | Software | | | | 6,000 | | | | 185,706 | |
| | OBIC Co. Ltd. | | | IT Services | | | | 15,800 | | | | 2,116,564 | |
| | Odakyu Electric Railway Co. Ltd. | | | Road & Rail | | | | 72,000 | | | | 927,203 | |
| | Oji Holdings Corp. | | | Paper & Forest Products | | | | 210,000 | | | | 780,545 | |
| | Okuma Corp. | | | Machinery | | | | 6,000 | | | | 205,188 | |
| | Olympus Corp. | | | Health Care Equipment & Supplies | | | | 300,000 | | | | 5,758,748 | |
| | Omron Corp. | | | Electronic Equipment, Instruments & Components | | | | 44,040 | | | | 2,012,979 | |
| | Ono Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 102,000 | | | | 2,382,549 | |
| | Open House Co. Ltd. | | | Household Durables | | | | 18,000 | | | | 608,726 | |
| | Oracle Corp. Japan | | | Software | | | | 8,100 | | | | 430,896 | |
| | Orient Corp. | | | Consumer Finance | | | | 13,200 | | | | 104,509 | |
| | Oriental Land Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 44,540 | | | | 6,063,496 | |
| | ORIX Corp. | | | Diversified Financial Services | | | | 282,000 | | | | 3,952,033 | |
| | ORIX JREIT Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 600 | | | | 766,866 | |
| | Osaka Gas Co. Ltd. | | | Gas Utilities | | | | 90,000 | | | | 1,359,218 | |
| | OSG Corp. | | | Machinery | | | | 18,000 | | | | 222,101 | |
| | Otsuka Corp. | | | IT Services | | | | 24,000 | | | | 750,285 | |
| | Otsuka Holdings Co. Ltd. | | | Pharmaceuticals | | | | 102,000 | | | | 3,230,288 | |
| | Paltac Corp. | | | Distributors | | | | 6,000 | | | | 184,670 | |
| | Pan Pacific International Holdings Corp. | | | Multiline Retail | | | | 96,000 | | | | 1,697,882 | |
| | Panasonic Corp. | | | Household Durables | | | | 510,000 | | | | 3,574,528 | |
| a | | Park24 Co. Ltd. | | | Commercial Services & Supplies | | | | 30,000 | | | | 387,371 | |
| | Penta-Ocean Construction Co. Ltd. | | | Construction & Engineering | | | | 66,000 | | | | 331,493 | |
| a | | PeptiDream Inc. | | | Biotechnology | | | | 19,700 | | | | 219,804 | |
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 235 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | |
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| 236 | | | | | | | | Semiannual Report | | franklintempleton.com |
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Persol Holdings Co. Ltd. | | | Professional Services | | | | 42,000 | | | $ | 776,193 | |
| | Pigeon Corp. | | | Household Products | | | | 24,000 | | | | 350,520 | |
| | Pola Orbis Holdings Inc. | | | Personal Products | | | | 18,000 | | | | 203,323 | |
| | Rakus Co. Ltd. | | | Software | | | | 24,000 | | | | 226,826 | |
| | Rakuten Inc. | | | Internet & Direct Marketing Retail | | | | 192,000 | | | | 823,738 | |
| | Recruit Holdings Co. Ltd. | | | Professional Services | | | | 330,000 | | | | 9,486,545 | |
| | Relo Group Inc. | | | Real Estate Management & Development | | | | 24,000 | | | | 365,111 | |
| a | | Renesas Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 288,000 | | | | 2,391,627 | |
| | Rengo Co. Ltd. | | | Containers & Packaging | | | | 48,000 | | | | 278,559 | |
| a | | RENOVA Inc. | | | Independent Power Producers & Energy Traders | | | | 12,000 | | | | 282,290 | |
| | Resona Holdings Inc. | | | Banks | | | | 510,000 | | | | 1,860,375 | |
| | Resorttrust Inc. | | | Hotels, Restaurants & Leisure | | | | 12,000 | | | | 192,504 | |
| | Ricoh Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 138,000 | | | | 1,006,791 | |
| | Rinnai Corp. | | | Household Durables | | | | 8,240 | | | | 591,479 | |
| | Rohm Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 19,800 | | | | 1,294,055 | |
| | Rohto Pharmaceutical Co. Ltd. | | | Personal Products | | | | 24,000 | | | | 768,524 | |
| | Ryohin Keikaku Co. Ltd. | | | Multiline Retail | | | | 54,000 | | | | 451,042 | |
| | Sankyo Co. Ltd. | | | Leisure Products | | | | 12,000 | | | | 363,536 | |
| | Sankyu Inc. | | | Road & Rail | | | | 12,000 | | | | 348,199 | |
| | Sanrio Co. Ltd. | | | Specialty Retail | | | | 12,000 | | | | 308,404 | |
| | Santen Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 84,000 | | | | 565,823 | |
| | Sanwa Holdings Corp. | | | Building Products | | | | 48,000 | | | | 412,532 | |
| | Sapporo Holdings Ltd. | | | Beverages | | | | 12,000 | | | | 263,636 | |
| | Sawai Group Holdings Co. Ltd. | | | Pharmaceuticals | | | | 6,000 | | | | 168,296 | |
| | SBI Holdings Inc. | | | Capital Markets | | | | 60,000 | | | | 1,076,099 | |
| | SCREEN Holdings Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 9,200 | | | | 500,853 | |
| | SCSK Corp. | | | IT Services | | | | 30,000 | | | | 453,902 | |
| | Secom Co. Ltd. | | | Commercial Services & Supplies | | | | 48,000 | | | | 2,744,468 | |
| | Sega Sammy Holdings Inc. | | | Leisure Products | | | | 36,000 | | | | 489,716 | |
| | Seibu Holdings Inc. | | | Industrial Conglomerates | | | | 48,000 | | | | 479,519 | |
| | Seiko Epson Corp. | | | Technology Hardware, Storage & Peripherals | | | | 66,000 | | | | 898,269 | |
| | Seino Holdings Co. Ltd. | | | Road & Rail | | | | 30,000 | | | | 240,423 | |
| | Sekisui Chemical Co. Ltd. | | | Household Durables | | | | 78,000 | | | | 952,738 | |
| | Sekisui House Ltd. | | | Household Durables | | | | 138,000 | | | | 2,289,115 | |
| | Sekisui House Reit Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 960 | | | | 538,547 | |
| | Seven & i Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 186,000 | | | | 7,460,817 | |
| | Seven Bank Ltd. | | | Banks | | | | 156,000 | | | | 279,139 | |
| | SG Holdings Co. Ltd. | | | Air Freight & Logistics | | | | 102,000 | | | | 1,395,281 | |
| | Sharp Corp. | | | Household Durables | | | | 48,000 | | | | 286,186 | |
| a | | SHIFT Inc. | | | IT Services | | | | 2,200 | | | | 287,112 | |
| | Shikoku Electric Power Co. Inc. | | | Electric Utilities | | | | 36,000 | | | | 179,820 | |
| | Shimadzu Corp. | | | Electronic Equipment, Instruments & Components | | | | 66,000 | | | | 1,730,422 | |
| | Shimamura Co. Ltd. | | | Specialty Retail | | | | 6,000 | | | | 506,961 | |
| | SHIMANO Inc. | | | Leisure Products | | | | 17,988 | | | | 2,825,984 | |
| | Shimizu Corp. | | | Construction & Engineering | | | | 126,000 | | | | 617,182 | |
| | Shin-Etsu Chemical Co. Ltd. | | | Chemicals | | | | 93,380 | | | | 9,244,778 | |
| | Shinko Electric Industries Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 18,000 | | | | 387,371 | |
| | Shinsei Bank Ltd. | | | Banks | | | | 12,000 | | | | 172,027 | |
| | Shionogi & Co. Ltd. | | | Pharmaceuticals | | | | 66,000 | | | | 3,186,804 | |
| | Ship Healthcare Holdings Inc. | | | Health Care Providers & Services | | | | 18,000 | | | | 338,126 | |
| | Shiseido Co. Ltd. | | | Personal Products | | | | 91,900 | | | | 3,210,103 | |
| | SHO-BOND Holdings Co. Ltd. | | | Construction & Engineering | | | | 12,000 | | | | 518,982 | |
| a | | Shochiku Co. Ltd. | | | Entertainment | | | | 2,100 | | | | 172,648 | |
| | Showa Denko K.K. | | | Chemicals | | | | 42,000 | | | | 596,000 | |
| a | | Skylark Holdings Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 54,000 | | | | 575,647 | |
| | SMC Corp. | | | Machinery | | | | 13,346 | | | | 5,368,090 | |
| | SMS Co. Ltd. | | | Professional Services | | | | 12,000 | | | | 242,827 | |
| | Softbank Corp. | | | Wireless Telecommunication Services | | | | 654,000 | | | | 6,535,708 | |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | SoftBank Group Corp. | | | Wireless Telecommunication Services | | | | 246,000 | | | $ | 8,327,749 | |
| | Sohgo Security Services Co. Ltd. | | | Commercial Services & Supplies | | | | 18,000 | | | | 452,658 | |
| | Sojitz Corp. | | | Trading Companies & Distributors | | | | 56,220 | | | | 824,977 | |
| | Sompo Holdings Inc. | | | Insurance | | | | 78,000 | | | | 3,105,019 | |
| | Sony Corp. | | | Household Durables | | | | 294,000 | | | | 18,861,335 | |
| | Sotetsu Holdings Inc. | | | Road & Rail | | | | 18,000 | | | | 298,083 | |
| | Square Enix Holdings Co. Ltd. | | | Entertainment | | | | 18,000 | | | | 774,742 | |
| | Stanley Electric Co. Ltd. | | | Auto Components | | | | 30,000 | | | | 469,239 | |
| | Subaru Corp. | | | Automobiles | | | | 144,000 | | | | 2,155,847 | |
| | Sugi Pharmacy Co. Ltd. | | | Food & Staples Retailing | | | | 8,440 | | | | 338,778 | |
| | Sumco Corp. | | | Semiconductors & Semiconductor Equipment | | | | 78,000 | | | | 909,627 | |
| | Sumitomo Bakelite Co. Ltd. | | | Chemicals | | | | 6,000 | | | | 164,358 | |
| | Sumitomo Chemical Co. Ltd. | | | Chemicals | | | | 360,000 | | | | 1,236,105 | |
| | Sumitomo Corp. | | | Trading Companies & Distributors | | | | 270,000 | | | | 3,362,292 | |
| | Sumitomo Dainippon Pharma Co. Ltd. | | | Pharmaceuticals | | | | 36,000 | | | | 256,423 | |
| | Sumitomo Electric Industries Ltd. | | | Auto Components | | | | 180,000 | | | | 1,820,581 | |
| | Sumitomo Forestry Co. Ltd. | | | Household Durables | | | | 36,000 | | | | 548,413 | |
| | Sumitomo Heavy Industries Ltd. | | | Machinery | | | | 24,000 | | | | 443,207 | |
| | Sumitomo Metal Mining Co. Ltd. | | | Metals & Mining | | | | 60,000 | | | | 1,724,412 | |
| | Sumitomo Mitsui Financial Group Inc. | | | Banks | | | | 306,000 | | | | 8,506,988 | |
| | Sumitomo Realty & Development Co. Ltd. | | | Real Estate Management & Development | | | | 96,000 | | | | 2,180,718 | |
| | Sumitomo Rubber Industries Ltd. | | | Auto Components | | | | 42,000 | | | | 333,980 | |
| | Sundrug Co. Ltd. | | | Food & Staples Retailing | | | | 16,200 | | | | 393,402 | |
| | Suntory Beverage & Food Ltd. | | | Beverages | | | | 30,000 | | | | 1,063,249 | |
| | Sushiro Global Holdings Ltd. | | | Hotels, Restaurants & Leisure | | | | 24,000 | | | | 368,759 | |
| | Suzuken Co. Ltd. | | | Health Care Providers & Services | | | | 18,000 | | | | 410,999 | |
| | Suzuki Motor Corp. | | | Automobiles | | | | 108,000 | | | | 3,343,452 | |
| | Sysmex Corp. | | | Health Care Equipment & Supplies | | | | 45,156 | | | | 2,423,378 | |
| | T&D Holdings Inc. | | | Insurance | | | | 120,000 | | | | 1,133,303 | |
| | Taiheiyo Cement Corp. | | | Construction Materials | | | | 30,000 | | | | 422,398 | |
| | Taisei Corp. | | | Construction & Engineering | | | | 42,000 | | | | 1,166,465 | |
| | Taisho Pharmaceutical Holdings Co. Ltd. | | | Pharmaceuticals | | | | 10,200 | | | | 373,484 | |
| | Taiyo Yuden Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 30,000 | | | | 772,047 | |
| | Takara Bio Inc. | | | Biotechnology | | | | 12,000 | | | | 141,020 | |
| | Takara Holdings Inc. | | | Beverages | | | | 42,000 | | | | 306,705 | |
| | Takashimaya Co. Ltd. | | | Multiline Retail | | | | 36,000 | | | | 425,548 | |
| | Takeda Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 360,000 | | | | 9,369,028 | |
| | TBS Holdings Inc. | | | Media | | | | 6,000 | | | | 65,619 | |
| | TDK Corp. | | | Electronic Equipment, Instruments & Components | | | | 86,520 | | | | 2,662,936 | |
| | TechnoPro Holdings Inc. | | | Professional Services | | | | 25,320 | | | | 539,654 | |
| | Teijin Ltd. | | | Chemicals | | | | 42,000 | | | | 406,812 | |
| | Terumo Corp. | | | Health Care Equipment & Supplies | | | | 156,000 | | | | 4,390,784 | |
| | The Bank of Kyoto Ltd. | | | Banks | | | | 18,000 | | | | 657,847 | |
| | The Chiba Bank Ltd. | | | Banks | | | | 144,000 | | | | 774,991 | |
| | The Chugoku Bank Ltd. | | | Banks | | | | 42,000 | | | | 264,921 | |
| | The Chugoku Electric Power Co. Inc. | | | Electric Utilities | | | | 72,000 | | | | 365,111 | |
| a | | The Iyo Bank Ltd. | | | Banks | | | | 66,000 | | | | 322,374 | |
| | The Japan Steel Works Ltd. | | | Machinery | | | | 12,000 | | | | 235,946 | |
| | The Kansai Electric Power Co. Inc. | | | Electric Utilities | | | | 174,000 | | | | 1,456,962 | |
| | The Shizuoka Bank Ltd. | | | Banks | | | | 114,000 | | | | 700,169 | |
| | THK Co. Ltd. | | | Machinery | | | | 30,000 | | | | 517,324 | |
| | TIS Inc. | | | IT Services | | | | 54,000 | | | | 1,430,723 | |
| | Tobu Railway Co. Ltd. | | | Road & Rail | | | | 48,000 | | | | 1,130,816 | |
| | Toda Corp. | | | Construction & Engineering | | | | 54,000 | | | | 277,564 | |
| | Toho Co. Ltd. | | | Entertainment | | | | 24,000 | | | | 870,496 | |
| | Toho Gas Co. Ltd. | | | Gas Utilities | | | | 19,600 | | | | 390,389 | |
| | Tohoku Electric Power Co. Inc. | | | Electric Utilities | | | | 114,000 | | | | 536,350 | |
| | Tokai Carbon Co. Ltd. | | | Chemicals | | | | 48,000 | | | | 324,654 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 237 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Tokio Marine Holdings Inc. | | | Insurance | | | | 450,000 | | | $ | 7,974,369 | |
| | Tokyo Century Corp. | | | Diversified Financial Services | | | | 15,000 | | | | 477,737 | |
| a | | Tokyo Electric Power Co. Holdings Inc. | | | Electric Utilities | | | | 372,000 | | | | 1,187,357 | |
| | Tokyo Electron Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 35,120 | | | | 8,662,019 | |
| | Tokyo Gas Co. Ltd. | | | Gas Utilities | | | | 96,000 | | | | 1,625,590 | |
| | Tokyo Ohka Kogyo Co. Ltd. | | | Chemicals | | | | 9,000 | | | | 375,557 | |
| | Tokyo Tatemono Co. Ltd. | | | Real Estate Management & Development | | | | 48,000 | | | | 682,469 | |
| | TOKYU Corp. | | | Road & Rail | | | | 114,000 | | | | 1,297,164 | |
| | Tokyu Fudosan Holdings Corp. | | | Real Estate Management & Development | | | | 144,000 | | | | 747,135 | |
| | TOPPAN Inc. | | | Commercial Services & Supplies | | | | 66,000 | | | | 982,169 | |
| | Toray Industries Inc. | | | Chemicals | | | | 360,000 | | | | 1,770,341 | |
| | Toshiba Corp. | | | Industrial Conglomerates | | | | 102,000 | | | | 3,627,732 | |
| | Toshiba TEC Corp. | | | Technology Hardware, Storage & Peripherals | | | | 6,000 | | | | 155,031 | |
| | Tosoh Corp. | | | Chemicals | | | | 66,000 | | | | 734,119 | |
| | TOTO Ltd. | | | Building Products | | | | 36,000 | | | | 1,198,798 | |
| | Toyo Seikan Group Holdings Ltd. | | | Containers & Packaging | | | | 36,000 | | | | 433,756 | |
| | Toyo Suisan Kaisha Ltd. | | | Food Products | | | | 24,000 | | | | 988,221 | |
| | Toyo Tire Corp. | | | Auto Components | | | | 24,000 | | | | 260,320 | |
| | Toyoda Gosei Co. Ltd. | | | Auto Components | | | | 18,000 | | | | 271,719 | |
| | Toyota Boshoku Corp. | | | Auto Components | | | | 18,000 | | | | 220,360 | |
| | Toyota Industries Corp. | | | Auto Components | | | | 36,000 | | | | 1,711,147 | |
| | Toyota Motor Corp. | | | Automobiles | | | | 2,892,000 | | | | 37,482,414 | |
| | Toyota Tsusho Corp. | | | Trading Companies & Distributors | | | | 54,000 | | | | 1,671,353 | |
| | Trend Micro Inc. | | | Software | | | | 30,000 | | | | 1,620,781 | |
| | TS TECH Co. Ltd. | | | Auto Components | | | | 24,000 | | | | 235,283 | |
| | Tsumura & Co. | | | Pharmaceuticals | | | | 18,000 | | | | 383,640 | |
| | Tsuruha Holdings Inc. | | | Food & Staples Retailing | | | | 8,570 | | | | 502,672 | |
| | Ube Industries Ltd. | | | Chemicals | | | | 24,000 | | | | 320,343 | |
| | Ulvac Inc. | | | Semiconductors & Semiconductor Equipment | | | | 12,000 | | | | 425,300 | |
| | Unicharm Corp. | | | Household Products | | | | 90,000 | | | | 2,953,470 | |
| | United Urban Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 720 | | | | 743,653 | |
| | Ushio Inc. | | | Electrical Equipment | | | | 24,000 | | | | 249,045 | |
| | USS Co. Ltd. | | | Specialty Retail | | | | 48,000 | | | | 741,829 | |
| | Welcia Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 24,000 | | | | 506,546 | |
| | West Japan Railway Co. | | | Road & Rail | | | | 54,000 | | | | 2,066,807 | |
| | Yakult Honsha Co. Ltd. | | | Food Products | | | | 30,000 | | | | 1,743,065 | |
| | Yamada Holdings Co. Ltd. | | | Specialty Retail | | | | 174,000 | | | | 572,206 | |
| | Yamaguchi Financial Group Inc. | | | Banks | | | | 54,000 | | | | 286,518 | |
| | Yamaha Corp. | | | Leisure Products | | | | 36,000 | | | | 1,278,386 | |
| | Yamaha Motor Co. Ltd. | | | Automobiles | | | | 72,000 | | | | 1,346,534 | |
| | Yamato Holdings Co. Ltd. | | | Air Freight & Logistics | | | | 78,000 | | | | 1,173,139 | |
| | Yamato Kogyo Co. Ltd. | | | Metals & Mining | | | | 6,000 | | | | 181,561 | |
| | Yamazaki Baking Co. Ltd. | | | Food Products | | | | 30,000 | | | | 344,675 | |
| | Yaoko Co. Ltd. | | | Food & Staples Retailing | | | | 6,000 | | | | 271,927 | |
| | YASKAWA Electric Corp. | | | Machinery | | | | 60,000 | | | | 1,726,485 | |
| | Yokogawa Electric Corp. | | | Electronic Equipment, Instruments & Components | | | | 60,000 | | | | 943,038 | |
| | Yokohama Rubber Co. Ltd. | | | Auto Components | | | | 30,000 | | | | 459,290 | |
| | Z Holdings Corp. | | | Interactive Media & Services | | | | 618,000 | | | | 1,623,293 | |
| | Zenkoku Hosho Co. Ltd. | | | Diversified Financial Services | | | | 12,000 | | | | 399,185 | |
| | Zensho Holdings Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 24,000 | | | | 594,425 | |
| | Zeon Corp. | | | Chemicals | | | | 36,000 | | | | 317,856 | |
| | Zozo Inc. | | | Internet & Direct Marketing Retail | | | | 24,000 | | | | 479,851 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $1,002,459,019) | | | | | | | | | | | 769,637,967 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 238 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Short-Term Investments 0.1% | | | | | | | | | |
| | Money Market Funds 0.1% | | | | | | | | | | | | |
| | | United States 0.1% | | | | | | | | | |
| b,c | | Institutional Fiduciary Trust Portfolio, 2.45% | | | Money Market Funds | | | | 392,360 | | | $ | 392,360 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments
(Cost $392,360) | | | | | | | | | | | 392,360 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $1,002,851,379) 99.0% | | | | | | | | | | | 770,030,327 | |
| | | Other Assets, less Liabilities 1.0% | | | | | | | | 7,942,048 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 777,972,375 | |
| | | | | | | | | | | | | | |
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 September 30, 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 | | | | 45 | | | $ | 8,064,527 | | | | 12/08/22 | | | $ | (46,911 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 239 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan Hedged ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $30.90 | | | $ | 30.70 | | | $ | 21.35 | | | $ | 23.12 | | | $ | 25.11 | | | $ | 25.91 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.33 | | | | 0.68 | | | | 0.88 | | | | 0.38 | | | | 0.38 | | | | 0.32 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (1.43 | ) | | | (0.08 | ) | | | 8.47 | | | | (2.15 | ) | | | (1.11 | ) | | | (1.11 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (1.10 | ) | | | 0.60 | | | | 9.35 | | | | (1.77 | ) | | | (0.73 | ) | | | (0.79 | ) |
| | | | |
| | | | | | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | (0.92 | ) | | | (0.40 | ) | | | — | | | | — | | | �� | (0.01 | ) | | | (0.01 | ) |
| | | | | | |
Net realized gains | | | — | | | | — | | | | — | | | | — | | | | (1.25 | ) | | | — | d |
| | | | |
| | | | | | |
Total Distributions | | | (0.92 | ) | | | (0.40 | ) | | | — | | | | — | | | | (1.26 | ) | | | (0.01 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | | $28.88 | | | $ | 30.90 | | | $ | 30.70 | | | $ | 21.35 | | | $ | 23.12 | | | $ | 25.11 | |
| | | | |
| | | | | | |
Total returne | | | (3.50)% | | | | 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% | | | | 0.09% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 2.20% | | | | 2.22% | | | | 3.29% | | | | 1.59% | | | | 1.51% | | | | 3.10% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $23,104 | | | | $24,720 | | | | $24,563 | | | | $4,269 | | | | $13,870 | | | | $45,197 | |
| | | | | | |
Portfolio turnover rateg | | | 6.68% | h | | | 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: | | | 6.68% | | | | 5.03% | | | | 6.31% | | | 10.06% | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 240 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Japan Hedged ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.4% | | | | | | | | | |
| | | Japan 98.4% | | | | | | | | | |
| | ABC-Mart Inc. | | | Specialty Retail | | | | 236 | | | $ | 10,158 | |
| | Acom Co. Ltd. | | | Consumer Finance | | | | 2,700 | | | | 5,801 | |
| | Activia Properties Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 5 | | | | 14,612 | |
| | Advance Residence Investment | | | Equity Real Estate Investment Trusts (REITs | ) | | | 9 | | | | 22,042 | |
| | Advantest Corp. | | | Semiconductors & Semiconductor Equipment | | | | 1,400 | | | | 64,804 | |
| | AEON Co. Ltd. | | | Food & Staples Retailing | | | | 5,000 | | | | 93,388 | |
| | AEON Financial Service Co. Ltd. | | | Consumer Finance | | | | 900 | | | | 8,904 | |
| | AEON Mall Co. Ltd. | | | Real Estate Management & Development | | | | 800 | | | | 8,898 | |
| | AEON REIT Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 12 | | | | 12,933 | |
| | AGC Inc. | | | Building Products | | | | 1,336 | | | | 41,443 | |
| | Aica Kogyo Co. Ltd. | | | Building Products | | | | 372 | | | | 8,044 | |
| | AIN Holdings Inc. | | | Food & Staples Retailing | | | | 236 | | | | 10,190 | |
| | Air Water Inc. | | | Chemicals | | | | 1,300 | | | | 15,340 | |
| | Aisin Seiki Co. Ltd. | | | Auto Components | | | | 1,256 | | | | 32,193 | |
| | Ajinomoto Co. Inc. | | | Food Products | | | | 3,348 | | | | 91,642 | |
| | Alfresa Holdings Corp. | | | Health Care Providers & Services | | | | 1,100 | | | | 12,843 | |
| | Alps Alpine Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,272 | | | | 9,192 | |
| | Amada Co. Ltd. | | | Machinery | | | | 2,100 | | | | 14,233 | |
| | Amano Corp. | | | Electronic Equipment, Instruments & Components | | | | 400 | | | | 6,715 | |
| a | | ANA Holdings Inc. | | | Airlines | | | | 1,100 | | | | 20,656 | |
| | Anritsu Corp. | | | Electronic Equipment, Instruments & Components | | | | 913 | | | | 9,960 | |
| | Aozora Bank Ltd. | | | Banks | | | | 800 | | | | 14,271 | |
| | Ariake Japan Co. Ltd. | | | Food Products | | | | 96 | | | | 3,329 | |
| | As One Corp. | | | Health Care Providers & Services | | | | 228 | | | | 9,435 | |
| | Asahi Group Holdings Ltd. | | | Beverages | | | | 3,372 | | | | 104,460 | |
| | Asahi Intecc Co. Ltd. | | | Health Care Equipment & Supplies | | | | 1,360 | | | | 21,770 | |
| | Asahi Kasei Corp. | | | Chemicals | | | | 8,700 | | | | 57,431 | |
| | Asics Corp. | | | Textiles, Apparel & Luxury Goods | | | | 1,200 | | | | 19,068 | |
| | ASKUL Corp. | | | Internet & Direct Marketing Retail | | | | 272 | | | | 2,807 | |
| | Astellas Pharma Inc. | | | Pharmaceuticals | | | | 12,900 | | | | 170,847 | |
| | Azbil Corp. | | | Electronic Equipment, Instruments & Components | | | | 872 | | | | 22,712 | |
| | Bandai Namco Holdings Inc. | | | Leisure Products | | | | 1,351 | | | | 88,044 | |
| | BayCurrent Consulting Inc. | | | Professional Services | | | | 90 | | | | 23,410 | |
| | Benefit One Inc. | | | Professional Services | | | | 372 | | | | 5,225 | |
| | Benesse Holdings Inc. | | | Diversified Consumer Services | | | | 500 | | | | 7,444 | |
| | BIC CAMERA Inc. | | | Specialty Retail | | | | 1,000 | | | | 8,546 | |
| | Bridgestone Corp. | | | Auto Components | | | | 3,984 | | | | 128,511 | |
| | Brother Industries Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 1,600 | | | | 27,535 | |
| | Calbee Inc. | | | Food Products | | | | 500 | | | | 10,709 | |
| | CANON Inc. | | | Technology Hardware, Storage & Peripherals | | | | 6,900 | | | | 151,209 | |
| | Canon Marketing Japan Inc. | | | Electronic Equipment, Instruments & Components | | | | 272 | | | | 6,013 | |
| | Capcom Co. Ltd. | | | Entertainment | | | | 1,248 | | | | 31,384 | |
| | Casio Computer Co. Ltd. | | | Household Durables | | | | 1,500 | | | | 13,151 | |
| | Central Japan Railway Co. | | | Road & Rail | | | | 1,290 | | | | 150,929 | |
| | Chubu Electric Power Co. Inc. | | | Electric Utilities | | | | 4,932 | | | | 44,432 | |
| | Chugai Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 4,592 | | | | 115,034 | |
| | Chuo Mitsui Trust Holdings Inc. | | | Banks | | | | 2,572 | | | | 72,836 | |
| | Coca-Cola Bottlers Japan Holdings Inc. | | | Beverages | | | | 900 | | | | 8,730 | |
| | COMSYS Holdings Corp. | | | Construction & Engineering | | | | 736 | | | | 12,519 | |
| | Concordia Financial Group Ltd. | | | Banks | | | | 7,500 | | | | 23,161 | |
| | Cosmo Energy Holdings Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 520 | | | | 13,328 | |
| | Cosmos Pharmaceutical Corp. | | | Food & Staples Retailing | | | | 97 | | | | 9,617 | |
| | Credit Saison Co. Ltd. | | | Consumer Finance | | | | 1,000 | | | | 11,690 | |
| | CyberAgent Inc. | | | Media | | | | 2,884 | | | | 24,268 | |
| | Dai Nippon Printing Co. Ltd. | | | Commercial Services & Supplies | | | | 1,872 | | | | 37,506 | |
| | Daicel Corp. | | | Chemicals | | | | 1,800 | | | | 10,583 | |
| | Daido Steel Co. Ltd. | | | Metals & Mining | | | | 268 | | | | 6,517 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 241 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Daifuku Co. Ltd. | | | Machinery | | | | 701 | | | $ | 32,981 | |
| | Dai-ichi Life Holdings Inc. | | | Insurance | | | | 6,900 | | | | 109,260 | |
| | Daiichi Sankyo Co. Ltd. | | | Pharmaceuticals | | | | 13,200 | | | | 368,610 | |
| | Daiichikosho Co. Ltd. | | | Entertainment | | | | 340 | | | | 9,560 | |
| | Daikin Industries Ltd. | | | Building Products | | | | 1,876 | | | | 288,959 | |
| | Daio Paper Corp. | | | Paper & Forest Products | | | | 500 | | | | 4,007 | |
| | Daito Trust Construction Co. Ltd. | | | Real Estate Management & Development | | | | 432 | | | | 40,500 | |
| | Daiwa House Industry Co. Ltd. | | | Real Estate Management & Development | | | | 4,472 | | | | 90,942 | |
| | Daiwa House Residential Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 15 | | | | 31,193 | |
| | Daiwa Office Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 2 | | | | 9,285 | |
| | Daiwa Securities Group Inc. | | | Capital Markets | | | | 10,300 | | | | 40,305 | |
| | Daiwa Securities Living Investments Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 14 | | | | 11,104 | |
| | DeNA Co. Ltd. | | | Entertainment | | | | 636 | | | | 8,037 | |
| | Denka Co. Ltd. | | | Chemicals | | | | 564 | | | | 12,371 | |
| | Denso Corp. | | | Auto Components | | | | 3,200 | | | | 145,602 | |
| | Dentsu Group Inc. | | | Media | | | | 1,500 | | | | 42,592 | |
| | Descente Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 300 | | | | 6,891 | |
| | DIC Corp. | | | Chemicals | | | | 500 | | | | 8,315 | |
| | Disco Corp. | | | Semiconductors & Semiconductor Equipment | | | | 178 | | | | 39,352 | |
| | DMG Mori Co. Ltd. | | | Machinery | | | | 736 | | | | 8,390 | |
| | Dowa Holdings Co. Ltd. | | | Metals & Mining | | | | 372 | | | | 13,339 | |
| | East Japan Railway Co. | | | Road & Rail | | | | 2,580 | | | | 132,275 | |
| | EBARA Corp. | | | Machinery | | | | 680 | | | | 22,245 | |
| | Eisai Co. Ltd. | | | Pharmaceuticals | | | | 1,860 | | | | 99,576 | |
| | Electric Power Development Co. Ltd. | | | Independent Power Producers & Energy Traders | | | | 1,100 | | | | 15,564 | |
| | ENEOS Holdings Inc. | | | Oil, Gas & Consumable Fuels | | | | 20,500 | | | | 65,871 | |
| | Ezaki Glico Co. Ltd. | | | Food Products | | | | 372 | | | | 9,162 | |
| | Fancl Corp. | | | Personal Products | | | | 432 | | | | 8,584 | |
| | FANUC Corp. | | | Machinery | | | | 1,360 | | | | 190,360 | |
| | Fast Retailing Co. Ltd. | | | Specialty Retail | | | | 360 | | | | 190,788 | |
| | FP Corp. | | | Containers & Packaging | | | | 272 | | | | 6,680 | |
| | Frontier Real Estate Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 4 | | | | 14,729 | |
| | Fuji Electric Co. Ltd. | | | Electrical Equipment | | | | 872 | | | | 31,869 | |
| | Fuji Kyuko Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 200 | | | | 5,914 | |
| | Fuji Media Holdings Inc. | | | Media | | | | 272 | | | | 1,996 | |
| | Fuji Oil Holdings Inc. | | | Food Products | | | | 272 | | | | 4,521 | |
| | FUJIFILM Holdings Corp. | | | Technology Hardware, Storage & Peripherals | | | | 2,456 | | | | 112,140 | |
| | Fujitsu General Ltd. | | | Household Durables | | | | 372 | | | | 7,723 | |
| | Fujitsu Ltd. | | | IT Services | | | | 1,292 | | | | 140,898 | |
| | Fukuoka Financial Group Inc. | | | Banks | | | | 1,100 | | | | 19,501 | |
| | Furukawa Electric Co. Ltd. | | | Electrical Equipment | | | | 412 | | | | 6,527 | |
| | Fuyo General Lease Co. Ltd. | | | Diversified Financial Services | | | | 100 | | | | 5,451 | |
| | GLP J-Reit | | | Equity Real Estate Investment Trusts (REITs | ) | | | 30 | | | | 33,183 | |
| | GMO internet Inc. | | | IT Services | | | | 400 | | | | 7,041 | |
| | GMO Payment Gateway Inc. | | | IT Services | | | | 260 | | | | 17,873 | |
| | Goldwin Inc. | | | Textiles, Apparel & Luxury Goods | | | | 276 | | | | 14,606 | |
| | GS Yuasa Corp. | | | Electrical Equipment | | | | 500 | | | | 7,800 | |
| | GungHo Online Entertainment Inc. | | | Entertainment | | | | 200 | | | | 3,074 | |
| | Hachijuni Bank Ltd. | | | Banks | | | | 3,100 | | | | 10,259 | |
| | Hakuhodo DY Holdings Inc. | | | Media | | | | 1,800 | | | | 12,660 | |
| | Hamamatsu Photonics K.K. | | | Electronic Equipment, Instruments & Components | | | | 872 | | | | 37,351 | |
| | Hankyu Hanshin Holdings Inc. | | | Road & Rail | | | | 1,500 | | | | 45,079 | |
| | Haseko Corp. | | | Household Durables | | | | 1,700 | | | | 18,451 | |
| | Heiwa Corp. | | | Leisure Products | | | | 372 | | | | 5,752 | |
| | Hikari Tsushin Inc. | | | Specialty Retail | | | | 116 | | | | 13,656 | |
| | Hino Motors Ltd. | | | Machinery | | | | 1,800 | | | | 7,412 | |
| | Hirogin Holdings Inc. | | | Banks | | | | 2,200 | | | | 9,241 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Hirose Electric Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 210 | | | $ | 27,537 | |
| | Hisamitsu Pharmaceutical Co. Inc. | | | Pharmaceuticals | | | | 500 | | | | 11,728 | |
| | Hitachi Construction Machinery Co. Ltd. | | | Machinery | | | | 736 | | | | 13,607 | |
| | Hitachi Ltd. | | | Industrial Conglomerates | | | | 6,400 | | | | 270,335 | |
| a | | Hitachi Metals Ltd. | | | Metals & Mining | | | | 1,372 | | | | 20,616 | |
| | Hitachi Transport System Ltd. | | | Road & Rail | | | | 208 | | | | 12,445 | |
| | Honda Motor Co. Ltd. | | | Automobiles | | | | 11,900 | | | | 257,904 | |
| | HORIBA Ltd. | | | Electronic Equipment, Instruments & Components | | | | 300 | | | | 11,627 | |
| | Hoshizaki Corp. | | | Machinery | | | | 844 | | | | 23,528 | |
| | House Foods Group Inc. | | | Food Products | | | | 500 | | | | 9,973 | |
| | Hoya Corp. | | | Health Care Equipment & Supplies | | | | 2,500 | | | | 239,732 | |
| | Hulic Co. Ltd. | | | Real Estate Management & Development | | | | 2,800 | | | | 20,563 | |
| | Ibiden Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 736 | | | | 20,136 | |
| | Idemitsu Kosan Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 1,688 | | | | 36,560 | |
| | IHI Corp. | | | Machinery | | | | 872 | | | | 18,676 | |
| | Iida Group Holdings Co. Ltd. | | | Household Durables | | | | 1,100 | | | | 14,918 | |
| | Industrial & Infrastructure Fund Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 14 | | | | 15,872 | |
| | Information Services International-Dentsu Ltd. | | | IT Services | | | | 200 | | | | 6,121 | |
| | INFRONEER Holdings Inc. | | | Construction & Engineering | | | | 1,592 | | | | 10,823 | |
| | INPEX Corp. | | | Oil, Gas & Consumable Fuels | | | | 7,000 | | | | 65,722 | |
| | Internet Initiative Japan Inc. | | | Diversified Telecommunication Services | | | | 800 | | | | 12,275 | |
| | Isetan Mitsukoshi Holdings Ltd. | | | Multiline Retail | | | | 2,500 | | | | 21,192 | |
| | Isuzu Motors Ltd. | | | Automobiles | | | | 3,600 | | | | 39,720 | |
| | Ito En Ltd. | | | Beverages | | | | 372 | | | | 15,060 | |
| | ITOCHU Corp. | | | Trading Companies & Distributors | | | | 9,412 | | | | 227,651 | |
| | ITOCHU Techno-Solutions Corp. | | | IT Services | | | | 700 | | | | 16,394 | |
| | Itoham Yonekyu Holdings Inc. | | | Food Products | | | | 1,100 | | | | 5,061 | |
| | Iwatani Corp. | | | Oil, Gas & Consumable Fuels | | | | 400 | | | | 15,061 | |
| | Izumi Co. Ltd. | | | Multiline Retail | | | | 308 | | | | 6,607 | |
| | J Front Retailing Co. Ltd. | | | Multiline Retail | | | | 1,700 | | | | 13,812 | |
| a | | Japan Airlines Co. Ltd. | | | Airlines | | | | 1,000 | | | | 17,838 | |
| a | | Japan Airport Terminal Co. Ltd. | | | Transportation Infrastructure | | | | 380 | | | | 15,883 | |
| | Japan Aviatn Elect | | | Electronic Equipment, Instruments & Components | | | | 272 | | | | 3,984 | |
| | Japan Exchange Group Inc. | | | Capital Markets | | | | 3,772 | | | | 50,881 | |
| | Japan Hotel REIT Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 32 | | | | 15,940 | |
| | Japan Logistics Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 6 | | | | 12,871 | |
| | Japan Post Bank Co. Ltd. | | | Banks | | | | 2,800 | | | | 19,518 | |
| | Japan Post Holdings Co. Ltd. | | | Insurance | | | | 15,200 | | | | 100,570 | |
| | Japan Post Insurance Co. Ltd. | | | Insurance | | | | 1,496 | | | | 20,940 | |
| | Japan Prime Realty Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 7 | | | | 19,006 | |
| | Japan Real Estate Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 9 | | | | 37,120 | |
| | Japan Retail Fund Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 49 | | | | 36,832 | |
| | Japan Tobacco Inc. | | | Tobacco | | | | 8,300 | | | | 136,130 | |
| | JCR Pharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 400 | | | | 5,983 | |
| | Jeol Ltd. | | | Health Care Equipment & Supplies | | | | 300 | | | | 9,855 | |
| | JFE Holdings Inc. | | | Metals & Mining | | | | 3,500 | | | | 32,426 | |
| | JGC Holdings Corp. | | | Construction & Engineering | | | | 1,600 | | | | 19,997 | |
| | JMDC Inc. | | | Health Care Technology | | | | 100 | | | | 3,292 | |
| | JSR Corp. | | | Chemicals | | | | 1,236 | | | | 23,483 | |
| | JTEKT Corp. | | | Auto Components | | | | 1,600 | | | | 10,125 | |
| | Justsystems Corp. | | | Software | | | | 200 | | | | 4,622 | |
| | Kadokawa Corp. | | | Media | | | | 600 | | | | 11,035 | |
| | Kagome Co. Ltd. | | | Food Products | | | | 500 | | | | 10,415 | |
| | Kajima Corp. | | | Construction & Engineering | | | | 3,100 | | | | 29,406 | |
| | Kakaku.com Inc. | | | Interactive Media & Services | | | | 872 | | | | 14,832 | |
| | Kaken Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 260 | | | | 6,853 | |
| | Kamigumi Co. Ltd. | | | Transportation Infrastructure | | | | 636 | | | | 11,749 | |
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 243 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Kandenko Co. Ltd. | | | Construction & Engineering | | | | 600 | | | $ | 3,449 | |
| | Kaneka Corp. | | | Chemicals | | | | 472 | | | | 11,772 | |
| | Kansai Paint Co. Ltd. | | | Chemicals | | | | 1,288 | | | | 18,215 | |
| | KAO Corp. | | | Personal Products | | | | 3,224 | | | | 131,370 | |
| | Katitas Co. Ltd. | | | Real Estate Management & Development | | | | 300 | | | | 6,663 | |
| | Kawasaki Heavy Industries Ltd. | | | Machinery | | | | 1,000 | | | | 15,109 | |
| | Kawasaki Kisen Kaisha Ltd. | | | Marine | | | | 1,700 | | | | 23,865 | |
| | KDDI Corp. | | | Wireless Telecommunication Services | | | | 11,568 | | | | 339,100 | |
| | Keihan Holdings Co. Ltd. | | | Industrial Conglomerates | | | | 692 | | | | 17,952 | |
| | Keikyu Corp. | | | Road & Rail | | | | 1,700 | | | | 17,218 | |
| | Keio Corp. | | | Road & Rail | | | | 800 | | | | 29,127 | |
| | Keisei Electric Railway Co. Ltd. | | | Road & Rail | | | | 1,004 | | | | 27,329 | |
| | Kenedix Office Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3 | | | | 14,114 | |
| | Kewpie Corp. | | | Food Products | | | | 736 | | | | 12,102 | |
| | Keyence Corp. | | | Electronic Equipment, Instruments & Components | | | | 1,374 | | | | 454,693 | |
| | Kikkoman Corp. | | | Food Products | | | | 1,336 | | | | 75,686 | |
| | Kinden Corp. | | | Construction & Engineering | | | | 872 | | | | 9,205 | |
| | Kintetsu Group Holdings Co. Ltd. | | | Road & Rail | | | | 1,296 | | | | 43,157 | |
| | Kirin Holdings Co. Ltd. | | | Beverages | | | | 5,300 | | | | 81,544 | |
| | Kobayashi Pharmaceutical Co. Ltd. | | | Personal Products | | | | 424 | | | | 24,840 | |
| | Kobe Bussan Co. Ltd. | | | Food & Staples Retailing | | | | 1,000 | | | | 24,146 | |
| | Kobe Steel Ltd. | | | Metals & Mining | | | | 2,400 | | | | 9,617 | |
| | Koei Tecmo Holdings Co. Ltd. | | | Entertainment | | | | 994 | | | | 16,310 | |
| | Koito Manufacturing Co. Ltd. | | | Auto Components | | | | 1,594 | | | | 21,706 | |
| | Kokuyo Co. Ltd. | | | Commercial Services & Supplies | | | | 500 | | | | 6,342 | |
| | Komatsu Ltd. | | | Machinery | | | | 6,416 | | | | 115,736 | |
| | Konami Holdings Corp. | | | Entertainment | | | | 676 | | | | 31,198 | |
| | Konica Minolta Inc. | | | Technology Hardware, Storage & Peripherals | | | | 3,300 | | | | 10,168 | |
| | Kose Corp. | | | Personal Products | | | | 256 | | | | 26,353 | |
| | Kotobuki Spirits Co. Ltd. | | | Food Products | | | | 100 | | | | 5,769 | |
| | K’s Holdings Corp. | | | Specialty Retail | | | | 1,100 | | | | 9,081 | |
| | Kubota Corp. | | | Machinery | | | | 7,600 | | | | 105,222 | |
| | Kuraray Co. Ltd. | | | Chemicals | | | | 2,400 | | | | 16,763 | |
| | Kurita Water Industries Ltd. | | | Machinery | | | | 736 | | | | 26,238 | |
| | Kusuri no Aoki Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 80 | | | | 3,764 | |
| | Kyocera Corp. | | | Electronic Equipment, Instruments & Components | | | | 2,192 | | | | 110,550 | |
| | Kyowa Exeo Corp. | | | Construction & Engineering | | | | 636 | | | | 9,188 | |
| | Kyowa Kirin Co. Ltd. | | | Pharmaceuticals | | | | 1,700 | | | | 38,934 | |
| | Kyudenko Corp. | | | Construction & Engineering | | | | 280 | | | | 5,320 | |
| | Kyushu Electric Power Co. Inc. | | | Electric Utilities | | | | 3,200 | | | | 17,067 | |
| | Kyushu Financial Group Inc. | | | Banks | | | | 2,700 | | | | 7,126 | |
| | Kyushu Railway Co. | | | Road & Rail | | | | 1,100 | | | | 23,749 | |
| | LaSalle Logiport REIT | | | Equity Real Estate Investment Trusts (REITs | ) | | | 12 | | | | 13,422 | |
| | Lasertec Corp. | | | Semiconductors & Semiconductor Equipment | | | | 584 | | | | 59,290 | |
| | Lawson Inc. | | | Food & Staples Retailing | | | | 352 | | | | 11,527 | |
| | LINTEC Corp. | | | Chemicals | | | | 272 | | | | 4,174 | |
| | Lion Corp. | | | Household Products | | | | 1,700 | | | | 19,214 | |
| | LIXIL Group Corp. | | | Building Products | | | | 1,936 | | | | 28,342 | |
| | M3 Inc. | | | Health Care Technology | | | | 2,920 | | | | 81,722 | |
| | Mabuchi Motor Co. Ltd. | | | Electrical Equipment | | | | 372 | | | | 10,100 | |
| | Makita Corp. | | | Machinery | | | | 1,728 | | | | 33,415 | |
| | Mani Inc. | | | Health Care Equipment & Supplies | | | | 400 | | | | 4,858 | |
| | Marubeni Corp. | | | Trading Companies & Distributors | | | | 10,900 | | | | 95,487 | |
| | Marui Group Co. Ltd. | | | Multiline Retail | | | | 1,372 | | | | 22,730 | |
| | Maruichi Steel Tube Ltd. | | | Metals & Mining | | | | 412 | | | | 8,422 | |
| | Maruwa Unyu Kikan Co. Ltd. | | | Air Freight & Logistics | | | | 200 | | | | 2,005 | |
| | Matsui Securities Co. Ltd. | | | Capital Markets | | | | 600 | | | | 3,233 | |
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| 244 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Matsumotokiyoshi Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 900 | | | $ | 38,737 | |
| | Mazda Motor Corp. | | | Automobiles | | | | 3,900 | | | | 25,758 | |
| | Mebuki Financial Group Inc. | | | Banks | | | | 6,800 | | | | 13,248 | |
| | Medipal Holdings Corp. | | | Health Care Providers & Services | | | | 1,100 | | | | 14,006 | |
| | Meiji Holdings Co. Ltd. | | | Food Products | | | | 893 | | | | 39,670 | |
| | Menicon Co. Ltd. | | | Health Care Equipment & Supplies | | | | 340 | | | | 6,983 | |
| | Minebea Mitsumi Inc. | | | Machinery | | | | 2,836 | | | | 41,910 | |
| | Miraca Holdings Inc. | | | Health Care Providers & Services | | | | 372 | | | | 6,785 | |
| | MISUMI Group Inc. | | | Machinery | | | | 1,980 | | | | 42,679 | |
| | Mitsubishi Chemical Holdings Corp. | | | Chemicals | | | | 9,000 | | | | 41,137 | |
| | Mitsubishi Corp. | | | Trading Companies & Distributors | | | | 8,373 | | | | 229,535 | |
| | Mitsubishi Electric Corp. | | | Electrical Equipment | | | | 13,700 | | | | 123,470 | |
| | Mitsubishi Estate Co. Ltd. | | | Real Estate Management & Development | | | | 7,901 | | | | 103,522 | |
| | Mitsubishi Gas Chemical Co. Inc. | | | Chemicals | | | | 1,236 | | | | 16,190 | |
| | Mitsubishi Heavy Industries Ltd. | | | Machinery | | | | 2,000 | | | | 66,406 | |
| | Mitsubishi Logistics Corp. | | | Transportation Infrastructure | | | | 424 | | | | 9,989 | |
| | Mitsubishi Materials Corp. | | | Metals & Mining | | | | 972 | | | | 13,357 | |
| a | | Mitsubishi Motors Corp. | | | Automobiles | | | | 4,200 | | | | 15,031 | |
| | Mitsubishi UFJ Financial Group Inc. | | | Banks | | | | 84,500 | | | | 380,336 | |
| | Mitsubishi UFJ Lease & Finance Co. Ltd. | | | Diversified Financial Services | | | | 4,589 | | | | 19,720 | |
| | Mitsui & Co. Ltd. | | | Trading Companies & Distributors | | | | 11,000 | | | | 234,751 | |
| | Mitsui Chemicals Inc. | | | Chemicals | | | | 1,236 | | | | 24,072 | |
| | Mitsui Fudosan Co. Ltd. | | | Real Estate Management & Development | | | | 6,400 | | | | 121,792 | |
| | Mitsui Fudosan Logistics Park Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 4 | | | | 13,679 | |
| | Mitsui High-Tec Inc. | | | Semiconductors & Semiconductor Equipment | | | | 220 | | | | 10,351 | |
| | Mitsui Mining and Smelting Co. Ltd. | | | Metals & Mining | | | | 372 | | | | 7,813 | |
| | Mitsui OSK Lines Ltd. | | | Marine | | | | 2,308 | | | | 41,490 | |
| | Miura Co. Ltd. | | | Machinery | | | | 680 | | | | 13,840 | |
| | Mizuho Financial Group Inc. | | | Banks | | | | 17,900 | | | | 193,228 | |
| a | | Money Forward Inc. | | | Software | | | | 300 | | | | 6,384 | |
| | MonotaRO Co. Ltd. | | | Trading Companies & Distributors | | | | 1,620 | | | | 24,869 | |
| | Mori Hills REIT Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 11 | | | | 11,878 | |
| | Morinaga & Co. Ltd. | | | Food Products | | | | 304 | | | | 8,348 | |
| | Morinaga Milk Industry Co. Ltd. | | | Food Products | | | | 308 | | | | 9,054 | |
| | MS&AD Insurance Group Holdings Inc. | | | Insurance | | | | 3,272 | | | | 86,714 | |
| | Murata Manufacturing Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,032 | | | | 184,740 | |
| | Nabtesco Corp. | | | Machinery | | | | 776 | | | | 15,842 | |
| | Nagase & Co. Ltd. | | | Trading Companies & Distributors | | | | 700 | | | | 9,532 | |
| | Nagoya Railroad Co. Ltd. | | | Road & Rail | | | | 1,476 | | | | 22,679 | |
| | Nankai Electric Railway Co. Ltd. | | | Road & Rail | | | | 736 | | | | 15,031 | |
| | NEC Corp. | | | IT Services | | | | 1,860 | | | | 59,432 | |
| | NEC System Integration & Construction Ltd. | | | IT Services | | | | 600 | | | | 6,520 | |
| | Net One Systems Co. Ltd. | | | IT Services | | | | 600 | | | | 11,681 | |
| | Nexon Co. Ltd. | | | Entertainment | | | | 2,772 | | | | 48,873 | |
| | NGK Insulators Ltd. | | | Machinery | | | | 1,900 | | | | 23,628 | |
| | NGK Spark Plug Co. Ltd. | | | Auto Components | | | | 1,400 | | | | 24,780 | |
| | NH Foods Ltd. | | | Food Products | | | | 736 | | | | 19,373 | |
| | NHK Spring Co. Ltd. | | | Auto Components | | | | 1,100 | | | | 6,467 | |
| | Nichirei Corp. | | | Food Products | | | | 736 | | | | 12,127 | |
| | Nidec Corp. | | | Electrical Equipment | | | | 3,189 | | | | 179,119 | |
| | Nifco Inc. | | | Auto Components | | | | 600 | | | | 12,456 | |
| | Nihon Kohden Corp. | | | Health Care Equipment & Supplies | | | | 500 | | | | 10,639 | |
| | Nihon M&A Center Inc. | | | Professional Services | | | | 1,744 | | | | 20,037 | |
| | Nihon Unisys Ltd. | | | IT Services | | | | 412 | | | | 8,938 | |
| | Nikon Corp. | | | Household Durables | | | | 2,200 | | | | 20,777 | |
| | Nintendo Co. Ltd. | | | Entertainment | | | | 7,430 | | | | 300,496 | |
| | Nippon Accommodations Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 3 | | | | 13,596 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 245 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Nippon Building Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 11 | | | $ | 48,333 | |
| | Nippon Electric Glass Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 500 | | | | 8,612 | |
| | Nippon Express Co. Ltd. | | | Road & Rail | | | | 500 | | | | 25,424 | |
| | Nippon Kayaku Co. Ltd. | | | Chemicals | | | | 1,100 | | | | 8,800 | |
| | Nippon Paint Holdings Co. Ltd. | | | Chemicals | | | | 7,152 | | | | 48,373 | |
| | Nippon Prologis REIT Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 16 | | | | 34,986 | |
| | Nippon Sanso Holdings Corp. | | | Chemicals | | | | 1,024 | | | | 16,137 | |
| | Nippon Shinyaku Co. Ltd. | | | Pharmaceuticals | | | | 336 | | | | 17,178 | |
| | Nippon Shobukai Co. Ltd. | | | Chemicals | | | | 256 | | | | 9,551 | |
| | Nippon Steel Corp. | | | Metals & Mining | | | | 5,700 | | | | 79,015 | |
| | Nippon Telegraph & Telephone Corp. | | | Diversified Telecommunication Services | | | | 8,300 | | | | 223,979 | |
| | Nippon Television Holdings Inc. | | | Media | | | | 100 | | | | 799 | |
| | Nippon Yusen KK | | | Marine | | | | 3,300 | | | | 56,244 | |
| | Nipro Corp. | | | Health Care Equipment & Supplies | | | | 700 | | | | 5,262 | |
| | Nishi-Nippon Railroad Co. Ltd. | | | Road & Rail | | | | 500 | | | | 9,962 | |
| | Nissan Chemical Corp. | | | Chemicals | | | | 912 | | | | 40,640 | |
| | Nissan Motor Co. Ltd. | | | Automobiles | | | | 13,600 | | | | 43,240 | |
| | Nisshin Seifun Group Inc. | | | Food Products | | | | 1,700 | | | | 17,241 | |
| | Nissin Foods Holdings Co. Ltd. | | | Food Products | | | | 452 | | | | 31,446 | |
| | Nitori Holdings Co. Ltd. | | | Specialty Retail | | | | 501 | | | | 42,193 | |
| | Nitto Denko Corp. | | | Chemicals | | | | 1,000 | | | | 54,095 | |
| | Noevir Holdings Co. Ltd. | | | Personal Products | | | | 92 | | | | 3,610 | |
| | NOF Corp. | | | Chemicals | | | | 500 | | | | 18,032 | |
| | NOK Corp. | | | Auto Components | | | | 872 | | | | 6,789 | |
| | Nomura Holdings Inc. | | | Capital Markets | | | | 21,100 | | | | 69,738 | |
| | Nomura Real Estate Holdings Inc. | | | Real Estate Management & Development | | | | 800 | | | | 18,101 | |
| | Nomura Real Estate Master Fund Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 32 | | | | 35,306 | |
| | Nomura Research Institute Ltd. | | | IT Services | | | | 2,740 | | | | 67,201 | |
| | NS Solutions Corp. | | | IT Services | | | | 236 | | | | 5,698 | |
| | NSK Ltd. | | | Machinery | | | | 3,100 | | | | 15,142 | |
| | NTT Data Corp. | | | IT Services | | | | 4,300 | | | | 55,434 | |
| | Obayashi Corp. | | | Construction & Engineering | | | | 4,700 | | | | 30,133 | |
| | OBIC Business Consultants Co. Ltd. | | | Software | | | | 184 | | | | 5,695 | |
| | OBIC Co. Ltd. | | | IT Services | | | | 467 | | | | 62,559 | |
| | Odakyu Electric Railway Co. Ltd. | | | Road & Rail | | | | 2,200 | | | | 28,331 | |
| | Oji Holdings Corp. | | | Paper & Forest Products | | | | 6,000 | | | | 22,301 | |
| | Okuma Corp. | | | Machinery | | | | 236 | | | | 8,071 | |
| | Olympus Corp. | | | Health Care Equipment & Supplies | | | | 8,840 | | | | 169,691 | |
| | Omron Corp. | | | Electronic Equipment, Instruments & Components | | | | 1,316 | | | | 60,152 | |
| | Ono Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 2,904 | | | | 67,833 | |
| | Open House Co. Ltd. | | | Household Durables | | | | 500 | | | | 16,909 | |
| | Oracle Corp. Japan | | | Software | | | | 260 | | | | 13,831 | |
| | Orient Corp. | | | Consumer Finance | | | | 360 | | | | 2,850 | |
| | Oriental Land Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 1,332 | | | | 181,333 | |
| | ORIX Corp. | | | Diversified Financial Services | | | | 8,400 | | | | 117,720 | |
| | ORIX JREIT Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 19 | | | | 24,284 | |
| | Osaka Gas Co. Ltd. | | | Gas Utilities | | | | 2,700 | | | | 40,777 | |
| | OSG Corp. | | | Machinery | | | | 600 | | | | 7,403 | |
| | Otsuka Corp. | | | IT Services | | | | 736 | | | | 23,009 | |
| | Otsuka Holdings Co. Ltd. | | | Pharmaceuticals | | | | 2,904 | | | | 91,968 | |
| | Paltac Corp. | | | Distributors | | | | 260 | | | | 8,002 | |
| | Pan Pacific International Holdings Corp. | | | Multiline Retail | | | | 2,828 | | | | 50,017 | |
| | Panasonic Corp. | | | Household Durables | | | | 15,000 | | | | 105,133 | |
| a | | Park24 Co. Ltd. | | | Commercial Services & Supplies | | | | 872 | | | | 11,260 | |
| | Penta-Ocean Construction Co. Ltd. | | | Construction & Engineering | | | | 1,900 | | | | 9,543 | |
| a | | PeptiDream Inc. | | | Biotechnology | | | | 660 | | | | 7,364 | |
| | Persol Holdings Co. Ltd. | | | Professional Services | | | | 1,200 | | | | 22,177 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Pigeon Corp. | | | Household Products | | | | 736 | | | $ | 10,749 | |
| | Pola Orbis Holdings Inc. | | | Personal Products | | | | 600 | | | | 6,777 | |
| | Rakus Co. Ltd. | | | Software | | | | 600 | | | | 5,671 | |
| | Rakuten Inc. | | | Internet & Direct Marketing Retail | | | | 5,500 | | | | 23,597 | |
| | Recruit Holdings Co. Ltd. | | | Professional Services | | | | 9,676 | | | | 278,157 | |
| | Relo Group Inc. | | | Real Estate Management & Development | | | | 736 | | | | 11,197 | |
| a | | Renesas Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 8,500 | | | | 70,586 | |
| | Rengo Co. Ltd. | | | Containers & Packaging | | | | 1,500 | | | | 8,705 | |
| a | | RENOVA Inc. | | | Independent Power Producers & Energy Traders | | | | 300 | | | | 7,057 | |
| | Resona Holdings Inc. | | | Banks | | | | 15,536 | | | | 56,672 | |
| | Resorttrust Inc. | | | Hotels, Restaurants & Leisure | | | | 400 | | | | 6,417 | |
| | Ricoh Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 4,200 | | | | 30,641 | |
| | Rinnai Corp. | | | Household Durables | | | | 228 | | | | 16,366 | |
| | Rohm Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 636 | | | | 41,567 | |
| | Rohto Pharmaceutical Co. Ltd. | | | Personal Products | | | | 736 | | | | 23,568 | |
| | Ryohin Keikaku Co. Ltd. | | | Multiline Retail | | | | 1,700 | | | | 14,199 | |
| | Sankyo Co. Ltd. | | | Leisure Products | | | | 272 | | | | 8,240 | |
| | Sankyu Inc. | | | Road & Rail | | | | 372 | | | | 10,794 | |
| | Sanrio Co. Ltd. | | | Specialty Retail | | | | 400 | | | | 10,280 | |
| | Santen Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 2,600 | | | | 17,514 | |
| | Sanwa Holdings Corp. | | | Building Products | | | | 1,300 | | | | 11,173 | |
| | Sapporo Holdings Ltd. | | | Beverages | | | | 400 | | | | 8,788 | |
| | Sawai Group Holdings Co. Ltd. | | | Pharmaceuticals | | | | 288 | | | | 8,078 | |
| | SBI Holdings Inc. | | | Capital Markets | | | | 1,712 | | | | 30,705 | |
| | SCREEN Holdings Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 292 | | | | 15,897 | |
| | SCSK Corp. | | | IT Services | | | | 872 | | | | 13,193 | |
| | Secom Co. Ltd. | | | Commercial Services & Supplies | | | | 1,372 | | | | 78,446 | |
| | Sega Sammy Holdings Inc. | | | Leisure Products | | | | 1,228 | | | | 16,705 | |
| | Seibu Holdings Inc. | | | Industrial Conglomerates | | | | 1,400 | | | | 13,986 | |
| | Seiko Epson Corp. | | | Technology Hardware, Storage & Peripherals | | | | 1,900 | | | | 25,859 | |
| | Seino Holdings Co. Ltd. | | | Road & Rail | | | | 1,000 | | | | 8,014 | |
| | Sekisui Chemical Co. Ltd. | | | Household Durables | | | | 2,300 | | | | 28,094 | |
| | Sekisui House Ltd. | | | Household Durables | | | | 3,900 | | | | 64,692 | |
| | Sekisui House Reit Inc. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 28 | | | | 15,708 | |
| | Seven & i Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 5,400 | | | | 216,604 | |
| | Seven Bank Ltd. | | | Banks | | | | 4,300 | | | | 7,694 | |
| | SG Holdings Co. Ltd. | | | Air Freight & Logistics | | | | 3,044 | | | | 41,640 | |
| | Sharp Corp. | | | Household Durables | | | | 1,400 | | | | 8,347 | |
| a | | SHIFT Inc. | | | IT Services | | | | 60 | | | | 7,830 | |
| a | | Shikoku Electric Power Co. Inc. | | | Electric Utilities | | | | 1,000 | | | | 4,995 | |
| | Shimadzu Corp. | | | Electronic Equipment, Instruments & Components | | | | 1,900 | | | | 49,815 | |
| | Shimamura Co. Ltd. | | | Specialty Retail | | | | 116 | | | | 9,801 | |
| | SHIMANO Inc. | | | Leisure Products | | | | 539 | | | | 84,679 | |
| | Shimizu Corp. | | | Construction & Engineering | | | | 3,500 | | | | 17,144 | |
| | Shin-Etsu Chemical Co. Ltd. | | | Chemicals | | | | 2,770 | | | | 274,235 | |
| | Shinko Electric Industries Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 500 | | | | 10,760 | |
| | Shinsei Bank Ltd. | | | Banks | | | | 400 | | | | 5,734 | |
| | Shionogi & Co. Ltd. | | | Pharmaceuticals | | | | 1,912 | | | | 92,321 | |
| | Ship Healthcare Holdings Inc. | | | Health Care Providers & Services | | | | 500 | | | | 9,392 | |
| | Shiseido Co. Ltd. | | | Personal Products | | | | 2,708 | | | | 94,592 | |
| | SHO-BOND Holdings Co. Ltd. | | | Construction & Engineering | | | | 340 | | | | 14,704 | |
| a | | Shochiku Co. Ltd. | | | Entertainment | | | | 56 | | | | 4,604 | |
| | Showa Denko K.K. | | | Chemicals | | | | 1,352 | | | | 19,186 | |
| a | | Skylark Holdings Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 1,500 | | | | 15,990 | |
| | SMC Corp. | | | Machinery | | | | 397 | | | | 159,683 | |
| | SMS Co. Ltd. | | | Professional Services | | | | 380 | | | | 7,690 | |
| | Softbank Corp. | | | Wireless Telecommunication Services | | | | 19,300 | | | | 192,873 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | SoftBank Group Corp. | | | Wireless Telecommunication Services | | | | 7,360 | | | $ | 249,155 | |
| | Sohgo Security Services Co. Ltd. | | | Commercial Services & Supplies | | | | 428 | | | | 10,763 | |
| | Sojitz Corp. | | | Trading Companies & Distributors | | | | 1,600 | | | | 23,479 | |
| | Sompo Holdings Inc. | | | Insurance | | | | 2,236 | | | | 89,011 | |
| | Sony Corp. | | | Household Durables | | | | 8,700 | | | | 558,142 | |
| | Sotetsu Holdings Inc. | | | Road & Rail | | | | 500 | | | | 8,280 | |
| | Square Enix Holdings Co. Ltd. | | | Entertainment | | | | 600 | | | | 25,825 | |
| | Stanley Electric Co. Ltd. | | | Auto Components | | | | 1,016 | | | | 15,892 | |
| | Subaru Corp. | | | Automobiles | | | | 4,200 | | | | 62,879 | |
| | Sugi Pharmacy Co. Ltd. | | | Food & Staples Retailing | | | | 284 | | | | 11,400 | |
| | Sumco Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,300 | | | | 26,822 | |
| | Sumitomo Bakelite Co. Ltd. | | | Chemicals | | | | 236 | | | | 6,465 | |
| | Sumitomo Chemical Co. Ltd. | | | Chemicals | | | | 10,600 | | | | 36,396 | |
| | Sumitomo Corp. | | | Trading Companies & Distributors | | | | 7,900 | | | | 98,378 | |
| | Sumitomo Dainippon Pharma Co. Ltd. | | | Pharmaceuticals | | | | 1,300 | | | | 9,260 | |
| | Sumitomo Electric Industries Ltd. | | | Auto Components | | | | 5,300 | | | | 53,606 | |
| | Sumitomo Forestry Co. Ltd. | | | Household Durables | | | | 1,000 | | | | 15,234 | |
| | Sumitomo Heavy Industries Ltd. | | | Machinery | | | | 736 | | | | 13,592 | |
| | Sumitomo Metal Mining Co. Ltd. | | | Metals & Mining | | | | 1,700 | | | | 48,858 | |
| | Sumitomo Mitsui Financial Group Inc. | | | Banks | | | | 9,188 | | | | 255,432 | |
| | Sumitomo Realty & Development Co. Ltd. | | | Real Estate Management & Development | | | | 2,700 | | | | 61,333 | |
| | Sumitomo Rubber Industries Ltd. | | | Auto Components | | | | 1,200 | | | | 9,542 | |
| | Sundrug Co. Ltd. | | | Food & Staples Retailing | | | | 440 | | | | 10,685 | |
| | Suntory Beverage & Food Ltd. | | | Beverages | | | | 940 | | | | 33,315 | |
| | Sushiro Global Holdings Ltd. | | | Hotels, Restaurants & Leisure | | | | 660 | | | | 10,141 | |
| | Suzuken Co. Ltd. | | | Health Care Providers & Services | | | | 500 | | | | 11,417 | |
| | Suzuki Motor Corp. | | | Automobiles | | | | 3,232 | | | | 100,056 | |
| | Sysmex Corp. | | | Health Care Equipment & Supplies | | | | 1,380 | | | | 74,060 | |
| | T&D Holdings Inc. | | | Insurance | | | | 3,600 | | | | 33,999 | |
| | Taiheiyo Cement Corp. | | | Construction Materials | | | | 800 | | | | 11,264 | |
| | Taisei Corp. | | | Construction & Engineering | | | | 1,240 | | | | 34,439 | |
| | Taisho Pharmaceutical Holdings Co. Ltd. | | | Pharmaceuticals | | | | 316 | | | | 11,571 | |
| | Taiyo Yuden Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 841 | | | | 21,643 | |
| | Takara Bio Inc. | | | Biotechnology | | | | 272 | | | | 3,196 | |
| | Takara Holdings Inc. | | | Beverages | | | | 1,200 | | | | 8,763 | |
| | Takashimaya Co. Ltd. | | | Multiline Retail | | | | 1,100 | | | | 13,003 | |
| | Takeda Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 10,592 | | | | 275,658 | |
| | TBS Holdings Inc. | | | Media | | | | 172 | | | | 1,881 | |
| | TDK Corp. | | | Electronic Equipment, Instruments & Components | | | | 2,556 | | | | 78,669 | |
| | TechnoPro Holdings Inc. | | | Professional Services | | | | 728 | | | | 15,516 | |
| | Teijin Ltd. | | | Chemicals | | | | 1,200 | | | | 11,623 | |
| | Terumo Corp. | | | Health Care Equipment & Supplies | | | | 4,660 | | | | 131,161 | |
| | The Bank of Kyoto Ltd. | | | Banks | | | | 500 | | | | 18,274 | |
| | The Chiba Bank Ltd. | | | Banks | | | | 4,100 | | | | 22,066 | |
| | The Chugoku Bank Ltd. | | | Banks | | | | 1,000 | | | | 6,308 | |
| | The Chugoku Electric Power Co. Inc. | | | Electric Utilities | | | | 2,000 | | | | 10,142 | |
| | The Iyo Bank Ltd. | | | Banks | | | | 1,900 | | | | 9,280 | |
| | The Japan Steel Works Ltd. | | | Machinery | | | | 400 | | | | 7,865 | |
| | The Kansai Electric Power Co. Inc. | | | Electric Utilities | | | | 5,100 | | | | 42,704 | |
| | The Shizuoka Bank Ltd. | | | Banks | | | | 3,300 | | | | 20,268 | |
| | THK Co. Ltd. | | | Machinery | | | | 780 | | | | 13,450 | |
| | TIS Inc. | | | IT Services | | | | 1,600 | | | | 42,392 | |
| | Tobu Railway Co. Ltd. | | | Road & Rail | | | | 1,472 | | | | 34,678 | |
| | Toda Corp. | | | Construction & Engineering | | | | 1,600 | | | | 8,224 | |
| | Toho Co. Ltd. | | | Entertainment | | | | 760 | | | | 27,566 | |
| | Toho Gas Co. Ltd. | | | Gas Utilities | | | | 665 | | | | 13,245 | |
| | Tohoku Electric Power Co. Inc. | | | Electric Utilities | | | | 3,500 | | | | 16,467 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Japan (continued) | | | | | | | | | |
| | Tokai Carbon Co. Ltd. | | | Chemicals | | | | 1,300 | | | $ | 8,793 | |
| | Tokio Marine Holdings Inc. | | | Insurance | | | | 13,292 | | | | 235,545 | |
| | Tokyo Century Corp. | | | Diversified Financial Services | | | | 432 | | | | 13,759 | |
| a | | Tokyo Electric Power Co. Holdings Inc. | | | Electric Utilities | | | | 11,000 | | | | 35,110 | |
| | Tokyo Electron Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 1,040 | | | | 256,506 | |
| | Tokyo Gas Co. Ltd. | | | Gas Utilities | | | | 2,897 | | | | 49,056 | |
| | Tokyo Ohka Kogyo Co. Ltd. | | | Chemicals | | | | 292 | | | | 12,185 | |
| | Tokyo Tatemono Co. Ltd. | | | Real Estate Management & Development | | | | 1,472 | | | | 20,929 | |
| | TOKYU Corp. | | | Road & Rail | | | | 3,500 | | | | 39,825 | |
| | Tokyu Fudosan Holdings Corp. | | | Real Estate Management & Development | | | | 4,100 | | | | 21,273 | |
| | TOPPAN Inc. | | | Commercial Services & Supplies | | | | 2,000 | | | | 29,763 | |
| | Toray Industries Inc. | | | Chemicals | | | | 10,700 | | | | 52,618 | |
| | Toshiba Corp. | | | Industrial Conglomerates | | | | 2,980 | | | | 105,987 | |
| | Toshiba TEC Corp. | | | Technology Hardware, Storage & Peripherals | | | | 220 | | | | 5,684 | |
| | Tosoh Corp. | | | Chemicals | | | | 1,872 | | | | 20,822 | |
| | TOTO Ltd. | | | Building Products | | | | 1,056 | | | | 35,165 | |
| | Toyo Seikan Group Holdings Ltd. | | | Containers & Packaging | | | | 1,000 | | | | 12,049 | |
| | Toyo Suisan Kaisha Ltd. | | | Food Products | | | | 673 | | | | 27,711 | |
| | Toyo Tire Corp. | | | Auto Components | | | | 636 | | | | 6,898 | |
| | Toyoda Gosei Co. Ltd. | | | Auto Components | | | | 500 | | | | 7,548 | |
| | Toyota Boshoku Corp. | | | Auto Components | | | | 400 | | | | 4,897 | |
| | Toyota Industries Corp. | | | Auto Components | | | | 1,100 | | | | 52,285 | |
| | Toyota Motor Corp. | | | Automobiles | | | | 85,509 | | | | 1,108,259 | |
| | Toyota Tsusho Corp. | | | Trading Companies & Distributors | | | | 1,600 | | | | 49,522 | |
| | Trend Micro Inc. | | | Software | | | | 808 | | | | 43,653 | |
| | TS TECH Co. Ltd. | | | Auto Components | | | | 800 | | | | 7,843 | |
| | Tsumura & Co. | | | Pharmaceuticals | | | | 500 | | | | 10,657 | |
| | Tsuruha Holdings Inc. | | | Food & Staples Retailing | | | | 296 | | | | 17,362 | |
| | Ube Industries Ltd. | | | Chemicals | | | | 636 | | | | 8,489 | |
| | Ulvac Inc. | | | Semiconductors & Semiconductor Equipment | | | | 372 | | | | 13,184 | |
| | Unicharm Corp. | | | Household Products | | | | 2,700 | | | | 88,604 | |
| | United Urban Investment Corp. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 20 | | | | 20,657 | |
| | Ushio Inc. | | | Electrical Equipment | | | | 700 | | | | 7,264 | |
| | USS Co. Ltd. | | | Specialty Retail | | | | 1,400 | | | | 21,637 | |
| | Welcia Holdings Co. Ltd. | | | Food & Staples Retailing | | | | 644 | | | | 13,592 | |
| | West Japan Railway Co. | | | Road & Rail | | | | 1,620 | | | | 62,004 | |
| | Yakult Honsha Co. Ltd. | | | Food Products | | | | 889 | | | | 51,653 | |
| | Yamada Holdings Co. Ltd. | | | Specialty Retail | | | | 5,000 | | | | 16,443 | |
| | Yamaguchi Financial Group Inc. | | | Banks | | | | 1,500 | | | | 7,959 | |
| | Yamaha Corp. | | | Leisure Products | | | | 1,100 | | | | 39,062 | |
| | Yamaha Motor Co. Ltd. | | | Automobiles | | | | 2,096 | | | | 39,199 | |
| | Yamato Holdings Co. Ltd. | | | Air Freight & Logistics | | | | 2,320 | | | | 34,893 | |
| | Yamato Kogyo Co. Ltd. | | | Metals & Mining | | | | 236 | | | | 7,141 | |
| | Yamazaki Baking Co. Ltd. | | | Food Products | | | | 772 | | | | 8,870 | |
| | Yaoko Co. Ltd. | | | Food & Staples Retailing | | | | 136 | | | | 6,164 | |
| | YASKAWA Electric Corp. | | | Machinery | | | | 1,820 | | | | 52,370 | |
| | Yokogawa Electric Corp. | | | Electronic Equipment, Instruments & Components | | | | 1,700 | | | | 26,719 | |
| | Yokohama Rubber Co. Ltd. | | | Auto Components | | | | 900 | | | | 13,779 | |
| | Z Holdings Corp. | | | Interactive Media & Services | | | | 18,400 | | | | 48,331 | |
| | Zenkoku Hosho Co. Ltd. | | | Diversified Financial Services | | | | 372 | | | | 12,375 | |
| | Zensho Holdings Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 700 | | | | 17,337 | |
| | Zeon Corp. | | | Chemicals | | | | 1,000 | | | | 8,829 | |
| | Zozo Inc. | | | Internet & Direct Marketing Retail | | | | 736 | | | | 14,715 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments (Cost $29,743,748) | | | | | | | | | | | 22,742,013 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 249 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Japan Hedged ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Short-Term Investments 1.2% | | | | | | | | | |
| | Money Market Funds 1.2% | | | | | | | | | | | | |
| | | United States 1.2% | | | | | | | | | |
| b,c | | Institutional Fiduciary Trust Portfolio, 2.45% | | | Money Market Funds | | | | 272,885 | | | $ | 272,885 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments (Cost $272,885) | | | | | | | | | | | 272,885 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $30,016,633) 99.6% | | | | | | | | | | | 23,014,898 | |
| | Other Assets, less Liabilities 0.4% | | | | | | | | | | | 89,563 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 23,104,461 | |
| | | | | | | | | | | | | | |
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 September 30, 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 | | | HSBK | | | | Buy | | | | 13,811,930 | | | $ | 98,490 | | | | 10/04/22 | | | $ | — | | | $ | (3,068 | ) |
Japanese Yen | | | UBSW | | | | Buy | | | | 13,811,930 | | | | 98,490 | | | | 10/04/22 | | | | — | | | | (3,068 | ) |
Japanese Yen | | | DBAB | | | | Buy | | | | 13,811,930 | | | | 98,486 | | | | 10/04/22 | | | | — | | | | (3,064 | ) |
Japanese Yen | | | MSCO | | | | Buy | | | | 5,650,336 | | | | 40,291 | | | | 10/04/22 | | | | — | | | | (1,255 | ) |
Japanese Yen | | | DBAB | | | | Buy | | | | 979,852,070 | | | | 6,769,739 | | | | 10/04/22 | | | | — | | | | (234 | ) |
Japanese Yen | | | HSBK | | | | Buy | | | | 979,852,070 | | | | 6,769,608 | | | | 10/04/22 | | | | — | | | | (103 | ) |
Japanese Yen | | | UBSW | | | | Buy | | | | 979,852,070 | | | | 6,769,571 | | | | 10/04/22 | | | | — | | | | (65 | ) |
Japanese Yen | | | MSCO | | | | Buy | | | | 400,848,664 | | | | 2,769,275 | | | | 10/04/22 | | | | 69 | | | | — | |
Japanese Yen | | | MSCO | | | | Sell | | | | 406,499,000 | | | | 2,939,706 | | | | 10/04/22 | | | | 131,326 | | | | — | |
Japanese Yen | | | DBAB | | | | Sell | | | | 993,664,000 | | | | 7,184,870 | | | | 10/04/22 | | | | 319,943 | | | | — | |
Japanese Yen | | | HSBK | | | | Sell | | | | 993,664,000 | | | | 7,186,024 | | | | 10/04/22 | | | | 321,096 | | | | — | |
Japanese Yen | | | UBSW | | | | Sell | | | | 993,664,000 | | | | 7,186,097 | | | | 10/04/22 | | | | 321,169 | | | | — | |
Japanese Yen | | | MSCO | | | | Sell | | | | 400,434,000 | | | | 2,773,784 | | | | 11/02/22 | | | | — | | | | (129 | ) |
Japanese Yen | | | UBSW | | | | Sell | | | | 978,839,000 | | | | 6,780,556 | | | | 11/02/22 | | | | — | | | | (123 | ) |
Japanese Yen | | | HSBK | | | | Sell | | | | 978,839,000 | | | | 6,780,612 | | | | 11/02/22 | | | | — | | | | (67 | ) |
Japanese Yen | | | DBAB | | | | Sell | | | | 978,839,000 | | | | 6,780,739 | | | | 11/02/22 | | | | 60 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Forward Exchange Contracts | | | $ | 1,093,663 | | | $ | (11,176 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized appreciation (depreciation) | | | | | | | $ | 1,082,487 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
At September 30, 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 | | | | 12 | | | $ | 215,054 | | | | 12/08/22 | | | | $(2,018) | |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 250 | | | | | | | | Semiannual 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
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019a | |
|
Per share operating performance
(for a share outstanding throughout the period) | |
| | | | | |
Net asset value, beginning of period | | | $25.25 | | | $ | 22.40 | | | $ | 15.20 | | | $ | 26.41 | | | $ | 26.17 | |
| | | | |
| | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment incomec | | | 1.33 | | | | 1.54 | | | | 0.57 | | | | 0.77 | | | | 0.38 | |
| | | | | |
Net realized and unrealized gains (losses) | | | (6.11 | ) | | | 2.83 | | | | 7.13 | | | | (11.08 | ) | | | (0.02 | ) |
| | | | |
| | | | | |
Total from investment operations | | | (4.78 | ) | | | 4.37 | | | | 7.70 | | | | (10.31 | ) | | | 0.36 | |
| | | | |
| | | | | |
Less distributions from net investment income | | | (0.80 | ) | | | (1.52 | ) | | | (0.50 | ) | | | (0.90 | ) | | | (0.12 | ) |
| | | | |
| | | | | |
Net asset value, end of period | | | $19.67 | | | $ | 25.25 | | | $ | 22.40 | | | $ | 15.20 | | | $ | 26.41 | |
| | | | |
| | | | | |
Total returnd | | | (18.91)% | | | | 21.12% | | | | 50.80% | | | | (40.49)% | | | | 1.42% | |
| | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total expenses | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.21% | | | | 0.19% | |
| | | | | |
Net investment income | | | 13.15% | | | | 6.75% | | | | 2.86% | | | | 2.97% | | | | 3.08% | |
| | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net assets, end of period (000’s) | | | $60,974 | | | | $7,575 | | | | $4,480 | | | | $1,520 | | | | $2,641 | |
| | | | | |
Portfolio turnover ratef | | | 3.85% | g | | | 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: | | | 3.85% | | | | 18.50% | | | | 10.21% | | | | 12.74% | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 251 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Latin America ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 78.7% | | | | | | | | | |
| | | Brazil 46.0% | | | | | | | | | |
| | Ambev SA | | | Beverages | | | | 465,000 | | | $ | 1,335,977 | |
| | Americanas SA | | | Internet & Catalog Retail | | | | 71,343 | | | | 223,967 | |
| | Atacadao SA | | | Food & Staples Retailing | | | | 55,800 | | | | 199,417 | |
| | Auren Energia SA | | | Independent Power Producers & Energy Traders | | | | 37,479 | | | | 93,891 | |
| | B3 SA – Brasil Bolsa Balcao | | | Capital Markets | | | | 647,900 | | | | 1,563,197 | |
| | Banco Bradesco SA | | | Banks | | | | 161,260 | | | | 486,268 | |
| | Banco BTG Pactual SA | | | Capital Markets | | | | 124,000 | | | | 568,779 | |
| | Banco do Brasil SA | | | Banks | | | | 89,900 | | | | 640,237 | |
| | Banco Santander Brasil SA | | | Banks | | | | 40,300 | | | | 226,056 | |
| | BB Seguridade Participacoes SA | | | Insurance | | | | 71,300 | | | | 350,248 | |
| | BR Malls Participacoes SA | | | Real Estate Management & Development | | | | 86,800 | | | | 151,331 | |
| | Bradespar SA | | | Metals & Mining | | | | 3,110 | | | | 12,793 | |
| a | | BRF SA | | | Food Products | | | | 86,800 | | | | 206,695 | |
| | Caixa Seguridade Participacoes S/A | | | Insurance | | | | 49,600 | | | | 78,038 | |
| | CCR SA | | | Transportation Infrastructure | | | | 117,800 | | | | 272,892 | |
| | Centrais Eletricas Brasileiras SA | | | Electric Utilities | | | | 133,300 | | | | 1,058,987 | |
| | Cia de Saneamento Basico do Estado de Sao Paulo | | | Water Utilities | | | | 37,200 | | | | 341,130 | |
| | Cia Energetica de Minas Gerais | | | Electric Utilities | | | | 34,169 | | | | 102,339 | |
| | Cia Paranaense de Energia | | | Electric Utilities | | | | 34,100 | | | | 39,088 | |
| | Cia Siderurgica Nacional SA | | | Metals & Mining | | | | 65,100 | | | | 153,096 | |
| | Cielo SA | | | IT Services | | | | 120,900 | | | | 120,702 | |
| | Cosan SA | | | Oil, Gas & Consumable Fuels | | | | 127,112 | | | | 408,443 | |
| | CPFL Energia SA | | | Electric Utilities | | | | 18,600 | | | | 116,094 | |
| | CSN Mineracao SA | | | Metals & Mining | | | | 52,700 | | | | 32,250 | |
| | Dexco SA | | | Paper & Forest Products | | | | 31,180 | | | | 53,899 | |
| | Diagnosticos da America SA | | | Health Care Providers & Services | | | | 9,300 | | | | 32,428 | |
| | EDP – Energias do Brasil SA | | | Electric Utilities | | | | 27,900 | | | | 112,604 | |
| a | | Embraer SA | | | Aerospace & Defense | | | | 77,500 | | | | 166,926 | |
| | Energisa SA | | | Electric Utilities | | | | 27,900 | | | | 216,078 | |
| a | | Eneva SA | | | Independent Power Producers & Energy Traders | | | | 127,100 | | | | 332,504 | |
| | Engie Brasil Energia SA | | | Independent Power Producers & Energy Traders | | | | 18,600 | | | | 132,429 | |
| | Equatorial Energia SA | | | Electric Utilities | | | | 99,200 | | | | 493,354 | |
| b | | GPS Participacoes e Empreendimentos SA, 144A | | | Commercial Services & Supplies | | | | 43,400 | | | | 107,841 | |
| | Grendene SA | | | Textiles, Apparel & Luxury Goods | | | | 37,200 | | | | 48,625 | |
| | GRUPO DE MODA SOMA SA | | | Textiles, Apparel & Luxury Goods | | | | 46,500 | | | | 114,512 | |
| a | | Grupo Mateus SA | | | Food & Staples Retailing | | | | 43,400 | | | | 52,958 | |
| b,c | | Hapvida Participacoes e Investimentos S/A, 144A | | | Health Care Providers & Services | | | | 424,752 | | | | 594,465 | |
| | Hypera SA | | | Pharmaceuticals | | | | 43,400 | | | | 355,057 | |
| | Itau Unibanco Holding SA | | | Banks | | | | 49,600 | | | | 215,682 | |
| | Klabin SA | | | Containers & Packaging | | | | 80,600 | | | | 270,462 | |
| | Localiza Rent a Car SA | | | Road & Rail | | | | 83,776 | | | | 946,204 | |
| | Lojas Renner SA | | | Multiline Retail | | | | 105,426 | | | | 542,835 | |
| | M Dias Branco SA | | | Food Products | | | | 12,400 | | | | 100,436 | |
| a | | Magazine Luiza SA | | | Multiline Retail | | | | 319,336 | | | | 264,497 | |
| | Marfrig Global Foods SA | | | Food Products | | | | 37,200 | | | | 67,882 | |
| | Multiplan Empreendimentos Imobiliarios SA | | | Real Estate Management & Development | | | | 31,000 | | | | 138,527 | |
| | Natura & Co. Holding SA | | | Personal Products | | | | 102,300 | | | | 278,595 | |
| | Neoenergia SA | | | Electric Utilities | | | | 24,800 | | | | 70,152 | |
| | Odontoprev SA | | | Health Care Providers & Services | | | | 31,070 | | | | 50,550 | |
| a | | Petro Rio SA | | | Oil, Gas & Consumable Fuels | | | | 71,300 | | | | 362,903 | |
| | Petroleo Brasileiro SA | | | Oil, Gas & Consumable Fuels | | | | 396,800 | | | | 2,426,790 | |
| | Porto Seguro SA | | | Insurance | | | | 18,600 | | | | 72,662 | |
| | Raia Drogasil SA | | | Food & Staples Retailing | | | | 114,700 | | | | 482,012 | |
| b | | Rede D’Or Sao Luiz SA, 144A | | | Health Care Providers & Services | | | | 49,600 | | | | 272,537 | |
| | Rumo SA | | | Road & Rail | | | | 133,300 | | | | 455,436 | |
| | Sao Martinho SA | | | Food Products | | | | 18,600 | | | | 87,758 | |
| | | | | | | | | | |
| | | | | | |
| 252 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Latin America ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Brazil (continued) | | | | | | | | | |
| | Sendas Distribuidora SA | | | Food & Staples Retailing | | | | 83,700 | | | $ | 271,580 | |
| | SIMPAR SA | | | Road & Rail | | | | 31,000 | | | | 55,365 | |
| | SLC Agricola SA | | | Food Products | | | | 9,300 | | | | 74,433 | |
| a | | Smartfit Escola de Ginastica e Danca SA | | | Hotels, Restaurants & Leisure | | | | 12,400 | | | | 34,847 | |
| | Sul America SA | | | Insurance | | | | 43,400 | | | | 177,007 | |
| | Suzano SA | | | Paper & Forest Products | | | | 77,500 | | | | 637,612 | |
| | Telefonica Brasil SA | | | Diversified Telecommunication Services | | | | 46,500 | | | | 348,093 | |
| | TIM SA | | | Wireless Telecommunication Services | | | | 86,800 | | | | 193,857 | |
| | Totvs SA | | | Software | | | | 46,500 | | | | 252,323 | |
| | Transmissora Alianca de Energia Eletrica SA | | | Electric Utilities | | | | 24,800 | | | | 178,589 | |
| | Ultrapar Participacoes SA | | | Oil, Gas & Consumable Fuels | | | | 86,842 | | | | 188,332 | |
| | Usinas Siderurgicas de Minas Gerais SA Usiminas | | | Metals & Mining | | | | 18,600 | | | | 28,198 | |
| | Vale SA | | | Metals & Mining | | | | 414,400 | | | | 5,519,357 | |
| | Vamos Locacao de Caminhoes Maquinas e Equipamentos SA | | | Road & Rail | | | | 21,700 | | | | 54,843 | |
| | Vibra Energia SA | | | Specialty Retail | | | | 117,800 | | | | 375,690 | |
| | WEG SA | | | Machinery | | | | 158,100 | | | | 939,448 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 28,031,089 | |
| | | | | | | | | | | | | | |
| | | Chile 4.3% | | | | | | | | | |
| | Banco de Chile | | | Banks | | | | 4,667,329 | | | | 414,972 | |
| | Banco de Credito e Inversiones SA | | | Banks | | | | 5,829 | | | | 149,690 | |
| | Banco Santander Chile | | | Banks | | | | 6,599,280 | | | | 232,988 | |
| | CAP SA | | | Metals & Mining | | | | 7,905 | | | | 51,658 | |
| | Cencosud SA | | | Food & Staples Retailing | | | | 139,283 | | | | 178,114 | |
| | Cencosud Shopping SA | | | Real Estate Management & Development | | | | 51,336 | | | | 54,126 | |
| | Cia Cervecerias Unidas SA | | | Beverages | | | | 14,415 | | | | 79,168 | |
| | Cia Sud Americana de Vapores SA | | | Marine | | | | 1,879,933 | | | | 130,898 | |
| | Colbun SA | | | Independent Power Producers & Energy Traders | | | | 767,157 | | | | 68,072 | |
| | Empresas CMPC SA | | | Paper & Forest Products | | | | 128,092 | | | | 196,978 | |
| | Empresas Copec SA | | | Oil, Gas & Consumable Fuels | | | | 52,173 | | | | 337,742 | |
| | Enel Americas SA | | | Electric Utilities | | | | 2,015,961 | | | | 214,658 | |
| | Enel Chile SA | | | Electric Utilities | | | | 2,639,247 | | | | 77,116 | |
| | Falabella SA | | | Multiline Retail | | | | 83,917 | | | | 169,072 | |
| | Itau CorpBanca Chile SA | | | Banks | | | | 34,425,717 | | | | 65,873 | |
| | Plaza SA | | | Real Estate Management & Development | | | | 31,093 | | | | 25,350 | |
| | Quinenco SA | | | Industrial Conglomerates | | | | 28,458 | | | | 62,392 | |
| | Sociedad Quimica y Minera de Chile SA, A | | | Chemicals | | | | 1,829 | | | | 141,309 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,650,176 | |
| | | | | | | | | | | | | | |
| | | Colombia 1.2% | | | | | | | | | |
| | Bancolombia SA | | | Banks | | | | 29,047 | | | | 196,639 | |
| | Cementos Argos SA | | | Construction Materials | | | | 54,839 | | | | 40,347 | |
| | Ecopetrol SA | | | Oil, Gas & Consumable Fuels | | | | 507,563 | | | | 229,143 | |
| | Grupo de Inversiones Suramericana SA | | | Diversified Financial Services | | | | 10,726 | | | | 87,554 | |
| | Interconexion Electrica SA ESP | | | Electric Utilities | | | | 46,159 | | | | 165,787 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 719,470 | |
| | | | | | | | | | | | | | |
| | | Mexico 25.9% | | | | | | | | | |
| | Alfa SAB de CV, A | | | Industrial Conglomerates | | | | 387,035 | | | | 246,763 | |
| | Alpek SAB de CV | | | Chemicals | | | | 41,137 | | | | 53,376 | |
| | America Movil SAB de CV | | | Wireless Telecommunication Services | | | | 3,049,036 | | | | 2,521,719 | |
| | Arca Continental SAB de CV | | | Beverages | | | | 47,244 | | | | 340,735 | |
| b | | Banco del Bajio SA, 144A | | | Banks | | | | 75,299 | | | | 190,649 | |
| | Becle SAB de CV | | | Beverages | | | | 57,195 | | | | 101,462 | |
| a | | Cemex SAB de CV | | | Construction Materials | | | | 1,570,739 | | | | 542,133 | |
| | Coca-Cola Femsa SAB de CV | | | Beverages | | | | 56,234 | | | | 329,084 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 253 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Latin America ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Mexico (continued) | | | | | | | | | |
| | Concentradora Fibra Danhos SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 26,133 | | | $ | 31,452 | |
| a | | Controladora Vuela Cia de Aviacion SAB de CV, A | | | Airlines | | | | 97,247 | | | | 68,821 | |
| | El Puerto de Liverpool SAB de CV | | | Multiline Retail | | | | 20,615 | | | | 90,734 | |
| | Fibra Uno Administracion SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 308,946 | | | | 318,511 | |
| | Fomento Economico Mexicano SAB de CV | | | Beverages | | | | 194,494 | | | | 1,220,889 | |
| | Gruma SAB de CV | | | Food Products | | | | 20,770 | | | | 199,256 | |
| | Grupo Aeroportuario del Centro Norte SAB de CV | | | Transportation Infrastructure | | | | 28,830 | | | | 181,690 | |
| | Grupo Aeroportuario del Pacifico SAB de CV | | | Transportation Infrastructure | | | | 36,735 | | | | 465,045 | |
| | Grupo Aeroportuario del Sureste SAB de CV | | | Transportation Infrastructure | | | | 21,328 | | | | 420,747 | |
| | Grupo Bimbo SAB de CV | | | Food Products | | | | 236,623 | | | | 835,168 | |
| | Grupo Carso SAB de CV, A1 | | | Industrial Conglomerates | | | | 48,236 | | | | 176,943 | |
| | Grupo Comercial Chedraui SA de CV | | | Food & Staples Retailing | | | | 49,352 | | | | 146,062 | |
| | Grupo Elektra SAB de CV | | | Banks | | | | 6,727 | | | | 345,040 | |
| | Grupo Financiero Banorte SAB de CV | | | Banks | | | | 307,861 | | | | 1,979,987 | |
| a | | Grupo Financiero Inbursa SAB de CV | | | Banks | | | | 212,784 | | | | 337,788 | |
| | Grupo Mexico SAB de CV, B | | | Metals & Mining | | | | 336,939 | | | | 1,141,479 | |
| | Grupo Televisa SAB | | | Media | | | | 253,518 | | | | 274,857 | |
| | Industrias Bachoco SAB de CV | | | Food Products | | | | 17,267 | | | | 66,861 | |
| | Industrias Penoles SAB de CV | | | Metals & Mining | | | | 13,268 | | | | 129,186 | |
| | Kimberly-Clark de Mexico SAB de CV, A | | | Household Products | | | | 88,195 | | | | 118,032 | |
| | Megacable Holdings SAB de CV | | | Media | | | | 32,271 | | | | 65,128 | |
| | Operadora De Sites Mexicanos SAB de CV, A-1 | | | Diversified Telecommunication Services | | | | 134,943 | | | | 112,343 | |
| | Orbia Advance Corp. SAB de CV | | | Chemicals | | | | 103,943 | | | | 174,621 | |
| | Prologis Property Mexico SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 62,839 | | | | 159,977 | |
| | Promotora y Operadora de Infraestructura SAB de CV | | | Transportation Infrastructure | | | | 23,405 | | | | 159,653 | |
| | Qualitas Controladora SAB de CV | | | Insurance | | | | 17,639 | | | | 72,854 | |
| | Regional SAB de CV | | | Banks | | | | 25,420 | | | | 143,525 | |
| | Sitios Latinoamerica SAB de CV | | | Construction & Engineering | | | | 152,452 | | | | 68,161 | |
| | Wal-Mart de Mexico SAB de CV, V | | | Food & Staples Retailing | | | | 549,785 | | | | 1,936,654 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 15,767,385 | |
| | | | | | | | | | | | | | |
| | | Panama 0.0%† | | | | | | | | | |
| a | | BAC Holding International Corp. | | | Banks | | | | 554,900 | | | | 23,288 | |
| | | | | | | | | | | | | | |
| | | United States 1.3% | | | | | | | | | |
| | GCC SAB de CV | | | Construction Materials | | | | 17,918 | | | | 107,557 | |
| | JBS SA | | | Food Products | | | | 145,700 | | | | 676,666 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 784,223 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $48,437,960) | | | | | | | | | | | 47,975,631 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 20.9% | | | | | | | | | |
| | | Brazil 17.9% | | | | | | | | | |
| d | | Alpargatas SA, 2.045%, pfd. | | | Textiles, Apparel & Luxury Goods | | | | 24,800 | | | | 97,525 | |
| d | | Banco Bradesco SA, 3.165%, pfd. | | | Banks | | | | 554,925 | | | | 2,035,500 | |
| d | | Bradespar SA, 32.075%, pfd. | | | Metals & Mining | | | | 27,907 | | | | 122,590 | |
| d | | Braskem SA, 35.194%, pfd., A | | | Chemicals | | | | 21,700 | | | | 105,273 | |
| d | | Centrais Eletricas Brasileiras SA, 3.575%, pfd., B | | | Electric Utilities | | | | 31,000 | | | | 258,770 | |
| d | | Cia de Transmissao de Energia Eletrica Paulista, 6.461%, pfd. | | | Electric Utilities | | | | 18,600 | | | | 78,989 | |
| d | | Cia Paranaense de Energia, 17.781%, pfd. | | | Electric Utilities | | | | 136,400 | | | | 165,934 | |
| d | | Companhia Energetica de Minas Gerais, 12.825%, pfd. | | | Electric Utilities | | | | 133,315 | | | | 265,208 | |
| d | | Gerdau SA, 14.894%, pfd. | | | Metals & Mining | | | | 111,600 | | | | 504,267 | |
| d | | Itau Unibanco Holding SA, 2.937%, pfd. | | | Banks | | | | 514,600 | | | | 2,669,639 | |
| d | | Itausa SA, 5.807%, pfd. | | | Banks | | | | 508,430 | | | | 914,617 | |
| d | | Metalurgica Gerdau SA, 21.719%, pfd. | | | Metals & Mining | | | | 74,400 | | | | 145,668 | |
| d | | Petroleo Brasileiro SA, 38.601%, pfd. | | | Oil, Gas & Consumable Fuels | | | | 598,300 | | | | 3,296,327 | |
| | | | | | | | | | |
| | | | | | |
| 254 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Latin America ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Preferred Stocks (continued) | | | | | | | | | |
| | | Brazil (continued) | | | | | | | | | |
| d | | Raizen SA, 1.575%, pfd. | | | Oil, Gas & Consumable Fuels | | | | 127,100 | | | $ | 98,459 | |
| d | | Unipar Carbocloro SA, 16.852%, pfd., B | | | Chemicals | | | | 4,940 | | | | 87,669 | |
| d | | Usinas Siderurgicas de Minas Gerais SA Usiminas, 10.931%, pfd., A | | | Metals & Mining | | | | 49,600 | | | | 68,960 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 10,915,395 | |
| | | | | | | | | | | | | | |
| | | Chile 2.4% | | | | | | | | | |
| | Embotelladora Andina SA, B, 16.21%, pfd., B | | | Beverages | | | | 40,176 | | | | 70,296 | |
| | Sociedad Quimica y Minera de Chile SA, 0.005%, pfd., B | | | Chemicals | | | | 14,539 | | | | 1,367,487 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 1,437,783 | |
| | | | | | | | | | | | | | |
| | | Colombia 0.6% | | | | | | | | | |
| | Bancolombia SA, 8.583%, pfd. | | | Banks | | | | 47,678 | | | | 290,800 | |
| | Grupo Aval Acciones y Valores SA, 5.062%, pfd. | | | Banks | | | | 463,419 | | | | 58,507 | |
| | Grupo de Inversiones Suramericana SA, 5.772%, pfd. | | | Diversified Financial Services | | | | 8,370 | | | | 23,321 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 372,628 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $11,896,256) | | | | | | | | | | | 12,725,806 | |
| | | | | | | | | | | | | | |
| | | Right 0.0%† | | | | | | | | | |
| | | Brazil 0.0%† | | | | | | | | | |
| a | | Localiza Rent a Car SA | | | Road & Rail | | | | 257 | | | | 523 | |
| | | | | | | | | | | | | | |
| | Total Rights (Cost $0) | | | | | | | | | | | 523 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $60,334,216) 99.6% | | | | | | | | | | | 60,701,960 | |
| | Other Assets, less Liabilities 0.4% | | | | | | | | | | | 271,581 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 60,973,541 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $1,165,492, representing 1.9% 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 September 30,2022, the value of was $594,465, representing 1.0% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
At September 30, 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 | | | | 10 | | | $ | 204,298 | | | | 10/13/22 | | | $ | (8,940 | ) |
Mini Bovespa Index | | | Long | | | | 2 | | | | 8,172 | | | | 10/13/22 | | | | (334 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Futures Contracts | | | | | | | | | | | | | | | | | | $ | (9,274 | ) |
| | | | | | | | | | | | | | | | | | | | |
*As of period end.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 255 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Mexico ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 27.49 | | | $ | 22.14 | | | $ | 14.35 | | | $ | 22.11 | | | $ | 24.98 | | | $ | 24.90 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.64 | | | | 0.66 | | | | 0.33 | | | | 0.64 | | | | 0.51 | | | | 0.12 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (5.69 | ) | | | 5.48 | | | | 7.78 | | | | (7.73 | ) | | | (2.86 | ) | | | 0.04 | |
| | | | |
| | | | | | |
Total from investment operations | | | (5.05 | ) | | | 6.14 | | | | 8.11 | | | | (7.09 | ) | | | (2.35 | ) | | | 0.16 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.34 | ) | | | (0.79 | ) | | | (0.32 | ) | | | (0.67 | ) | | | (0.52 | ) | | | (0.08 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 22.10 | | | $ | 27.49 | | | $ | 22.14 | | | $ | 14.35 | | | $ | 22.11 | | | $ | 24.98 | |
| | | | |
| | | | | | |
Total returnd | | | (18.41)% | | | | 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% | | | | 0.19% | |
| | | | | | |
Net investment income | | | 5.28% | | | | 2.73% | | | | 1.80% | | | | 2.93% | | | | 2.21% | | | | 1.18% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $9,946 | | | | $12,372 | | | | $5,536 | | | | $2,871 | | | | $4,422 | | | | $2,498 | |
| | | | | | |
Portfolio turnover ratef | | | 8.34% | g | | | 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: | | | 8.34% | | | | 22.39% | | | | 18.32% | | | | 19.32% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 256 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Mexico ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.9% | | | | | | | | | |
| | | Mexico 99.1% | | | | | | | | | |
| | Alfa SAB de CV, A | | | Industrial Conglomerates | | | | 305,667 | | | $ | 194,885 | |
| | Alpek SAB de CV | | | Chemicals | | | | 31,464 | | | | 40,825 | |
| | America Movil SAB de CV | | | Wireless Telecommunication Services | | | | 1,599,543 | | | | 1,322,909 | |
| | Arca Continental SAB de CV | | | Beverages | | | | 37,170 | | | | 268,079 | |
| a | | Banco del Bajio SA, 144A | | | Banks | | | | 59,688 | | | | 151,124 | |
| | Becle SAB de CV | | | Beverages | | | | 45,396 | | | | 80,531 | |
| b | | Cemex SAB de CV | | | Construction Materials | | | | 973,881 | | | | 336,130 | |
| | Coca-Cola Femsa SAB de CV | | | Beverages | | | | 44,262 | | | | 259,023 | |
| | Concentradora Fibra Danhos SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 19,953 | | | | 24,014 | |
| b | | Controladora Vuela Cia de Aviacion SAB de CV, A | | | Airlines | | | | 78,552 | | | | 55,591 | |
| | El Puerto de Liverpool SAB de CV | | | Multiline Retail | | | | 16,641 | | | | 73,243 | |
| | Fibra Uno Administracion SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 242,064 | | | | 249,558 | |
| | Fomento Economico Mexicano SAB de CV | | | Beverages | | | | 110,412 | | | | 693,085 | |
| | Gruma SAB de CV | | | Food Products | | | | 16,407 | | | | 157,400 | |
| | Grupo Aeroportuario del Centro Norte SAB de CV | | | Transportation Infrastructure | | | | 22,941 | | | | 144,577 | |
| | Grupo Aeroportuario del Pacifico SAB de CV | | | Transportation Infrastructure | | | | 24,255 | | | | 307,055 | |
| | Grupo Aeroportuario del Sureste SAB de CV | | | Transportation Infrastructure | | | | 14,985 | | | | 295,616 | |
| | Grupo Bimbo SAB de CV | | | Food Products | | | | 129,114 | | | | 455,712 | |
| | Grupo Carso SAB de CV, A1 | | | Industrial Conglomerates | | | | 37,962 | | | | 139,255 | |
| | Grupo Comercial Chedraui SA de CV | | | Food & Staples Retailing | | | | 38,844 | | | | 114,962 | |
| | Grupo Elektra SAB de CV | | | Banks | | | | 5,343 | | | | 274,052 | |
| | Grupo Financiero Banorte SAB de CV | | | Banks | | | | 166,122 | | | | 1,068,402 | |
| b | | Grupo Financiero Inbursa SAB de CV | | | Banks | | | | 167,949 | | | | 266,614 | |
| | Grupo Mexico SAB de CV, B | | | Metals & Mining | | | | 188,577 | | | | 638,859 | |
| | Grupo Televisa SAB | | | Media | | | | 202,248 | | | | 219,272 | |
| | Industrias Bachoco SAB de CV | | | Food Products | | | | 13,554 | | | | 52,484 | |
| | Industrias Penoles SAB de CV | | | Metals & Mining | | | | 10,449 | | | | 101,738 | |
| | Kimberly-Clark de Mexico SAB de CV, A | | | Household Products | | | | 70,065 | | | | 93,768 | |
| | Megacable Holdings SAB de CV | | | Media | | | | 25,200 | | | | 50,857 | |
| | Operadora De Sites Mexicanos SAB de CV, A-1 | | | Diversified Telecommunication Services | | | | 105,552 | | | | 87,875 | |
| | Orbia Advance Corp. SAB de CV | | | Chemicals | | | | 81,738 | | | | 137,317 | |
| | Prologis Property Mexico SA de CV | | | Equity Real Estate Investment Trusts (REITs | ) | | | 49,923 | | | | 127,095 | |
| | Promotora y Operadora de Infraestructura SAB de CV | | | Transportation Infrastructure | | | | 18,423 | | | | 125,670 | |
| | Qualitas Controladora SAB de CV | | | Insurance | | | | 14,193 | | | | 58,621 | |
| | Regional SAB de CV | | | Banks | | | | 19,926 | | | | 112,505 | |
| b | | Sitios Latinoamerica SAB de CV | | | Construction & Engineering | | | | 79,977 | | | | 35,758 | |
| | Wal-Mart de Mexico SAB de CV, V | | | Food & Staples Retailing | | | | 295,002 | | | | 1,039,164 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 9,853,625 | |
| | | | | | | | | | | | | | |
| | | United States 0.8% | | | | | | | | | |
| | GCC SAB de CV | | | Construction Materials | | | | 13,743 | | | | 82,496 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $10,126,558) 99.9% | | | | | | | | | | | 9,936,121 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 9,737 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 9,945,858 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $694,093, representing 7.0% of net assets.
bNon-income producing.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 257 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Russia ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | — | b | | $ | 26.98 | | | $ | 18.91 | | | $ | 23.37 | | | $ | 24.24 | | | $ | 23.90 | |
| | | | |
| | | | | | |
| Income from investment operationsc: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income (loss)d | | | — | | | | 1.68 | | | | 1.41 | | | | 1.73 | | | | 1.03 | | | | (— | )b |
| | | | | | |
Net realized and unrealized gains (losses) | | | 0.01 | e | | | (27.28 | ) | | | 8.34 | | | | (4.44 | ) | | | (1.26 | ) | | | 0.34 | |
| | | | |
| | | | | | |
Total from investment operations | | | 0.01 | e | | | (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 period | | $ | 0.01 | e | | $ | — | | | $ | 26.98 | | | $ | 18.91 | | | $ | 23.37 | | | $ | 24.24 | |
| | | | |
| | | | | | |
Total returnf | | | 72.50% | g | | | (100.00)% | | | | 52.27% | | | | (13.90)% | | | | (0.63)% | | | | 1.42% | |
| | | | | | |
| Ratios to average net assetsh | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
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% | | | | 0.19% | | | | 0.19% | |
| | | | | | |
Net investment income (loss) | | | 104.56% | g | | | 6.19% | | | | 6.02% | | | | 6.49% | | | | 4.57% | | | | (0.13)% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $5 | | | | $3 | | | | $10,794 | | | | $13,240 | | | | $11,683 | | | | $2,424 | |
| | | | | | |
Portfolio turnover ratei | | | —% | j | | | 20.45% | j | | | 18.82% | j | | | 15.74% | j | | | 31.57% | | | | 7.58% | |
aFor the period February 6, 2018 (commencement of operations) to March 31, 2018.
bAmount rounds to less than $0.01 per share.
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.
eActual amount less than $0.01 per share. Amount shown reflects effect of rounding.
fTotal 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.
gThe amounts shown reflect the Fund’s NAV per share increasing from $0.003378 as of March 31, 2022 to $0.005827 as of September 30, 2022.
hRatios are annualized for periods less than one year.
iPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| | | | | | | | | | | | | | | | | | | | | | | | |
| jPortfolio turnover rate excluding cash creations was as follows: | | | 20.45% | | | | 18.82% | | | | 15.74% | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 258 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Russia ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | 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 Works PJSC | | | 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 PJSC | | | Electric Utilities | | | | 1,418,704 | | | | — | |
| | Novatek PJSC | | | Oil, Gas & Consumable Fuels | | | | 47,472 | | | | — | |
| | Novolipetsk Steel PJSC | | | Metals & Mining | | | | 200,944 | | | | — | |
| | PhosAgro PJSC | | | Chemicals | | | | 6,208 | | | | — | |
| | Polyus PJSC | | | Metals & Mining | | | | 3,504 | | | | — | |
| | Raspadskaya OJSC | | | Metals & Mining | | | | 10,720 | | | | — | |
| | Rosneft Oil Co. 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 Producers & Energy Traders | | | | 1,811,376 | | | | — | |
| b | | United Co. RUSAL International PJSC | | | Metals & Mining | | | | 447,600 | | | | — | |
| | VTB Bank PJSC | | | Banks | | | | 886,353,216 | | | | — | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $21,363,101) | | | | | | | | | | | — | |
| | | | | | | | | | | | | | |
| | | 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
(Cost $1,113,686) | | | . | | | | | | | | — | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $22,476,787) 0.0% | | | | | | | | | | | — | |
| | Other Assets, less
Liabilities 100.0% | | | | | | | | | | | 4,664 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 4,664 | |
| | | | | | | | | | | | | | |
†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 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 September 30, 2022, the value of was $0, representing 0.0% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 259 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Saudi Arabia ETF
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, beginning of period | | $ | 41.30 | | | $ | 30.33 | | | $ | 20.15 | | | $ | 27.89 | | | $ | 24.71 | |
| | | | |
| | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment incomec | | | 0.61 | | | | 0.62 | | | | 0.52 | | | | 0.89 | | | | 0.11 | |
| | | | | |
Net realized and unrealized gains (losses) | | | (5.19 | ) | | | 11.03 | | | | 10.23 | | | | (7.80 | ) | | | 3.07 | |
| | | | |
| | | | | |
Total from investment operations | | | (4.58 | ) | | | 11.65 | | | | 10.75 | | | | (6.91 | ) | | | 3.18 | |
| | | | |
| | | | | |
Less distributions from net investment income | | | (0.33 | ) | | | (0.68 | ) | | | (0.57 | ) | | | (0.83 | ) | | | — | |
| | | | |
| | | | | |
Net asset value, end of period | | $ | 36.39 | | | $ | 41.30 | | | $ | 30.33 | | | $ | 20.15 | | | $ | 27.89 | |
| | | | |
| | | | | |
Total returnd | | | (11.10)% | | | | 38.99% | | | | 54.12% | | | | (25.51)% | | | | 12.87% | |
| | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total expenses | | | 0.39% | | | | 0.39% | | | | 0.39% | | | | 0.39% | | | | 0.39% | |
| | | | | |
Net investment income | | | 3.09% | | | | 1.77% | | | | 2.11% | | | | 3.46% | | | | 0.93% | |
| | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net assets, end of period (000’s) | | | $5,458 | | | | $4,130 | | | | $3,033 | | | | $2,015 | | | | $2,789 | |
| | | | | |
Portfolio turnover ratef | | | 2.48% | g | | | 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: | | | 2.48% | | | | 15.51% | | | | 16.74% | | | | 32.37% | | | | | |
| | | | | | | | | | |
| | | | | | |
| 260 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Saudi Arabia ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.8% | | | | | | | | | |
| | | Saudi Arabia 99.8% | | | | | | | | | |
| | Abdullah Al Othaim Markets Co. | | | Food & Staples Retailing | | | | 816 | | | $ | 26,802 | |
| | ACWA Power Co. | | | Independent Power Producers & Energy Traders | | | | 2,457 | | | | 109,868 | |
| | Advanced Petrochemical Co. | | | Chemicals | | | | 2,355 | | | | 27,988 | |
| a | | Al Rajhi Bank | | | Banks | | | | 34,788 | | | | 752,799 | |
| | Alinma Bank | | | Banks | | | | 17,742 | | | | 171,186 | |
| | Almarai Co. JSC | | | Food Products | | | | 4,650 | | | | 65,845 | |
| | Arab National Bank | | | Banks | | | | 12,282 | | | | 100,525 | |
| | Arabian Centres Co. Ltd. | | | Real Estate Management & Development | | | | 2,952 | | | | 15,243 | |
| | Arabian Internet & Communications Services Co. | | | IT Services | | | | 465 | | | | 29,457 | |
| a | | Bank AlBilad | | | Banks | | | | 9,042 | | | | 114,319 | |
| | Bank Al-Jazira | | | Banks | | | | 7,413 | | | | 44,632 | |
| | Banque Saudi Fransi | | | Banks | | | | 10,845 | | | | 121,238 | |
| | BinDawood Holding Co. | | | Food & Staples Retailing | | | | 537 | | | | 9,719 | |
| | Bupa Arabia for Cooperative Insurance Co. | | | Insurance | | | | 1,056 | | | | 47,333 | |
| a | | Co. for Cooperative Insurance | | | Insurance | | | | 1,137 | | | | 24,362 | |
| | Dallah Healthcare Co. | | | Health Care Providers & Services | | | | 699 | | | | 29,396 | |
| a | | Dar Al Arkan Real Estate Development Co. | | | Real Estate Management & Development | | | | 9,768 | | | | 41,339 | |
| | Dr Sulaiman Al Habib Medical Services Group Co. | | | Health Care Providers & Services | | | | 1,692 | | | | 93,675 | |
| | Elm Co. | | | IT Services | | | | 471 | | | | 39,716 | |
| a | | Emaar Economic City | | | Real Estate Management & Development | | | | 8,133 | | | | 21,301 | |
| | Etihad Etisalat Co. | | | Wireless Telecommunication Services | | | | 6,963 | | | | 65,979 | |
| | Jarir Marketing Co. | | | Specialty Retail | | | | 1,086 | | | | 48,273 | |
| a | | Mobile Telecommunications Co. Saudi Arabia | | | Wireless Telecommunication Services | | | | 8,151 | | | | 24,863 | |
| | Mouwasat Medical Services Co. | | | Health Care Providers & Services | | | | 876 | | | | 46,167 | |
| | Nahdi Medical Co. | | | Food & Staples Retailing | | | | 723 | | | | 36,525 | |
| a | | National Industrialization Co. | | | Chemicals | | | | 6,021 | | | | 21,860 | |
| | Qassim Cement Co. | | | Construction Materials | | | | 810 | | | | 16,687 | |
| a | | Rabigh Refining & Petrochemical Co. | | | Oil, Gas & Consumable Fuels | | | | 7,719 | | | | 28,189 | |
| | Riyad Bank | | | Banks | | | | 25,425 | | | | 214,864 | |
| | SABIC Agri-Nutrients Co. | | | Chemicals | | | | 4,170 | | | | 175,369 | |
| | Sahara International Petrochemical Co. | | | Chemicals | | | | 6,630 | | | | 73,853 | |
| a | | Saudi Airlines Catering Co. | | | Commercial Services & Supplies | | | | 738 | | | | 14,025 | |
| a | | Saudi Arabian Mining Co. | | | Metals & Mining | | | | 13,830 | | | | 256,207 | |
| b | | Saudi Arabian Oil Co., 144A | | | Oil, Gas & Consumable Fuels | | | | 49,857 | | | | 475,745 | |
| | Saudi Basic Industries Corp. | | | Chemicals | | | | 16,056 | | | | 379,498 | |
| | Saudi British Bank | | | Banks | | | | 17,811 | | | | 185,600 | |
| | Saudi Cement Co. | | | Construction Materials | | | | 1,392 | | | | 19,340 | |
| | Saudi Electricity Co. | | | Electric Utilities | | | | 14,421 | | | | 94,195 | |
| a | | Saudi Ground Services Co. | | | Transportation Infrastructure | | | | 1,641 | | | | 11,291 | |
| | Saudi Industrial Investment Group | | | Chemicals | | | | 6,825 | | | | 41,528 | |
| | Saudi Investment Bank | | | Banks | | | | 9,042 | | | | 41,107 | |
| a | | Saudi Kayan Petrochemical Co. | | | Chemicals | | | | 13,563 | | | | 49,602 | |
| | Saudi National Bank | | | Banks | | | | 38,610 | | | | 648,467 | |
| a | | Saudi Research & Media Group | | | Media | | | | 594 | | | | 30,072 | |
| | Saudi Tadawul Group Holding Co. | | | Capital Markets | | | | 663 | | | | 35,541 | |
| | Saudi Telecom Co. | | | Diversified Telecommunication Services | | | | 32,148 | | | | 336,711 | |
| | Saudia Dairy & Foodstuff Co. | | | Food Products | | | | 282 | | | | 14,562 | |
| | Savola Group | | | Food Products | | | | 4,830 | | | | 36,447 | |
| a | | Seera Group Holding | | | Hotels, Restaurants & Leisure | | | | 2,700 | | | | 13,884 | |
| | Southern Province Cement Co. | | | Construction Materials | | | | 1,275 | | | | 18,461 | |
| | United Electronics Co. | | | Specialty Retail | | | | 540 | | | | 15,810 | |
| a | | Yamama Cement Co. | | | Construction Materials | | | | 1,824 | | | | 13,958 | |
| | Yanbu Cement Co. | | | Construction Materials | | | | 1,419 | | | | 14,126 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | | Semiannual Report | | | | | | | | 261 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Saudi Arabia ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Saudi Arabia (continued) | | | | | | | | | |
| | Yanbu National Petrochemical Co. | | | Chemicals | | | | 5,085 | | | $ | 62,666 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $4,370,666) 99.8% | | | | | | | | | | | 5,448,215 | |
| | Other Assets, less Liabilities 0.2% | | | | | | | | | | | 9,793 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 5,458,008 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $475,745, representing 8.7% of net assets.
| | | | | | | | | | |
| | | | | | |
| 262 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Africa ETF
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019a | |
Per share operating performance
(for a share outstanding throughout the period) | |
| | | | | |
Net asset value, beginning of period | | $ | 29.79 | | | $ | 26.22 | | | $ | 14.81 | | | $ | 26.62 | | | $ | 24.42 | |
| | | | |
| | | | | |
Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net investment incomec | | | 0.62 | | | | 0.94 | | | | 1.03 | | | | 2.65 | | | | 0.22 | |
| | | | | |
Net realized and unrealized gains (losses) | | | (10.14 | ) | | | 3.35 | | | | 11.33 | | | | (11.76 | ) | | | 2.04 | |
| | | | |
| | | | | |
Total from investment operations | | | (9.52 | ) | | | 4.29 | | | | 12.36 | | | | (9.11 | ) | | | 2.26 | |
| | | | |
| | | | | |
Less distributions from net investment income | | | (0.60 | ) | | | (0.72 | ) | | | (0.95 | ) | | | (2.70 | ) | | | (0.06 | ) |
| | | | |
| | | | | |
Net asset value, end of period | | $ | 19.67 | | | $ | 29.79 | | | $ | 26.22 | | | $ | 14.81 | | | $ | 26.62 | |
| | | | |
| | | | | |
Total returnd | | | (32.23)% | | | | 16.82% | | | | 85.24% | | | | (38.46)% | | | | 9.26% | |
|
| Ratios to average net assetse | |
| | | | | |
Total expenses | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | | | | 0.19% | |
| | | | | |
Net investment income | | | 5.15% | | | | 3.56% | | | | 4.94% | | | | 10.42% | | | | 1.75% | |
|
| Supplemental data | |
| | | | | |
Net assets, end of period (000’s) | | | $2,950 | | | | $5,958 | | | | $2,622 | | | | $1,481 | | | | $2,662 | |
| | | | | |
Portfolio turnover ratef | | | 4.29% | g | | | 13.19% | h | | | 11.08% | h | | | 21.44% | h | | | 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”).
| | | | | | | | | | | | | | | | | | | | |
| hPortfolio turnover rate excluding cash creations was as follows: | | | 4.29% | | | | 13.19% | | | | 11.08% | | | | 21.44% | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 263 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE South Africa ETF
| | | | | | | | | | | | | | |
| | | |
| | | Industry | | | Shares | | | Value | |
| | | Common Stocks 100.0% | |
| | | Luxembourg 0.9% | |
| | Reinet Investments SCA | | | Capital Markets | | | | 1,869 | | | $ | 27,759 | |
| | | | | | | | | | | | | | |
| | | Romania 1.0% | |
| | NEPI Rockcastle PLC | | | Real Estate Management & Development | | | | 6,393 | | | | 28,834 | |
| | | | | | | | | | | | | | |
| | | South Africa 98.1% | |
| | Absa Group Ltd. | | | Banks | | | | 11,445 | | | | 112,479 | |
| | African Rainbow Minerals Ltd. | | | Metals & Mining | | | | 1,458 | | | | 19,836 | |
| | Anglo American Platinum Ltd. | | | Metals & Mining | | | | 774 | | | | 55,480 | |
| | AngloGold Ashanti Ltd. | | | Metals & Mining | | | | 5,766 | | | | 80,100 | |
| | Aspen Pharmacare Holdings Ltd. | | | Pharmaceuticals | | | | 5,106 | | | | 38,149 | |
| | AVI Ltd. | | | Food Products | | | | 4,527 | | | | 18,337 | |
| | Bid Corp. Ltd. | | | Food & Staples Retailing | | | | 4,584 | | | | 71,115 | |
| | Bidvest Group Ltd. | | | Industrial Conglomerates | | | | 4,677 | | | | 51,146 | |
| | Capitec Bank Holdings Ltd. | | | Banks | | | | 1,170 | | | | 101,099 | |
| | Clicks Group Ltd. | | | Food & Staples Retailing | | | | 3,363 | | | | 53,415 | |
| a,b | | Dis-Chem Pharmacies Ltd., 144A, Reg S | | | Food & Staples Retailing | | | | 5,121 | | | | 9,075 | |
| c | | Discovery Ltd. | | | Insurance | | | | 7,239 | | | | 42,264 | |
| c | | Distell Group Holdings Ltd. | | | Beverages | | | | 1,092 | | | | 10,478 | |
| | Exxaro Resources Ltd. | | | Oil, Gas & Consumable Fuels | | | | 3,324 | | | | 37,439 | |
| | FirstRand Ltd. | | | Diversified Financial Services | | | | 68,394 | | | | 231,145 | |
| | Foschini Group Ltd. | | | Specialty Retail | | | | 4,425 | | | | 28,962 | |
| | Gold Fields Ltd. | | | Metals & Mining | | | | 12,102 | | | | 99,287 | |
| | Growthpoint Properties Ltd. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 46,776 | | | | 30,685 | |
| | Harmony Gold Mining Co. Ltd. | | | Metals & Mining | | | | 7,371 | | | | 17,521 | |
| | Impala Platinum Holdings Ltd. | | | Metals & Mining | | | | 11,202 | | | | 105,753 | |
| | Investec Ltd. | | | Capital Markets | | | | 3,945 | | | | 15,725 | |
| | Kumba Iron Ore Ltd. | | | Metals & Mining | | | | 747 | | | | 16,120 | |
| | Life Healthcare Group Holdings Ltd. | | | Health Care Providers & Services | | | | 19,035 | | | | 18,270 | |
| | Momentum Metropolitan Holdings | | | Insurance | | | | 17,754 | | | | 16,586 | |
| | Mr Price Group Ltd. | | | Specialty Retail | | | | 3,537 | | | | 34,005 | |
| | MTN Group Ltd. | | | Wireless Telecommunication Services | | | | 24,810 | | | | 165,487 | |
| | MultiChoice Group | | | Media | | | | 4,743 | | | | 30,518 | |
| | Naspers Ltd., N | | | Internet & Direct Marketing Retail | | | | 2,928 | | | | 368,725 | |
| | Nedbank Group Ltd. | | | Banks | | | | 5,778 | | | | 64,215 | |
| | Netcare Ltd. | | | Health Care Providers & Services | | | | 19,836 | | | | 15,143 | |
| c | | Northam Platinum Ltd. | | | Metals & Mining | | | | 5,097 | | | | 44,477 | |
| | Old Mutual Ltd. | | | Insurance | | | | 62,250 | | | | 33,874 | |
| a,b | | Pepkor Holdings Ltd., 144A, Reg S | | | Specialty Retail | | | | 24,774 | | | | 28,630 | |
| | Pick ‘N Pay Stores Ltd. | | | Food & Staples Retailing | | | | 4,773 | | | | 14,734 | |
| | Rand Merchant Investment Holdings Ltd. | | | Insurance | | | | 10,377 | | | | 16,906 | |
| | Redefine Properties Ltd. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 91,011 | | | | 17,977 | |
| | Remgro Ltd. | | | Diversified Financial Services | | | | 7,008 | | | | 51,763 | |
| | Resilient REIT Ltd. | | | Equity Real Estate Investment Trusts (REITs | ) | | | 4,194 | | | | 11,187 | |
| | Royal Bafokeng Platinum Ltd. | | | Metals & Mining | | | | 1,035 | | | | 8,266 | |
| | Sanlam Ltd. | | | Insurance | | | | 24,189 | | | | 69,434 | |
| | Santam Ltd. | | | Insurance | | | | 561 | | | | 7,805 | |
| c | | Sappi Ltd. | | | Paper & Forest Products | | | | 7,836 | | | | 19,193 | |
| c | | Sasol Ltd. | | | Chemicals | | | | 7,686 | | | | 122,198 | |
| | Shoprite Holdings Ltd. | | | Food & Staples Retailing | | | | 6,687 | | | | 80,735 | |
| | Sibanye Stillwater Ltd. | | | Metals & Mining | | | | 38,598 | | | | 90,221 | |
| | SPAR Group Ltd. | | | Food & Staples Retailing | | | | 2,649 | | | | 21,130 | |
| | Standard Bank Group Ltd. | | | Banks | | | | 18,309 | | | | 146,696 | |
| | Tiger Brands Ltd. | | | Food Products | | | | 2,169 | | | | 20,449 | |
| | Transaction Capital Ltd. | | | Consumer Finance | | | | 7,692 | | �� | | 15,733 | |
| | Truworths International Ltd. | | | Specialty Retail | | | | 5,244 | | | | 14,545 | |
| | | | | | | | | | |
| | | | | | |
| 264 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Africa ETF (continued)
| | | | | | | | | | | | | | |
| | | |
| | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | |
| | | South Africa (continued) | |
| | Vodacom Group Ltd. | | | Wireless Telecommunication Services | | | | 8,211 | | | $ | 55,774 | |
| | Woolworths Holdings Ltd. | | | Multiline Retail | | | | 12,876 | | | | 43,752 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 2,894,038 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $3,808,391) 100.0% | | | | | | | | | | | 2,950,631 | |
| | Other Assets, less Liabilities 0.0%† | | | | | | | | | | | (377 | ) |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 2,950,254 | |
| | | | | | | | | | | | | | |
†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 September 30, 2022, the value of was $37,705, representing 1.3% 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 September 30, 2022, the value of was $37,705, representing 1.3% of net assets.
cNon-income producing.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 265 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Korea ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | |
| | | | | | |
Net asset value, beginning of period | | $ | 25.57 | | | $ | 31.48 | | | $ | 16.52 | | | $ | 21.19 | | | $ | 25.98 | | | $ | 25.75 | |
| | | | |
| | | | | | |
Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.09 | | | | 0.55 | | | | 0.54 | | | | 0.36 | | | | 0.40 | | | | 0.10 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (8.70 | ) | | | (5.87 | ) | | | 14.72 | | | | (4.58 | ) | | | (4.81 | ) | | | 0.40 | |
| | | | |
| | | | | | |
Total from investment operations | | | (8.61 | ) | | | (5.32 | ) | | | 15.26 | | | | (4.22 | ) | | | (4.41 | ) | | | 0.50 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.07 | ) | | | (0.59 | ) | | | (0.30 | ) | | | (0.45 | ) | | | (0.38 | ) | | | (0.27 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 16.89 | | | $ | 25.57 | | | $ | 31.48 | | | $ | 16.52 | | | $ | 21.19 | | | $ | 25.98 | |
| | | | |
| | | | | | |
Total returnd | | | (33.72)% | | | | (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% | | | | 0.09% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 0.85% | | | | 1.86% | | | | 2.07% | | | | 1.78% | | | | 1.74% | | | | 0.94% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $43,913 | | | | $61,361 | | | | $62,966 | | | | $11,562 | | | | $16,948 | | | | $25,981 | |
| | | | | | |
Portfolio turnover ratef | | | 4.38% | g | | | 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: | | | 4.38% | | | | 10.53% | | | | 8.65% | | | | 8.02% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 266 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE South Korea ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 95.8% | | | | | | | | | |
| | | South Korea 95.8% | | | | | | | | | |
| a | | Alteogen Inc., A | | | Biotechnology | | | | 2,262 | | | $ | 71,700 | |
| | Amorepacific Corp., H | | | Personal Products | | | | 2,288 | | | | 163,120 | |
| | AMOREPACIFIC Group, A | | | Personal Products | | | | 2,288 | | | | 42,939 | |
| | BGF retail Co. Ltd. | | | Food & Staples Retailing | | | | 494 | | | | 57,145 | |
| | BNK Financial Group Inc., H | | | Banks | | | | 22,490 | | | | 94,632 | |
| | Celltrion Healthcare Co. Ltd., A | | | Health Care Providers & Services | | | | 7,540 | | | | 357,316 | |
| | Celltrion Inc., A | | | Biotechnology | | | | 8,476 | | | | 1,039,727 | |
| a | | Celltrion Pharm Inc., A | | | Pharmaceuticals | | | | 1,534 | | | | 68,728 | |
| | Cheil Worldwide Inc., A | | | Media | | | | 5,538 | | | | 87,868 | |
| | CJ CheilJedang Corp., A | | | Food Products | | | | 624 | | | | 179,258 | |
| | CJ Corp., A | | | Industrial Conglomerates | | | | 988 | | | | 47,995 | |
| | CJ ENM Co. Ltd., A | | | Internet & Catalog Retail | | | | 780 | | | | 41,489 | |
| a | | CJ Logistics Corp., A | | | Road & Rail | | | | 650 | | | | 41,071 | |
| | Coway Co. Ltd. | | | Household Durables | | | | 4,446 | | | | 167,498 | |
| a | | Daewoo Engineering & Construction Co. Ltd., A | | | Construction & Engineering | | | | 14,170 | | | | 40,805 | |
| a | | Daewoo Shipbuilding & Marine Engineering Co. Ltd., A | | | Machinery | | | | 3,822 | | | | 50,623 | |
| | DB Insurance Co. Ltd., A | | | Insurance | | | | 3,562 | | | | 137,431 | |
| | DGB Financial Group Inc., A | | | Banks | | | | 12,298 | | | | 59,913 | |
| | DL E&C Co. Ltd., A | | | Construction & Engineering | | | | 2,418 | | | | 57,970 | |
| | DL Holdings Co. Ltd., A | | | Construction & Engineering | | | | 936 | | | | 37,487 | |
| | Dongsuh Cos. Inc., A | | | Food & Staples Retailing | | | | 2,470 | | | | 35,910 | |
| | Doosan Bobcat Inc., A | | | Machinery | | | | 1,924 | | | | 38,327 | |
| a | | Doosan Enerbility Co. Ltd., H | | | Electrical Equipment | | | | 33,150 | | | | 330,179 | |
| | Ecopro BM Co. Ltd. | | | Electrical Equipment | | | | 3,120 | | | | 192,124 | |
| | E-MART Inc., A | | | Food & Staples Retailing | | | | 1,560 | | | | 91,482 | |
| | F&F Co. Ltd. / New | | | Textiles, Apparel & Luxury Goods | | | | 1,248 | | | | 119,941 | |
| | Fila Holdings Corp. | | | Textiles, Apparel & Luxury Goods | | | | 4,108 | | | | 89,872 | |
| | Green Cross Corp. | | | Biotechnology | | | | 416 | | | | 35,910 | |
| | GS Engineering & Construction Corp. | | | Construction & Engineering | | | | 5,018 | | | | 79,091 | |
| | GS Holdings Corp. | | | Oil, Gas & Consumable Fuels | | | | 4,082 | | | | 118,976 | |
| | GS Retail Co. Ltd. | | | Food & Staples Retailing | | | | 3,120 | | | | 55,827 | |
| | Hana Financial Group Inc. | | | Banks | | | | 22,776 | | | | 564,346 | |
| a | | Hanjin Kal Corp. | | | Airlines | | | | 1,690 | | | | 44,119 | |
| | Hankook Tire & Technology Co. Ltd. | | | Auto Components | | | | 5,772 | | | | 142,212 | |
| | Hanmi Pharm Co. Ltd. | | | Pharmaceuticals | | | | 572 | | | | 91,555 | |
| | Hanmi Science Co. Ltd. | | | Pharmaceuticals | | | | 1,144 | | | | 25,228 | |
| | Hanon Systems | | | Auto Components | | | | 12,896 | | | | 74,995 | |
| | Hanssem Co. Ltd. | | | Household Durables | | | | 754 | | | | 22,530 | |
| | Hanwha Aerospace Co. Ltd. | | | Aerospace & Defense | | | | 2,756 | | | | 118,469 | |
| | Hanwha Corp. | | | Industrial Conglomerates | | | | 3,380 | | | | 57,763 | |
| | Hanwha Corp. | | | Industrial Conglomerates | | | | 1,820 | | | | 17,809 | |
| a | | Hanwha Life Insurance Co. Ltd. | | | Insurance | | | | 22,022 | | | | 32,170 | |
| a | | Hanwha Solutions Corp. | | | Chemicals | | | | 9,048 | | | | 298,501 | |
| | HD Hyundai Co. Ltd. | | | Machinery | | | | 3,952 | | | | 149,440 | |
| | Hite Jinro Co. Ltd. | | | Beverages | | | | 2,444 | | | | 45,269 | |
| | HL Mando Co. Ltd. | | | Auto Components | | | | 2,626 | | | | 81,403 | |
| a | | HLB Inc. | | | Leisure Products | | | | 7,020 | | | | 210,252 | |
| | HMM Co. Ltd. | | | Marine | | | | 23,036 | | | | 297,872 | |
| | Hotel Shilla Co. Ltd. | | | Specialty Retail | | | | 2,470 | | | | 124,130 | |
| a | | HYBE Co. Ltd. | | | Entertainment | | | | 1,456 | | | | 137,387 | |
| | Hyundai Department Store Co. Ltd. | | | Multiline Retail | | | | 1,170 | | | | 44,487 | |
| a | | Hyundai Doosan Infracore Co. Ltd. | | | Machinery | | | | 10,920 | | | | 33,965 | |
| | Hyundai Engineering & Construction Co. Ltd. | | | Construction & Engineering | | | | 5,720 | | | | 149,927 | |
| | Hyundai Glovis Co. Ltd. | | | Air Freight & Logistics | | | | 1,456 | | | | 165,374 | |
| a | | Hyundai Heavy Industries Co. Ltd. | | | Machinery | | | | 1,170 | | | | 94,045 | |
| | Hyundai Marine & Fire Insurance Co. Ltd. | | | Insurance | | | | 4,784 | | | | 97,974 | |
| a | | Hyundai Mipo Dockyard Co. Ltd. | | | Machinery | | | | 1,586 | | | | 114,180 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | | Semiannual Report | | | | | | | | 267 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Korea ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | South Korea (continued) | | | | | | | | | |
| | Hyundai Mobis Co. Ltd. | | | Auto Components | | | | 4,862 | | | $ | 649,082 | |
| | Hyundai Motor Co. | | | Automobiles | | | | 10,998 | | | | 1,356,781 | |
| | Hyundai Steel Co. | | | Metals & Mining | | | | 5,876 | | | | 115,409 | |
| | Hyundai Wia Corp. | | | Auto Components | | | | 1,222 | | | | 51,333 | |
| | Iljin Materials Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,352 | | | | 48,006 | |
| | Industrial Bank of Korea | | | Banks | | | | 19,812 | | | | 131,831 | |
| | Kakao Corp. | | | Interactive Media & Services | | | | 23,920 | | | | 954,660 | |
| a | | Kakao Games Corp. | | | Entertainment | | | | 2,288 | | �� | | 68,207 | |
| a | | KakaoBank Corp. | | | Banks | | | | 13,390 | | | | 187,649 | |
| a | | Kakaopay Corp. | | | IT Services | | | | 1,690 | | | | 57,999 | |
| a | | Kangwon Land Inc. | | | Hotels, Restaurants & Leisure | | | | 8,346 | | | | 137,379 | |
| | KB Financial Group Inc. | | | Banks | | | | 30,706 | | | | 937,899 | |
| | KCC Corp. | | | Building Products | | | | 312 | | | | 50,484 | |
| | KEPCO Plant Service & Engineering Co. Ltd. | | | Commercial Services & Supplies | | | | 1,690 | | | | 40,989 | |
| | Kia Corp. | | | Automobiles | | | | 20,358 | | | | 1,023,094 | |
| | Korea Aerospace Industries Ltd. | | | Aerospace & Defense | | | | 5,538 | | | | 187,542 | |
| a | | Korea Electric Power Corp. | | | Electric Utilities | | | | 20,176 | | | | 283,454 | |
| | Korea Gas Corp. | | | Gas Utilities | | | | 2,080 | | | | 49,140 | |
| | Korea Investment Holdings Co. Ltd. | | | Capital Markets | | | | 3,042 | | | | 100,996 | |
| a | | Korea Shipbuilding & Offshore Engineering Co. Ltd. | | | Machinery | | | | 3,406 | | | | 173,550 | |
| | Korea Zinc Co. Ltd. | | | Metals & Mining | | | | 780 | | | | 324,387 | |
| a | | Korean Air Lines Co. Ltd. | | | Airlines | | | | 13,806 | | | | 213,261 | |
| a | | Krafton Inc. | | | Entertainment | | | | 2,314 | | | | 339,652 | |
| | KT&G Corp. | | | Tobacco | | | | 8,476 | | | | 513,051 | |
| | Kumho Petrochemical Co. Ltd. | | | Chemicals | | | | 1,378 | | | | 111,246 | |
| a | | L&F Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,768 | | | | 219,594 | |
| | LG Chem Ltd. | | | Chemicals | | | | 3,692 | | | | 1,383,177 | |
| | LG Corp. | | | Industrial Conglomerates | | | | 7,020 | | | | 363,095 | |
| | LG Display Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 17,654 | | | | 148,073 | |
| | LG Electronics Inc. | | | Household Durables | | | | 8,528 | | | | 468,512 | |
| a | | LG Energy Solution Ltd. | | | Electrical Equipment | | | | 2,730 | | | | 813,829 | |
| | LG H&H Co. Ltd. | | | Personal Products | | | | 702 | | | | 310,593 | |
| | LG Innotek Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,118 | | | | 213,723 | |
| | LG Uplus Corp. | | | Diversified Telecommunication Services | | | | 16,510 | | | | 124,053 | |
| | Lotte Chemical Corp. | | | Chemicals | | | | 1,170 | | | | 117,761 | |
| | Lotte Chilsung Beverage Co. Ltd. | | | Beverages | | | | 234 | | | | 26,087 | |
| | Lotte Corp. | | | Industrial Conglomerates | | | | 2,106 | | | | 56,378 | |
| | LOTTE Fine Chemical Co. Ltd. | | | Chemicals | | | | 1,404 | | | | 55,249 | |
| | Lotte Shopping Co. Ltd. | | | Multiline Retail | | | | 910 | | | | 55,019 | |
| | LS Corp. | | | Electrical Equipment | | | | 1,378 | | | | 54,611 | |
| | Meritz Financial Group Inc. | | | Diversified Financial Services | | | | 2,080 | | | | 30,312 | |
| | Mirae Asset Securities Co. Ltd. | | | Capital Markets | | | | 21,112 | | | | 88,243 | |
| | Mirae Asset Securities Co. Ltd. | | | Capital Markets | | | | 11,024 | | | | 28,163 | |
| | NAVER Corp. | | | Interactive Media & Services | | | | 11,388 | | | | 1,540,210 | |
| | NCSoft Corp. | | | Entertainment | | | | 1,248 | | | | 301,816 | |
| b | | Netmarble Corp., 144A | | | Software | | | | 1,378 | | | | 49,410 | |
| | NH Investment & Securities Co. Ltd. | | | Capital Markets | | | | 10,868 | | | | 68,291 | |
| a | | NHN Corp. | | | Software | | | | 1,378 | | | | 20,708 | |
| | NongShim Co. Ltd. | | | Food Products | | | | 260 | | | | 54,155 | |
| | OCI Co. Ltd. | | | Chemicals | | | | 1,404 | | | | 89,302 | |
| | Orion Corp/Republic of Korea | | | Food Products | | | | 1,690 | | | | 121,668 | |
| | Ottogi Corp. | | | Food Products | | | | 104 | | | | 33,511 | |
| | Pan Ocean Co. Ltd. | | | Marine | | | | 15,054 | | | | 47,350 | |
| a | | Paradise Co. Ltd. | | | Hotels, Restaurants & Leisure | | | | 3,640 | | | | 39,181 | |
| a | | Pearl Abyss Corp. | | | Entertainment | | | | 2,470 | | | | 80,538 | |
| | POSCO Chemical Co. Ltd. | | | Construction Materials | | | | 2,158 | | | | 226,253 | |
| | | | | | | | | | |
| | | | | | |
| 268 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Korea ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | South Korea (continued) | | | | | | | | | |
| | POSCO Holdings Inc. | | | Metals & Mining | | | | 5,902 | | | $ | 870,428 | |
| | Posco International Corp. | | | Trading Companies & Distributors | | | | 3,952 | | | | 57,732 | |
| | S-1 Corp. | | | Commercial Services & Supplies | | | | 1,534 | | | | 62,081 | |
| a,b | | Samsung Biologics Co. Ltd., 144A | | | Life Sciences Tools & Services | | | | 1,456 | | | | 821,271 | |
| | Samsung C&T Corp. | | | Industrial Conglomerates | | | | 6,630 | | | | 479,629 | |
| | Samsung Card Co. Ltd. | | | Consumer Finance | | | | 2,418 | | | | 51,040 | |
| | Samsung Electro-Mechanics Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,394 | | | | 343,977 | |
| | Samsung Electronics Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 214,448 | | | | 7,959,173 | |
| a | | Samsung Engineering Co. Ltd. | | | Construction & Engineering | | | | 12,402 | | | | 197,208 | |
| | Samsung Fire & Marine Insurance Co. Ltd. | | | Insurance | | | | 2,600 | | | | 334,382 | |
| a | | Samsung Heavy Industries Co. Ltd. | | | Machinery | | | | 48,620 | | | | 180,452 | |
| | Samsung Life Insurance Co. Ltd. | | | Insurance | | | | 5,876 | | | | 256,282 | |
| | Samsung SDI Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,160 | | | | 1,587,587 | |
| | Samsung SDS Co. Ltd. | | | IT Services | | | | 2,886 | | | | 231,977 | |
| | Samsung Securities Co. Ltd. | | | Capital Markets | | | | 4,914 | | | | 105,616 | |
| | SD Biosensor Inc. | | | Health Care Equipment & Supplies | | | | 2,678 | | | | 49,790 | |
| | Seegene Inc. | | | Biotechnology | | | | 2,288 | | | | 42,859 | |
| a | | Shin Poong Pharmaceutical Co. Ltd. | | | Pharmaceuticals | | | | 2,652 | | | | 36,887 | |
| | Shinhan Financial Group Co. Ltd. | | | Banks | | | | 39,390 | | | | 922,321 | |
| | Shinsegae Inc. | | | Multiline Retail | | | | 546 | | | | 88,157 | |
| a,c | | SillaJen Inc. | | | Biotechnology | | | | 1,616 | | | | — | |
| a | | SK Biopharmaceuticals Co. Ltd. | | | Pharmaceuticals | | | | 1,950 | | | | 77,553 | |
| a | | SK Bioscience Co. Ltd. | | | Biotechnology | | | | 1,586 | | | | 89,016 | |
| | SK Chemicals Co. Ltd. | | | Chemicals | | | | 1,066 | | | | 67,803 | |
| | SK Hynix Inc. | | | Semiconductors & Semiconductor Equipment | | | | 42,770 | | | | 2,484,229 | |
| a,b | | SK IE Technology Co. Ltd., 144A | | | Chemicals | | | | 2,028 | | | | 74,276 | |
| | SK Inc. | | | Industrial Conglomerates | | | | 2,860 | | | | 383,812 | |
| a | | SK Innovation Co. Ltd. | | | Oil, Gas & Consumable Fuels | | | | 4,108 | | | | 412,035 | |
| | SK Networks Co. Ltd. | | | Trading Companies & Distributors | | | | 10,686 | | | | 29,578 | |
| a | | SK Square Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 7,800 | | | | 197,085 | |
| | SK Telecom Co. Ltd. | | | Wireless Telecommunication Services | | | | 2,730 | | | | 96,934 | |
| | SKC Co. Ltd. | | | Chemicals | | | | 1,534 | | | | 89,958 | |
| | S-Oil Corp. | | | Oil, Gas & Consumable Fuels | | | | 3,224 | | | | 182,529 | |
| | Solus Advanced Materials Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 1,066 | | | | 22,278 | |
| | SSANGYONG C&E Co. Ltd. | | | Construction Materials | | | | 8,684 | | | | 35,629 | |
| | Wemade Co. Ltd. | | | Entertainment | | | | 1,352 | | | | 43,281 | |
| | Woori Financial Group Inc. | | | Banks | | | | 50,050 | | | | 374,317 | |
| | Yuhan Corp. | | | Pharmaceuticals | | | | 3,952 | | | | 149,992 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks
(Cost $60,942,799) | | | | | | | | | | | 42,092,856 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 4.0% | | | | | | | | | |
| | | South Korea 4.0% | | | | | | | | | |
| d | | Amorepacific Corp., 2.345%, pfd. | | | Personal Products | | | | 832 | | | | 24,424 | |
| d | | CJ CheilJedang Corp., 4.184%, pfd. | | | Food Products | | | | 104 | | | | 12,249 | |
| d | | Hyundai Motor Co., 6.093%, pfd. | | | Automobiles | | | | 2,756 | | | | 161,234 | |
| d | | Hyundai Motor Co., 6.005%, pfd. | | | Automobiles | | | | 1,742 | | | | 102,399 | |
| d | | LG Chem Ltd., 4.782%, pfd. | | | Chemicals | | | | 598 | | | | 105,330 | |
| d | | LG Electronics Inc., 2.436%, pfd. | | | Household Durables | | | | 1,378 | | | | 35,589 | |
| d | | LG H&H Co. Ltd., 3.657%, pfd. | | | Personal Products | | | | 156 | | | | 35,928 | |
| d | | Samsung Electronics Co. Ltd., 2.311%, pfd. | | | Technology Hardware, Storage & Peripherals | | | | 37,310 | | | | 1,223,065 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 269 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE South Korea ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Preferred Stocks (continued) | | | | | | | | | |
| | | South Korea (continued) | | | | | | | | | |
| d | | Samsung Fire & Marine Insurance Co. Ltd., 7.77%, pfd. | | | Insurance | | | | 208 | | | $ | 22,462 | |
| d | | Samsung SDI Co. Ltd., 0.387%, pfd. | | | Electronic Equipment, Instruments & Components | | | | 104 | | | | 19,699 | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks
(Cost $2,553,083) | | | | | | | | | | | 1,742,379 | |
| | | | | | | | | | | | | | |
| | | Total Investments
(Cost $63,495,882) 99.8% | | | | | | | | 43,835,235 | |
| | | Other Assets, less Liabilities 0.2% | | | | | | | | 77,411 | |
| | | | | | | | | | | | | | |
| | | Net Assets 100.0% | | | | | | | | $43,912,646 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $944,957, representing 2.2% 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 September 30, 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 | | | | | | | | | | | | | | | |
Kospi 200 Mini | | | Long | | | | 2 | | | $ | 98,710 | | | | 12/08/22 | | | $ | (491 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
| | | | | | |
| 270 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Switzerland ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Net asset value, beginning of period | | $ | 34.00 | | | $ | 30.36 | | | $ | 24.44 | | | $ | 23.86 | | | $ | 23.11 | | | $ | 23.56 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income | | | 0.38 | | | | 0.70 | | | | 0.88 | | | | 1.06 | | | | 0.53 | | | | 0.22 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (7.50 | ) | | | 3.62 | | | | 5.74 | | | | (0.16 | ) | | | 0.83 | | | | (0.67 | ) |
| | | | |
| | | | | | |
Total from investment operations | | | (7.12 | ) | | | 4.32 | | | | 6.62 | | | | 0.90 | | | | 1.36 | | | | (0.45 | ) |
| | | | |
| | | | | | |
| Less distributions from net investment income | | | (0.54 | ) | | | (0.68 | ) | | | (0.70 | ) | | | (0.32 | ) | | | (0.61 | ) | | | — | |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 26.34 | | | $ | 34.00 | | | $ | 30.36 | | | $ | 24.44 | | | $ | 23.86 | | | $ | 23.11 | |
| | | | |
| | | | | | |
Total returnc | | | (20.98)% | | | | 14.22% | | | | 27.54% | | | | 3.70% | | | | 6.13% | | | | (1.91)% | |
| | | | | | |
| Ratios to average net assetsd | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total expenses | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 2.56% | | | | 2.07% | | | | 3.13% | | | | 4.12% | | | | 2.35% | | | | 6.54% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $50,042 | | | | $47,593 | | | | $48,570 | | | | $34,213 | | | | $2,386 | | | | $2,311 | |
| | | | | | |
Portfolio turnover ratee | | | 4.54%f | | | | 13.99%f | | | | 12.59%f | | | | 16.25%f | | | | 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.
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: | | | 4.54% | | | | 13.99% | | | | 12.59% | | | 16.25% | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 271 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Switzerland ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 98.5% | | | | | | | | | |
| | | Switzerland 98.5% | | | | | | | | | |
| | ABB Ltd. | | | Electrical Equipment | | | | 59,641 | | | $ | 1,563,361 | |
| | Adecco Group AG | | | Professional Services | | | | 6,707 | | | | 186,781 | |
| | Alcon Inc. | | | Health Care Equipment & Supplies | | | | 19,190 | | | | 1,133,560 | |
| | Bachem Holding AG | | | Life Sciences Tools & Services | | | | 1,292 | | | | 82,436 | |
| | Baloise Holding AG | | | Insurance | | | | 1,900 | | | | 244,582 | |
| | Banque Cantonale Vaudoise | | | Banks | | | | 1,197 | | | | 113,954 | |
| | Barry Callebaut AG | | | Food Products | | | | 150 | | | | 284,836 | |
| | Belimo Holding AG | | | Building Products | | | | 399 | | | | 148,979 | |
| | BKW AG | | | Electric Utilities | | | | 760 | | | | 91,192 | |
| | Chocoladefabriken Lindt & Spruengli AG | | | Food Products | | | | 88 | | | | 854,742 | |
| | Cie Financiere Richemont SA | | | Textiles, Apparel & Luxury Goods | | | | 19,209 | | | | 1,840,005 | |
| a | | Clariant AG | | | Chemicals | | | | 9,557 | | | | 154,388 | |
| | Credit Suisse Group AG | | | Capital Markets | | | | 110,485 | | | | 446,318 | |
| | DKSH Holding AG | | | Professional Services | | | | 1,501 | | | | 109,496 | |
| | Emmi AG | | | Food Products | | | | 76 | | | | 59,379 | |
| | EMS-Chemie Holding AG | | | Chemicals | | | | 299 | | | | 190,929 | |
| a | | Flughafen Zurich AG | | | Transportation Infrastructure | | | | 798 | | | | 119,102 | |
| | Geberit AG | | | Building Products | | | | 1,468 | | | | 637,612 | |
| | Georg Fischer AG | | | Machinery | | | | 3,465 | | | | 167,573 | |
| | Givaudan AG | | | Chemicals | | | | 390 | | | | 1,189,911 | |
| | Helvetia Holding AG | | | Insurance | | | | 1,463 | | | | 138,088 | |
| | Holcim Ltd., B | | | Construction Materials | | | | 23,066 | | | | 960,371 | |
| | Julius Baer Group Ltd. | | | Capital Markets | | | | 8,987 | | | | 397,190 | |
| | Kuehne + Nagel International AG | | | Marine | | | | 2,128 | | | | 436,735 | |
| | Logitech International SA | | | Technology Hardware, Storage & Peripherals | | | | 6,137 | | | | 286,508 | |
| | Lonza Group AG | | | Life Sciences Tools & Services | | | | 2,933 | | | | 1,449,142 | |
| | Nestle SA | | | Food Products | | | | 92,644 | | | | 10,079,065 | |
| | Novartis AG | | | Pharmaceuticals | | | | 74,860 | | | | 5,744,654 | |
| | Partners Group Holding AG | | | Capital Markets | | | | 948 | | | | 774,967 | |
| | PSP Swiss Property AG | | | Real Estate Management & Development | | | | 1,824 | | | | 183,466 | |
| | Roche Holding AG, Bearer | | | Pharmaceuticals | | | | 969 | | | | 381,791 | |
| | Roche Holding AG, Non-Voting | | | Pharmaceuticals | | | | 25,175 | | | | 8,273,156 | |
| | Schindler Holding AG, PC | | | Machinery | | | | 1,729 | | | | 271,669 | |
| | Schindler Holding AG | | | Machinery | | | | 798 | | | | 121,615 | |
| | SGS SA | | | Professional Services | | | | 249 | | | | 537,592 | |
| | SIG Combibloc Group AG | | | Containers & Packaging | | | | 16,093 | | | | 329,953 | |
| | Sika AG | | | Chemicals | | | | 6,213 | | | | 1,266,903 | |
| | Sonova Holding AG | | | Health Care Equipment & Supplies | | | | 2,185 | | | | 488,392 | |
| | Straumann Holding AG | | | Health Care Equipment & Supplies | | | | 4,508 | | | | 420,640 | |
| | Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 1,900 | | | | 80,614 | |
| | Swiss Life Holding AG | | | Insurance | | | | 1,292 | | | | 575,608 | |
| | Swiss Prime Site AG | | | Real Estate Management & Development | | | | 3,211 | | | | 257,728 | |
| | Swiss Re AG | | | Insurance | | | | 12,217 | | | | 908,098 | |
| | Swisscom AG | | | Diversified Telecommunication Services | | | | 1,083 | | | | 510,003 | |
| | Tecan Group AG | | | Life Sciences Tools & Services | | | | 532 | | | | 185,396 | |
| | Temenos AG | | | Software | | | | 2,546 | | | | 174,450 | |
| | The Swatch Group AG | | | Textiles, Apparel & Luxury Goods | | | | 1,216 | | | | 277,360 | |
| | UBS Group AG | | | Capital Markets | | | | 116,698 | | | | 1,716,234 | |
| b | | VAT Group AG, 144A | | | Machinery | | | | 1,083 | | | | 224,247 | |
| | | | | | | | | | |
| | | | | | |
| 272 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Switzerland ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Switzerland (continued) | | | | | | | | | |
| | Zurich Insurance Group AG | | | Insurance | | | | 5,472 | | | $ | 2,196,027 | |
| | | | | | | | | | | | | | |
| | Total Investments (Cost $56,620,228) 98.5% | | | | | | | | | | | 49,266,798 | |
| | Other Assets, less Liabilities 1.5% | | | | | | | | | | | 774,868 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 50,041,666 | |
| | | | | | | | | | | | | | |
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 September 30, 2022, the value of was $224,247, representing 0.4% of net assets.
At September 30, 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 | | | | 7 | | | $ | 729,622 | | | | 12/16/22 | | | $ | (32,156 | ) |
*As of period end.
See Note 8 regarding other derivative information.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 273 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Taiwan ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 43.67 | | | $ | 41.12 | | | $ | 23.18 | | | $ | 24.72 | | | $ | 26.34 | | | $ | 25.59 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment income (loss)c | | | 1.36 | | | | 0.98 | | | | 0.74 | | | | 0.89 | | | | 0.47 | | | | (0.02 | ) |
| | | | | | |
Net realized and unrealized gains (losses) | | | (14.15 | ) | | | 2.64 | | | | 17.99 | | | | (1.56 | ) | | | (1.85 | ) | | | 0.77 | |
| | | | |
| | | | | | |
Total from investment operations | | | (12.79 | ) | | | 3.62 | | | | 18.73 | | | | (0.67 | ) | | | (1.38 | ) | | | 0.75 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.00 | ) | | | (1.07 | ) | | | (0.79 | ) | | | (0.87 | ) | | | (0.24 | ) | | | — | d |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 30.88 | | | $ | 43.67 | | | $ | 41.12 | | | $ | 23.18 | | | $ | 24.72 | | | $ | 26.34 | |
| | | | |
| | | | | | |
Total returne | | | (29.26)% | | | | 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% | | | | 0.19% | |
| | | | | | |
Net investment income (loss) | | | 7.27% | | | | 2.20% | | | | 2.24% | | | | 3.39% | | | | 1.96% | | | | (0.19)% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $27,788 | | | | $43,667 | | | | $32,897 | | | | $13,906 | | | | $14,834 | | | | $5,268 | |
| | | | | | |
Portfolio turnover rateg | | | 4.77% | h | | | 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: | | | 1.44% | | | | 7.86% | | | | 10.63% | | | | 12.57% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 274 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE Taiwan ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.8% | | | | | | | | | |
| | | China 1.3% | | | | | | | | | |
| a | | Airtac International Group, A | | | Machinery | | | | 6,923 | | | $ | 159,615 | |
| | Silergy Corp. | | | Semiconductors & Semiconductor Equipment | | | | 14,220 | | | | 188,561 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 348,176 | |
| | | | | | | | | | | | | | |
| | | Taiwan 98.3% | | | | | | | | | |
| | Accton Technology Corp. | | | Communications Equipment | | | | 24,030 | | | | 206,248 | |
| | Acer Inc., H | | | Technology Hardware, Storage & Peripherals | | | | 124,000 | | | | 85,533 | |
| | Advanced Energy Solution Holding Co. Ltd. | | | Electrical Equipment | | | | 1,080 | | | | 21,703 | |
| | Advantech Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 18,138 | | | | 167,675 | |
| | ASE Industrial Holding Co. Ltd., A | | | Semiconductors & Semiconductor Equipment | | | | 150,100 | | | | 378,689 | |
| | Asia Cement Corp. | | | Construction Materials | | | | 108,000 | | | | 134,026 | |
| | ASMedia Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 1,720 | | | | 35,972 | |
| | ASPEED Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 1,350 | | | | 75,687 | |
| | Asustek Computer Inc. | | | Technology Hardware, Storage & Peripherals | | | | 31,540 | | | | 232,460 | |
| | AU Optronics Corp., H | | | Electronic Equipment, Instruments & Components | | | | 430,000 | | | | 199,093 | |
| | Capital Securities Corp., A | | | Capital Markets | | | | 87,000 | | | | 28,910 | |
| a | | Catcher Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 32,000 | | | | 173,864 | |
| | Cathay Financial Holding Co. Ltd., A | | | Insurance | | | | 363,300 | | | | 457,143 | |
| | Chailease Holding Co. Ltd., A | | | Diversified Financial Services | | | | 61,002 | | | | 350,652 | |
| | Chang Hwa Commercial Bank Ltd., A | | | Banks | | | | 288,033 | | | | 155,588 | |
| | Cheng Shin Rubber Industry Co. Ltd., A | | | Auto Components | | | | 81,300 | | | | 91,417 | |
| | Chicony Electronics Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 26,520 | | | | 68,829 | |
| | China Airlines Ltd., A | | | Airlines | | | | 126,000 | | | | 77,984 | |
| | China Development Financial Holding Corp., A | | | Banks | | | | 714,000 | | | | 269,867 | |
| | China Motor Corp., A | | | Automobiles | | | | 11,460 | | | | 14,673 | |
| | China Steel Corp., A | | | Metals & Mining | | | | 545,000 | | | | 458,329 | |
| | Chunghwa Telecom Co. Ltd. | | | Diversified Telecommunication Services | | | | 167,240 | | | | 600,503 | |
| | Compal Electronics Inc., H | | | Technology Hardware, Storage & Peripherals | | | | 180,000 | | | | 123,027 | |
| | CTBC Financial Holding Co. Ltd., A | | | Banks | | | | 801,000 | | | | 500,798 | |
| | Delta Electronics Inc., A | | | Electronic Equipment, Instruments & Components | | | | 95,490 | | | | 760,936 | |
| | E Ink Holdings Inc. | | | Electronic Equipment, Instruments & Components | | | | 39,500 | | | | 263,756 | |
| | E.Sun Financial Holding Co. Ltd., A | | | Banks | | | | 601,415 | | | | 487,777 | |
| | Eclat Textile Co. Ltd., A | | | Textiles, Apparel & Luxury Goods | | | | 8,820 | | | | 108,899 | |
| | eMemory Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 3,018 | | | | 108,842 | |
| | ENNOSTAR Inc., H | | | Semiconductors & Semiconductor Equipment | | | | 27,820 | | | | 36,320 | |
| | Eternal Materials Co. Ltd., H | | | Chemicals | | | | 48,300 | | | | 46,096 | |
| | EVA Airways Corp., H | | | Airlines | | | | 111,000 | | | | 98,592 | |
| | Evergreen Marine Corp. Taiwan Ltd. | | | Marine | | | | 44,072 | | | | 202,668 | |
| | Far Eastern International Bank | | | Banks | | | | 105,091 | | | | 36,742 | |
| | Far Eastern New Century Corp. | | | Industrial Conglomerates | | | | 172,800 | | | | 176,071 | |
| | Far EasTone Telecommunications Co. Ltd. | | | Wireless Telecommunication Services | | | | 71,000 | | | | 161,907 | |
| | Feng Tay Enterprise Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 19,240 | | | | 95,749 | |
| | First Financial Holding Co. Ltd. | | | Banks | | | | 457,770 | | | | 374,879 | |
| | Formosa Chemicals & Fibre Corp. | | | Chemicals | | | | 151,000 | | | | 328,643 | |
| | Formosa Petrochemical Corp. | | | Oil, Gas & Consumable Fuels | | | | 59,820 | | | | 156,196 | |
| | Formosa Plastics Corp. | | | Chemicals | | | | 164,460 | | | | 448,588 | |
| | Formosa Sumco Technology Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,460 | | | | 10,615 | |
| | Formosa Taffeta Co. Ltd. | | | Textiles, Apparel & Luxury Goods | | | | 45,000 | | | | 38,340 | |
| | Foxconn Technology Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 48,360 | | | | 69,839 | |
| | Fubon Financial Holding Co. Ltd. | | | Insurance | | | | 323,149 | | | | 507,894 | |
| | Genius Electronic Optical Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 3,690 | | | | 40,155 | |
| | Giant Manufacturing Co. Ltd. | | | Leisure Products | | | | 13,100 | | | | 84,792 | |
| | Globalwafers Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 9,270 | | | | 107,010 | |
| | Hiwin Technologies Corp. | | | Machinery | | | | 12,289 | | | | 68,511 | |
| | Hon Hai Precision Industry Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 525,600 | | | | 1,688,595 | |
| | Hotai Motor Co. Ltd. | | | Specialty Retail | | | | 14,040 | | | | 252,949 | |
| a | | HTC Corp. | | | Technology Hardware, Storage & Peripherals | | | | 31,500 | | | | 54,370 | |
| | Hua Nan Financial Holdings Co. Ltd. | | | Banks | | | | 450,029 | | | | 315,385 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 275 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Taiwan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Taiwan (continued) | | | | | | | | | |
| | Innolux Corp. | | | Electronic Equipment, Instruments & Components | | | | 451,000 | | | $ | 148,444 | |
| | Inventec Corp. | | | Technology Hardware, Storage & Peripherals | | | | 132,000 | | | | 95,209 | |
| | Largan Precision Co. Ltd. | | | Electronic Equipment, Instruments & Components | | | | 4,500 | | | | 237,409 | |
| | Lite-On Technology Corp. | | | Technology Hardware, Storage & Peripherals | | | | 93,600 | | | | 188,090 | |
| | MediaTek Inc. | | | Semiconductors & Semiconductor Equipment | | | | 65,520 | | | | 1,137,092 | |
| | Mega Financial Holding Co. Ltd. | | | Banks | | | | 496,150 | | | | 486,789 | |
| | Micro-Star International Co. Ltd. | | | Technology Hardware, Storage & Peripherals | | | | 30,500 | | | | 103,271 | |
| | momo.com Inc. | | | Internet & Catalog Retail | | | | 2,438 | | | | 41,006 | |
| | Nan Ya Plastics Corp. | | | Chemicals | | | | 248,490 | | | | 523,606 | |
| | Nan Ya Printed Circuit Board Corp. | | | Electronic Equipment, Instruments & Components | | | | 9,000 | | | | 53,576 | |
| | Nanya Technology Corp. | | | Semiconductors & Semiconductor Equipment | | | | 35,190 | | | | 54,255 | |
| | Nien Made Enterprise Co. Ltd. | | | Household Durables | | | | 6,120 | | | | 48,480 | |
| | Novatek Microelectronics Corp. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 25,240 | | | | 174,102 | |
| a | | OBI Pharma Inc. | | | Biotechnology | | | | 7,446 | | | | 16,769 | |
| a | | Oneness Biotech Co. Ltd. | | | Pharmaceuticals | | | | 13,200 | | | | 104,980 | |
| | Pegatron Corp. | | | Technology Hardware, Storage & Peripherals | | | | 90,000 | | | | 165,832 | |
| | Pou Chen Corp. | | | Textiles, Apparel & Luxury Goods | | | | 117,000 | | | | 105,027 | |
| | Powerchip Semiconductor Manufacturing Corp. | | | Semiconductors & Semiconductor Equipment | | | | 126,000 | | | | 113,106 | |
| | Powertech Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 31,300 | | | | 76,010 | |
| | President Chain Store Corp. | | | Food & Staples Retailing | | | | 24,840 | | | | 221,024 | |
| | Quanta Computer Inc. | | | Technology Hardware, Storage & Peripherals | | | | 117,260 | | | | 284,388 | |
| | Realtek Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 20,942 | | | | 178,095 | |
| | Ruentex Development Co. Ltd. | | | Real Estate Management & Development | | | | 69,000 | | | | 111,707 | |
| | Shin Kong Financial Holding Co. Ltd. | | | Insurance | | | | 592,565 | | | | 153,232 | |
| | Sino-American Silicon Products Inc. | | | Semiconductors & Semiconductor Equipment | | | | 23,820 | | | | 98,284 | |
| | SinoPac Financial Holdings Co. Ltd. | | | Banks | | | | 468,070 | | | | 255,051 | |
| | Synnex Technology International Corp. | | | Electronic Equipment, Instruments & Components | | | | 59,100 | | | | 98,286 | |
| | Taishin Financial Holding Co. Ltd. | | | Banks | | | | 498,872 | | | | 215,268 | |
| | Taiwan Business Bank | | | Banks | | | | 231,631 | | | | 91,926 | |
| | Taiwan Cement Corp. | | | Construction Materials | | | | 261,418 | | | | 278,306 | |
| | Taiwan Cooperative Financial Holding Co. Ltd. | | | Banks | | | | 441,446 | | | | 364,987 | |
| | Taiwan Fertilizer Co. Ltd. | | | Chemicals | | | | 32,400 | | | | 56,230 | |
| | Taiwan Glass Industry Corp. | | | Building Products | | | | 72,000 | | | | 39,573 | |
| | Taiwan High Speed Rail Corp. | | | Transportation Infrastructure | | | | 91,000 | | | | 81,688 | |
| | Taiwan Mobile Co. Ltd. | | | Wireless Telecommunication Services | | | | 75,780 | | | | 228,183 | |
| | Taiwan Secom Co. Ltd. | | | Commercial Services & Supplies | | | | 12,280 | | | | 39,065 | |
| | Taiwan Semiconductor Manufacturing Co. Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 402,620 | | | | 5,351,527 | |
| | Teco Electric & Machinery Co. Ltd. | | | Electrical Equipment | | | | 87,000 | | | | 77,138 | |
| | The Shanghai Commercial & Savings Bank Ltd. | | | Banks | | | | 144,000 | | | | 223,150 | |
| | Transcend Information Inc. | | | Technology Hardware, Storage & Peripherals | | | | 12,280 | | | | 24,948 | |
| | U-Ming Marine Transport Corp. | | | Marine | | | | 18,000 | | | | 20,694 | |
| | Unimicron Technology Corp. | | | Electronic Equipment, Instruments & Components | | | | 55,800 | | | | 206,510 | |
| | Uni-President Enterprises Corp. | | | Food Products | | | | 210,700 | | | | 446,632 | |
| | United Microelectronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 515,220 | | | | 580,148 | |
| | Vanguard International Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 39,360 | | | | 80,582 | |
| | Voltronic Power Technology Corp. | | | Electrical Equipment | | | | 2,880 | | | | 127,450 | |
| | Walsin Lihwa Corp. | | | Electrical Equipment | | | | 150,679 | | | | 192,211 | |
| | Walsin Technology Corp. | | | Electronic Equipment, Instruments & Components | | | | 21,280 | | | | 49,934 | |
| | Wan Hai Lines Ltd. | | | Marine | | | | 40,530 | | | | 85,275 | |
| | Win Semiconductors Corp. | | | Semiconductors & Semiconductor Equipment | | | | 17,550 | | | | 68,267 | |
| | Winbond Electronics Corp. | | | Semiconductors & Semiconductor Equipment | | | | 128,000 | | | | 79,625 | |
| | Wistron Corp. | | | Technology Hardware, Storage & Peripherals | | | | 125,000 | | | | 104,531 | |
| | Wiwynn Corp. | | | Technology Hardware, Storage & Peripherals | | | | 3,820 | | | | 97,218 | |
| | Yageo Corp. | | | Electronic Equipment, Instruments & Components | | | | 22,250 | | | | 188,518 | |
| | Yang Ming Marine Transport Corp. | | | Marine | | | | 77,400 | | | | 149,929 | |
| | Yuanta Financial Holding Co. Ltd. | | | Capital Markets | | | | 532,406 | | | | 327,838 | |
| | Yulon Motor Co. Ltd. | | | Automobiles | | | | 23,549 | | | | 30,448 | |
| | | | | | | | | | |
| | | | | | |
| 276 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE Taiwan ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | Taiwan (continued) | | | | | | | | | |
| | Yulon Nissan Motor Co. Ltd. | | | Automobiles | | | | 1,260 | | | $ | 7,540 | |
| | Zhen Ding Technology Holding Ltd. | | | Electronic Equipment, Instruments & Components | | | | 27,900 | | | | 93,149 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 27,321,394 | |
| | | | | | | | | | | | | | |
| | | United States 0.2% | | | | | | | | | |
| | Parade Technologies Ltd. | | | Semiconductors & Semiconductor Equipment | | | | 3,060 | | | | 57,058 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $27,057,905) 99.8% | | | | | | | | | | | 27,726,628 | |
| | Other Assets, less Liabilities 0.2% | | | | | | | | | | | 61,144 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 27,787,772 | |
| | | | | | | | | | | | | | |
aNon-income producing.
At September 30, 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 TAIWAN INDEX | | | Long | | | | 2 | | | $ | 93,400 | | | | 10/28/22 | | | $ | (4,144 | ) |
*As of period end.
See Note 8 regarding other derivative information.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 277 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE United Kingdom ETF
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
September 30, 2022 (unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018a | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 25.46 | | | $ | 23.78 | | | $ | 17.92 | | | $ | 24.23 | | | $ | 25.23 | | | $ | 24.89 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.55 | | | | 0.95 | | | | 0.84 | | | | 1.08 | | | | 1.05 | | | | 0.38 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (5.75 | ) | | | 1.47 | | | | 5.62 | | | | (6.30 | ) | | | (1.21 | ) | | | 0.07 | |
| | | | |
| | | | | | |
Total from investment operations | | | (5.20 | ) | | | 2.42 | | | | 6.46 | | | | (5.22 | ) | | | (0.16 | ) | | | 0.45 | |
| | | | |
| | | | | | |
| Less distributions from net investment income | | | (0.49 | ) | | | (0.74 | ) | | | (0.60 | ) | | | (1.09 | ) | | | (0.84 | ) | | | (0.11 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 19.77 | | | $ | 25.46 | | | $ | 23.78 | | | $ | 17.92 | | | $ | 24.23 | | | $ | 25.23 | |
| | | | |
| | | | | | |
Total returnd | | | (20.61)% | | | | 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% | | | | 0.09% | |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | | | | 0.09% | |
| | | | | | |
Net investment income | | | 4.73% | | | | 3.77% | | | | 3.98% | | | | 4.84% | | | | 4.46% | | | | 3.68% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $390,474 | | | | $613,573 | | | | $205,673 | | | | $89,624 | | | | $29,076 | | | | $2,523 | |
| | | | | | |
Portfolio turnover ratef | | | 2.90%g | | | | 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: | | | 2.90% | | | | 5.76% | | | | 7.26% | | | | 4.41% | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
| 278 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin FTSE United Kingdom ETF
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.0% | | | | | | | | | |
| | | Australia 6.3% | | | | | | | | | |
| | Glencore PLC | | | Metals & Mining | | | | 2,492,450 | | | $ | 13,303,666 | |
| | Rio Tinto PLC | | | Metals & Mining | | | | 207,375 | | | | 11,333,877 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 24,637,543 | |
| | | | | | | | | | | | | | |
| | | Bermuda 0.2% | | | | | | | | | |
| | Hiscox Ltd. | | | Insurance | | | | 63,200 | | | | 622,534 | |
| | | | | | | | | | | | | | |
| | | Chile 0.2% | | | | | | | | | |
| | Antofagasta PLC | | | Metals & Mining | | | | 65,570 | | | | 816,499 | |
| | | | | | | | | | | | | | |
| | | Germany 0.1% | | | | | | | | | |
| a,b | | TUI AG | | | Hotels, Restaurants & Leisure | | | | 235,420 | | | | 284,217 | |
| | | | | | | | | | | | | | |
| | | Ireland 4.1% | | | | | | | | | |
| | CRH PLC | | | Construction Materials | | | | 145,755 | | | | 4,734,751 | |
| | DCC PLC | | | Industrial Conglomerates | | | | 18,960 | | | | 992,429 | |
| | Experian PLC | | | Professional Services | | | | 174,985 | | | | 5,197,882 | |
| a | | Flutter Entertainment PLC | | | Hotels, Restaurants & Leisure | | | | 33,575 | | | | 3,724,738 | |
| | Smurfit Kappa Group PLC | | | Containers & Packaging | | | | 49,770 | | | | 1,434,513 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | 16,084,313 | |
| | | | | | | | | | | | | | |
| | | Isle Of Man 0.3% | | | | | | | | | |
| | GVC Holdings PLC | | | Hotels, Restaurants & Leisure | | | | 111,785 | | | | 1,355,171 | |
| | | | | | | | | | | | | | |
| | | Mexico 0.1% | | | | | | | | | |
| | Fresnillo PLC | | | Metals & Mining | | | | 34,760 | | | | 298,469 | |
| | | | | | | | | | | | | | |
| | | Netherlands 8.9% | | | | | | | | | |
| | Shell PLC | | | Oil, Gas & Consumable Fuels | �� | | | 1,393,955 | | | | 34,957,139 | |
| | | | | | | | | | | | | | |
| | | Nigeria 0.1% | | | | | | | | | |
| | Airtel Africa PLC, 144A | | | Wireless Telecommunication Services | | | | 204,215 | | | | 294,531 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0% | | | | | | | | | |
| c | | Evraz PLC | | | Metals & Mining | | | | 128,818 | | | | — | |
| | | | | | | | | | | | | | |
| | | Switzerland 0.2% | | | | | | | | | |
| | Coca-Cola HBC AG | | | Beverages | | | | 37,525 | | | | 793,380 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 78.5% | | | | | | | | | |
| | 3i Group PLC | | | Capital Markets | | | | 181,305 | | | | 2,212,130 | |
| | Abrdn PLC | | | Capital Markets | | | | 409,220 | | | | 635,426 | |
| | Admiral Group PLC | | | Insurance | | | | 54,115 | | | | 1,156,522 | |
| | Anglo American PLC | | | Metals & Mining | | | | 229,890 | | | | 7,020,006 | |
| | Ashtead Group PLC | | | Trading Companies & Distributors | | | | 84,135 | | | | 3,837,565 | |
| | Associated British Foods PLC | | | Food Products | | | | 65,570 | | | | 923,364 | |
| | AstraZeneca PLC | | | Pharmaceuticals | | | | 281,240 | | | | 31,218,994 | |
| d | | Auto Trader Group PLC, 144A | | | Interactive Media & Services | | | | 175,775 | | | | 1,010,520 | |
| | AVEVA Group PLC | | | Software | | | | 22,515 | | | | 789,694 | |
| | Aviva PLC | | | Insurance | | | | 531,670 | | | | 2,303,978 | |
| | B&M European Value Retail SA | | | Multiline Retail | | | | 176,170 | | | | 601,972 | |
| | BAE Systems PLC | | | Aerospace & Defense | | | | 600,795 | | | | 5,296,929 | |
| | Barclays PLC | | | Banks | | | | 3,074,680 | | | | 4,952,756 | |
| | Barratt Developments PLC | | | Household Durables | | | | 195,130 | | | | 745,392 | |
| | Bellway PLC | | | Household Durables | | | | 23,305 | | | | 443,042 | |
| | Berkeley Group Holdings PLC | | | Household Durables | | | | 19,355 | | | | 712,349 | |
| | BP PLC | | | Oil, Gas & Consumable Fuels | | | | 3,535,645 | | | | 17,093,757 | |
| | British American Tobacco PLC | | | Tobacco | | | | 426,600 | | | | 15,365,023 | |
| | British Land Co. PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 177,750 | | | | 695,867 | |
| | BT Group PLC | | | Diversified Telecommunication Services | | | | 1,326,410 | | | | 1,796,794 | |
| | Bunzl PLC | | | Trading Companies & Distributors | | | | 64,385 | | | | 1,983,693 | |
| | Burberry Group PLC | | | Textiles, Apparel & Luxury Goods | | | | 75,050 | | | | 1,514,711 | |
| a | | Centrica PLC | | | Multi-Utilities | | | | 1,128,515 | | | | 892,414 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 279 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE United Kingdom ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United Kingdom (continued) | | | | | | | | | |
| | Compass Group PLC | | | Hotels, Restaurants & Leisure | | | | 339,305 | | | $ | 6,836,726 | |
| a | | ConvaTec Group PLC, 144A | | | Health Care Equipment & Supplies | | | | 312,445 | | | | 717,096 | |
| | Croda International PLC | | | Chemicals | | | | 25,675 | | | | 1,847,487 | |
| | Dechra Pharmaceuticals PLC | | | Pharmaceuticals | | | | 20,935 | | | | 612,754 | |
| | Derwent London PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 18,960 | | | | 427,534 | |
| | Diageo PLC | | | Beverages | | | | 429,760 | | | | 18,218,158 | |
| | Direct Line Insurance Group PLC | | | Insurance | | | | 251,615 | | | | 521,028 | |
| | Dr. Martens PLC | | | Textiles, Apparel & Luxury Goods | | | | 104,280 | | | | 259,356 | |
| | DS Smith PLC | | | Containers & Packaging | | | | 245,690 | | | | 704,583 | |
| a | | easyJet PLC | | | Airlines | | | | 70,310 | | | | 232,636 | |
| | Electrocomponents PLC | | | Trading Companies & Distributors | | | | 88,875 | | | | 961,356 | |
| | Endeavour Mining PLC | | | Metals & Mining | | | | 34,760 | | | | 636,750 | |
| | Ferguson PLC | | | Trading Companies & Distributors | | | | 40,290 | | | | 4,229,515 | |
| | GSK PLC | | | Pharmaceuticals | | | | 761,165 | | | | 11,095,227 | |
| a | | Haleon PLC | | | Personal Products | | | | 951,555 | | | | 2,966,250 | |
| | Halma PLC | | | Electronic Equipment, Instruments & Components | | | | 72,285 | | | | 1,650,145 | |
| | Hargreaves Lansdown PLC | | | Capital Markets | | | | 71,495 | | | | 692,111 | |
| | Hikma Pharmaceuticals PLC | | | Pharmaceuticals | | | | 31,205 | | | | 474,963 | |
| | HomeServe PLC | | | Commercial Services & Supplies | | | | 52,930 | | | | 699,575 | |
| | Howden Joinery Group PLC | | | Trading Companies & Distributors | | | | 101,910 | | | | 574,726 | |
| | HSBC Holdings PLC | | | Banks | | | | 3,835,055 | | | | 20,005,439 | |
| | IMI PLC | | | Machinery | | | | 48,585 | | | | 606,894 | |
| | Imperial Brands PLC | | | Tobacco | | | | 180,120 | | | | 3,729,809 | |
| | Informa PLC | | | Media | | | | 274,525 | | | | 1,591,099 | |
| | InterContinental Hotels Group PLC | | | Hotels, Restaurants & Leisure | | | | 35,155 | | | | 1,714,549 | |
| | Intermediate Capital Group PLC | | | Capital Markets | | | | 52,535 | | | | 576,361 | |
| a | | International Consolidated Airlines Group SA | | | Airlines | | | | 210,535 | | | | 222,494 | |
| | Intertek Group PLC | | | Professional Services | | | | 30,810 | | | | 1,274,955 | |
| | ITV PLC | | | Media | | | | 718,505 | | | | 459,424 | |
| | J Sainsbury PLC | | | Food & Staples Retailing | | | | 325,480 | | | | 633,290 | |
| | JD Sports Fashion PLC | | | Specialty Retail | | | | 463,335 | | | | 518,255 | |
| | Johnson Matthey PLC | | | Chemicals | | | | 34,760 | | | | 711,057 | |
| | Kingfisher PLC | | | Specialty Retail | | | | 378,015 | | | | 930,039 | |
| | Land Securities Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 136,670 | | | | 796,082 | |
| | Legal & General Group PLC | | | Insurance | | | | 1,129,305 | | | | 2,729,291 | |
| | Lloyds Banking Group PLC | | | Banks | | | | 13,025,520 | | | | 6,018,263 | |
| | London Stock Exchange Group PLC | | | Capital Markets | | | | 69,915 | | | | 5,953,355 | |
| | M&G PLC | | | Diversified Financial Services | | | | 482,690 | | | | 897,416 | |
| | Melrose Industries PLC | | | Industrial Conglomerates | | | | 761,955 | | | | 869,282 | |
| | Mondi PLC | | | Paper & Forest Products | | | | 92,430 | | | | 1,438,323 | |
| | National Grid PLC | | | Multi-Utilities | | | | 694,015 | | | | 7,212,723 | |
| | NatWest Group PLC | | | Banks | | | | 968,145 | | | | 2,441,391 | |
| | Next PLC | | | Multiline Retail | | | | 23,305 | | | | 1,248,997 | |
| a,c | | NMC Health PLC | | | Health Care Providers & Services | | | | 3,705 | | | | — | |
| a | | Ocado Group PLC | | | Food & Staples Retailing | | | | 109,810 | | | | 579,194 | |
| | Pearson PLC | | | Media | | | | 139,830 | | | | 1,353,007 | |
| | Pennon Group PLC | | | Water Utilities | | | | 50,165 | | | | 440,713 | |
| | Persimmon PLC | | | Household Durables | | | | 60,830 | | | | 840,318 | |
| | Phoenix Group Holdings PLC | | | Insurance | | | | 138,645 | | | | 815,325 | |
| | Prudential PLC | | | Insurance | | | | 523,375 | | | | 5,221,966 | |
| | Reckitt Benckiser Group PLC | | | Household Products | | | | 136,275 | | | | 9,090,913 | |
| | RELX PLC | | | Professional Services | | | | 353,130 | | | | 8,680,258 | |
| | Renishaw PLC | | | Electronic Equipment, Instruments & Components | | | | 6,448 | | | | 253,078 | |
| | Rentokil Initial PLC | | | Commercial Services & Supplies | | | | 355,105 | | | | 1,892,827 | |
| | Rightmove PLC | | | Interactive Media & Services | | | | 158,790 | | | | 854,734 | |
| a | | Rolls-Royce Holdings PLC | | | Aerospace & Defense | | | | 1,595,010 | | | | 1,239,056 | |
| | Royal Mail PLC | | | Air Freight & Logistics | | | | 168,665 | | | | 347,284 | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE United Kingdom ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United Kingdom (continued) | | | | | | | | | |
| | Schroders PLC | | | Capital Markets | | | | 123,182 | | | $ | 535,319 | |
| | Segro PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 228,705 | | | | 1,922,434 | |
| | Severn Trent PLC | | | Water Utilities | | | | 47,400 | | | | 1,246,092 | |
| | Smith & Nephew PLC | | | Health Care Equipment & Supplies | | | | 166,295 | | | | 1,950,096 | |
| | Smiths Group PLC | | | Industrial Conglomerates | | | | 69,125 | | | | 1,165,179 | |
| | Spirax-Sarco Engineering PLC | | | Machinery | | | | 13,825 | | | | 1,605,015 | |
| | SSE PLC | | | Electric Utilities | | | | 203,425 | | | | 3,468,696 | |
| | St. James’s Place Capital PLC | | | Capital Markets | | | | 101,910 | | | | 1,178,575 | |
| | Standard Chartered PLC | | | Banks | | | | 465,310 | | | | 2,944,103 | |
| | Tate & Lyle PLC | | | Food Products | | | | 75,840 | | | | 575,689 | |
| | Taylor Wimpey PLC | | | Household Durables | | | | 668,340 | | | | 658,778 | |
| | Tesco PLC | | | Food & Staples Retailing | | | | 1,409,755 | | | | 3,254,430 | |
| | The Sage Group PLC | | | Software | | | | 193,945 | | | | 1,509,443 | |
| | Unilever PLC | | | Personal Products | | | | 483,480 | | | | 21,421,028 | |
| | UNITE Group PLC | | | Equity Real Estate Investment Trusts (REITs | ) | | | 60,435 | | | | 579,175 | |
| | United Utilities Group PLC | | | Water Utilities | | | | 129,560 | | | | 1,285,451 | |
| | Vodafone Group PLC | | | Wireless Telecommunication Services | | | | 4,780,290 | | | | 5,396,001 | |
| | Weir Group PLC | | | Machinery | | | | 49,770 | | | | 781,426 | |
| | Whitbread PLC | | | Hotels, Restaurants & Leisure | | | | 38,315 | | | | 984,589 | |
| a | | Wise PLC, A | | | IT Services | | | | 87,295 | | | | 643,737 | |
| | WPP PLC | | | Media | | | | 203,425 | | | | 1,703,124 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | 306,556,715 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments
(Cost $508,915,285) | | | | | | | | | | | 386,700,511 | |
| | | | | | | | | | | | | | |
| | | 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, 2.45% | | | Money Market Funds | | | | 273,000 | | | | 273,000 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments
(Cost $273,000) | | | | | | | | | | | 273,000 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $509,188,285) 99.1% | | | | | | | | | | | 386,973,511 | |
| | Other Assets, less Liabilities 0.9% | | | | | | | | | | | 3,500,130 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 390,473,641 | |
| | | | | | | | | | | | | | |
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2022. See Note 1(d).
cFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
dSecurity 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 September 30, 2022, the value of was $2,022,147, representing 0.5% of net assets.
eThe rate shown is the annualized seven-day effective yield at period end.
fSee Note 3(c) regarding investments in affiliated management investment companies.
| | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 281 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin FTSE United Kingdom ETF (continued)
At September 30, 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 | | | | | | | | | | | | | | | |
FTSE 100 Index | | | Long | | | | 47 | | | $ | 3,627,767 | | | | 12/16/22 | | | $ | (236,095 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 332.
| | | | | | | | | | |
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| 282 | | | | | | | | Semiannual 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
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin FTSE
Asia ex Japan ETF | | | Franklin FTSE
Australia ETF | | | Franklin FTSE
Brazil ETF | | | Franklin FTSE
Canada ETF | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 37,997,819 | | | $ | 25,399,172 | | | $ | 283,908,891 | | | $ | 300,579,922 | |
Value – Unaffiliated issuers | | $ | 30,334,092 | | | $ | 22,913,777 | | | $ | 277,548,283 | | | $ | 257,885,497 | |
Cash | | | — | | | | 197 | | | | 182,456 | | | | — | |
Foreign currency, at value (cost $58,396, $279,747, $1,047,633 and $334,426, respectively) | | | 57,880 | | | | 276,344 | | | | 981,878 | | | | 332,236 | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends | | | 52,691 | | | | 98,762 | | | | 1,039,760 | | | | 618,927 | |
Variation margin on futures contracts | | | — | | | | 386 | | | | — | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | | | | | |
Futures contracts | | | 49 | | | | 38,423 | | | | 579,506 | | | | 48,347 | |
Other assets | | | 46 | | | | — | | | | — | | | | — | |
| | | | |
Total assets | | | 30,444,758 | | | | 23,327,889 | | | | 280,331,883 | | | | 258,885,007 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Management fees | | | 5,111 | | | | 1,872 | | | | 43,256 | | | | 21,523 | |
Variation margin on futures contracts | | | — | | | | — | | | | 88,129 | | | | 1,582 | |
Funds advanced by custodian | | | 8,683 | | | | — | | | | — | | | | 647 | |
Deferred tax | | | 145,188 | | | | — | | | | — | | | | — | |
| | | | |
Total liabilities | | | 158,982 | | | | 1,872 | | | | 131,385 | | | | 23,752 | |
| | | | |
Net assets, at value | | $ | 30,285,776 | | | $ | 23,326,017 | | | $ | 280,200,498 | | | $ | 258,861,255 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 40,272,908 | | | $ | 26,726,887 | | | $ | 406,857,769 | | | $ | 296,448,312 | |
Total distributable earnings (loss) | | | (9,987,132 | ) | | | (3,400,870 | ) | | | (126,657,271 | ) | | | (37,587,057 | ) |
| | | | |
Net assets, at value | | $ | 30,285,776 | | | $ | 23,326,017 | | | $ | 280,200,498 | | | $ | 258,861,255 | |
| | | | |
Shares outstanding | | | 1,600,000 | | | | 1,000,000 | | | | 15,500,000 | | | | 9,200,000 | |
| | | | |
Net asset value per share | | $ | 18.93 | | | $ | 23.33 | | | $ | 18.08 | | | $ | 28.14 | |
| | | | |
| | | | | | | | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 283 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin FTSE
China ETF | | | Franklin FTSE
Europe ETF | | | Franklin FTSE
Europe Hedged ETF | | | Franklin FTSE
France ETF | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 138,328,688 | | | $ | 51,710,478 | | | $ | 19,730,791 | | | $ | 8,467,663 | |
Value – Unaffiliated issuers | | $ | 91,369,615 | | | $ | 36,113,747 | | | $ | 14,141,600 | | | $ | 6,580,831 | |
Cash | | | — | | | | 20,055 | | | | — | | | | — | |
Foreign currency, at value (cost $47,695, $20,448, $58,337 and $2,701, respectively) | | | 47,674 | | | | 20,414 | | | | 57,540 | | | | 2,652 | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends | | | 131,406 | | | | 354,619 | | | | 35,314 | | | | 7,019 | |
Variation margin on futures contracts | | | 527 | | | | 4,994 | | | | 421 | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | | | | | |
Futures contracts | | | 9,330 | | | | 43,691 | | | | 3,379 | | | | — | |
Unrealized appreciation on OTC forward exchange contracts | | | — | | | | — | | | | 463,463 | | | | — | |
Other assets | | | — | | | | 122 | | | | 36 | | | | — | |
| | | | |
Total assets | | | 91,558,552 | | | | 36,557,642 | | | | 14,701,753 | | | | 6,590,502 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Investment securities purchased | | | — | | | | — | | | | 456,599 | | | | — | |
Management fees | | | 15,649 | | | | 2,518 | | | | 1,099 | | | | 577 | |
Funds advanced by custodian | | | 58,531 | | | | — | | | | 30,607 | | | | 2,603 | |
Unrealized depreciation on OTC forward exchange contracts | | | — | | | | — | | | | 9,551 | | | | — | |
| | | | |
Total liabilities | | | 74,180 | | | | 2,518 | | | | 497,856 | | | | 3,180 | |
| | | | |
Net assets, at value | | $ | 91,484,372 | | | $ | 36,555,124 | | | $ | 14,203,897 | | | $ | 6,587,322 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 154,199,656 | | | $ | 50,687,177 | | | $ | 17,257,761 | | | $ | 8,740,296 | |
Total distributable earnings (loss) | | | (62,715,284 | ) | | | (14,132,053 | ) | | | (3,053,864 | ) | | | (2,152,974 | ) |
| | | | |
Net assets, at value | | $ | 91,484,372 | | | $ | 36,555,124 | | | $ | 14,203,897 | | | $ | 6,587,322 | |
| | | | |
Shares outstanding | | | 5,400,000 | | | | 1,800,000 | | | | 600,000 | | | | 300,000 | |
| | | | |
Net asset value per share | | $ | 16.94 | | | $ | 20.31 | | | $ | 23.67 | | | $ | 21.96 | |
| | | | |
| | | | | | | | | | |
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| 284 | | | | | | | | Semiannual 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)
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin FTSE
Germany ETF | | | Franklin FTSE
Hong Kong ETF | | | Franklin FTSE
India ETF | | | Franklin FTSE
Italy ETF | |
Assets: | | | | | | | | | | | | | | | | |
Investments in securities: | | | | | | | | | | | | | | | | |
Cost – Unaffiliated issuers | | $ | 19,708,863 | | | $ | 15,063,230 | | | $ | 49,608,914 | | | $ | 3,322,879 | |
Value – Unaffiliated issuers | | $ | 13,157,450 | | | $ | 11,180,353 | | | $ | 53,998,101 | | | $ | 2,678,906 | |
Cash | | | 3,924 | | | | 417 | | | | — | | | | 360 | |
Foreign currency, at value (cost $6,569, $30,206, $20,278 and $1,998, respectively) | | | 6,439 | | | | 30,204 | | | | 20,274 | | | | 1,982 | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends | | | — | | | | 37,263 | | | | 17,053 | | | | — | |
Investment securities sold | | | — | | | | — | | | | 37,263 | | | | — | |
Variation margin on futures contracts | | | — | | | | 160 | | | | — | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | | | | | |
Futures contracts | | | — | | | | 6,750 | | | | 10 | | | | — | |
| | | | |
Total assets | | | 13,167,813 | | | | 11,255,147 | | | | 54,072,701 | | | | 2,681,248 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Investment securities purchased | | | — | | | | — | | | | 16,620 | | | | — | |
Management fees | | | 966 | | | | 900 | | | | 8,670 | | | | 211 | |
Funds advanced by custodian | | | — | | | | — | | | | 42,473 | | | | — | |
Deferred tax | | | — | | | | — | | | | 680,011 | | | | — | |
| | | | |
Total liabilities | | | 966 | | | | 900 | | | | 747,774 | | | | 211 | |
| | | | |
Net assets, at value | | $ | 13,166,847 | | | $ | 11,254,247 | | | $ | 53,324,927 | | | $ | 2,681,037 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 20,206,663 | | | $ | 16,156,328 | | | $ | 52,135,669 | | | $ | 3,728,641 | |
Total distributable earnings (loss) | | | (7,039,816 | ) | | | (4,902,081 | ) | | | 1,189,258 | | | | (1,047,604 | ) |
| | | | |
Net assets, at value | | $ | 13,166,847 | | | $ | 11,254,247 | | | $ | 53,324,927 | | | $ | 2,681,037 | |
| | | | |
Shares outstanding | | | 850,000 | | | | 600,000 | | | | 1,850,000 | | | | 150,000 | |
| | | | |
Net asset value per share | | $ | 15.49 | | | $ | 18.76 | | | $ | 28.82 | | | $ | 17.87 | |
| | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 285 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | $ | 1,002,459,019 | | | $ | 29,743,748 | | | $ | 60,334,216 | | | $ | 10,126,558 | |
Cost – Non-controlled affiliates (Note 3c) | | | 392,360 | | | | 272,885 | | | | — | | | | — | |
Value – Unaffiliated issuers | | $ | 769,637,967 | | | $ | 22,742,013 | | | $ | 60,701,960 | | | $ | 9,936,121 | |
Value – Non-controlled affiliates (Note 3c) | | | 392,360 | | | | 272,885 | | | | — | | | | — | |
Cash | | | 3 | | | | — | | | | 129,046 | | | | 470 | |
Foreign currency, at value (cost $349,368 and $6,195, respectively) | | | 348,532 | | | | 6,187 | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends | | | 7,376,935 | | | | 210,085 | | | | 197,230 | | | | 65,668 | |
Deposits with brokers for: | | | | | | | | | | | | | | | | |
Futures contracts | | | 401,050 | | | | 10,695 | | | | 54,139 | | | | — | |
Unrealized appreciation on OTC forward exchange contracts | | | — | | | | 1,093,663 | | | | — | | | | — | |
| | | | |
Total assets | | | 778,156,847 | | | | 24,335,528 | | | | 61,082,375 | | | | 10,002,259 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Investment securities purchased | | | — | | | | 954,798 | | | | 37,284 | | | | 28,649 | |
Management fees | | | 60,121 | | | | 1,777 | | | | 9,976 | | | | 1,573 | |
Variation margin on futures contracts | | | 124,351 | | | | 3,319 | | | | 9,263 | | | | — | |
Funds advanced by custodian | | | — | | | | 259,997 | | | | — | | | | — | |
Foreign currency advanced by custodian | | | — | | | | — | | | | 52,059 | | | | 26,179 | |
Unrealized depreciation on OTC forward exchange contracts | | | — | | | | 11,176 | | | | — | | | | — | |
Accrued expenses and other liabilities | | | — | | | | — | | | | 252 | | | | — | |
| | | | |
Total liabilities | | | 184,472 | | | | 1,231,067 | | | | 108,834 | | | | 56,401 | |
| | | | |
Net assets, at value | | $ | 777,972,375 | | | $ | 23,104,461 | | | $ | 60,973,541 | | | $ | 9,945,858 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 1,019,094,736 | | | $ | 26,243,566 | | | $ | 59,414,204 | | | $ | 10,460,130 | |
Total distributable earnings (loss) | | | (241,122,361 | ) | | | (3,139,105 | ) | | | 1,559,337 | | | | (514,272 | ) |
| | | | |
Net assets, at value | | $ | 777,972,375 | | | $ | 23,104,461 | | | $ | 60,973,541 | | | $ | 9,945,858 | |
| | | | |
Shares outstanding | | | 36,000,000 | | | | 800,000 | | | | 3,100,000 | | | | 450,000 | |
| | | | |
Net asset value per share | | $ | 21.61 | | | $ | 28.88 | | | $ | 19.67 | | | $ | 22.10 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 286 | | | | | | | | Semiannual 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)
September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | | $ | 4,370,666 | | | $ | 3,808,391 | | | $ | 63,495,882 | |
Value – Unaffiliated issuers | | $ | — | | | $ | 5,448,215 | | | $ | 2,950,631 | | | $ | 43,835,235 | |
Cash | | | 4,500 | | | | 101 | | | | — | | | | — | |
Foreign currency, at value (cost $5,246, $11,038 and $2,671, respectively) | | | — | | | | 5,250 | | | | 11,082 | | | | 2,631 | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends | | | — | | | | 5,914 | | | | 8,047 | | | | 78,542 | |
Affiliates | | | 82 | | | | — | | | | — | | | | — | |
Deposits with brokers for: | | | | | | | | | | | | | | | | |
Futures contracts | | | — | | | | — | | | | — | | | | 8,997 | |
Other assets | | | 82 | | | | — | | | | — | | | | 3,264 | |
| | | | |
Total assets | | | 4,664 | | | | 5,459,480 | | | | 2,969,760 | | | | 43,928,669 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | | | | | |
Management fees | | | — | | | | 1,472 | | | | 637 | | | | 3,551 | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | 1,647 | |
Funds advanced by custodian | | | — | | | | — | | | | 18,868 | | | | 10,825 | |
| | | | |
Total liabilities | | | — | | | | 1,472 | | | | 19,505 | | | | 16,023 | |
| | | | |
Net assets, at value | | $ | 4,664 | | | $ | 5,458,008 | | | $ | 2,950,255 | | | $ | 43,912,646 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | | | | | |
Paid-in capital | | $ | 23,177,931 | | | $ | 4,366,705 | | | $ | 4,028,309 | | | $ | 74,619,328 | |
Total distributable earnings (loss) | | | (23,173,267 | ) | | | 1,091,303 | | | | (1,078,054 | ) | | | (30,706,682 | ) |
| | | | |
Net assets, at value | | $ | 4,664 | | | $ | 5,458,008 | | | $ | 2,950,255 | | | $ | 43,912,646 | |
| | | | |
Shares outstanding | | | 800,000 | | | | 150,000 | | | | 150,000 | | | | 2,600,000 | |
| | | | |
Net asset value per share | | $ | 0.01 | 1 | | $ | 36.39 | | | $ | 19.67 | | | $ | 16.89 | |
| | | | |
1Actual amount less than $0.01 per share. Amount shown reflects effect of rounding.
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 287 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
| | | | | | | | | | | | |
| | | |
| | | Franklin FTSE
Switzerland ETF | | | Franklin FTSE
Taiwan ETF | | | Franklin FTSE
United Kingdom ETF | |
Assets: | |
Investments in securities: | |
Cost – Unaffiliated issuers | | $ | 56,620,228 | | | $ | 27,057,905 | | | $ | 508,915,285 | |
Cost – Non-controlled affiliates (Note 3c) | | | — | | | | — | | | | 273,000 | |
Value – Unaffiliated issuers+ | | $ | 49,266,798 | | | $ | 27,726,628 | | | $ | 386,700,511 | |
Value – Non-controlled affiliates (Note 3c) | | | — | | | | — | | | | 273,000 | |
Cash | | | 15,628 | | | | 235 | | | | 183,345 | |
Foreign currency, at value (cost $64,370, $91,017 and $2,453,368, respectively) | | | 63,836 | | | | 90,647 | | | | 2,457,240 | |
Receivables: | | | | | | | | | | | | |
Dividends | | | 636,272 | | | | 51,099 | | | | 971,902 | |
Investment securities sold | | | — | | | | 3,008,546 | | | | 5,796,643 | |
Variation margin on futures contracts | | | 9,406 | | | | — | | | | 19,711 | |
Deposits with brokers for: | | | | | | | | | | | | |
Futures contracts | | | 53,398 | | | | 5,720 | | | | 232,635 | |
| | | | |
Total assets | | | 50,045,338 | | | | 30,882,875 | | | | 396,634,987 | |
| | | | |
Liabilities: | | | | | | | | | | | | |
Payables: | | | | | | | | | | | | |
Capital shares redeemed | | | — | | | | 3,088,871 | | | | 5,852,699 | |
Management fees | | | 3,672 | | | | 5,285 | | | | 35,647 | |
Variation margin on futures contracts | | | — | | | | 947 | | | | — | |
Payable upon return of securities loaned | | | — | | | | — | | | | 273,000 | |
| | | | |
Total liabilities | | | 3,672 | | | | 3,095,103 | | | | 6,161,346 | |
| | | | |
Net assets, at value | | $ | 50,041,666 | | | $ | 27,787,772 | | | $ | 390,473,641 | |
| | | | |
Net assets consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 58,423,427 | | | $ | 27,933,402 | | | $ | 517,666,536 | |
Total distributable earnings (loss) | | | (8,381,761 | ) | | | (145,630 | ) | | | (127,192,895 | ) |
| | | | |
Net assets, at value | | $ | 50,041,666 | | | $ | 27,787,772 | | | $ | 390,473,641 | |
| | | | |
Shares outstanding | | | 1,900,000 | | | | 900,000 | | | | 19,750,000 | |
| | | | |
Net asset value per share | | $ | 26.34 | | | $ | 30.88 | | | $ | 19.77 | |
| | | | |
+Includes securities loaned | | | — | | | | — | | | $ | 258,853 | |
| | | | | | | | | | |
| | | | | | |
| 288 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | $ | 667,810 | | | $ | 1,058,630 | | | $ | 25,194,990 | | | $ | 2,944,553 | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | 147 | | | | — | | | | — | | | | — | |
Interest from securities loaned (Note 1d): | | | | | | | | | | | | | | | | |
Unaffiliated issuers (net of fees and rebates) | | | 22 | | | | — | | | | — | | | | — | |
| | | | |
Total investment income | | | 667,979 | | | | 1,058,630 | | | | 25,194,990 | | | | 2,944,553 | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
Management fees (Note 3a) | | | 33,498 | | | | 12,196 | | | | 322,160 | | | | 84,441 | |
| | | | |
Total expenses | | | 33,498 | | | | 12,196 | | | | 322,160 | | | | 84,441 | |
Expenses waived/paid by affiliates (Note 3c) | | | (83 | ) | | | — | | | | — | | | | — | |
| | | | |
Net expenses | | | 33,415 | | | | 12,196 | | | | 322,160 | | | | 84,441 | |
| | | | |
Net investment income | | | 634,564 | | | | 1,046,434 | | | | 24,872,830 | | | | 2,860,112 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (626,751 | ) | | | (360,009 | ) | | | (67,283,022 | ) | | | (1,237,263 | ) |
In-kind redemptions | | | — | | | | — | | | | — | | | | 4,103,296 | |
Foreign currency transactions | | | (11,830 | ) | | | (24,660 | ) | | | (1,250,479 | ) | | | (34,643 | ) |
Futures contracts | | | (41,334 | ) | | | 6,546 | | | | (1,608,425 | ) | | | 19,482 | |
| | | | |
Net realized gain (loss) | | | (679,915 | ) | | | (378,123 | ) | | | (70,141,926 | ) | | | 2,850,872 | |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (8,273,349 | ) | | | (7,858,469 | ) | | | (49,813,914 | ) | | | (50,177,295 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | 331 | | | | (12,575 | ) | | | (210,147 | ) | | | (17,449 | ) |
Futures contracts | | | — | | | | (30,610 | ) | | | (301,747 | ) | | | (27,595 | ) |
Change in deferred taxes on unrealized appreciation . | | | 32,817 | | | | — | | | | — | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (8,240,201 | ) | | | (7,901,654 | ) | | | (50,325,808 | ) | | | (50,222,339 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (8,920,116 | ) | | | (8,279,777 | ) | | | (120,467,734 | ) | | | (47,371,467 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (8,285,552 | ) | | $ | (7,233,343 | ) | | $ | (95,594,904 | ) | | $ | (44,511,355 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 87,538 | | | $ | 6,194 | | | $ | 647,525 | | | $ | 519,619 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | �� | | 289 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | $ | 2,286,484 | | | $ | 2,564,949 | | | $ | 415,515 | | | $ | 200,539 | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | 699 | | | | — | | | | — | | | | — | |
Interest from securities loaned (Note 1d): | | | | | | | | | | | | | | | | |
Unaffiliated issuers (net of fees and rebates) | | | 262 | | | | — | | | | — | | | | — | |
| | | | |
Total investment income | | | 2,287,445 | | | | 2,564,949 | | | | 415,515 | | | | 200,539 | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
Management fees (Note 3a) | | | 101,032 | | | | 45,740 | | | | 8,738 | | | | 3,997 | |
Other | | | — | | | | 300 | | | | 27 | | | | 1 | |
| | | | |
Total expenses | | | 101,032 | | | | 46,040 | | | | 8,765 | | | | 3,998 | |
Expenses waived/paid by affiliates (Note 3c) | | | (85 | ) | | | — | | | | (19 | ) | | | — | |
| | | | |
Net expenses | | | 100,947 | | | | 46,040 | | | | 8,746 | | | | 3,998 | |
| | | | |
Net investment income | | | 2,186,498 | | | | 2,518,909 | | | | 406,769 | | | | 196,541 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (4,280,868 | ) | | | (1,491,768 | ) | | | (356,831 | ) | | | (157,529 | ) |
In-kind redemptions | | | — | | | | 6,498,626 | | | | 308,341 | | | | (981 | ) |
Foreign currency transactions | | | (6,565 | ) | | | (46,836 | ) | | | (9,780 | ) | | | (2,082 | ) |
Forward exchange contracts | | | — | | | | — | | | | 2,400,365 | | | | — | |
Futures contracts | | | (167,578 | ) | | | (16,286 | ) | | | (5,566 | ) | | | (552 | ) |
| | | | |
Net realized gain (loss) | | | (4,455,011 | ) | | | 4,943,736 | | | | 2,336,529 | | | | (161,144 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (21,031,771 | ) | | | (32,791,800 | ) | | | (6,005,471 | ) | | | (2,196,188 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | 75 | | | | (31,446 | ) | | | (3,021 | ) | | | (219 | ) |
Futures contracts | | | (10,265 | ) | | | (104,736 | ) | | | (2,661 | ) | | | — | |
Forward exchange contracts | | | — | | | | — | | | | 231,381 | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (21,041,961 | ) | | | (32,927,982 | ) | | | (5,779,772 | ) | | | (2,196,407 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (25,496,972 | ) | | | (27,984,246 | ) | | | (3,443,243 | ) | | | (2,357,551 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (23,310,474 | ) | | $ | (25,465,337 | ) | | $ | (3,036,474 | ) | | $ | (2,161,010 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 189,463 | | | $ | 335,429 | | | $ | 54,791 | | | $ | 34,284 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 290 | | | | | | | | Semiannual 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 period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | $ | 360,215 | | | $ | 390,609 | | | $ | 390,234 | | | $ | 96,363 | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | — | | | | — | | | | — | | | | 31 | |
| | | | |
Total investment income | | | 360,215 | | | | 390,609 | | | | 390,234 | | | | 96,394 | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
Management fees (Note 3a) | | | 5,835 | | | | 6,559 | | | | 50,462 | | | | 1,427 | |
Other | | | 22 | | | | — | | | | — | | | | — | |
| | | | |
Total expenses | | | 5,857 | | | | 6,559 | | | | 50,462 | | | | 1,427 | |
| | | | |
Net investment income | | | 354,358 | | | | 384,050 | | | | 339,772 | | | | 94,967 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (306,423 | ) | | | (662,705 | ) | | | (398,053 | ) | | | (18,725 | ) |
In-kind redemptions | | | 293,599 | | | | 210,305 | | | | — | | | | — | |
Foreign currency transactions | | | (1,665 | ) | | | (171 | ) | | | (15,539 | ) | | | (1,334 | ) |
Futures contracts | | | (10,835 | ) | | | (7,727 | ) | | | 8,288 | | | | — | |
| | | | |
Net realized gain (loss) | | | (25,324 | ) | | | (460,298 | ) | | | (405,304 | ) | | | (20,059 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (4,771,967 | ) | | | (2,670,835 | ) | | | (4,538,293 | ) | | | (1,006,288 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | (252 | ) | | | 35 | | | | (383 | ) | | | 7 | |
Futures contracts | | | — | | | | (2,790 | ) | | | (1,364 | ) | | | — | |
Change in deferred taxes on unrealized appreciation | | | — | | | | — | | | | 282,670 | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (4,772,219 | ) | | | (2,673,590 | ) | | | (4,257,370 | ) | | | (1,006,281 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (4,797,543 | ) | | | (3,133,888 | ) | | | (4,662,674 | ) | | | (1,026,340 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (4,443,185 | ) | | $ | (2,749,838 | ) | | $ | (4,322,902 | ) | | $ | (931,373 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 54,657 | | | $ | 322 | | | $ | 120,042 | | | $ | 16,252 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 291 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | $ | 9,566,709 | | | $ | 275,980 | | | $ | 2,195,569 | | | $ | 279,025 | |
| | | | |
Total investment income | | | 9,566,709 | | | | 275,980 | | | | 2,195,569 | | | | 279,025 | |
| | | | |
Expenses: | |
Management fees (Note 3a) | | | 345,667 | | | | 10,852 | | | | 31,269 | | | | 9,699 | |
Other | | | 147 | | | | 5 | | | | — | | | | — | |
| | | | |
Total expenses | | | 345,814 | | | | 10,857 | | | | 31,269 | | | | 9,699 | |
Expenses waived/paid by affiliates (Note 3c) | | | (770 | ) | | | (114 | ) | | | — | | | | — | |
| | | | |
Net expenses | | | 345,044 | | | | 10,743 | | | | 31,269 | | | | 9,699 | |
| | | | |
Net investment income | | | 9,221,665 | | | | 265,237 | | | | 2,164,300 | | | | 269,326 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (6,964,317 | ) | | | (778,530 | ) | | | (224,883 | ) | | | (107,145 | ) |
In-kind redemptions | | | 5,332,608 | | | | — | | | | — | | | | 462,021 | |
Foreign currency transactions | | | (1,012,262 | ) | | | (33,885 | ) | | | (129,548 | ) | | | (1,237 | ) |
Forward exchange contracts | | | — | | | | 3,894,512 | | | | — | | | | — | |
Futures contracts | | | (144,459 | ) | | | (13,148 | ) | | | (30,378 | ) | | | — | |
| | | | |
Net realized gain (loss) | | | (2,788,430 | ) | | | 3,068,949 | | | | (384,809 | ) | | | 353,639 | |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | (188,140,700 | ) | | | (4,736,283 | ) | | | (496,933 | ) | | | (2,787,536 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | (50,259 | ) | | | (1,968 | ) | | | (5,246 | ) | | | 396 | |
Futures contracts | | | (194,653 | ) | | | (3,463 | ) | | | (10,285 | ) | | | — | |
Forward exchange contracts | | | — | | | | 532,139 | | | | — | | | | — | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (188,385,612 | ) | | | (4,209,575 | ) | | | (512,464 | ) | | | (2,787,140 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (191,174,042 | ) | | | (1,140,626 | ) | | | (897,273 | ) | | | (2,433,501 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (181,952,377 | ) | | $ | (875,389 | ) | | $ | 1,267,027 | | | $ | (2,164,175 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 1,060,774 | | | $ | 30,532 | | | $ | 72,637 | | | $ | 18,038 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 292 | | | | | | | | Semiannual 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 period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
| | | 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 | | $ | 2,048 | | | $ | 70,972 | | | $ | 103,052 | | | $ | 257,195 | |
Non-cash dividends | | | — | | | | — | | | | 24,173 | | | | — | |
Interest: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | 81 | | | | — | | | | — | | | | 9 | |
| | | | |
Total investment income | | | 2,129 | | | | 70,972 | | | | 127,225 | | | | 257,204 | |
| | | | |
Expenses: | | | | | | | | | | | | | | | | |
Management fees (Note 3a) | | | — | | | | 7,955 | | | | 4,526 | | | | 24,574 | |
| | | | |
Total expenses | | | — | | | | 7,955 | | | | 4,526 | | | | 24,574 | |
| | | | |
Net investment income | | | 2,129 | | | | 63,017 | | | | 122,699 | | | | 232,630 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | — | | | | (9,485 | ) | | | (85,356 | ) | | | (1,427,796 | ) |
In-kind redemptions | | | — | | | | — | | | | 124,789 | | | | — | |
Foreign currency transactions | | | (167 | ) | | | 108 | | | | (2,336 | ) | | | (68,604 | ) |
Forward exchange contracts | | | — | | | | (28 | ) | | | — | | | | — | |
Futures contracts | | | — | | | | — | | | | — | | | | (36,280 | ) |
| | | | |
Net realized gain (loss) | | | (167 | ) | | | (9,405 | ) | | | 37,097 | | | | (1,532,680 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Unaffiliated issuers | | | — | | | | (576,837 | ) | | | (2,071,645 | ) | | | (20,362,231 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | 6 | | | | 84 | | | | 16,421 | |
Futures contracts | | | — | | | | — | | | | — | | | | (38,433 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) | | | — | | | | (576,831 | ) | | | (2,071,561 | ) | | | (20,384,243 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (167 | ) | | | (586,236 | ) | | | (2,034,464 | ) | | | (21,916,923 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | 1,962 | | | $ | (523,219 | ) | | $ | (1,911,765 | ) | | $ | (21,684,293 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | (2,048 | ) | | $ | 3,457 | | | $ | 18,068 | | | $ | 51,760 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 293 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
| | | | | | | | | | | | |
| | | |
| | | Franklin FTSE
Switzerland ETF | | | Franklin FTSE
Taiwan ETF | | | Franklin FTSE
United Kingdom ETF | |
Investment income: | | | | | | | | | | | | |
Dividends: (net of foreign taxes)a | | | | | | | | | | | | |
Unaffiliated issuers | | $ | 658,472 | | | $ | 1,399,710 | | | $ | 12,860,185 | |
Interest: | | | | | | | | | | | | |
Unaffiliated issuers | | | — | | | | 119 | | | | 1,178 | |
Interest from securities loaned (Note 1d): | | | | | | | | | | | | |
Unaffiliated issuers (net of fees and rebates) | | | — | | | | — | | | | 5,724 | |
Non-Controlled affiliates (Note 3c) | | | — | | | | — | | | | 1,503 | |
| | | | |
Total investment income | | | 658,472 | | | | 1,399,829 | | | | 12,868,590 | |
| | | | |
Expenses: | | | | | | | | | | | | |
Management fees (Note 3a) | | | 22,314 | | | | 35,642 | | | | 240,297 | |
Other | | | 333 | | | | — | | | | — | |
| | | | |
Total expenses | | | 22,647 | | | | 35,642 | | | | 240,297 | |
Expenses waived/paid by affiliates (Note 3c) | | | — | | | | — | | | | (603 | ) |
| | | | |
Net expenses | | | 22,647 | | | | 35,642 | | | | 239,694 | |
| | | | |
Net investment income | | | 635,825 | | | | 1,364,187 | | | | 12,628,896 | |
| | | | |
Realized and unrealized gains (losses): | | | | | | | | | | | | |
Net realized gain (loss) from: | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | |
Unaffiliated issuers | | | (488,183 | ) | | | (1,393,031 | ) | | | (6,258,629 | ) |
In-kind redemptions | | | — | | | | — | | | | 2,975,345 | |
Foreign currency transactions | | | 4,279 | | | | (27,659 | ) | | | (727,190 | ) |
Futures contracts | | | (106,148 | ) | | | 6,016 | | | | 43,771 | |
| | | | |
Net realized gain (loss) | | | (590,052 | ) | | | (1,414,674 | ) | | | (3,966,703 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | |
Unaffiliated issuers | | | (11,098,614 | ) | | | (12,730,974 | ) | | | (131,147,185 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | (38,284 | ) | | | 671 | | | | (29,905 | ) |
Futures contracts | | | (66,572 | ) | | | (4,144 | ) | | | (467,356 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (11,203,470 | ) | | | (12,734,447 | ) | | | (131,644,446 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (11,793,522 | ) | | | (14,149,121 | ) | | | (135,611,149 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (11,157,697 | ) | | $ | (12,784,934 | ) | | $ | (122,982,253 | ) |
| | | | |
| | | | | | | | | | | | |
aForeign taxes withheld on dividends | | $ | 98,683 | | | $ | 347,840 | | | $ | 18,322 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 294 | | | | | | | | Semiannual 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
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE Asia ex Japan ETF | | | Franklin FTSE Australia ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 634,564 | | | $ | 664,421 | | | $ | 1,046,434 | | | $ | 1,235,873 | |
Net realized gain (loss) | | | (679,915 | ) | | | (979,634 | ) | | | (378,123 | ) | | | (464,945 | ) |
Net change in unrealized appreciation (depreciation) | | | (8,240,201 | ) | | | (3,275,420 | ) | | | (7,901,654 | ) | | | 2,892,489 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (8,285,552 | ) | | | (3,590,633 | ) | | | (7,233,343 | ) | | | 3,663,417 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (179,723 | ) | | | (744,268 | ) | | | (890,273 | ) | | | (1,262,140 | ) |
| | | | |
Capital share transactions: (Note 2) | | | — | | | | 8,769,376 | | | | 1,481,449 | | | | 4,271,838 | |
| | | | |
Net increase (decrease) in net assets | | | (8,465,275 | ) | | | 4,434,475 | | | | (6,642,167 | ) | | | 6,673,115 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 38,751,051 | | | | 34,316,576 | | | | 29,968,184 | | | | 23,295,069 | |
| | | | |
End of period | | $ | 30,285,776 | | | $ | 38,751,051 | | | $ | 23,326,017 | | | $ | 29,968,184 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 295 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE Brazil ETF | | | Franklin FTSE Canada ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 24,872,830 | | | $ | 20,729,461 | | | $ | 2,860,112 | | | $ | 725,501 | |
Net realized gain (loss) | | | (70,141,926 | ) | | | (18,881,968 | ) | | | 2,850,872 | | | | (201,770 | ) |
Net change in unrealized appreciation (depreciation) | | | (50,325,808 | ) | | | 69,556,549 | | | | (50,222,339 | ) | | | 5,384,898 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (95,594,904 | ) | | | 71,404,042 | | | | (44,511,355 | ) | | | 5,908,629 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (19,382,271 | ) | | | (16,614,538 | ) | | | (353,032 | ) | | | (639,656 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (132,641,830 | ) | | | 365,373,593 | | | | 260,436,831 | | | | 13,859,588 | |
| | | | |
Net increase (decrease) in net assets | | | (247,619,005 | ) | | | 420,163,097 | | | | 215,572,444 | | | | 19,128,561 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 527,819,503 | | | | 107,656,406 | | | | 43,288,811 | | | | 24,160,250 | |
| | | | |
End of period | | $ | 280,200,498 | | | $ | 527,819,503 | | | $ | 258,861,255 | | | $ | 43,288,811 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 296 | | | | | | | | Semiannual 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 China ETF | | | Franklin FTSE Europe ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 2,186,498 | | | $ | 2,209,264 | | | $ | 2,518,909 | | | $ | 6,105,734 | |
Net realized gain (loss) | | | (4,455,011 | ) | | | (4,775,014 | ) | | | 4,943,736 | | | | 26,177,110 | |
Net change in unrealized appreciation (depreciation) | | | (21,041,961 | ) | | | (42,274,445 | ) | | | (32,927,982 | ) | | | (24,258,897 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (23,310,474 | ) | | | (44,840,195 | ) | | | (25,465,337 | ) | | | 8,023,947 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (728,166 | ) | | | (1,744,579 | ) | | | (2,772,187 | ) | | | (7,497,235 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 4,069,254 | | | | 37,256,442 | | | | (120,064,434 | ) | | | (44,796,057 | ) |
| | | | |
Net increase (decrease) in net assets | | | (19,969,386 | ) | | | (9,328,332 | ) | | | (148,301,958 | ) | | | (44,269,345 | ) |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 111,453,758 | | | | 120,782,090 | | | | 184,857,082 | | | | 229,126,427 | |
| | | | |
End of period | | $ | 91,484,372 | | | $ | 111,453,758 | | | $ | 36,555,124 | | | $ | 184,857,082 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 297 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE Europe Hedged ETF | | | Franklin FTSE France ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 406,769 | | | $ | 515,076 | | | $ | 196,541 | | | $ | 268,585 | |
Net realized gain (loss) | | | 2,336,529 | | | | 758,844 | | | | (161,144 | ) | | | (84,036 | ) |
Net change in unrealized appreciation (depreciation) | | | (5,779,772 | ) | | | (221,066 | ) | | | (2,196,407 | ) | | | (57,195 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (3,036,474 | ) | | | 1,052,854 | | | | (2,161,010 | ) | | | 127,354 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (284,556 | ) | | | (666,937 | ) | | | (159,161 | ) | | | (270,848 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (4,169,746 | ) | | | 5,879,630 | | | | (1,180,388 | ) | | | 3,120,862 | |
| | | | |
Net increase (decrease) in net assets | | | (7,490,776 | ) | | | 6,265,547 | | | | (3,500,559 | ) | | | 2,977,368 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 21,694,673 | | | | 15,429,126 | | | | 10,087,881 | | | | 7,110,513 | |
| | | | |
End of period | | $ | 14,203,897 | | | $ | 21,694,673 | | | $ | 6,587,322 | | | $ | 10,087,881 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 298 | | | | | | | | Semiannual 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 Germany ETF | | | Franklin FTSE Hong Kong ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 354,358 | | | $ | 423,991 | | | $ | 384,050 | | | $ | 489,122 | |
Net realized gain (loss) | | | (25,324 | ) | | | (191,927 | ) | | | (460,298 | ) | | | (407,601 | ) |
Net change in unrealized appreciation (depreciation) | | | (4,772,219 | ) | | | (2,762,955 | ) | | | (2,673,590 | ) | | | (2,850,341 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (4,443,185 | ) | | | (2,530,891 | ) | | | (2,749,838 | ) | | | (2,768,820 | ) |
| | | | |
Distributions to shareholders (Note 1f) | | | (385,657 | ) | | | (404,523 | ) | | | (249,606 | ) | | | (478,429 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 1,220,980 | | | | 10,617,319 | | | | (3,319,699 | ) | | | 3,959,042 | |
| | | | |
Net increase (decrease) in net assets | | | (3,607,862 | ) | | | 7,681,905 | | | | (6,319,143 | ) | | | 711,793 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 16,774,709 | | | | 9,092,804 | | | | 17,573,390 | | | | 16,861,597 | |
| | | | |
End of period | | $ | 13,166,847 | | | $ | 16,774,709 | | | $ | 11,254,247 | | | $ | 17,573,390 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 299 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE India ETF | | | Franklin FTSE Italy ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 339,772 | | | $ | 318,604 | | | $ | 94,967 | | | $ | 127,754 | |
Net realized gain (loss) | | | (405,304 | ) | | | (535,539 | ) | | | (20,059 | ) | | | (26,481 | ) |
Net change in unrealized appreciation (depreciation) | | | (4,257,370 | ) | | | 3,883,589 | | | | (1,006,281 | ) | | | (211,281 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (4,322,902 | ) | | | 3,666,654 | | | | (931,373 | ) | | | (110,008 | ) |
| | | | |
Distributions to shareholders (Note 1f) | | | — | | | | (1,055,912 | ) | | | (85,702 | ) | | | (166,253 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 7,507,913 | | | | 23,985,026 | | | | — | | | | — | |
| | | | |
Net increase (decrease) in net assets | | | 3,185,011 | | | | 26,595,768 | | | | (1,017,075 | ) | | | (276,261 | ) |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 50,139,916 | | | | 23,544,148 | | | | 3,698,112 | | | | 3,974,373 | |
| | | | |
End of period | | $ | 53,324,927 | | | $ | 50,139,916 | | | $ | 2,681,037 | | | $ | 3,698,112 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 300 | | | | | | | | Semiannual 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 Japan ETF | | | Franklin FTSE Japan Hedged ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 9,221,665 | | | $ | 14,429,061 | | | $ | 265,237 | | | $ | 366,040 | |
Net realized gain (loss) | �� | | (2,788,430 | ) | | | 12,140,033 | | | | 3,068,949 | | | | 1,786,855 | |
Net change in unrealized appreciation (depreciation) | | | (188,385,612 | ) | | | (89,344,816 | ) | | | (4,209,575 | ) | | | (2,137,629 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (181,952,377 | ) | | | (62,775,722 | ) | | | (875,389 | ) | | | 15,266 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (7,811,752 | ) | | | (15,304,771 | ) | | | (739,945 | ) | | | (162,493 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 178,099,217 | | | | 268,783,660 | | | | — | | | | 303,836 | |
| | | | |
Net increase (decrease) in net assets | | | (11,664,912 | ) | | | 190,703,167 | | | | (1,615,334 | ) | | | 156,609 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 789,637,287 | | | | 598,934,120 | | | | 24,719,795 | | | | 24,563,186 | |
| | | | |
End of period | | $ | 777,972,375 | | | $ | 789,637,287 | | | $ | 23,104,461 | | | $ | 24,719,795 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 301 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE Latin America ETF | | | Franklin FTSE Mexico ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 2,164,300 | | | $ | 322,765 | | | $ | 269,326 | | | $ | 254,422 | |
Net realized gain (loss) | | | (384,809 | ) | | | (234,913 | ) | | | 353,639 | | | | (158,105 | ) |
Net change in unrealized appreciation (depreciation) | | | (512,464 | ) | | | 1,079,782 | | | | (2,787,140 | ) | | | 2,181,332 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | 1,267,027 | | | | 1,167,634 | | | | (2,164,175 | ) | | | 2,277,649 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (239,701 | ) | | | (304,300 | ) | | | (135,990 | ) | | | (302,647 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 52,371,383 | | | | 2,231,798 | | | | (126,002 | ) | | | 4,861,121 | |
| | | | |
Net increase (decrease) in net assets | | | 53,398,709 | | | | 3,095,132 | | | | (2,426,167 | ) | | | 6,836,123 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 7,574,832 | | | | 4,479,700 | | | | 12,372,025 | | | | 5,535,902 | |
| | | | |
End of period | | $ | 60,973,541 | | | $ | 7,574,832 | | | $ | 9,945,858 | | | $ | 12,372,025 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 302 | | | | | | | | Semiannual 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 Russia ETF | | | Franklin FTSE Saudi Arabia ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 2,129 | | | $ | 1,109,115 | | | $ | 63,017 | | | $ | 62,016 | |
Net realized gain (loss) | | | (167 | ) | | | (184,908 | ) | | | (9,405 | ) | | | 42,036 | |
Net change in unrealized appreciation (depreciation) | | | — | | | | (23,581,497 | ) | | | (576,831 | ) | | | 1,061,595 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | 1,962 | | | | (22,657,290 | ) | | | (523,219 | ) | | | 1,165,647 | |
| | | | |
Distributions to shareholders (Note 1f) | | | — | | | | (1,062,975 | ) | | | (33,263 | ) | | | (68,376 | ) |
| | | | |
Capital share transactions: (Note 2) | | | — | | | | 12,929,102 | | | | 1,884,180 | | | | — | |
| | | | |
Net increase (decrease) in net assets | | | 1,962 | | | | (10,791,163 | ) | | | 1,327,698 | | | | 1,097,271 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 2,702 | | | | 10,793,865 | | | | 4,130,310 | | | | 3,033,039 | |
| | | | |
End of period | | $ | 4,664 | | | $ | 2,702 | | | $ | 5,458,008 | | | $ | 4,130,310 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE South Africa ETF | | | Franklin FTSE South Korea ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 122,699 | | | $ | 141,667 | | | $ | 232,630 | | | $ | 1,268,057 | |
Net realized gain (loss) | | | 37,097 | | | | (81,742 | ) | | | (1,532,680 | ) | | | (5,450,316 | ) |
Net change in unrealized appreciation (depreciation) | | | (2,071,561 | ) | | | 824,250 | | | | (20,384,243 | ) | | | (8,014,155 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (1,911,765 | ) | | | 884,175 | | | | (21,684,293 | ) | | | (12,196,414 | ) |
| | | | |
Distributions to shareholders (Note 1f) | | | (119,737 | ) | | | (111,346 | ) | | | (184,893 | ) | | | (1,354,645 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (975,988 | ) | | | 2,562,673 | | | | 4,420,390 | | | | 11,946,711 | |
| | | | |
Net increase (decrease) in net assets | | | (3,007,490 | ) | | | 3,335,502 | | | | (17,448,796 | ) | | | (1,604,348 | ) |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 5,957,745 | | | | 2,622,243 | | | | 61,361,442 | | | | 62,965,790 | |
| | | | |
End of period | | $ | 2,950,255 | | | $ | 5,957,745 | | | $ | 43,912,646 | | | $ | 61,361,442 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Franklin FTSE Switzerland ETF | | | Franklin FTSE Taiwan ETF | |
| | | | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | | | | | | | | | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 635,825 | | | $ | 999,855 | | | $ | 1,364,187 | | | $ | 990,911 | |
Net realized gain (loss) | | | (590,052 | ) | | | 3,329,359 | | | | (1,414,674 | ) | | | (550,668 | ) |
Net change in unrealized appreciation (depreciation) | | | (11,203,470 | ) | | | 2,599,949 | | | | (12,734,447 | ) | | | 2,783,522 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (11,157,697 | ) | | | 6,929,163 | | | | (12,784,934 | ) | | | 3,223,765 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (923,204 | ) | | | (1,077,037 | ) | | | (4,973 | ) | | | (1,073,757 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 14,529,343 | | | | (6,828,650 | ) | | | (3,088,871 | ) | | | 8,619,703 | |
| | | | |
Net increase (decrease) in net assets | | | 2,448,442 | | | | (976,524 | ) | | | (15,878,778 | ) | | | 10,769,711 | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of period | | | 47,593,224 | | | | 48,569,748 | | | | 43,666,550 | | | | 32,896,839 | |
| | | | |
End of period | | $ | 50,041,666 | | | $ | 47,593,224 | | | $ | 27,787,772 | | | $ | 43,666,550 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| | | | | | | | |
| |
| | | Franklin FTSE United Kingdom ETF | |
| | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | |
Operations: | | | | | | | | |
Net investment income | | $ | 12,628,896 | | | $ | 15,398,911 | |
Net realized gain (loss) | | | (3,966,703 | ) | | | (202,105 | ) |
Net change in unrealized appreciation (depreciation) | | | (131,644,446 | ) | | | 8,007,752 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (122,982,253 | ) | | | 23,204,558 | |
| | | | |
Distributions to shareholders (Note 1f) | | | (11,193,755 | ) | | | (11,671,197 | ) |
| | | | |
Capital share transactions: (Note 2) | | | (88,922,851 | ) | | | 396,366,561 | |
| | | | |
Net increase (decrease) in net assets | | | (223,098,859 | ) | | | 407,899,922 | |
Net assets: | | | | | | | | |
Beginning of period | | | 613,572,500 | | | | 205,672,578 | |
| | | | |
End of period | | $ | 390,473,641 | | | $ | 613,572,500 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
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 Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, 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 September 30, 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
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 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
f. Security Transactions, Investment Income, Expenses and Distributions (continued)
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 Fund 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 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 (UNAUDITED)
At September 30, 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 | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 400,000 | | | $ | 8,769,376 | |
| | | | |
Net increase (decrease) | | | — | | | $ | — | | | | | | | | 400,000 | | | $ | 8,769,376 | |
| | | | |
| |
| | | Franklin FTSE Australia ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 50,000 | | | $ | 1,481,449 | | | | | | | | 150,000 | | | $ | 4,271,838 | |
| | | | |
Net increase (decrease) | | | 50,000 | | | $ | 1,481,449 | | | | | | | | 150,000 | | | $ | 4,271,838 | |
| | | | |
| |
| | | Franklin FTSE Brazil ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 2,500,000 | | | $ | 48,522,946 | | | | | | | | 17,500,000 | | | $ | 372,085,342 | |
Shares redeemed | | | (9,400,000 | ) | | | (181,164,776 | ) | | | | | | | (300,000 | ) | | | (6,711,749 | ) |
| | | | |
Net increase (decrease) | | | (6,900,000 | ) | | $ | (132,641,830 | ) | | | | | | | 17,200,000 | | | $ | 365,373,593 | |
| | | | |
| |
| | | Franklin FTSE Canada ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 8,900,000 | | | $ | 287,702,352 | | | | | | | | 400,000 | | | $ | 13,859,588 | |
Shares redeemed | | | (900,000 | ) | | | (27,265,521 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | 8,000,000 | | | $ | 260,436,831 | | | | | | | | 400,000 | | | $ | 13,859,588 | |
| | | | |
| |
| | | Franklin FTSE China ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 200,000 | | | $ | 4,069,254 | | | | | | | | 1,600,000 | | | $ | 43,703,237 | |
Shares redeemed | | | — | | | | — | | | | | | | | (200,000 | ) | | | (6,446,795 | ) |
| | | | |
Net increase (decrease) | | | 200,000 | | | $ | 4,069,254 | | | | | | | | 1,400,000 | | | $ | 37,256,442 | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Franklin FTSE Europe ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 400,000 | | | $ | 8,816,510 | | | | | | | | 1,400,000 | | | $ | 38,599,643 | |
Shares redeemed | | | (5,400,000 | ) | | | (128,880,944 | ) | | | | | | | (3,000,000 | ) | | | (83,395,700 | ) |
| | | | |
Net increase (decrease) | | | (5,000,000 | ) | | $ | (120,064,434 | ) | | | | | | | (1,600,000 | ) | | $ | (44,796,057 | ) |
| | | | |
| |
| | | Franklin FTSE Europe Hedged ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 400,000 | | | $ | 10,645,856 | | | | | | | | 200,000 | | | $ | 5,879,630 | |
Shares redeemed | | | (600,000 | ) | | | (14,815,602 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | (200,000 | ) | | $ | (4,169,746 | ) | | | | | | | 200,000 | | | $ | 5,879,630 | |
| | | | |
| |
| | | Franklin FTSE France ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 100,000 | | | $ | 3,120,862 | |
Shares redeemed | | | (50,000 | ) | | | (1,180,388 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | (50,000 | ) | | $ | (1,180,388 | ) | | | | | | | 100,000 | | | $ | 3,120,862 | |
| | | | |
| |
| | | Franklin FTSE Germany ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 200,000 | | | $ | 3,405,239 | | | | | | | | 400,000 | | | $ | 10,617,319 | |
Shares redeemed | | | (100,000 | ) | | | (2,184,259 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | 100,000 | | | $ | 1,220,980 | | | | | | | | 400,000 | | | $ | 10,617,319 | |
| | | | |
| |
| | | Franklin FTSE Hong Kong ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 150,000 | | | $ | 3,959,042 | |
Shares redeemed | | | (150,000 | ) | | | (3,319,699 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | (150,000 | ) | | $ | (3,319,699 | ) | | | | | | | 150,000 | | | $ | 3,959,042 | |
| | | | |
| |
| | | Franklin FTSE India ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 250,000 | | | $ | 7,507,913 | | | | | | | | 750,000 | | | $ | 23,985,026 | |
| | | | |
Net increase (decrease) | | | 250,000 | | | $ | 7,507,913 | | | | | | | | 750,000 | | | $ | 23,985,026 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | | Franklin FTSE Japan ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 9,000,000 | | | $ | 221,942,625 | | | | | | | | 11,400,000 | | | $ | 340,542,812 | |
Shares redeemed | | | (1,800,000 | ) | | | (43,843,408 | ) | | | | | | | (2,400,000 | ) | | | (71,759,152 | ) |
| | | | |
Net increase (decrease) | | | 7,200,000 | | | $ | 178,099,217 | | | | | | | | 9,000,000 | | | $ | 268,783,660 | |
| | | | |
| |
| | | Franklin FTSE Japan Hedged ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 400,000 | | | $ | 12,446,606 | |
Shares redeemed | | | — | | | | — | | | | | | | | (400,000 | ) | | | (12,142,770 | ) |
| | | | |
Net increase (decrease) | | | — | | | $ | — | | | | | | | | — | | | $ | 303,836 | |
| | | | |
| |
| | | Franklin FTSE Latin America ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 2,800,000 | | | $ | 52,371,383 | | | | | | | | 100,000 | | | $ | 2,231,798 | |
| | | | |
Net increase (decrease) | | | 2,800,000 | | | $ | 52,371,383 | | | | | | | | 100,000 | | | $ | 2,231,798 | |
| | | | |
| |
| | | Franklin FTSE Mexico ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 50,000 | | | $ | 1,141,877 | | | | | | | | 200,000 | | | $ | 4,861,121 | |
Shares redeemed | | | (50,000 | ) | | | (1,267,879 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | — | | | $ | (126,002 | ) | | | | | | | 200,000 | | | $ | 4,861,121 | |
| | | | |
| |
| | | Franklin FTSE Russia ETF1,2 | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 400,000 | | | $ | 12,929,102 | |
| | | | |
Net increase (decrease) | | | — | | | $ | — | | | | | | | | 400,000 | | | $ | 12,929,102 | |
| | | | |
| |
| | | Franklin FTSE Saudi Arabia ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 50,000 | | | $ | 1,884,180 | | | | | | | | — | | | $ | — | |
| | | | |
Net increase (decrease) | | | 50,000 | | | $ | 1,884,180 | | | | | | | | — | | | $ | — | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
| | | | | | | | | | | | | | | | | | | | |
| | | Franklin FTSE South Africa ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 100,000 | | | $ | 2,562,673 | |
Shares redeemed | | | (50,000 | ) | | | (975,988 | ) | | | | | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | (50,000 | ) | | $ | (975,988 | ) | | | | | | | 100,000 | | | $ | 2,562,673 | |
| | | | |
| |
| | | Franklin FTSE South Korea ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 200,000 | | | $ | 4,420,390 | | | | | | | | 800,000 | | | $ | 23,052,455 | |
Shares redeemed | | | — | | | | — | | | | | | | | (400,000 | ) | | | (11,105,744 | ) |
| | | | |
Net increase (decrease) | | | 200,000 | | | $ | 4,420,390 | | | | | | | | 400,000 | | | $ | 11,946,711 | |
| | | | |
| |
| | | Franklin FTSE Switzerland ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 500,000 | | | $ | 14,529,343 | | | | | | | | 300,000 | | | $ | 10,413,668 | |
Shares redeemed | | | — | | | | — | | | | | | | | (500,000 | ) | | | (17,242,318 | ) |
| | | | |
Net increase (decrease) | | | 500,000 | | | $ | 14,529,343 | | | | | | | | (200,000 | ) | | $ | (6,828,650 | ) |
| | | | |
| |
| | | Franklin FTSE Taiwan ETF | |
| | | |
| | | Six Months Ended September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | — | | | $ | — | | | | | | | | 300,000 | | | $ | 13,007,178 | |
Shares redeemed | | | (100,000 | ) | | | (3,088,871 | ) | | | | | | | (100,000 | ) | | | (4,387,475 | ) |
| | | | |
Net increase (decrease) | | | (100,000 | ) | | $ | (3,088,871 | ) | | | | | | | 200,000 | | | $ | 8,619,703 | |
| | | | |
| |
| | | Franklin FTSE United Kingdom ETF | |
| | | |
| | | Six Months Ended
September 30, 2022 | | | | | | Year Ended March 31, 2022 | |
| | | | | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Shares sold | | | 2,150,000 | | | $ | 50,219,908 | | | | | | | | 16,400,000 | | | $ | 419,981,074 | |
Shares redeemed | | | (6,500,000 | ) | | | (139,142,759 | ) | | | | | | | (950,000 | ) | | | (23,614,513 | ) |
| | | | |
Net increase (decrease) | | | (4,350,000 | ) | | $ | (88,922,851 | ) | | | | | | | 15,450,000 | | | $ | 396,366,561 | |
| | | | |
1Effective March 1, 2022: The Fund has suspended new creations of its shares until further notice. Please refer to the prospectus for further detail.
2Effective 4 AM Eastern Time on March 4, 2022: The NYSE Arca, Inc. announced a trading halt of the Fund.
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 Templeton 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 | | Semiannual Report | | | | | | | | 315 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 period ended September 30, 2022, investments in affiliated management investment companies were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | Value at
Beginning
of Period | | | Purchases | | | Sales | | | Realized
Gain (Loss) | | | Net Change in
Unrealized
Appreciation
(Depreciation) | | | Value at
End of
Period | | | Number
of Shares
Held at
End of
Period | | | Investment
Income | |
| | | | | | | | |
| Franklin FTSE Japan ETF Non-Controlled Affiliates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividend
Income |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 251,746 | | | $ | 8,827,573 | | | $ | (8,686,959 | ) | | $ | — | | | $ | — | | | $ | 392,360 | | | | 392,360 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Franklin FTSE Japan Hedged ETF Non-Controlled Affiliates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividend
Income |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 695,758 | | | $ | 3,280,700 | | | $ | (3,703,573 | ) | | $ | — | | | $ | — | | | $ | 272,885 | | | | 272,885 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Franklin FTSE United Kingdom ETF Non-Controlled Affiliates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income
from
Securities
loaned |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | 620,830 | | | $ | 8,948,366 | | | $ | (9,296,196 | ) | | $ | — | | | $ | — | | | $ | 273,000 | | | | 273,000 | | | $ | 1,503 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
d. Other Affiliated Transactions
At September 30, 2022, the shares of the Funds were owned by the following entities:
| | | | | | | | |
| | |
| Funds | | Shares | | | Percentage of
Outstanding Sharesa | |
| | |
| Franklin FTSE Canada ETF | | | | | | | | |
Franklin Resources Inc | | | 1,927,000 | | | | 20.9% | |
| | | | |
| | |
| Franklin FTSE Italy ETF | | | | | | | | |
Franklin Resources Inc | | | 14,000 | | | | 9.3% | |
| | | | |
| | |
| Franklin FTSE Latin America ETF | | | | | | | | |
Franklin Resources Inc | | | 1,100,000 | | | | 35.5% | |
| | | | |
| | |
| Franklin FTSE Saudi Arabia ETF | | | | | | | | |
Franklin Resources Inc | | | 40,000 | | | | 26.7% | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | |
| | |
| Funds | | Shares | | | Percentage of
Outstanding Sharesa | |
| | |
| Franklin FTSE South Africa ETF | | | | | | | | |
Franklin Resources Inc | | | 16,000 | | | | 10.7% | |
| | | | |
| | |
| Franklin FTSE United Kingdom ETF | | | | | | | | |
Franklin Managed Income Fund | | | 1,250,000 | | | | 6.3% | |
| | | | |
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 Asia ex Japan
ETF | | | Franklin
FTSE
Australia
ETF | | | Franklin
FTSE
Brazil
ETF | | | Franklin
FTSE
Canada
ETF | |
| 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
FTSE
China
ETF | | | Franklin
FTSE
Europe
ETF | | | Franklin
FTSE
Europe Hedged 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 | | | | — | |
| | | | |
Total capital loss carryforwards | | $ | 433,291 | | | $ | 664,668 | | | $ | 1,027,908 | | | $ | 305,156 | |
| | | | |
| | | | |
| | | 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 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 317 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
| | | | | | | | | | | | | | | | |
| | | 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 | | | | — | | | | 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 | | | | | |
| | | | | | | | |
At September 30, 2022, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin FTSE Asia ex Japan
ETF | | | Franklin FTSE Australia ETF | | | Franklin FTSE Brazil ETF | | | Franklin
FTSE
Canada
ETF | |
Cost of investments | | $ | 37,997,819 | | | $ | 25,399,172 | | | $ | 283,908,891 | | | $ | 300,579,922 | |
| | | | |
Unrealized appreciation | | $ | 1,815,114 | | | $ | 615,041 | | | $ | 10,727,138 | | | $ | 708,848 | |
Unrealized depreciation | | | (9,478,841 | ) | | | (3,100,436 | ) | | | (17,087,746 | ) | | | (43,403,273 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (7,663,727 | ) | | $ | (2,485,395 | ) | | $ | (6,360,608 | ) | | $ | (42,694,425 | ) |
| | | | |
| | | | |
| | | Franklin
FTSE
China
ETF | | | Franklin
FTSE
Europe
ETF | | | Franklin
FTSE
Europe Hedged
ETF | | | Franklin
FTSE
France
ETF | |
Cost of investments | | $ | 138,328,688 | | | $ | 51,710,748 | | | $ | 19,730,791 | | | $ | 8,467,663 | |
| | | | |
Unrealized appreciation | | $ | 3,252,991 | | | $ | 26,229 | | | $ | 5,375 | | | $ | 81,608 | |
Unrealized depreciation | | | (50,212,064 | ) | | | (15,623,230 | ) | | | (5,594,566 | ) | | | (1,968,440 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (46,959,073 | ) | | $ | (15,597,001 | ) | | $ | (5,589,191 | ) | | $ | (1,886,832 | ) |
| | | | |
| | | | |
| | | Franklin
FTSE
Germany
ETF | | | Franklin
FTSE
Hong Kong
ETF | | | Franklin
FTSE
India
ETF | | | Franklin
FTSE
Italy
ETF | |
Cost of investments | | $ | 19,708,863 | | | $ | 15,063,230 | | | $ | 49,608,914 | | | $ | 3,322,879 | |
| | | | |
Unrealized appreciation | | $ | 26,407 | | | $ | 112,446 | | | $ | 6,899,676 | | | $ | 117,286 | |
Unrealized depreciation | | | (6,577,820 | ) | | | (3,995,323 | ) | | | (2,510,489 | ) | | | (761,259 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (6,551,413 | ) | | $ | (3,882,877 | ) | | $ | 4,389,187 | | | $ | (643,973 | ) |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | |
| | | Franklin
FTSE
Japan
ETF | | | Franklin
FTSE
Japan Hedged
ETF | | | Franklin
FTSE
Latin America
ETF | | | Franklin
FTSE
Mexico
ETF | |
Cost of investments | | $ | 1,002,851,379 | | | $ | 30,016,633 | | | $ | 60,334,216 | | | $ | 10,126,558 | |
| | | | |
Unrealized appreciation | | $ | 2,385,843 | | | $ | 60,865 | | | $ | 3,324,984 | | | $ | 772,270 | |
Unrealized depreciation | | | (235,206,895 | ) | | | (7,062,600 | ) | | | (2,957,240 | ) | | | (962,707 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (232,821,052 | ) | | $ | (7,001,735 | ) | | $ | 367,744 | | | $ | (190,437 | ) |
| | | | |
| | | | |
| | | Franklin
FTSE
Russia
ETF | | | Franklin
FTSE
Saudi Arabia
ETF | | | Franklin
FTSE
South Africa
ETF | | | Franklin
FTSE
South Korea
ETF | |
Cost of investments | | $ | 22,476,787 | | | $ | 4,370,666 | | | $ | 3,808,391 | | | $ | 63,495,882 | |
| | | | |
Unrealized appreciation | | $ | — | | | $ | 1,187,725 | | | $ | 13,197 | | | $ | 368,793 | |
Unrealized depreciation | | | (22,476,787 | ) | | | (110,176 | ) | | | (870,957 | ) | | | (20,029,440 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (22,476,787 | ) | | $ | 1,077,549 | | | $ | (857,760 | ) | | $ | (19,660,647 | ) |
| | | | |
| | | | |
| | | Franklin
FTSE
Switzerland
ETF | | | Franklin
FTSE
Taiwan
ETF | | | Franklin
FTSE
United Kingdom
ETF | | | | |
Cost of investments | | $ | 56,620,228 | | | $ | 27,057,905 | | | $ | 509,188,285 | | | | | |
| | | | | | | | |
Unrealized appreciation | | $ | 52,949 | | | $ | 2,901,366 | | | $ | 2,612,528 | | | | | |
Unrealized depreciation | | | (7,406,379 | ) | | | (2,232,643 | ) | | | (124,827,302 | ) | | | | |
| | | | | | | | |
Net unrealized appreciation (depreciation) . | | $ | (7,353,430 | ) | | $ | 668,723 | | | $ | (122,214,774 | ) | | | | |
| | | | | | | | |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of corporate actions, 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 period ended September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
FTSE
Asia ex Japan
ETF | | | Franklin
FTSE
Australia
ETF | | | Franklin
FTSE
Brazil
ETF | | | Franklin
FTSE
Canada
ETF | |
Purchases | | $ | 1,435,551 | | | $ | 2,322,210 | | | $ | 78,762,940 | | | $ | 294,805,019 | |
Sales | | $ | 1,059,870 | | | $ | 1,113,774 | | | $ | 208,129,414 | | | $ | 32,857,855 | |
| | | | |
| | | Franklin
FTSE
China
ETF | | | Franklin
FTSE
Europe
ETF | | | Franklin
FTSE
Europe Hedged
ETF | | | Franklin
FTSE
France
ETF | |
Purchases | | $ | 10,736,162 | | | $ | 2,617,430 | | | $ | 3,068,275 | | | $ | 254,515 | |
Sales | | $ | 5,773,130 | | | $ | 3,094,746 | | | $ | 655,263 | | | $ | 1,395,850 | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions (continued)
| | | | | | | | | | | | | | | | |
| | | Franklin
FTSE
Germany
ETF | | | Franklin
FTSE
Hong Kong
ETF | | | Franklin
FTSE
India
ETF | | | Franklin
FTSE
Italy
ETF | |
Purchases | | $ | 385,775 | | | $ | 789,221 | | | $ | 9,158,427 | | | $ | 180,397 | |
Sales | | $ | 424,281 | | | $ | 737,053 | | | $ | 1,294,528 | | | $ | 174,458 | |
| | | | |
| | | Franklin
FTSE
Japan
ETF | | | Franklin
FTSE
Japan Hedged
ETF | | | Franklin
FTSE
Latin America
ETF | | | Franklin
FTSE
Mexico
ETF | |
Purchases | | $ | 14,584,584 | | | $ | 8,585,551 | | | $
|
40,917,790 |
| | $ | 974,177 | |
Sales | | $ | 12,836,214 | | | $ | 5,277,252 | | | $ | 1,326,100 | | | $ | 848,782 | |
| | | | |
| | | Franklin
FTSE
Russia
ETF | | | Franklin
FTSE
Saudi Arabia
ETF | | | Franklin
FTSE
South Africa
ETF | | | Franklin
FTSE
South Korea
ETF | |
Purchases | | $ | — | | | $ | 2,003,791 | | | $ | 209,763 | | | $ | 7,472,472 | |
Sales | | $ | — | | | $ | 103,782 | | | $ | 1,177,780 | | | $ | 2,376,066 | |
| | | | |
| | | Franklin
FTSE
Switzerland
ETF | | | Franklin
FTSE
Taiwan
ETF | | | Franklin
FTSE
United Kingdom
ETF | | | | |
Purchases | | $ | 2,231,602 | | | $ | 1,761,633 | | | $ | 18,912,719 | | | | | |
Sales | | $ | 2,446,419 | | | $ | 3,586,444 | | | $ | 15,142,121 | | | | | |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
FTSE
Asia ex Japan
ETF | | | Franklin
FTSE
Australia
ETF | | | Franklin
FTSE
Brazil
ETF | | | Franklin
FTSE
Canada
ETF
| |
Cost of Securities Received | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Value of Securities Delivereda | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | |
| | | Franklin
FTSE
China
ETF | | | Franklin
FTSE
Europe
ETF | | | Franklin
FTSE
Europe Hedged
ETF | | | Franklin
FTSE
France
ETF | |
Cost of Securities Received | | $ | 286,510 | | | $ | 8,627,968 | | | $ | 10,576,827 | | | $ | — | |
Value of Securities Delivereda | | $ | — | | | $ | 127,792,935 | | | $ | 14,396,526 | | | $ | — | |
| | | | |
| | | Franklin
FTSE
Germany
ETF | | | Franklin
FTSE
Hong Kong
ETF | | | Franklin
FTSE
India
ETF | | | Franklin
FTSE
Italy
ETF | |
Cost of Securities Received | | $ | 3,400,552 | | | $ | — | | | $ | — | | | $ | — | |
Value of Securities Delivereda | | $ | 2,181,384 | | | $ | 3,255,694 | | | $ | — | | | $ | — | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | |
| | | Franklin
FTSE
Japan
ETF | | | Franklin
FTSE
Japan Hedged
ETF | | | Franklin
FTSE
Latin America
ETF | | | Franklin
FTSE
Mexico
ETF | |
Cost of Securities Received | | $ | 219,741,404 | | | $ | — | | | $ | — | | | $ | 1,140,462 | |
Value of Securities Delivereda | | $ | 42,752,134 | | | $ | — | | | $ | — | | | $ | 1,266,860 | |
| | | | |
| | | Franklin
FTSE
Russia
ETF | | | Franklin
FTSE
Saudi Arabia
ETF | | | Franklin
FTSE
South Africa
ETF | | | Franklin
FTSE
South Korea
ETF | |
Cost of Securities Received | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Value of Securities Delivereda | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | |
| | | Franklin
FTSE
Switzerland ETF | | | Franklin
FTSE
Taiwan
ETF | | | Franklin
FTSE
United Kingdom
ETF | | | | |
Cost of Securities Received | | $ | 14,253,301 | | | $ | — | | | $ | 49,831,235 | | | | | |
Value of Securities Delivereda | | $ | — | | | $ | — | | | $ | 137,847,279 | | | | | |
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 September 30, 2022, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
| | | | |
| |
| | | Franklin
FTSE
United Kingdom
ETF | |
| Securities lending transactionsa: | | | |
Equity Investmentsb | | $ | 273,000 | |
| | | | |
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
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. Concentration of Risk (continued)
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.
At September 30, 2022, the Franklin FTSE Russia ETF had 100% of its net assets invested in securities with significant economic risk or exposure to Russia. The Valuation Committee determined that based on their analysis of the market and access to market participants, the Russian financial instruments held by the Franklin FTSE Russia ETF had no value at September 30, 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 September 30, 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 Australia ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 30,610 | a |
| | | | | | | | | | | | |
| Franklin FTSE Brazil ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 88,239 | a |
| | | | | | | | | | | | |
| Franklin FTSE Canada ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 27,595 | a |
| | | | | | | | | | | | |
| Franklin FTSE China ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 10,265 | a |
| | | | | | | | | | | | |
| Franklin FTSE Europe ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 33,003 | a |
| | | | | | | | | | | | |
| Franklin FTSE Europe Hedged ETF | | | |
| | | | |
Foreign exchange contracts | | Unrealized appreciation on OTC forward exchange contracts | | $ | 463,463 | | | Unrealized depreciation on OTC forward exchange contracts | | $ | 9,551 | |
| | | | |
Index contracts | | Variation margin on futures contracts | | | — | | | Variation margin on futures contracts | | | 2,661 | a |
| | | | | | | | | | | | |
| | | | |
Totals | | | | $ | 463,463 | | | | | $ | 12,212 | |
| | | | | | | | | | | | |
| Franklin FTSE Hong Kong ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 2,203 | a |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | |
| | |
| | | Asset Derivatives | | | Liability Derivatives | |
| | | | |
| | | Statements of Assets and
Liabilities Location | | Fair Value | | | Statements of Assets and
Liabilities Location | | Fair Value | |
| Franklin FTSE Japan ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 46,911 | a |
| | | | | | | | | | | | |
| Franklin FTSE Japan Hedged ETF | | | |
| | | | |
Foreign exchange contracts | | Unrealized appreciation on OTC forward exchange contracts | | $ | 1,093,663 | | | Unrealized depreciation on OTC forward exchange contracts | | $ | 11,176 | |
| | | | |
Index contracts | | Variation margin on futures contracts | | | — | | | Variation margin on futures contracts | | | 2,018 | a |
| | | | | | | | | | | | |
| | | | |
Totals | | | | $ | 1,093,663 | | | | | $ | 13,194 | |
| | | | | | | | | | | | |
| Franklin FTSE Latin America ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 9,274 | a |
| | | | | | | | | | | | |
| Franklin FTSE South Korea ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 491 | a |
| | | | | | | | | | | | |
| Franklin FTSE Switzerland ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 32,156 | a |
| | | | | | | | | | | | |
| Franklin FTSE Taiwan ETF | | | | | | | | | | |
| | | | |
Equity contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 4,144 | a |
| | | | | | | | | | | | |
| Franklin FTSE United Kingdom ETF | | | | | | | | | | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 236,095 | a |
| | | | | | | | | | | | |
aThis amount reflects the cumulative appreciation (depreciation) of future contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at year 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 period ended September 30, 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 appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (41,334 | ) | | Futures contracts | | $ | — | |
| | | | | | | | | | | | |
| Franklin FTSE Australia ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | 6,546 | | | Futures contracts | | $ | (30,610 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Brazil ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (1,608,425 | ) | | Futures contracts | | $ | (301,741 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Canada ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | 19,482 | | | Futures contracts | | $ | (27,595 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 China ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (167,458 | ) | | Futures contracts | | $ | (10,265 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Europe ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (16,286 | ) | | Futures contracts | | $ | (104,736 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Europe Hedged ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Foreign exchange contracts | | Forward exchange contracts | | $ | 2,400,365 | | | Forward exchange contracts | | $ | 231,381 | |
| | | | |
Equity contracts | | Futures contracts | | | (5,566 | ) | | Futures contracts | | | (2,661 | ) |
| | | | | | | | | | | | |
Totals | | | | $ | 2,394,799 | | | | | $ | 228,720 | |
| | | | | | | | | | | | |
| Franklin FTSE France ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (552 | ) | | Futures contracts | | $ | — | |
| | | | | | | | | | | | |
| Franklin FTSE Germany ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (10,835 | ) | | Futures contracts | | $ | — | |
| | | | | | | | | | | | |
| Franklin FTSE Hong Kong ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (7,727 | ) | | Futures contracts | | $ | (2,790 | ) |
| | | | | | | | | | | | |
| Franklin FTSE India ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | 8,288 | | | Futures contracts | | $ | (1,364 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Japan ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (144,459 | ) | | Futures contracts | | $ | (194,653 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Japan Hedged ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Foreign exchange contracts | | Forward exchange contracts | | $ | 3,894,512 | | | Forward exchange contracts | | $ | 532,139 | |
| | | | |
Equity contracts | | Futures contracts | | | (13,148 | ) | | Futures contracts | | | (3,463 | ) |
| | | | | | | | | | | | |
Totals | | | | $ | 3,881,364 | | | | | $ | 528,676 | |
| | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | |
| | | | |
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 Latin America ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (30,378 | ) | | Futures contracts | | $ | (10,285 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Saudi Arabia ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Foreign exchange contracts | | Forward exchange contracts | | $ | (28 | ) | | Forward exchange contracts | | $ | — | |
| | | | | | | | | | | | |
| Franklin FTSE South Korea ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (36,280 | ) | | Futures contracts | | $ | (38,433 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Switzerland ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (106,148 | ) | | Futures contracts | | $ | (66,572 | ) |
| | | | | | | | | | | | |
| Franklin FTSE Taiwan ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | 6,016 | | | Futures contracts | | $ | (4,144 | ) |
| | | | | | | | | | | | |
| Franklin FTSE United Kingdom ETF | | | | | | | | | | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | 43,771 | | | Futures contracts | | $ | (467,356 | ) |
| | | | | | | | | | | | |
For the period ended September 30, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
FTSE
Asia ex Japan
ETF | | | Franklin
FTSE
Brazil
ETF | | | Franklin
FTSE
China
ETF | | | Franklin
FTSE
Europe
ETF | |
Futures contracts | | $ | 151,872 | | | $ | 6,898,920 | | | $ | 699,896 | | | $ | 909,212 | |
Forward exchange contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | |
| | | Franklin
FTSE
Europe Hedged
ETF | | | Franklin
FTSE
Germany
ETF | | | Franklin
FTSE
Hong Kong
ETF | | | Franklin
FTSE
India
ETF | |
Futures contracts | | $ | 116,834 | | | $ | 161,371 | | | $ | 86,021 | | | $ | 89,581 | |
Forward exchange contracts | | $ | 60,466,472 | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Franklin
FTSE
Japan
ETF | | | Franklin
FTSE
Japan Hedged
ETF | | | Franklin
FTSE
Latin America
ETF | | | | |
Futures contracts | | $ | 5,795,892 | | | $ | 233,243 | | | $ | 345,696 | | | | | |
Forward exchange contracts | | $ | — | | | $ | 67,381,207 | | | $ | — | | | | | |
| | | | |
| | | Franklin
FTSE
South Korea
ETF | | | Franklin
FTSE
Switzerland
ETF | | | Franklin
FTSE
Taiwan
ETF | | | | |
Futures contracts | | $ | 269,787 | | | $ | 680,063 | | | $ | 397,645 | | | | | |
Forward exchange contracts | | $ | — | | | $ | — | | | $ | — | | | | | |
| | | | |
| | | Franklin
FTSE
United Kingdom
ETF | | | | | | | | | | |
Futures contracts | | $ | 3,758,711 | | | | | | | | | | | | | |
At September 30, 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 | | $ | 463,463 | | | $ | 9,551 | |
| | | | |
| | |
| Franklin FTSE Japan Hedged ETF | | | | | | | | |
Foreign exchange contracts | | $ | 1,093,663 | | | $ | 11,176 | |
| | | | |
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 September 30, 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
| | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
BOFA | | $ | 140,166 | | | $ | (2,514 | ) | | $ | — | | | $ | — | | | $ | 137,652 | |
DBAB | | | 162,709 | | | | (4,592 | ) | | | — | | | | — | | | | 158,117 | |
HSBK | | | 66,895 | | | | (980 | ) | | | — | | | | — | | | | 65,915 | |
MSCO | | | 26,829 | | | | (497 | ) | | | — | | | | — | | | | 26,332 | |
UBSW | | | 66,864 | | | | (968 | ) | | | — | | | | — | | | | 65,896 | |
| | | | |
Total | | $ | 463,463 | | | $ | (9,551 | ) | | $ | — | | | $ | — | | | $ | 453,912 | |
| | | | |
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | | | | 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 Japan
Hedged ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
DBAB | | $ | 320,003 | | | $ | (3,298 | ) | | $ | — | | | $ | — | | | $ | 316,705 | |
HSBK | | | 321,096 | | | | (3,238 | ) | | | — | | | | — | | | | 317,858 | |
MSCO | | | 131,395 | | | | (1,384 | ) | | | — | | | | — | | | | 130,011 | |
UBSW | | | 321,169 | | | | (3,256 | ) | | | — | | | | — | | | | 317,913 | |
| | | | |
Total | | $ | 1,093,663 | | | $ | (11,176 | ) | | $ | — | | | $ | — | | | $ | 1,082,487 | |
| | | | |
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 September 30, 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 | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
BOFA | | $ | 2,514 | | | $ | (2,514 | ) | | $ | — | | | $ | — | | | $ | — | |
DBAB | | | 4,592 | | | | (4,592 | ) | | | — | | | | — | | | | — | |
HSBK | | | 980 | | | | (980 | ) | | | — | | | | — | | | | — | |
MSCO | | | 497 | | | | (497 | ) | | | — | | | | — | | | | — | |
UBSW | | | 968 | | | | (968 | ) | | | — | | | | — | | | | — | |
| | | | |
Total | | $ | 9,551 | | | $ | (9,551 | ) | | $ | — | | | $ | — | | | $ | — | |
| | | | |
Franklin FTSE Japan
Hedged ETF | | | | | | | | | | | | | | | |
| Counterparty | | | | | | | | | | | | | | | |
DBAB | | $ | 3,298 | | | $ | (3,298 | ) | | $ | — | | | $ | — | | | $ | — | |
HSBK | | | 3,238 | | | | (3,238 | ) | | | — | | | | — | | | | — | |
MSCO | | | 1,384 | | | | (1,384 | ) | | | — | | | | — | | | | — | |
UBSW | | | 3,256 | | | | (3,256 | ) | | | — | | | | — | | | | — | |
| | | | |
Total | | $ | 11,176 | | | $ | (11,176 | ) | | $ | — | | | $ | — | | | $ | — | |
| | | | |
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.
| | | | | | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 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 Investmentsb | | $ | 30,334,092 | | | $ | — | | | $ | — | c | | $ | 30,334,092 | |
| | | | |
| | | | |
| Franklin FTSE Australia ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 22,913,777 | | | $ | — | | | $ | — | | | $ | 22,913,777 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 30,610 | | | $ | — | | | $ | — | | | $ | 30,610 | |
| | | | |
| | | | |
| Franklin FTSE Brazil ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 277,548,283 | | | $ | — | | | $ | — | | | $ | 277,548,283 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 88,239 | | | $ | — | | | $ | — | | | $ | 88,239 | |
| | | | |
| | | | |
| Franklin FTSE Canada ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 257,885,497 | | | $ | — | | | $ | — | | | $ | 257,885,497 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 27,595 | | | $ | — | | | $ | — | | | $ | 27,595 | |
| | | | |
| | | | |
| Franklin FTSE China ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 91,369,615 | | | $ | — | | | $ | — | | | $ | 91,369,615 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 10,265 | | | $ | — | | | $ | — | | | $ | 10,265 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin FTSE Europe ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 36,113,747 | | | $ | — | | | $ | — | c | | $ | 36,113,747 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 33,003 | | | $ | — | | | $ | — | | | $ | 33,003 | |
| | | | |
| | | | |
| Franklin FTSE Europe Hedged ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 14,141,600 | | | $ | — | | | $ | — | c | | $ | 14,141,600 | |
| | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 463,463 | | | $ | — | | | $ | 463,463 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 9,551 | | | $ | — | | | $ | 9,551 | |
Futures Contracts | | | 2,661 | | | | — | | | | — | | | | 2,661 | |
| | | | |
Total Other Financial Instruments | | $ | 2,661 | | | $ | 9,551 | | | $ | — | | | $ | 12,212 | |
| | | | |
| | | | |
| Franklin FTSE France ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 6,580,831 | | | $ | — | | | $ | — | | | $ | 6,580,831 | |
| | | | |
| | | | |
| Franklin FTSE Germany ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 13,157,450 | | | $ | — | | | $ | — | | | $ | 13,157,450 | |
| | | | |
| | | | |
| Franklin FTSE Hong Kong ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 11,180,353 | | | $ | — | | | $ | — | | | $ | 11,180,353 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 2,203 | | | $ | — | | | $ | — | | | $ | 2,203 | |
| | | | |
| | | | |
| Franklin FTSE India ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 53,998,101 | | | $ | — | | | $ | — | | | $ | 53,998,101 | |
| | | | |
| | | | |
| Franklin FTSE Italy ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 2,678,906 | | | $ | — | | | $ | — | | | $ | 2,678,906 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin FTSE Japan ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 769,637,967 | | | $ | — | | | $ | — | | | $ | 769,637,967 | |
Short-Term Investments | | | 392,360 | | | | — | | | | — | | | | 392,360 | |
| | | | |
Total Investments in Securities | | $ | 770,030,327 | | | $ | — | | | $ | — | | | $ | 770,030,327 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 46,911 | | | $ | — | | | $ | — | | | $ | 46,911 | |
| | | | |
| | | | |
| Franklin FTSE Japan Hedged ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 22,742,013 | | | $ | — | | | $ | — | | | $ | 22,742,013 | |
Short-Term Investments | | | 272,885 | | | | — | | | | — | | | | 272,885 | |
| | | | |
Total Investments in Securities | | $ | 23,014,898 | | | $ | — | | | $ | — | | | $ | 23,014,898 | |
| | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 1,093,663 | | | $ | — | | | $ | 1,093,663 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Forward Exchange Contracts | | $ | — | | | $ | 11,176 | | | $ | — | | | $ | 11,176 | |
Futures Contracts | | | 2,018 | | | | — | | | | — | | | | 2,018 | |
| | | | |
Total Other Financial Instruments | | $ | 2,018 | | | $ | 11,176 | | | $ | — | | | $ | 13,194 | |
| | | | |
| | | | |
| Franklin FTSE Latin America ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 60,701,960 | | | $ | — | | | $ | — | | | $ | 60,701,960 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 9,274 | | | $ | — | | | $ | — | | | $ | 9,274 | |
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| Franklin FTSE Mexico ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 9,936,121 | | | $ | — | | | $ | — | | | $ | 9,936,121 | |
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| Franklin FTSE Russia ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | — | | | $ | — | | | $ | — | c | | $ | — | |
| | | | |
| | | | |
| Franklin FTSE Saudi Arabia ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 5,448,215 | | | $ | — | | | $ | — | | | $ | 5,448,215 | |
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| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin FTSE South Africa ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 2,950,631 | | | $ | — | | | $ | — | | | $ | 2,950,631 | |
| | | | |
| | | | |
| Franklin FTSE South Korea ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 43,835,235 | | | $ | — | | | $ | — | c | | $ | 43,835,235 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 491 | | | $ | — | | | $ | — | | | $ | 491 | |
| | | | |
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| Franklin FTSE Switzerland ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 49,266,798 | | | $ | — | | | $ | — | | | $ | 49,266,798 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 32,156 | | | $ | — | | | $ | — | | | $ | 32,156 | |
| | | | |
| | | | |
| Franklin FTSE Taiwan ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 27,726,628 | | | $ | — | | | $ | — | | | $ | 27,726,628 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 4,144 | | | $ | — | | | $ | — | | | $ | 4,144 | |
| | | | |
| | | | |
| Franklin FTSE United Kingdom ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 386,700,511 | | | $ | — | | | $ | — | c | | $ | 386,700,511 | |
Short-Term Investments | | | 273,000 | | | | — | | | | — | | | | 273,000 | |
| | | | |
Total Investments in Securities | | $ | 386,973,511 | | | $ | — | | | $ | — | | | $ | 386,973,511 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 236,095 | | | $ | — | | | $ | — | | | $ | 236,095 | |
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aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at September 30, 2022.
10. 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.
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10. Subsequent Events (continued)
Abbreviations
| | | | | | |
| Selected Portfolio | | Counterparty |
| ADR | | American Depositary Receipt | | BOFA | | Bank of America Corp. |
| IDR | | International Depository Receipt | | DBAB | | Deutsche Bank AG |
| NVDR | | Non-Voting Depositary Receipt | | HSBK | | HSBC Bank PLC |
| REIT | | Real Estate Investment Trust | | MSCO | | Morgan Stanley |
| SF | | Single Family | | UBSW | | UBS AG |
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Shareholder Information
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
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
(each a Fund)
At a meeting held on May 25, 2022 (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 the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the 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.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board
also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a virtual contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and subsequently, requested additional information from management that the Independent Trustees reviewed and considered at the Meeting. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such 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 provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant.
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The Board acknowledged the ongoing integration of the Legg Mason family of funds into the Franklin Templeton (FT) family of funds and developing strategies to address areas of heightened concern in the registered fund industry, including various regulatory initiatives and recent geopolitical concerns.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to being a global leader in stewardship and sustainability and the recent addition of a senior executive focused on environmental, social and governance and climate control initiatives.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board noted that, in light of the Funds’ use of a ���passive” or indexing investment approach, management evaluates each Fund based on their tracking error against a specified benchmark. The Board also noted that management did not provide peer fund performance analyses typically prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data, as the Funds’ are pure-index exchange-traded funds as opposed to active or smart beta funds. The Board referenced earlier discussions with management on matters related to, among other things, the importance of performance to asset growth and growth of market share, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding management’s strategy behind the overall product line-up, the sources of asset growth, the nature of management’s research, potential use of innovative data and technology, and investments in marketing and distribution. The Board noted management’s high level of client engagement and the strength of its compliance program. The Board then noted that for the one-year period ended February 28, 2022, each Fund’s tracking error was within the tolerance anticipated for such Fund, except that the tracking error for the Franklin FTSE Asia ex Japan ETF was 8.8 basis points outside the tolerance anticipated for this Fund, for the Franklin FTSE India ETF was 182.9 basis
points outside the tolerance for this Fund and for the Franklin FTSE Saudi Arabia ETF was 7 basis points outside the tolerance for this Fund. The Board discussed the tracking error of the Funds with management and management explained that, for the Franklin FTSE Asia ex Japan ETF and the Franklin FTSE India ETF, each Fund’s tracking error was outside the tolerance anticipated due, in part, to fees and capital gain tax accrual from holding Indian equities. Management further explained that, for the Franklin FTSE Saudi Arabia ETF, the Fund’s tracking error was outside the tolerance anticipated due, in part, to the compounding effect of fees in a period of strong absolute returns.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio, noting that each Fund pays a Unified Fee (as defined below). The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual or semi-annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group. The Expense Group for each Fund was as follows:
| | • | | The Expense Group for the Franklin FTSE Asia Ex Japan ETF was comprised of pure index exchange-traded funds, which included the Fund and two other Pacific ex-Japan funds. |
| | • | | The Expense Group for the Franklin FTSE Australia ETF was comprised of pure index exchange-traded funds, which included the Fund and one other Pacific region fund. |
| | • | | The Expense Group for the Franklin FTSE Brazil ETF was comprised of pure index exchange-traded funds, which included the Fund and two other Latin American funds. |
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| | • | | The Expense Group for the Franklin FTSE Canada ETF was comprised of pure index exchange-traded funds, which included the Fund and two other international large-cap core funds. |
| | • | | The Expense Group for the Franklin FTSE China ETF was comprised of pure index exchange-traded funds, which included the Fund and six other China region funds. |
| | • | | The Expense Group for the Franklin FTSE Europe ETF was comprised of pure index exchange-traded funds, which included the Fund and four other European region funds. |
| | • | | The Expense Group for the Franklin FTSE Europe Hedged ETF was comprised of pure index exchange- traded funds, which included the Fund and two other European region funds. |
| | • | | The Expense Group for the Franklin FTSE France ETF was comprised of pure index exchange-traded funds, which included the Fund and two other European region funds. |
| | • | | The Expense Group for the Franklin FTSE Germany ETF was comprised of pure index exchange-traded funds, which included the Fund and two other European region funds. |
| | • | | The Expense Group for the Franklin FTSE Hong Kong ETF was comprised of pure index exchange-traded funds, which included the Fund and one other China region fund. |
| | • | | The Expense Group for the Franklin FTSE India ETF was comprised of pure index exchange-traded funds, which included the Fund and three other India region funds. |
| | • | | The Expense Group for the Franklin FTSE Italy ETF was comprised of pure index exchange-traded funds, which included the Fund and one other European region fund. |
| | • | | The Expense Group for the Franklin FTSE Japan ETF was comprised of pure index exchange-traded funds, which included the Fund and two other Japanese funds. |
| | • | | The Expense Group for the Franklin FTSE Japan Hedged ETF was comprised of pure index exchange- traded funds, which included the Fund and two other Japanese funds. |
| | • | | The Expense Group for the Franklin FTSE Latin America ETF was comprised of pure index exchange-traded funds, which included the Fund and one other Latin American fund. |
| | • | | The Expense Group for the Franklin FTSE Mexico ETF was comprised of pure index exchange-traded funds, which included the Fund and one other Latin American fund. |
| | • | | The Expense Group for the Franklin FTSE Russia ETF was comprised of pure index exchange-traded funds, which included the Fund and two other emerging markets funds. |
| | • | | The Expense Group for the Franklin FTSE Saudi Arabia ETF was comprised of pure index exchange-traded funds, which included the Fund and one other emerging markets fund. |
| | • | | The Expense Group for the Franklin FTSE South Africa ETF was comprised of pure index exchange-traded funds, which included the Fund and one other emerging markets fund. |
| | • | | The Expense Group for the Franklin FTSE South Korea ETF was comprised of pure index exchange-traded funds, which included the Fund and two other Pacific ex-Japan funds. |
| | • | | The Expense Group for the Franklin FTSE Swit- zerland ETF was comprised of pure index exchange- traded funds, which included the Fund and one other European region fund. |
| | • | | The Expense Group for the Franklin FTSE Taiwan ETF was comprised of pure index exchange-traded funds, which included the Fund and one other China region fund. |
| | • | | The Expense Group for the Franklin FTSE United Kingdom ETF was comprised of pure index exchange- traded funds, which included the Fund and one other European region fund. |
The Board noted that the Management Rates and actual total expense ratios for the Funds were below the medians of their respective Expense Groups, except that the actual total expense ratio for each of the Franklin FTSE Asia Ex Japan ETF, Franklin FTSE Europe ETF, Franklin FTSE Europe Hedged ETF and Franklin FTSE Japan Hedged ETF was equal to the median of its Expense Group. The Board also noted the small size of each Fund’s Expense Group, except for the Franklin FTSE China ETF which had six peers in its Expense Group. The Board further noted each Fund’s unified management fee (Unified Fee). The Board also noted that pursuant to the Unified Fee arrangement the Manager reimburses the Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s Unified Fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses, (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
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(vii) other non-routine or extraordinary expenses. The Board concluded that the Management Rate charged to each Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2021, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures but, over the long run, is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that, as of December 31, 2021, each Fund (except for the Franklin FTSE Japan ETF and Franklin FTSE United Kingdom ETF) had net assets below $250 million (and in most cases much less). The Board also noted management’s representation that, while the Franklin FTSE Japan ETF and Franklin FTSE United Kingdom ETF had net assets of approximately $809 million and $611 million, respectively, as of December 31, 2021, none of the Funds experienced a profit for the fiscal year ended September 30, 2021. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
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 the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program –In-Kind ETFs
Franklin FTSE Australia ETF
Franklin FTSE Canada 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 Italy ETF
Franklin FTSE Japan ETF
Franklin FTSE Japan Hedged ETF
Franklin FTSE Mexico ETF
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Franklin FTSE Russia ETF
Franklin FTSE South Africa ETF
Franklin FTSE Switzerland ETF
Franklin FTSE United Kingdom ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding
sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2021, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2020. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Liquidity Risk Management Program –Non-In-Kind ETFs
Franklin FTSE Asia ex Japan ETF
Franklin FTSE Brazil ETF
Franklin FTSE China ETF
Franklin FTSE India ETF
Franklin FTSE Latin America ETF
Franklin FTSE Saudi Arabia ETF
Franklin FTSE South Korea ETF
Franklin FTSE Taiwan ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds
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that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid
Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2021, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2020. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
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.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
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.
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 | | Semiannual Report Franklin Templeton ETF Trust | | |
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| | 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 Trust Company 1 Heritage Drive Mail Stop OHD0100 North Quincy, MA 02171 |
| © 2022 Franklin Templeton Investments. All rights reserved. | | | | ETF5 S 11/22 |
SEMIANNUAL REPORT
FRANKLIN U.S. EQUITY
INDEX ETF
Formerly, Franklin LibertyQ Global Equity ETF
A Series of Franklin Templeton ETF Trust
September 30, 2022
Visit franklintempleton.com for fund
updates and documents, or to find helpful
financial planning tools.
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| Not FDIC Insured | | | | | May Lose Value | | | | | No Bank Guarantee |
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SEMIANNUAL REPORT
Franklin U.S. Equity Index ETF
Formerly, Franklin LibertyQ Global Equity ETF
This semiannual report for Franklin U.S. Equity Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ Global Equity ETF changed its name to Franklin U.S. Equity Index ETF. The Fund also changed its ticker symbol, underlying index, distribution frequency, investment goal and strategy and reduced its unified management fee.
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 Morningstar® US Target Market Exposure 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 includes large- and mid-capitalization stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -20.60% based on market price and -20.82% based on net asset value (NAV).
On August 1, 2022, the Fund changed its underlying index from the LibertyQ Global Equity Index-NR to the Underlying Index, which also became the Fund’s primary benchmark at that time. For the six-month period, the Underlying Index posted a cumulative total return of -20.76%.2 The Blended Morningstar® US Target Market Exposure Index, which measures the performance of the previous underlying index through July 31, 2022, followed by the performance of the Underlying Index thereafter, posted a -20.79% cumulative total return for the same period.2
The Fund’s former primary benchmark, the MSCI All Country World Index (ACWI)-NR posted a -21.41% cumulative total return for the six-month period.3 The Underlying Index
replaced the MSCI ACWI-NR as the Fund’s primary benchmark effective August 1, 2022 to more accurately reflect the Fund’s new investment strategy.
You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index, posted a -20.20% total return for the six months ended September 30, 2022.3 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices, particularly as the period progressed. Although consumer spending continued to rise, deteriorating financial conditions negatively impacted consumer sentiment, which improved slightly at the end of the period after falling in June 2022 to the lowest level in over 60 years.
Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business
1. The Morningstar® US Target Market Exposure Index is a free float-adjusted market capitalization weighted index that is maintained and calculated by Morningstar, Inc.
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 9.
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FRANKLIN U.S. EQUITY INDEX ETF
investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end.
In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore, the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
| | | | |
| Top 10 Sectors/Industries | |
|
| 9/30/22 | |
| |
| | | % of Total
Net Assets | |
Software | | | 9.1% | |
Technology Hardware, Storage & Peripherals | | | 6.9% | |
Semiconductors & Semiconductor Equipment | | | 4.7% | |
Interactive Media & Services | | | 4.7% | |
IT Services | | | 4.6% | |
Pharmaceuticals | | | 4.5% | |
Oil, Gas & Consumable Fuels | | | 4.2% | |
Banks | | | 3.5% | |
Internet & Direct Marketing Retail | | | 3.5% | |
Health Care Providers & Services | | | 3.5% | |
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 Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund generally rebalances and reconstitutes its portfolio in accordance with the Underlying Index, which is rebalanced quarterly and reconstituted semiannually.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
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| Top 10 Holdings | | | |
| |
| 9/30/22 | | | |
| |
Company Sector/Industry, Country | | % of Total
Net Assets | |
Apple Inc.
Technology Hardware, Storage & Peripherals, United States | | | 6.6% | |
Microsoft Corp.
Software, United States | | | 5.5% | |
Amazon.com Inc.
Internet & Direct Marketing Retail, United States | | | 3.2% | |
Tesla Inc.
Automobiles, United States | | | 2.2% | |
Alphabet Inc., A
Interactive Media & Services, United States | | | 1.8% | |
Alphabet Inc., C
Interactive Media & Services, United States | | | 1.6% | |
Berkshire Hathaway Inc., B
Diversified Financial Services, United States | | | 1.5% | |
UnitedHealth Group Inc.
Health Care Providers & Services, United States | | | 1.5% | |
Johnson & Johnson
Pharmaceuticals, United States | | | 1.4% | |
Exxon Mobil Corp.
Oil, Gas & Consumable Fuels, United States | | | 1.2% | |
As of July 20, 2022, the Franklin U.S. Equity Index ETF held Russian securities that were fair valued at zero. While Russian securities were removed from the Fund’s former underlying index and Russian securities are not included in the Fund’s new Underlying Index, as of July 20, 2022 the Fund has not been able to dispose of all such securities due to ongoing issues related to Russia’s invasion of Ukraine. The Fund will continue to monitor Russian related developments and will seek to dispose of such securities as soon as it is practicable.
Thank you for your participation in Franklin U.S. Equity Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
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FRANKLIN U.S. EQUITY INDEX ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 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 U.S. EQUITY INDEX ETF
Performance Summary as of September 30, 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 does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
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. Market Price returns typically are based upon the official closing price of the ETF’s shares. 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 9/30/221
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| | |
| | | Cumulative Total Return2 | | | Average Annual Total Return2 | |
| | | Based on
NAV3 | | | Based on
market price4 | | | Based on
NAV3 | | | Based on
market price4 | |
6-Month | | | -20.82% | | | | -20.60% | | | | -20.82% | | | | -20.60% | |
1-Year | | | -17.85% | | | | -17.72% | | | | -17.85% | | | | -17.72% | |
5-Year | | | +23.34% | | | | +22.96% | | | | +4.28% | | | | +4.22% | |
Since Inception (6/1/16) | | | +47.38% | | | | +47.46% | | | | +6.32% | | | | +6.33% | |
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| Distribution Rate5 | | 30-Day Standardized Yield6 | |
0.19% | | | 1.72% | |
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 U.S. EQUITY INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
|
|
Net Investment
Income |
$0.551543 |
Total Annual Operating Expenses7
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 focuses on particular 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 industries, sectors or investments. Neither the Fund nor the investment manager can offer assurances that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. 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 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, 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. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
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. 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.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN U.S. EQUITY INDEX 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.
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| | | | Actual (actual return after expenses) | | | Hypothetical (5% annual return before expenses) | | | | |
| | | | | |
Beginning
Account
Value 4/1/22 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Ending
Account
Value 9/30/22 | | | Expenses
Paid During
Period
4/1/22–9/30/221,2 | | | Net Annualized
Expense Ratio2 | |
| | $1,000.00 | | | $ | 791.80 | | | $ | 0.27 | | | $ | 1,024.77 | | | $ | 0.30 | | | | 0.06 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.35% to 0.03%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.13 based upon the Fund’s actual performance and $0.15 based upon a hypothetical 5% return.
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FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Equity Index ETFa
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| | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended March 31, | |
| | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
| | | | | | |
Per share operating performance
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | $ | 40.04 | | | $ | 37.65 | | | $ | 26.77 | | | $ | 30.90 | | | $ | 30.14 | | | $ | 27.18 | |
| | | | |
| | | | | | |
| Income from investment operationsb: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomec | | | 0.32 | | | | 1.05 | | | | 0.81 | | | | 0.90 | | | | 0.89 | | | | 0.74 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (8.62 | ) | | | 2.34 | | | | 10.97 | | | | (4.00 | ) | | | 0.67 | | | | 3.01 | |
| | | | |
| | | | | | |
Total from investment operations | | | (8.30 | ) | | | 3.39 | | | | 11.78 | | | | (3.10 | ) | | | 1.56 | | | | 3.75 | |
| | | | |
| | | | | | |
Less distributions from net investment income | | | (0.55 | ) | | | (1.00 | ) | | | (0.90 | ) | | | (1.03 | ) | | | (0.80 | ) | | | (0.79 | ) |
| | | | |
| | | | | | |
Net asset value, end of period | | $ | 31.19 | | | $ | 40.04 | | | $ | 37.65 | | | $ | 26.77 | | | $ | 30.90 | | | $ | 30.14 | |
| | | | |
| | | | | | |
Total returnd | | | (20.82)% | | | | 9.00% | | | | 44.55% | | | | (10.53)% | | | | 5.44% | | | | 13.91% | |
| | | | | | |
| Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses before waiver and payments by affiliates | | | 0.06% | | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.35% | | | | 0.90% | f |
| | | | | | |
Expenses net of waiver and payments by affiliates | | | 0.06% | | | | 0.35% | | | | 0.34% | | | | 0.34% | | | | 0.34% | | | | 0.35% | f |
| | | | | | |
Net investment income | | | 1.90% | | | | 2.63% | | | | 2.45% | | | | 2.86% | | | | 2.99% | | | | 2.53% | |
| | | | | | |
| Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $567,590 | | | | $16,014 | | | | $15,059 | | | | $16,059 | | | | $24,721 | | | | $18,082 | |
| | | | | | |
Portfolio turnover rateg | | | 9.49% | h | | | 24.13% | h | | | 31.70% | h | | | 27.85% | h | | | 34.99% | | | | 35.01% | |
aEffective August 1, 2022, Formerly, Franklin LibertyQ Global Equity ETF was renamed Franklin U.S. Equity Index ETF.
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”).
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| hPortfolio turnover rate excluding cash creations was as follows: | | | 9.49% | | | | 24.13% | | | | 31.70% | | | | 27.85% | |
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FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Equity Index ETF
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| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks 99.9% | | | | | | | | | |
| | | Brazil 0.1% | | | | | | | | | |
| a | | MercadoLibre Inc. | | | Internet & Direct Marketing Retail | | | | 831 | | | $ | 687,885 | |
| | | | | | | | | | | | | | |
| | | China 0.1% | | | | | | | | | |
| | NXP Semiconductors NV | | | Semiconductors & Semiconductor Equipment | | | | 4,732 | | | | 698,017 | |
| | Sunac China Holdings Ltd. | | | Real Estate Management & Development | | | | 1,000 | | | | 136 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 698,153 | |
| | | | | | | | | | | | | | |
| | | Ireland 0.1% | | | | | | | | | |
| | Seagate Technology Holdings PLC | | | Technology Hardware, Storage & Peripherals | | | | 3,458 | | | | 184,069 | |
| | | | | | | | | | | | | | |
| | | Peru 0.0%† | | | | | | | | | |
| | Southern Copper Corp. | | | Metals & Mining | | | | 1,456 | | | | 65,287 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| b | | Alrosa PJSC | | | Metals & Mining | | | | 3,584 | | | | — | |
| a,b | | Gazprom PJSC | | | Oil, Gas & Consumable Fuels | | | | 15,428 | | | | — | |
| b | | Inter RAO UES PJSC | | | Electric Utilities | | | | 53,546 | | | | — | |
| b | | LUKOIL PJSC | | | Oil, Gas & Consumable Fuels | | | | 516 | | | | — | |
| b | | MMC Norilsk Nickel PJSC | | | Metals & Mining | | | | 100 | | | | — | |
| b | | Novolipetsk Steel PJSC | | | Metals & Mining | | | | 2,272 | | | | — | |
| b | | PhosAgro PJSC | | | Chemicals | | | | 73 | | | | — | |
| b | | PhosAgro PJSC | | | Chemicals | | | | 2 | | | | — | |
| b | | Polymetal International PLC | | | Metals & Mining | | | | 470 | | | | — | |
| b | | Polyus PJSC | | | Metals & Mining | | | | 50 | | | | — | |
| b | | Rosneft Oil Co. PJSC | | | Oil, Gas & Consumable Fuels | | | | 1,154 | | | | — | |
| b | | Severstal PAO | | | Metals & Mining | | | | 392 | | | | — | |
| b | | Surgutneftegas PJSC | | | Oil, Gas & Consumable Fuels | | | | 8,286 | | | | — | |
| b | | Tatneft PAO | | | Oil, Gas & Consumable Fuels | | | | 1,974 | | | | — | |
| a,b | | TCS Group Holding PLC, GDR | | | Banks | | | | 118 | | | | — | |
| a,b | | United Co. RUSAL International PJSC | | | Metals & Mining | | | | 1,714 | | | | — | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | — | |
| | | | | | | | | | | | | | |
| | | Switzerland 0.1% | | | | | | | | | |
| | TE Connectivity Ltd. | | | Electronic Equipment, Instruments & Components | | | | 5,642 | | | | 622,651 | |
| | | | | | | | | | | | | | |
| | | United Kingdom 0.4% | | | | | | | | | |
| | Linde PLC | | | Chemicals | | | | 8,918 | | | | 2,404,204 | |
| | | | | | | | | | | | | | |
| | | United States 99.1% | | | | | | | | | |
| | 3M Co. | | | Industrial Conglomerates | | | | 10,192 | | | | 1,126,216 | |
| | Abbott Laboratories | | | Health Care Equipment & Supplies | | | | 31,486 | | | | 3,046,585 | |
| | AbbVie Inc. | | | Biotechnology | | | | 31,850 | | | | 4,274,588 | |
| a | | ABIOMED Inc. | | | Health Care Equipment & Supplies | | | | 910 | | | | 223,551 | |
| | Accenture PLC, A | | | IT Services | | | | 11,284 | | | | 2,903,373 | |
| | Activision Blizzard Inc. | | | Entertainment | | | | 12,740 | | | | 947,092 | |
| a | | Adobe Inc. | | | Software | | | | 8,372 | | | | 2,303,974 | |
| | Advance Auto Parts Inc. | | | Specialty Retail | | | | 1,092 | | | | 170,723 | |
| a | | Advanced Micro Devices Inc. | | | Semiconductors & Semiconductor Equipment | | | | 29,120 | | | | 1,845,043 | |
| | AES Corp. | | | Independent Power Producers & Energy Traders | | | | 11,830 | | | | 267,358 | |
| | Aflac Inc. | | | Insurance | | | | 10,556 | | | | 593,247 | |
| | Agilent Technologies Inc. | | | Life Sciences Tools & Services | | | | 5,278 | | | | 641,541 | |
| a | | agilon health Inc. | | | Health Care Providers & Services | | | | 3,458 | | | | 80,986 | |
| | Air Products and Chemicals Inc. | | | Chemicals | | | | 4,004 | | | | 931,851 | |
| a | | Airbnb Inc., A | | | Hotels, Restaurants & Leisure | | | | 7,098 | | | | 745,574 | |
| a | | Akamai Technologies Inc. | | | IT Services | | | | 2,730 | | | | 219,274 | |
| | Albemarle Corp. | | | Chemicals | | | | 2,002 | | | | 529,409 | |
| | Albertsons Cos Inc. | | | Food & Staples Retailing | | | | 2,912 | | | | 72,392 | |
| | Alexandria Real Estate Equities Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,730 | | | | 382,719 | |
| a | | Align Technology Inc. | | | Health Care Equipment & Supplies | | | | 1,276 | | | | 264,272 | |
| a | | Alleghany Corp. | | | Insurance | | | | 222 | | | | 186,340 | |
| | Allegion PLC | | | Building Products | | | | 1,638 | | | | 146,896 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 9 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Alliant Energy Corp. | | | Electric Utilities | | | | 4,368 | | | $ | 231,460 | |
| | Allstate Corp. | | | Insurance | | | | 4,914 | | | | 611,940 | |
| | Ally Financial Inc. | | | Consumer Finance | | | | 5,642 | | | | 157,017 | |
| a | | Alnylam Pharmaceuticals Inc. | | | Biotechnology | | | | 2,184 | | | | 437,149 | |
| a | | Alphabet Inc., A | | | Interactive Media & Services | | | | 107,744 | | | | 10,305,714 | |
| a | | Alphabet Inc., C | | | Interactive Media & Services | | | | 96,096 | | | | 9,239,630 | |
| | Altria Group Inc. | | | Tobacco | | | | 32,214 | | | | 1,300,801 | |
| a | | Amazon.com Inc. | | | Internet & Direct Marketing Retail | | | | 159,068 | | | | 17,974,684 | |
| a,c | | AMC Entertainment Holdings Inc., A | | | Entertainment | | | | 9,100 | | | | 63,427 | |
| | Amcor PLC | | | Containers & Packaging | | | | 27,300 | | | | 292,929 | |
| | Ameren Corp. | | | Multi-Utilities | | | | 4,550 | | | | 366,503 | |
| | American Electric Power Co. Inc. | | | Electric Utilities | | | | 9,100 | | | | 786,695 | |
| | American Express Co. | | | Consumer Finance | | | | 10,738 | | | | 1,448,664 | |
| | American Financial Group Inc. | | | Insurance | | | | 1,274 | | | | 156,613 | |
| | American International Group Inc. | | | Insurance | | | | 13,468 | | | | 639,461 | |
| | American Tower Corp. | | | Equity Real Estate Investment Trusts (REITs) | | | | 8,372 | | | | 1,797,468 | |
| | American Water Works Co. Inc. | | | Water Utilities | | | | 3,276 | | | | 426,404 | |
| | Ameriprise Financial Inc. | | | Capital Markets | | | | 2,002 | | | | 504,404 | |
| | AmerisourceBergen Corp. | | | Health Care Providers & Services | | | | 2,730 | | | | 369,451 | |
| | AMETEK Inc. | | | Electrical Equipment | | | | 4,186 | | | | 474,734 | |
| | Amgen Inc. | | | Biotechnology | | | | 9,646 | | | | 2,174,208 | |
| | Amphenol Corp., A | | | Electronic Equipment, Instruments & Components | | | | 10,556 | | | | 706,830 | |
| | Analog Devices Inc. | | | Semiconductors & Semiconductor Equipment | | | | 9,282 | | | | 1,293,354 | |
| | Annaly Capital Management Inc. | | | Mortgage Real Estate Investment Trusts (REITs) | | | | 7,826 | | | | 134,294 | |
| a | | ANSYS Inc. | | | Software | | | | 1,638 | | | | 363,145 | |
| | Aon PLC, A | | | Insurance | | | | 3,822 | | | | 1,023,799 | |
| | Apollo Global Management Inc. | | | Diversified Financial Services | | | | 7,826 | | | | 363,909 | |
| | Apple Inc. | | | Technology Hardware, Storage & Peripherals | | | | 270,998 | | | | 37,451,924 | |
| | Applied Materials Inc. | | | Semiconductors & Semiconductor Equipment | | | | 15,470 | | | | 1,267,457 | |
| a | | AppLovin Corp., A | | | Software | | | | 2,184 | | | | 42,566 | |
| a | | Aptiv PLC | | | Auto Components | | | | 4,732 | | | | 370,090 | |
| | Aramark | | | Hotels, Restaurants & Leisure | | | | 4,550 | | | | 141,960 | |
| a | | Arch Capital Group Ltd. | | | Insurance | | | | 6,552 | | | | 298,378 | |
| | Archer-Daniels-Midland Co. | | | Food Products | | | | 10,010 | | | | 805,304 | |
| a | | Arista Networks Inc. | | | Communications Equipment | | | | 4,368 | | | | 493,104 | |
| | Arthur J Gallagher & Co. | | | Insurance | | | | 3,822 | | | | 654,403 | |
| | AT&T Inc. | | | Diversified Telecommunication Services | | | | 127,764 | | | | 1,959,900 | |
| | Atmos Energy Corp. | | | Gas Utilities | | | | 2,548 | | | | 259,514 | |
| a | | Autodesk Inc. | | | Software | | | | 3,822 | | | | 713,950 | |
| | Automatic Data Processing Inc. | | | IT Services | | | | 7,462 | | | | 1,687,830 | |
| a | | AutoZone Inc. | | | Specialty Retail | | | | 350 | | | | 749,676 | |
| | AvalonBay Communities Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,548 | | | | 469,316 | |
| | Avangrid Inc. | | | Electric Utilities | | | | 1,092 | | | | 45,536 | |
| a | | Avantor Inc. | | | Life Sciences Tools & Services | | | | 12,012 | | | | 235,435 | |
| | Avery Dennison Corp. | | | Containers & Packaging | | | | 1,456 | | | | 236,891 | |
| | Baker Hughes Co. | | | Energy Equipment & Services | | | | 17,472 | | | | 366,213 | |
| | Ball Corp. | | | Containers & Packaging | | | | 5,642 | | | | 272,621 | |
| | Bank of America Corp. | | | Banks | | | | 125,216 | | | | 3,781,523 | |
| | Bank of New York Mellon Corp. | | | Capital Markets | | | | 13,104 | | | | 504,766 | |
| | Bath & Body Works Inc. | | | Specialty Retail | | | | 4,368 | | | | 142,397 | |
| | Baxter International Inc. | | | Health Care Equipment & Supplies | | | | 9,100 | | | | 490,126 | |
| | Becton Dickinson and Co. | | | Health Care Equipment & Supplies | | | | 5,096 | | | | 1,135,542 | |
| | Bentley Systems Inc., B | | | Software | | | | 3,458 | | | | 105,780 | |
| a | | Berkshire Hathaway Inc., B | | | Diversified Financial Services | | | | 32,396 | | | | 8,650,380 | |
| | Best Buy Co. Inc. | | | Specialty Retail | | | | 3,640 | | | | 230,558 | |
| a | | Bill.com Holdings Inc. | | | Software | | | | 1,638 | | | | | |
| a | | Biogen Inc. | | | Biotechnology | | | | 2,548 | | | | 680,316 | |
| | | | | | | | | | |
| | | | | | |
| 10 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| a | | BioMarin Pharmaceutical Inc. | | | Biotechnology | | | | 3,276 | | | $ | 277,707 | |
| a | | Bio-Rad Laboratories Inc., A | | | Life Sciences Tools & Services | | | | 364 | | | | 151,839 | |
| | Bio-Techne Corp. | | | Life Sciences Tools & Services | | | | 728 | | | | 206,752 | |
| | BlackRock Inc. | | | Capital Markets | | | | 2,705 | | | | 1,488,507 | |
| | Blackstone Inc. | | | Capital Markets | | | | 12,740 | | | | 1,066,338 | |
| a | | Block Inc. | | | IT Services | | | | 9,464 | | | | 520,425 | |
| a | | Boeing Co. | | | Aerospace & Defense | | | | 10,010 | | | | 1,212,011 | |
| a | | Booking Holdings Inc. | | | Hotels, Restaurants & Leisure | | | | 712 | | | | 1,169,966 | |
| | BorgWarner Inc. | | | Auto Components | | | | 4,368 | | | | 137,155 | |
| | Boston Properties Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,548 | | | | 191,024 | |
| a | | Boston Scientific Corp. | | | Health Care Equipment & Supplies | | | | 25,844 | | | | 1,000,938 | |
| | Bristol-Myers Squibb Co. | | | Pharmaceuticals | | | | 38,220 | | | | 2,717,060 | |
| | Broadcom Inc. | | | Semiconductors & Semiconductor Equipment | | | | 7,280 | | | | 3,232,393 | |
| | Broadridge Financial Solutions Inc. | | | IT Services | | | | 2,184 | | | | 315,195 | |
| | Brown & Brown Inc. | | | Insurance | | | | 4,004 | | | | 242,162 | |
| | Brown-Forman Corp., A | | | Beverages | | | | 910 | | | | 61,480 | |
| | Brown-Forman Corp., B | | | Beverages | | | | 3,094 | | | | 205,968 | |
| | Bunge Ltd. | | | Food Products | | | | 2,730 | | | | 225,416 | |
| a | | Burlington Stores Inc. | | | Specialty Retail | | | | 1,274 | | | | 142,548 | |
| | C.H. Robinson Worldwide Inc. | | | Air Freight & Logistics | | | | 2,184 | | | | 210,341 | |
| a | | Cadence Design Systems Inc. | | | Software | | | | 4,914 | | | | 803,095 | |
| a | | Caesars Entertainment Inc. | | | Hotels, Restaurants & Leisure | | | | 3,822 | | | | 123,298 | |
| | Camden Property Trust | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,002 | | | | 239,139 | |
| | Campbell Soup Co. | | | Food Products | | | | 3,640 | | | | 171,517 | |
| | Capital One Financial Corp. | | | Consumer Finance | | | | 6,916 | | | | 637,448 | |
| | Cardinal Health Inc. | | | Health Care Providers & Services | | | | 4,732 | | | | 315,530 | |
| | Carlyle Group Inc. | | | Capital Markets | | | | 3,822 | | | | 98,760 | |
| a | | CarMax Inc. | | | Specialty Retail | | | | 2,912 | | | | 192,250 | |
| a | | Carnival Corp. | | | Hotels, Restaurants & Leisure | | | | 16,744 | | | | 117,710 | |
| | Carrier Global Corp. | | | Building Products | | | | 15,106 | | | | 537,169 | |
| a | | Catalent Inc. | | | Pharmaceuticals | | | | 3,094 | | | | 223,882 | |
| | Caterpillar Inc. | | | Machinery | | | | 9,464 | | | | 1,552,853 | |
| a | | CBRE Group Inc., A | | | Real Estate Management & Development | | | | 5,824 | | | | 393,178 | |
| | CDW Corp. | | | Electronic Equipment, Instruments & Components | | | | 2,366 | | | | 369,285 | |
| | Celanese Corp. | | | Chemicals | | | | 2,002 | | | | 180,861 | |
| a | | Centene Corp. | | | Health Care Providers & Services | | | | 10,374 | | | | 807,201 | |
| | CenterPoint Energy Inc. | | | Multi-Utilities | | | | 11,102 | | | | 312,854 | |
| a | | Ceridian HCM Holding Inc. | | | Software | | | | 2,912 | | | | 162,723 | |
| | CF Industries Holdings Inc. | | | Chemicals | | | | 3,640 | | | | 350,350 | |
| a | | Charles River Laboratories International Inc. | | | Life Sciences Tools & Services | | | | 910 | | | | 179,088 | |
| | Charles Schwab Corp. | | | Capital Markets | | | | 27,300 | | | | 1,962,051 | |
| a | | Charter Communications Inc., A | | | Media | | | | 2,003 | | | | 607,610 | |
| | Cheniere Energy Inc. | | | Oil, Gas & Consumable Fuels | | | | 4,550 | | | | 754,890 | |
| | Chevron Corp. | | | Oil, Gas & Consumable Fuels | | | | 32,214 | | | | 4,628,185 | |
| a | | Chipotle Mexican Grill Inc. | | | Hotels, Restaurants & Leisure | | | | 498 | | | | 748,374 | |
| | Chubb Ltd. | | | Insurance | | | | 7,462 | | | | 1,357,189 | |
| | Church & Dwight Co. Inc. | | | Household Products | | | | 4,550 | | | | 325,052 | |
| | Cigna Corp. | | | Health Care Providers & Services | | | | 5,460 | | | | 1,514,986 | |
| | Cincinnati Financial Corp. | | | Insurance | | | | 2,730 | | | | 244,526 | |
| | Cintas Corp. | | | Commercial Services & Supplies | | | | 1,459 | | | | 566,369 | |
| | Cisco Systems Inc. | | | Communications Equipment | | | | 74,256 | | | | 2,970,240 | |
| | Citigroup Inc. | | | Banks | | | | 34,398 | | | | 1,433,365 | |
| | Citizens Financial Group Inc. | | | Banks | | | | 8,554 | | | | 293,915 | |
| | Citrix Systems Inc. | | | Software | | | | 1,476 | | | | 153,356 | |
| a | | Clarivate PLC | | | Professional Services | | | | 7,462 | | | | 70,068 | |
| | Clorox Co. | | | Household Products | | | | 2,184 | | | | 280,404 | |
| a | | Cloudflare Inc., A | | | Software | | | | 4,914 | | | | 271,793 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 11 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | CME Group Inc. | | | Capital Markets | | | | 6,370 | | | $ | 1,128,318 | |
| | CMS Energy Corp. | | | Multi-Utilities | | | | 5,096 | | | | 296,791 | |
| | Coca-Cola Co. | | | Beverages | | | | 69,706 | | | | 3,904,930 | |
| | Cognex Corp. | | | Electronic Equipment, Instruments & Components | | | | 3,276 | | | | 135,790 | |
| | Cognizant Technology Solutions Corp., A | | | IT Services | | | | 9,464 | | | | 543,612 | |
| a,c | | Coinbase Global Inc., A | | | Capital Markets | | | | 2,730 | | | | 176,058 | |
| | Colgate-Palmolive Co. | | | Household Products | | | | 14,924 | | | | 1,048,411 | |
| | Comcast Corp., A | | | Media | | | | 78,624 | | | | 2,306,042 | |
| | Comerica Inc. | | | Banks | | | | 2,184 | | | | 155,282 | |
| | Conagra Brands Inc. | | | Food Products | | | | 8,372 | | | | 273,178 | |
| | ConocoPhillips | | | Oil, Gas & Consumable Fuels | | | | 22,568 | | | | 2,309,609 | |
| | Consolidated Edison Inc. | | | Multi-Utilities | | | | 6,370 | | | | 546,291 | |
| | Constellation Brands Inc., A | | | Beverages | | | | 2,912 | | | | 668,828 | |
| | Constellation Energy Corp. | | | Electric Utilities | | | | 5,824 | | | | 484,499 | |
| | Continental Resources Inc. | | | Oil, Gas & Consumable Fuels | | | | 1,092 | | | | 72,957 | |
| a | | Copart Inc. | | | Commercial Services & Supplies | | | | 3,822 | | | | 406,661 | |
| | Corning Inc. | | | Electronic Equipment, Instruments & Components | | | | 13,650 | | | | 396,123 | |
| | Corteva Inc. | | | Chemicals | | | | 12,922 | | | | 738,492 | |
| a | | CoStar Group Inc. | | | Professional Services | | | | 7,098 | | | | 494,376 | |
| | Costco Wholesale Corp. | | | Food & Staples Retailing | | | | 8,008 | | | | 3,781,938 | |
| | Coterra Energy Inc., A | | | Oil, Gas & Consumable Fuels | | | | 14,560 | | | | 380,307 | |
| a | | Crowdstrike Holdings Inc., A | | | Software | | | | 3,822 | | | | 629,904 | |
| | Crown Castle Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 7,826 | | | | 1,131,248 | |
| | Crown Holdings Inc. | | | Containers & Packaging | | | | 2,184 | | | | 176,970 | |
| | CSX Corp. | | | Road & Rail | | | | 38,584 | | | | 1,027,878 | |
| | Cummins Inc. | | | Machinery | | | | 2,548 | | | | 518,543 | |
| | CVS Health Corp. | | | Health Care Providers & Services | | | | 23,660 | | | | 2,256,454 | |
| | D.R. Horton Inc. | | | Household Durables | | | | 5,824 | | | | 392,246 | |
| | Danaher Corp. | | | Life Sciences Tools & Services | | | | 11,830 | | | | 3,055,571 | |
| | Darden Restaurants Inc. | | | Hotels, Restaurants & Leisure | | | | 2,184 | | | | 275,883 | |
| a | | Datadog Inc., A | | | Software | | | | 4,550 | | | | 403,949 | |
| a | | DaVita Inc. | | | Health Care Providers & Services | | | | 1,092 | | | | 90,385 | |
| | Deere & Co. | | | Machinery | | | | 4,914 | | | | 1,640,735 | |
| | Dell Technologies Inc., C | | | Technology Hardware, Storage & Peripherals | | | | 4,732 | | | | 161,692 | |
| a | | Delta Air Lines Inc. | | | Airlines | | | | 11,284 | | | | 316,629 | |
| | DENTSPLY SIRONA Inc. | | | Health Care Equipment & Supplies | | | | 3,640 | | | | 103,194 | |
| | Devon Energy Corp. | | | Oil, Gas & Consumable Fuels | | | | 11,648 | | | | 700,394 | |
| a | | Dexcom Inc. | | | Health Care Equipment & Supplies | | | | 6,916 | | | | 557,015 | |
| | Diamondback Energy Inc. | | | Oil, Gas & Consumable Fuels | | | | 3,276 | | | | 394,627 | |
| | Digital Realty Trust Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 5,096 | | | | 505,421 | |
| | Discover Financial Services | | | Consumer Finance | | | | 4,914 | | | | 446,781 | |
| a | | DISH Network Corp., A | | | Media | | | | 4,186 | | | | 57,892 | |
| a | | DocuSign Inc. | | | Software | | | | 3,458 | | | | 184,899 | |
| | Dollar General Corp. | | | Multiline Retail | | | | 4,004 | | | | 960,399 | |
| a | | Dollar Tree Inc. | | | Multiline Retail | | | | 3,822 | | | | 520,174 | |
| | Dominion Energy Inc. | | | Multi-Utilities | | | | 14,924 | | | | 1,031,398 | |
| | Dominos Pizza Inc. | | | Hotels, Restaurants & Leisure | | | | 728 | | | | 225,826 | |
| a | | DoorDash Inc., A | | | Internet & Direct Marketing Retail | | | | 4,732 | | | | 233,997 | |
| | Dover Corp. | | | Machinery | | | | 2,548 | | | | 297,046 | |
| | Dow Inc. | | | Chemicals | | | | 12,922 | | | | 567,663 | |
| | DTE Energy Co. | | | Multi-Utilities | | | | 3,458 | | | | 397,843 | |
| | Duke Energy Corp. | | | Electric Utilities | | | | 14,014 | | | | 1,303,582 | |
| | Duke Realty Corp. | | | Equity Real Estate Investment Trusts (REITs) | | | | 6,734 | | | | 324,579 | |
| | Dun & Bradstreet Holdings Inc. | | | Professional Services | | | | 4,368 | | | | 54,120 | |
| | DuPont de Nemours Inc. | | | Chemicals | | | | 9,100 | | | | 458,640 | |
| a | | DXC Technology Co. | | | IT Services | | | | 4,550 | | | | 111,384 | |
| a | | Dynatrace Inc. | | | Software | | | | 3,640 | | | | 126,708 | |
| | | | | | | | | | |
| | | | | | |
| 12 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | East West Bancorp Inc. | | | Banks | | | | 2,366 | | | $ | 158,853 | |
| | Eastman Chemical Co. | | | Chemicals | | | | 2,366 | | | | 168,104 | |
| | Eaton Corp. PLC | | | Electrical Equipment | | | | 7,098 | | | | 946,589 | |
| | eBay Inc. | | | Internet & Direct Marketing Retail | | | | 10,010 | | | | 368,468 | |
| | Ecolab Inc. | | | Chemicals | | | | 4,368 | | | | 630,827 | |
| | Edison International | | | Electric Utilities | | | | 6,734 | | | | 381,010 | |
| a | | Edwards Lifesciences Corp. | | | Health Care Equipment & Supplies | | | | 11,102 | | | | 917,358 | |
| a | | Elanco Animal Health Inc. | | | Pharmaceuticals | | | | 8,372 | | | | 103,897 | |
| | Electronic Arts Inc. | | | Entertainment | | | | 4,732 | | | | 547,540 | |
| | Elevance Health Inc. | | | Health Care Providers & Services | | | | 4,368 | | | | 1,984,120 | |
| | Eli Lilly & Co. | | | Pharmaceuticals | | | | 14,196 | | | | 4,590,277 | |
| | Emerson Electric Co. | | | Electrical Equipment | | | | 10,556 | | | | 772,910 | |
| a | | Enphase Energy Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,366 | | | | 656,494 | |
| | Entegris Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,730 | | | | 226,645 | |
| | Entergy Corp. | | | Electric Utilities | | | | 3,640 | | | | 366,293 | |
| | EOG Resources Inc. | | | Oil, Gas & Consumable Fuels | | | | 10,556 | | | | 1,179,422 | |
| a | | EPAM Systems Inc. | | | IT Services | | | | 1,092 | | | | 395,511 | |
| | Equifax Inc. | | | Professional Services | | | | 2,184 | | | | 374,403 | |
| | Equinix Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 1,638 | | | | 931,760 | |
| | Equitable Holdings Inc. | | | Diversified Financial Services | | | | 6,370 | | | | 167,850 | |
| | Equity LifeStyle Properties Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 3,094 | | | | 194,427 | |
| | Equity Residential | | | Equity Real Estate Investment Trusts (REITs) | | | | 6,006 | | | | 403,723 | |
| | Essex Property Trust Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 1,093 | | | | 264,757 | |
| | Estee Lauder Cos Inc., A | | | Personal Products | | | | 4,186 | | | | 903,757 | |
| a | | Etsy Inc. | | | Internet & Direct Marketing Retail | | | | 2,184 | | | | 218,684 | |
| | Everest Re Group Ltd. | | | Insurance | | | | 728 | | | | 191,056 | |
| | Evergy Inc. | | | Electric Utilities | | | | 4,004 | | | | 237,838 | |
| | Eversource Energy | | | Electric Utilities | | | | 6,188 | | | | 482,416 | |
| a | | Exact Sciences Corp. | | | Biotechnology | | | | 2,912 | | | | 94,611 | |
| | Exelon Corp. | | | Electric Utilities | | | | 18,018 | | | | 674,954 | |
| a | | Expedia Group Inc. | | | Internet & Direct Marketing Retail | | | | 2,730 | | | | 255,774 | |
| | Expeditors International of Washington Inc. | | | Air Freight & Logistics | | | | 2,912 | | | | 257,159 | |
| | Extra Space Storage Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,366 | | | | 408,632 | |
| | Exxon Mobil Corp. | | | Oil, Gas & Consumable Fuels | | | | 74,802 | | | | 6,530,963 | |
| a | | F5 Networks Inc. | | | Communications Equipment | | | | 1,092 | | | | 158,045 | |
| | FactSet Research Systems Inc. | | | Capital Markets | | | | 728 | | | | 291,280 | |
| | Fastenal Co. | | | Trading Companies & Distributors | | | | 10,374 | | | | 477,619 | |
| | Federal Realty Investment Trust | | | Equity Real Estate Investment Trusts (REITs) | | | | 1,274 | | | | 114,813 | |
| | FedEx Corp. | | | Air Freight & Logistics | | | | 4,368 | | | | 648,517 | |
| | Fidelity National Financial Inc. | | | Insurance | | | | 4,914 | | | | 177,887 | |
| | Fidelity National Information Services Inc. | | | IT Services | | | | 10,920 | | | | 825,224 | |
| | Fifth Third Bancorp | | | Banks | | | | 12,376 | | | | 395,537 | |
| | First Republic Bank | | | Banks | | | | 3,276 | | | | 427,682 | |
| | FirstEnergy Corp. | | | Electric Utilities | | | | 10,192 | | | | 377,104 | |
| a | | Fiserv Inc. | | | IT Services | | | | 11,466 | | | | 1,072,874 | |
| a | | FleetCor Technologies Inc. | | | IT Services | | | | 1,456 | | | | 256,504 | |
| a | | Flex Ltd. | | | Electronic Equipment, Instruments & Components | | | | 8,736 | | | | 145,542 | |
| | FMC Corp. | | | Chemicals | | | | 2,184 | | | | 230,849 | |
| | Ford Motor Co. | | | Automobiles | | | | 70,070 | | | | 784,784 | |
| a | | Fortinet Inc. | | | Software | | | | 11,830 | | | | 581,208 | |
| | Fortive Corp. | | | Machinery | | | | 6,370 | | | | 371,371 | |
| | Fortune Brands Home & Security Inc. | | | Building Products | | | | 2,366 | | | | 127,031 | |
| | Fox Corp., A | | | Media | | | | 5,460 | | | | 167,513 | |
| | Fox Corp., B | | | Media | | | | 2,730 | | | | 77,805 | |
| | Franklin Resources Inc. | | | Capital Markets | | | | 4,914 | | | | 105,749 | |
| | Freeport-McMoRan Inc. | | | Metals & Mining | | | | 25,844 | | | | 706,317 | |
| | Garmin Ltd. | | | Household Durables | | | | 2,730 | | | | 219,246 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 13 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| a | | Gartner Inc. | | | IT Services | | | | 1,456 | | | $ | 402,861 | |
| a | | Generac Holdings Inc. | | | Electrical Equipment | | | | 1,092 | | | | 194,529 | |
| | General Dynamics Corp. | | | Aerospace & Defense | | | | 4,004 | | | | 849,529 | |
| | General Electric Co. | | | Industrial Conglomerates | | | | 19,656 | | | | 1,216,903 | |
| | General Mills Inc. | | | Food Products | | | | 10,738 | | | | 822,638 | |
| | General Motors Co. | | | Automobiles | | | | 26,390 | | | | 846,855 | |
| | Genuine Parts Co. | | | Distributors | | | | 2,548 | | | | 380,467 | |
| | Gilead Sciences Inc. | | | Biotechnology | | | | 22,568 | | | | 1,392,220 | |
| | Global Payments Inc. | | | IT Services | | | | 4,914 | | | | 530,958 | |
| | Globe Life Inc. | | | Insurance | | | | 1,638 | | | | 163,309 | |
| a | | GoDaddy Inc., A | | | IT Services | | | | 2,730 | | | | 193,502 | |
| | Goldman Sachs Group Inc. | | | Capital Markets | | | | 6,188 | | | | 1,813,393 | |
| | Halliburton Co. | | | Energy Equipment & Services | | | | 16,380 | | | | 403,276 | |
| | Hartford Financial Services Group Inc. | | | Insurance | | | | 5,824 | | | | 360,739 | |
| | Hasbro Inc. | | | Leisure Products | | | | 2,366 | | | | 159,516 | |
| | HCA Healthcare Inc. | | | Health Care Providers & Services | | | | 3,822 | | | | 702,445 | |
| | Healthpeak Properties Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 9,464 | | | | 216,915 | |
| | HEICO Corp. | | | Aerospace & Defense | | | | 728 | | | | 104,817 | |
| | HEICO Corp., A | | | Aerospace & Defense | | | | 1,274 | | | | 146,026 | |
| a | | Henry Schein Inc. | | | Health Care Providers & Services | | | | 2,366 | | | | 155,612 | |
| | Hess Corp. | | | Oil, Gas & Consumable Fuels | | | | 4,914 | | | | 535,577 | |
| | Hewlett Packard Enterprise Co. | | | Technology Hardware, Storage & Peripherals | | | | 23,114 | | | | 276,906 | |
| | Hilton Worldwide Holdings Inc. | | | Hotels, Restaurants & Leisure | | | | 4,914 | | | | 592,727 | |
| a | | Hologic Inc. | | | Health Care Equipment & Supplies | | | | 4,368 | | | | 281,823 | |
| | Honeywell International Inc. | | | Industrial Conglomerates | | | | 12,194 | | | | 2,036,032 | |
| a | | Horizon Therapeutics PLC | | | Biotechnology | | | | 4,004 | | | | 247,808 | |
| | Hormel Foods Corp. | | | Food Products | | | | 5,460 | | | | 248,102 | |
| | Host Hotels & Resorts Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 12,740 | | | | 202,311 | |
| | Howmet Aerospace Inc. | | | Aerospace & Defense | | | | 6,552 | | | | 202,653 | |
| | HP Inc. | | | Technology Hardware, Storage & Peripherals | | | | 16,380 | | | | 408,190 | |
| | Hubbell Inc., B | | | Electrical Equipment | | | | 910 | | | | 202,930 | |
| a | | HubSpot Inc. | | | Software | | | | 910 | | | | 245,809 | |
| | Humana Inc. | | | Health Care Providers & Services | | | | 2,186 | | | | 1,060,625 | |
| | Huntington Bancshares Inc. | | | Banks | | | | 25,662 | | | | 338,225 | |
| | Huntington Ingalls Industries Inc. | | | Aerospace & Defense | | | | 728 | | | | 161,252 | |
| a | | IAC Inc. | | | Interactive Media & Services | | | | 1,456 | | | | 80,633 | |
| | IDEX Corp. | | | Machinery | | | | 1,274 | | | | 254,609 | |
| a | | IDEXX Laboratories Inc. | | | Health Care Equipment & Supplies | | | | 1,456 | | | | 474,365 | |
| | Illinois Tool Works Inc. | | | Machinery | | | | 5,096 | | | | 920,592 | |
| a | | Illumina Inc. | | | Life Sciences Tools & Services | | | | 2,912 | | | | 555,580 | |
| a | | Incyte Corp. | | | Biotechnology | | | | 3,276 | | | | 218,313 | |
| | Ingersoll Rand Inc. | | | Machinery | | | | 7,280 | | | | 314,933 | |
| a | | Insulet Corp. | | | Health Care Equipment & Supplies | | | | 1,274 | | | | 292,256 | |
| | Intel Corp. | | | Semiconductors & Semiconductor Equipment | | | | 73,528 | | | | 1,894,817 | |
| | Intercontinental Exchange Inc. | | | Capital Markets | | | | 10,192 | | | | 920,847 | |
| | International Business Machines Corp. | | | IT Services | | | | 16,198 | | | | 1,924,484 | |
| | International Flavors & Fragrances Inc. | | | Chemicals | | | | 4,550 | | | | 413,277 | |
| | International Paper Co. | | | Containers & Packaging | | | | 6,552 | | | | 207,698 | |
| | Interpublic Group of Cos Inc. | | | Media | | | | 6,916 | | | | 177,050 | |
| | Intuit Inc. | | | Software | | | | 5,096 | | | | 1,973,783 | |
| a | | Intuitive Surgical Inc. | | | Health Care Equipment & Supplies | | | | 6,370 | | | | 1,193,993 | |
| | Invesco Ltd. | | | Capital Markets | | | | 8,190 | | | | 112,203 | |
| | Invitation Homes Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 10,920 | | | | 368,768 | |
| a | | IQVIA Holdings Inc. | | | Life Sciences Tools & Services | | | | 3,276 | | | | 593,415 | |
| | Iron Mountain Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 5,096 | | | | 224,071 | |
| | Jack Henry & Associates Inc. | | | IT Services | | | | 1,274 | | | | 232,212 | |
| | Jacobs Solutions Inc. | | | Professional Services | | | | 2,366 | | | | 256,687 | |
| | | | | | | | | | |
| | | | | | |
| 14 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| a | | Jazz Pharmaceuticals PLC | | | Pharmaceuticals | | | | 1,092 | | | $ | 145,553 | |
| | JB Hunt Transport Services Inc. | | | Road & Rail | | | | 1,456 | | | | 227,748 | |
| | Jefferies Financial Group Inc. | | | Capital Markets | | | | 3,276 | | | | 96,642 | |
| | Johnson & Johnson | | | Pharmaceuticals | | | | 47,138 | | | | 7,700,464 | |
| | Johnson Controls International PLC | | | Building Products | | | | 12,376 | | | | 609,147 | |
| | JPMorgan Chase & Co. | | | Banks | | | | 52,598 | | | | 5,496,491 | |
| | Juniper Networks Inc. | | | Communications Equipment | | | | 6,188 | | | | 161,631 | |
| | Kellogg Co. | | | Food Products | | | | 4,550 | | | | 316,953 | |
| | Keurig Dr Pepper Inc. | | | Beverages | | | | 15,288 | | | | 547,616 | |
| | KeyCorp | | | Banks | | | | 16,562 | | | | 265,323 | |
| a | | Keysight Technologies Inc. | | | Electronic Equipment, Instruments & Components | | | | 3,276 | | | | 515,511 | |
| | Kimberly-Clark Corp. | | | Household Products | | | | 6,006 | | | | 675,915 | |
| | Kimco Realty Corp. | | | Equity Real Estate Investment Trusts (REITs) | | | | 11,102 | | | | 204,388 | |
| | Kinder Morgan Inc. | | | Oil, Gas & Consumable Fuels | | | | 35,854 | | | | 596,611 | |
| | KKR & Co. Inc. | | | Capital Markets | | | | 10,556 | | | | 453,908 | |
| | KLA Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,548 | | | | 771,101 | |
| | Kraft Heinz Co. | | | Food Products | | | | 14,196 | | | | 473,437 | |
| | L3Harris Technologies Inc. | | | Aerospace & Defense | | | | 3,458 | | | | 718,676 | |
| | Laboratory Corp. of America Holdings | | | Health Care Providers & Services | | | | 1,638 | | | | 335,479 | |
| | Lam Research Corp. | | | Semiconductors & Semiconductor Equipment | | | | 2,548 | | | | 932,568 | |
| | Lamb Weston Holdings Inc. | | | Food Products | | | | 2,730 | | | | 211,247 | |
| a | | Las Vegas Sands Corp. | | | Hotels, Restaurants & Leisure | | | | 6,006 | | | | 225,345 | |
| | Lear Corp. | | | Auto Components | | | | 1,092 | | | | 130,701 | |
| | Leidos Holdings Inc. | | | Professional Services | | | | 2,548 | | | | 222,874 | |
| | Lennar Corp., A | | | Household Durables | | | | 4,550 | | | | 339,203 | |
| | Lennar Corp., B | | | Household Durables | | | | 182 | | | | 10,831 | |
| | Lennox International Inc. | | | Building Products | | | | 546 | | | | 121,578 | |
| a | | Liberty Broadband Corp. | | | Media | | | | 2,366 | | | | 174,611 | |
| a | | Liberty Broadband Corp., A | | | Media | | | | 364 | | | | 27,154 | |
| a | | Liberty Media Corp.-Liberty SiriusXM, C | | | Media | | | | 1,274 | | | | 48,501 | |
| a | | Liberty Media Corp.-Liberty SiriusXM, C | | | Media | | | | 2,730 | | | | 102,948 | |
| | Lincoln National Corp. | | | Insurance | | | | 2,730 | | | | 119,874 | |
| a | | Live Nation Entertainment Inc. | | | Entertainment | | | | 2,730 | | | | 207,589 | |
| | LKQ Corp. | | | Distributors | | | | 4,550 | | | | 214,533 | |
| | Lockheed Martin Corp. | | | Aerospace & Defense | | | | 4,186 | | | | 1,617,010 | |
| | Loews Corp. | | | Insurance | | | | 3,822 | | | | 190,488 | |
| | Lowe’s Cos Inc. | | | Specialty Retail | | | | 11,466 | | | | 2,153,429 | |
| a,c | | Lucid Group Inc. | | | Automobiles | | | | 10,010 | | | | 139,840 | |
| a | | Lululemon Athletica Inc. | | | Textiles, Apparel & Luxury Goods | | | | 2,003 | | | | 559,959 | |
| | Lumen Technologies Inc. | | | Diversified Telecommunication Services | | | | 16,562 | | | | 120,571 | |
| a | | Lyft Inc., A | | | Road & Rail | | | | 5,096 | | | | 67,114 | |
| | LyondellBasell Industries NV, A | | | Chemicals | | | | 4,550 | | | | 342,524 | |
| | M&T Bank Corp. | | | Banks | | | | 3,094 | | | | 545,534 | |
| | Marathon Oil Corp. | | | Oil, Gas & Consumable Fuels | | | | 12,740 | | | | 287,669 | |
| | Marathon Petroleum Corp. | | | Oil, Gas & Consumable Fuels | | | | 8,918 | | | | 885,825 | |
| a | | Markel Corp. | | | Insurance | | | | 246 | | | | 266,718 | |
| | MarketAxess Holdings Inc. | | | Capital Markets | | | | 728 | | | | 161,973 | |
| | Marriott International Inc., A | | | Hotels, Restaurants & Leisure | | | | 4,914 | | | | 688,648 | |
| | Marsh & McLennan Cos Inc. | | | Insurance | | | | 8,918 | | | | 1,331,368 | |
| | Martin Marietta Materials Inc. | | | Construction Materials | | | | 1,092 | | | | 351,722 | |
| | Marvell Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 15,106 | | | | 648,198 | |
| | Masco Corp. | | | Building Products | | | | 4,368 | | | | 203,942 | |
| | Mastercard Inc., A | | | IT Services | | | | 15,288 | | | | 4,346,990 | |
| a | | Match Group Inc. | | | Interactive Media & Services | | | | 4,914 | | | | 234,644 | |
| | McCormick & Co. Inc. | | | Food Products | | | | 4,550 | | | | 324,279 | |
| | McDonald’s Corp. | | | Hotels, Restaurants & Leisure | | | | 13,286 | | | | 3,065,612 | |
| | McKesson Corp. | | | Health Care Providers & Services | | | | 2,548 | | | | 865,989 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 15 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Medtronic PLC | | | Health Care Equipment & Supplies | | | | 23,842 | | | $ | 1,925,241 | |
| | Merck & Co. Inc. | | | Pharmaceuticals | | | | 45,500 | | | | 3,918,460 | |
| a | | Meta Platforms Inc., A | | | Interactive Media & Services | | | | 40,950 | | | | 5,556,096 | |
| | MetLife Inc. | | | Insurance | | | | 12,194 | | | | 741,151 | |
| a | | Mettler-Toledo International Inc. | | | Life Sciences Tools & Services | | | | 413 | | | | 447,742 | |
| | MGM Resorts International | | | Hotels, Restaurants & Leisure | | | | 6,188 | | | | 183,907 | |
| | Microchip Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 9,828 | | | | 599,803 | |
| | Micron Technology Inc. | | | Semiconductors & Semiconductor Equipment | | | | 19,838 | | | | 993,884 | |
| | Microsoft Corp. | | | Software | | | | 133,770 | | | | 31,155,033 | |
| | Mid-America Apartment Communities Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,002 | | | | 310,450 | |
| a | | Moderna Inc. | | | Biotechnology | | | | 6,188 | | | | 731,731 | |
| a | | Mohawk Industries Inc. | | | Household Durables | | | | 910 | | | | 82,983 | |
| a | | Molina Healthcare Inc. | | | Health Care Providers & Services | | | | 1,092 | | | | 360,185 | |
| | Molson Coors Beverage Co., B | | | Beverages | | | | 3,640 | | | | 174,684 | |
| | Mondelez International Inc., A | | | Food Products | | | | 24,570 | | | | 1,347,173 | |
| a | | MongoDB Inc. | | | IT Services | | | | 1,274 | | | | 252,965 | |
| | Monolithic Power Systems Inc. | | | Semiconductors & Semiconductor Equipment | | | | 728 | | | | 264,555 | |
| a | | Monster Beverage Corp. | | | Beverages | | | | 6,734 | | | | 585,589 | |
| | Moody’s Corp. | | | Capital Markets | | | | 2,912 | | | | 707,936 | |
| | Morgan Stanley | | | Capital Markets | | | | 24,024 | | | | 1,898,136 | |
| | Mosaic Co. | | | Chemicals | | | | 6,370 | | | | 307,862 | |
| | Motorola Solutions Inc. | | | Communications Equipment | | | | 3,094 | | | | 692,963 | |
| | MSCI Inc. | | | Capital Markets | | | | 1,456 | | | | 614,126 | |
| | Nasdaq Inc. | | | Capital Markets | | | | 6,006 | | | | 340,420 | |
| | NetApp Inc. | | | Technology Hardware, Storage & Peripherals | | | | 3,822 | | | | 236,391 | |
| a | | Netflix Inc. | | | Entertainment | | | | 8,008 | | | | 1,885,404 | |
| a | | Neurocrine Biosciences Inc. | | | Biotechnology | | | | 1,820 | | | | 193,302 | |
| | Newell Brands Inc. | | | Household Durables | | | | 6,370 | | | | 88,479 | |
| | Newmont Corp. | | | Metals & Mining | | | | 14,014 | | | | 589,008 | |
| | News Corp., A | | | Media | | | | 6,734 | | | | 101,751 | |
| | News Corp., B | | | Media | | | | 2,002 | | | | 30,871 | |
| | NextEra Energy Inc. | | | Electric Utilities | | | | 35,308 | | | | 2,768,500 | |
| | Nielsen Holdings PLC | | | Professional Services | | | | 6,916 | | | | 191,712 | |
| | NIKE Inc., B | | | Textiles, Apparel & Luxury Goods | | | | 22,568 | | | | 1,875,852 | |
| | NiSource Inc. | | | Multi-Utilities | | | | 7,280 | | | | 183,383 | |
| | Norfolk Southern Corp. | | | Road & Rail | | | | 4,186 | | | | 877,595 | |
| | Northern Trust Corp. | | | Capital Markets | | | | 3,640 | | | | 311,438 | |
| | Northrop Grumman Corp. | | | Aerospace & Defense | | | | 2,548 | | | | 1,198,375 | |
| | NortonLifeLock Inc. | | | Software | | | | 10,192 | | | | 205,267 | |
| a | | Novocure Ltd. | | | Health Care Equipment & Supplies | | | | 1,456 | | | | 110,627 | |
| | NRG Energy Inc. | | | Electric Utilities | | | | 4,368 | | | | 167,163 | |
| | Nucor Corp. | | | Metals & Mining | | | | 4,732 | | | | 506,277 | |
| | NVIDIA Corp. | | | Semiconductors & Semiconductor Equipment | | | | 44,954 | | | | 5,456,966 | |
| a | | NVR Inc. | | | Household Durables | | | | 55 | | | | 219,289 | |
| | Occidental Petroleum Corp. | | | Oil, Gas & Consumable Fuels | | | | 13,286 | | | | 816,425 | |
| a | | Okta Inc. | | | IT Services | | | | 2,730 | | | | 155,255 | |
| a | | Olaplex Holdings Inc. | | | Personal Products | | | | 1,092 | | | | 10,429 | |
| | Old Dominion Freight Line Inc. | | | Road & Rail | | | | 1,638 | | | | 407,485 | |
| | Omnicom Group Inc. | | | Media | | | | 3,640 | | | | 229,648 | |
| a | | ON Semiconductor Corp. | | | Semiconductors & Semiconductor Equipment | | | | 7,644 | | | | 476,451 | |
| | ONEOK Inc. | | | Oil, Gas & Consumable Fuels | | | | 7,826 | | | | 401,004 | |
| | Oracle Corp. | | | Software | | | | 27,118 | | | | 1,656,096 | |
| a | | O’Reilly Automotive Inc. | | | Specialty Retail | | | | 1,156 | | | | 813,073 | |
| | Otis Worldwide Corp. | | | Machinery | | | | 7,462 | | | | 476,076 | |
| | Owens Corning | | | Building Products | | | | 1,820 | | | | 143,070 | |
| | PACCAR Inc. | | | Machinery | | | | 6,188 | | | | 517,874 | |
| | Packaging Corp. of America | | | Containers & Packaging | | | | 1,638 | | | | 183,931 | |
| | | | | | | | | | |
| | | | | | |
| 16 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| a | | Palantir Technologies Inc., A | | | Software | | | | 32,214 | | | $ | 261,900 | |
| a | | Palo Alto Networks Inc. | | | Software | | | | 5,460 | | | | 894,293 | |
| | Parker-Hannifin Corp. | | | Machinery | | | | 2,366 | | | | 573,305 | |
| | Paychex Inc. | | | IT Services | | | | 5,642 | | | | 633,089 | |
| a | | Paycom Software Inc. | | | Software | | | | 910 | | | | 300,291 | |
| a | | Paylocity Holding Corp. | | | Software | | | | 728 | | | | 175,870 | |
| a | | PayPal Holdings Inc. | | | IT Services | | | | 20,930 | | | | 1,801,445 | |
| | Pentair PLC | | | Machinery | | | | 3,094 | | | | 125,709 | |
| | PepsiCo Inc. | | | Beverages | | | | 24,752 | | | | 4,041,012 | |
| | PerkinElmer Inc. | | | Life Sciences Tools & Services | | | | 2,184 | | | | 262,801 | |
| | Pfizer Inc. | | | Pharmaceuticals | | | | 100,646 | | | | 4,404,269 | |
| a | | PG&E Corp. | | | Electric Utilities | | | | 28,938 | | | | 361,725 | |
| | Philip Morris International Inc. | | | Tobacco | | | | 27,846 | | | | 2,311,496 | |
| | Phillips 66 | | | Oil, Gas & Consumable Fuels | | | | 8,554 | | | | 690,479 | |
| | Pinnacle West Capital Corp. | | | Electric Utilities | | | | 2,002 | | | | 129,149 | |
| a | | Pinterest Inc., A | | | Interactive Media & Services | | | | 10,192 | | | | 237,474 | |
| | Pioneer Natural Resources Co. | | | Oil, Gas & Consumable Fuels | | | | 4,368 | | | | 945,803 | |
| a | | Playtika Holding Corp. | | | Entertainment | | | | 1,820 | | | | 17,090 | |
| a | | Plug Power Inc. | | | Electrical Equipment | | | | 9,282 | | | | 195,015 | |
| | PNC Financial Services Group Inc. | | | Banks | | | | 7,462 | | | | 1,114,972 | |
| | Pool Corp. | | | Distributors | | | | 728 | | | | 231,657 | |
| | PPG Industries Inc. | | | Chemicals | | | | 4,186 | | | | 463,348 | |
| | PPL Corp. | | | Electric Utilities | | | | 13,104 | | | | 332,186 | |
| | Principal Financial Group Inc. | | | Insurance | | | | 4,186 | | | | 302,020 | |
| | Prologis Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 13,286 | | | | 1,349,858 | |
| | Prudential Financial Inc. | | | Insurance | | | | 6,552 | | | | 562,031 | |
| a | | PTC Inc. | | | Software | | | | 1,820 | | | | 190,372 | |
| | Public Service Enterprise Group Inc. | | | Multi-Utilities | | | | 8,918 | | | | 501,459 | |
| | Public Storage | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,912 | | | | 852,663 | |
| | PulteGroup Inc. | | | Household Durables | | | | 4,368 | | | | 163,800 | |
| a | | Qorvo Inc. | | | Semiconductors & Semiconductor Equipment | | | | 1,820 | | | | 144,526 | |
| | QUALCOMM Inc. | | | Semiconductors & Semiconductor Equipment | | | | 20,202 | | | | 2,282,422 | |
| | Quanta Services Inc. | | | Construction & Engineering | | | | 2,548 | | | | 324,590 | |
| | Quest Diagnostics Inc. | | | Health Care Providers & Services | | | | 2,002 | | | | 245,625 | |
| | Raymond James Financial Inc. | | | Capital Markets | | | | 3,458 | | | | 341,720 | |
| | Raytheon Technologies Corp. | | | Aerospace & Defense | | | | 26,390 | | | | 2,160,285 | |
| | Realty Income Corp. | | | Equity Real Estate Investment Trusts (REITs) | | | | 11,102 | | | | 646,136 | |
| | Regency Centers Corp. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,730 | | | | 147,011 | |
| a | | Regeneron Pharmaceuticals Inc. | | | Biotechnology | | | | 1,923 | | | | 1,324,697 | |
| | Regions Financial Corp. | | | Banks | | | | 16,562 | | | | 332,399 | |
| | Reinsurance Group of America Inc. | | | Insurance | | | | 1,274 | | | | 160,282 | |
| | Republic Services Inc. | | | Commercial Services & Supplies | | | | 3,640 | | | | 495,186 | |
| | ResMed Inc. | | | Health Care Equipment & Supplies | | | | 2,730 | | | | 595,959 | |
| a | | RingCentral Inc., A | | | Software | | | | 1,274 | | | | 50,909 | |
| a | | Rivian Automotive Inc., A | | | Automobiles | | | | 9,828 | | | | 323,439 | |
| | Rockwell Automation Inc. | | | Electrical Equipment | | | | 2,184 | | | | 469,800 | |
| a | | Roku Inc. | | | Entertainment | | | | 2,184 | | | | 123,178 | |
| | Rollins Inc. | | | Commercial Services & Supplies | | | | 4,004 | | | | 138,859 | |
| | Roper Technologies Inc. | | | Industrial Conglomerates | | | | 1,820 | | | | 654,545 | |
| | Ross Stores Inc. | | | Specialty Retail | | | | 6,188 | | | | 521,463 | |
| a | | Royal Caribbean Cruises Ltd. | | | Hotels, Restaurants & Leisure | | | | 3,822 | | | | 144,854 | |
| | Royalty Pharma PLC | | | Pharmaceuticals | | | | 6,370 | | | | 255,947 | |
| | S&P Global Inc. | | | Capital Markets | | | | 6,006 | | | | 1,833,932 | |
| a | | Salesforce Inc. | | | Software | | | | 17,836 | | | | 2,565,530 | |
| | SBA Communications Corp. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,002 | | | | 569,869 | |
| | Schlumberger NV | | | Energy Equipment & Services | | | | 25,298 | | | | 908,198 | |
| a | | Seagen Inc. | | | Biotechnology | | | | 2,366 | | | | 323,740 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 17 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Sealed Air Corp. | | | Containers & Packaging | | | | 2,730 | | | $ | 121,512 | |
| | SEI Investments Co. | | | Capital Markets | | | | 1,820 | | | | 89,271 | |
| | Sempra Energy | | | Multi-Utilities | | | | 5,642 | | | | 845,961 | |
| | Sensata Technologies Holding PLC | | | Electrical Equipment | | | | 2,912 | | | | 108,559 | |
| a | | ServiceNow Inc. | | | Software | | | | 3,640 | | | | 1,374,500 | |
| | Sherwin-Williams Co. | | | Chemicals | | | | 4,186 | | | | 857,083 | |
| | Signature Bank | | | Banks | | | | 1,092 | | | | 164,892 | |
| | Simon Property Group Inc. | | | Real Estate Investment Trusts (REITs) | | | | 5,824 | | | | 522,704 | |
| c | | Sirius XM Holdings Inc. | | | Media | | | | 16,016 | | | | 91,451 | |
| | Skyworks Solutions Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,912 | | | | 248,306 | |
| a | | Snap Inc., A | | | Interactive Media & Services | | | | 19,474 | | | | 191,235 | |
| | Snap-on Inc. | | | Machinery | | | | 910 | | | | 183,229 | |
| a | | Snowflake Inc., A | | | IT Services | | | | 5,096 | | | | 866,116 | |
| a | | SolarEdge Technologies Inc. | | | Semiconductors & Semiconductor Equipment | | | | 910 | | | | 210,629 | |
| | Southern Co. | | | Electric Utilities | | | | 19,292 | | | | 1,311,856 | |
| a | | Southwest Airlines Co. | | | Airlines | | | | 10,374 | | | | 319,934 | |
| a | | Splunk Inc. | | | Software | | | | 2,912 | | | | 218,982 | |
| | SS&C Technologies Holdings Inc. | | | IT Services | | | | 3,822 | | | | 182,501 | |
| | Stanley Black & Decker Inc. | | | Machinery | | | | 2,730 | | | | 205,323 | |
| | Starbucks Corp. | | | Hotels, Restaurants & Leisure | | | | 20,748 | | | | 1,748,226 | |
| | State Street Corp. | | | Capital Markets | | | | 6,552 | | | | 398,427 | |
| | Steel Dynamics Inc. | | | Metals & Mining | | | | 3,276 | | | | 232,432 | |
| | STERIS PLC | | | Health Care Equipment & Supplies | | | | 1,820 | | | | 302,630 | |
| | Stryker Corp. | | | Health Care Equipment & Supplies | | | | 6,006 | | | | 1,216,455 | |
| | Sun Communities Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,184 | | | | 295,561 | |
| a | | SVB Financial Group | | | Banks | | | | 1,092 | | | | 366,672 | |
| | Synchrony Financial | | | Consumer Finance | | | | 8,918 | | | | 251,398 | |
| a | | Synopsys Inc. | | | Software | | | | 2,730 | | | | 834,042 | |
| | Sysco Corp. | | | Food & Staples Retailing | | | | 9,100 | | | | 643,461 | |
| | T Rowe Price Group Inc. | | | Capital Markets | | | | 4,004 | | | | 420,460 | |
| a | | Take-Two Interactive Software Inc. | | | Entertainment | | | | 2,730 | | | | 297,570 | |
| | Tapestry Inc. | | | Textiles, Apparel & Luxury Goods | | | | 4,550 | | | | 129,357 | |
| | Targa Resources Corp. | | | Oil, Gas & Consumable Fuels | | | | 4,004 | | | | 241,601 | |
| | Target Corp. | | | Multiline Retail | | | | 8,372 | | | | 1,242,321 | |
| a | | Teledyne Technologies Inc. | | | Electronic Equipment, Instruments & Components | | | | 910 | | | | 307,098 | |
| | Teleflex Inc. | | | Health Care Equipment & Supplies | | | | 910 | | | | 183,329 | |
| | Teradyne Inc. | | | Semiconductors & Semiconductor Equipment | | | | 2,730 | | | | 205,160 | |
| a | | Tesla Inc. | | | Automobiles | | | | 47,792 | | | | 12,676,828 | |
| | Texas Instruments Inc. | | | Semiconductors & Semiconductor Equipment | | | | 16,380 | | | | 2,535,296 | |
| | Texas Pacific Land Corp. | | | Oil, Gas & Consumable Fuels | | | | 109 | | | | 193,718 | |
| | Textron Inc. | | | Aerospace & Defense | | | | 3,822 | | | | 222,670 | |
| | The Cooper Cos Inc. | | | Health Care Equipment & Supplies | | | | 910 | | | | 240,149 | |
| | The Hershey Co. | | | Food Products | | | | 2,548 | | | | 561,758 | |
| | The Home Depot Inc. | | | Specialty Retail | | | | 18,382 | | | | 5,072,329 | |
| | The J.M. Smucker Co. | | | Food Products | | | | 2,002 | | | | 275,095 | |
| | The Kroger Co. | | | Food & Staples Retailing | | | | 11,830 | | | | 517,563 | |
| | The Procter & Gamble Co. | | | Household Products | | | | 42,952 | | | | 5,422,690 | |
| | The Progressive Corp. | | | Insurance | | | | 10,556 | | | | 1,226,713 | |
| | The TJX Cos Inc. | | | Specialty Retail | | | | 20,930 | | | | 1,300,172 | |
| | The Travelers Companies Inc. | | | Insurance | | | | 4,186 | | | | 641,295 | |
| | Thermo Fisher Scientific Inc. | | | Life Sciences Tools & Services | | | | 7,027 | | | | 3,564,024 | |
| a | | T-Mobile US Inc. | | | Wireless Telecommunication Services | | | | 10,738 | | | | 1,440,717 | |
| | Tractor Supply Co. | | | Specialty Retail | | | | 2,002 | | | | 372,132 | |
| a | | Trade Desk Inc., A | | | Software | | | | 7,826 | | | | 467,604 | |
| | Trane Technologies PLC | | | Building Products | | | | 4,186 | | | | 606,175 | |
| | TransDigm Group Inc. | | | Aerospace & Defense | | | | 910 | | | | 477,586 | |
| | TransUnion | | | Professional Services | | | | 3,458 | | | | 205,716 | |
| | | | | | | | | | |
| | | | | | |
| 18 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| a | | Trimble Inc. | | | Electronic Equipment, Instruments & Components | | | | 4,368 | | | $ | 237,051 | |
| | Truist Financial Corp. | | | Banks | | | | 23,660 | | | | 1,030,156 | |
| a | | Twilio Inc., A | | | IT Services | | | | 3,276 | | | | 226,503 | |
| a | | Twitter Inc. | | | Interactive Media & Services | | | | 12,012 | | | | 526,606 | |
| a | | Tyler Technologies Inc. | | | Software | | | | 728 | | | | 252,980 | |
| | Tyson Foods Inc., A | | | Food Products | | | | 5,096 | | | | 335,979 | |
| a | | Uber Technologies Inc. | | | Road & Rail | | | | 35,490 | | | | 940,485 | |
| | UDR Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 5,460 | | | | 227,737 | |
| | UGI Corp. | | | Gas Utilities | | | | 3,640 | | | | 117,681 | |
| a | | UiPath Inc., A | | | Software | | | | 5,460 | | | | 68,851 | |
| a | | Ulta Beauty Inc. | | | Specialty Retail | | | | 910 | | | | 365,083 | |
| | Union Pacific Corp. | | | Road & Rail | | | | 11,284 | | | | 2,198,349 | |
| a | | United Airlines Holdings Inc. | | | Airlines | | | | 5,642 | | | | 183,534 | |
| | United Parcel Service Inc., B | | | Air Freight & Logistics | | | | 13,104 | | | | 2,116,820 | |
| a | | United Rentals Inc. | | | Trading Companies & Distributors | | | | 1,274 | | | | 344,133 | |
| | UnitedHealth Group Inc. | | | Health Care Providers & Services | | | | 16,744 | | | | 8,456,390 | |
| a | | Unity Software Inc. | | | Software | | | | 3,094 | | | | 98,575 | |
| | Universal Health Services Inc., B | | | Health Care Providers & Services | | | | 1,092 | | | | 96,293 | |
| | US BanCorp | | | Banks | | | | 24,024 | | | | 968,648 | |
| | Vail Resorts Inc. | | | Hotels, Restaurants & Leisure | | | | 728 | | | | 156,986 | |
| | Valero Energy Corp. | | | Oil, Gas & Consumable Fuels | | | | 7,280 | | | | 777,868 | |
| a | | Veeva Systems Inc., A | | | Health Care Technology | | | | 2,548 | | | | 420,114 | |
| | Ventas Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 6,916 | | | | 277,816 | |
| a | | VeriSign Inc. | | | IT Services | | | | 1,638 | | | | 284,521 | |
| | Verisk Analytics Inc. | | | Professional Services | | | | 2,912 | | | | 496,583 | |
| | Verizon Communications Inc. | | | Diversified Telecommunication Services | | | | 75,530 | | | | 2,867,874 | |
| a | | Vertex Pharmaceuticals Inc. | | | Biotechnology | | | | 4,550 | | | | 1,317,407 | |
| | VF Corp. | | | Textiles, Apparel & Luxury Goods | | | | 5,642 | | | | 168,752 | |
| | ViacomCBS Inc., B | | | Media | | | | 9,100 | | | | 173,264 | |
| | Viatris Inc. | | | Pharmaceuticals | | | | 21,840 | | | | 186,077 | |
| | VICI Properties Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 17,290 | | | | 516,107 | |
| | Visa Inc., A | | | IT Services | | | | 29,302 | | | | 5,205,500 | |
| | Vistra Corp. | | | Independent Power Producers & Energy Traders | | | | 7,462 | | | | 156,702 | |
| | VMware Inc., A | | | Software | | | | 3,640 | | | | 387,514 | |
| | Vornado Realty Trust | | | Equity Real Estate Investment Trusts (REITs) | | | | 2,730 | | | | 63,227 | |
| | Voya Financial Inc. | | | Diversified Financial Services | | | | 1,820 | | | | 110,110 | |
| | Vulcan Materials Co. | | | Construction Materials | | | | 2,366 | | | | 373,142 | |
| | W R Berkley Corp. | | | Insurance | | | | 3,640 | | | | 235,071 | |
| | W.W. Grainger Inc. | | | Trading Companies & Distributors | | | | 728 | | | | 356,130 | |
| | Walgreens Boots Alliance Inc. | | | Food & Staples Retailing | | | | 12,740 | | | | 400,036 | |
| | Walmart Inc. | | | Food & Staples Retailing | | | | 25,480 | | | | 3,304,756 | |
| a | | Walt Disney Co. | | | Media | | | | 32,760 | | | | 3,090,251 | |
| a | | Warner Bros Discovery Inc. | | | Entertainment | | | | 39,494 | | | | 454,181 | |
| | Waste Management Inc. | | | Commercial Services & Supplies | | | | 6,734 | | | | 1,078,854 | |
| a | | Waters Corp. | | | Life Sciences Tools & Services | | | | 1,092 | | | | 294,327 | |
| | Watsco Inc. | | | Trading Companies & Distributors | | | | 546 | | | | 140,573 | |
| | WEC Energy Group Inc. | | | Multi-Utilities | | | | 5,642 | | | | 504,564 | |
| | Wells Fargo & Co. | | | Banks | | | | 68,068 | | | | 2,737,695 | |
| | Welltower Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 8,372 | | | | 538,487 | |
| | West Pharmaceutical Services Inc. | | | Life Sciences Tools & Services | | | | 1,274 | | | | 313,506 | |
| a | | Western Digital Corp. | | | Technology Hardware, Storage & Peripherals | | | | 5,460 | | | | 177,723 | |
| | Westinghouse Air Brake Technologies Corp. | | | Machinery | | | | 3,276 | | | | 266,503 | |
| | Westlake Corp. | | | Chemicals | | | | 546 | | | | 47,436 | |
| | Westrock Co. | | | Containers & Packaging | | | | 4,914 | | | | 151,793 | |
| | Weyerhaeuser Co. | | | Equity Real Estate Investment Trusts (REITs) | | | | 13,104 | | | | 374,250 | |
| | Whirlpool Corp. | | | Household Durables | | | | 1,092 | | | | 147,213 | |
| | Williams Companies Inc. | | | Oil, Gas & Consumable Fuels | | | | 21,840 | | | | 625,279 | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | Semiannual Report | | | | | | | | 19 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
| | | | | | | | | | | | | | |
| | | | |
| | | | | Industry | | | Shares | | | Value | |
| | | Common Stocks (continued) | | | | | | | | | |
| | | United States (continued) | | | | | | | | | |
| | Willis Towers Watson PLC | | | Insurance | | | | 2,002 | | | $ | 402,282 | |
| a | | Workday Inc., A | | | Software | | | | 3,640 | | | | 554,081 | |
| | WP Carey Inc. | | | Equity Real Estate Investment Trusts (REITs) | | | | 3,822 | | | | 266,776 | |
| a | | Wynn Resorts Ltd. | | | Hotels, Restaurants & Leisure | | | | 1,820 | | | | 114,715 | |
| | Xcel Energy Inc. | | | Electric Utilities | | | | 9,646 | | | | 617,344 | |
| | Xylem Inc. | | | Machinery | | | | 3,276 | | | | 286,191 | |
| | Yum! Brands Inc. | | | Hotels, Restaurants & Leisure | | | | 5,096 | | | | 541,909 | |
| a | | Zebra Technologies Corp., A | | | Electronic Equipment, Instruments & Components | | | | 910 | | | | 238,429 | |
| a | | Zillow Group Inc., A | | | Real Estate Management & Development | | | | 1,274 | | | | 36,475 | |
| a | | Zillow Group Inc., C | | | Real Estate Management & Development | | | | 2,730 | | | | 78,105 | |
| | Zimmer Biomet Holdings Inc. | | | Health Care Equipment & Supplies | | | | 3,640 | | | | 380,562 | |
| | Zions Bancorp NA | | | Banks | | | | 2,730 | | | | 138,848 | |
| | Zoetis Inc. | | | Pharmaceuticals | | | | 8,372 | | | | 1,241,484 | |
| a | | Zoom Video Communications Inc., A | | | Software | | | | 4,004 | | | | 294,654 | |
| a | | ZoomInfo Technologies Inc., A | | | Interactive Media & Services | | | | 4,914 | | | | 204,717 | |
| a | | Zscaler Inc. | | | Software | | | | 1,456 | | | | 239,323 | |
| | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | 562,101,405 | |
| | | | | | | | | | | | | | |
| | Total Common Stocks (Cost $624,323,734) | | | | | | | | | | | 566,763,654 | |
| | | | | | | | | | | | | | |
| | | Preferred Stocks 0.0%† | | | | | | | | | |
| | | Brazil 0.0%† | | | | | | | | | |
| b,d | | Companhia Energetica de Minas Gerais,
12.825%, pfd. | | | Electric Utilities | | | | 1 | | | | 2 | |
| | | | | | | | | | | | | | |
| | | Russia 0.0%† | | | | | | | | | |
| b,d | | Surgutneftegas PJSC, pfd. | | | Oil, Gas & Consumable Fuels | | | | 10,688 | | | | — | |
| | | | | | | | | | | | | | |
| | Total Preferred Stocks (Cost $6,130) | | | | | | | | | | | 2 | |
| | | | | | | | | | | | | | |
| | Total Investments before Short Term Investments (Cost $624,329,864) | | | | | | | | | | | 566,763,656 | |
| | | | | | | | | | | | | | |
| | | Short-Term Investments 0.0%† | | | | | | | | | |
| | Investments from Cash Collateral Received for Loaned Securities 0.0%† | | | | | | | | | | | | |
| | | United States 0.0%† | | | | | | | | | |
| e,f | | Institutional Fiduciary Trust Portfolio, 2.45% | | | Money Market Funds | | | | 235,865 | | | | 235,865 | |
| | | | | | | | | | | | | | |
| | Total Short-Term Investments
(Cost $235,865) | | | | | | | | | | | 235,865 | |
| | | | | | | | | | | | | | |
| | Total Investments
(Cost $624,565,729) 99.9% | | | | | | | | | | | 566,999,521 | |
| | Other Assets, less Liabilities 0.1% | | | | | | | | | | | 590,152 | |
| | | | | | | | | | | | | | |
| | Net Assets 100.0% | | | | | | | | | | $ | 567,589,673 | |
| | | | | | | | | | | | | | |
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
cA portion or all of the security is on loan at September 30, 2022. See Note 1(d).
dVariable rate security. The rate shown represents the yield at period end.
eThe rate shown is the annualized seven-day effective yield at period end.
fSee Note 3(c) regarding investments in affiliated management investment companies.
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
At September 30, 2022, the Fund had the following futures contracts outstanding. See Note 1(b).
| | | | | | | | | | | | | | | | | | | | |
| Futures Contracts | |
| | | | | |
| Description | | Type | | | Number of
Contracts | | | Notional
Amount* | | | Expiration
Date | | | Value/Unrealized
Appreciation
(Depreciation) | |
| Index Contracts | | | | | | | | | | | | | | | |
S&P 500 E-Mini | | | Long | | | | 4 | | | $ | 720,300 | | | | 12/16/22 | | | $ | (69,808 | ) |
*As of period end.
See Note 8 regarding other derivative information
See Abbreviations on page 32.
| | | | | | | | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 21 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2022 (unaudited)
Franklin U.S. Equity Index ETF
| | | | |
| |
Assets: | | | | |
Investments in securities: | | | | |
Cost – Unaffiliated issuers | | $ | 624,329,864 | |
Cost – Non-controlled affiliates (Note 3c) | | | 235,865 | |
Value – Unaffiliated issuers+ | | $ | 566,763,656 | |
Value – Non-controlled affiliates (Note 3c) | | | 235,865 | |
Cash | | | 589,895 | |
Foreign currency, at value (cost $862) | | | 842 | |
Receivables: | | | | |
Capital shares sold | | | 183,998,633 | |
Dividends | | | 309,364 | |
Deposits with brokers for: | | | | |
Futures contracts | | | 40,000 | |
| | | | |
Total assets | | | 751,938,255 | |
| | | | |
Liabilities: | | | | |
Payables: | | | | |
Investment securities purchased | | | 184,091,988 | |
Management fees | | | 10,217 | |
Variation margin on futures contracts | | | 10,512 | |
Payable upon return of securities loaned | | | 235,865 | |
| | | | |
Total liabilities | | | 184,348,582 | |
| | | | |
Net assets, at value | | $ | 567,589,673 | |
| | | | |
Net assets consist of: | | | | |
Paid-in capital | | $ | 623,666,182 | |
Total distributable earnings (loss) | | | (56,076,509 | ) |
| | | | |
Net assets, at value | | $ | 567,589,673 | |
| | | | |
Shares outstanding | | | 18,200,000 | |
| | | | |
Net asset value per share | | $ | 31.19 | |
| | | | |
+Includes securities loaned | | $ | 230,950 | |
| | | | | | | | | | |
| | | | | | |
| 22 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2022 (unaudited)
Franklin U.S. Equity Index ETF
| | | | |
| |
Investment income: | | | | |
Dividends: (net of foreign taxes)a | | | | |
Unaffiliated issuers | | $ | 946,669 | |
Interest: | | | | |
Unaffiliated issuers | | | 739 | |
Interest from securities loaned (Note 1c): | | | | |
Unaffiliated issuers (net of fees and rebates) | | | 1,278 | |
| | | | |
Total investment income | | | 948,686 | |
| | | | |
Expenses: | | | | |
Management fees (Note 3a) | | | 30,320 | |
Other | | | 55 | |
| | | | |
Total expenses | | | 30,375 | |
Expenses waived/paid by affiliates (Note 3c) | | | (6 | ) |
| | | | |
Net expenses | | | 30,369 | |
| | | | |
Net investment income | | | 918,317 | |
| | | | |
Realized and unrealized gains (losses): | | | | |
Net realized gain (loss) from: | | | | |
Investments: | | | | |
Unaffiliated issuers | | | (463,612 | ) |
In-kind redemptions | | | 1,657,890 | |
Foreign currency transactions | | | (5,275 | ) |
Futures contracts | | | (194,605 | ) |
| | | | |
Net realized gain (loss) | | | 994,398 | |
| | | | |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments: | | | | |
Unaffiliated issuers | | | (60,555,354 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | (801 | ) |
Futures contracts | | | (70,222 | ) |
Change in deferred taxes on unrealized appreciation | | | 3,475 | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | (60,622,902 | ) |
| | | | |
Net realized and unrealized gain (loss) | | | (59,628,504 | ) |
| | | | |
Net increase (decrease) in net assets resulting from operations | | $ | (58,710,187 | ) |
| | | | |
| | | | |
aForeign taxes withheld on dividends | | $ | 13,332 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | | | | | | 23 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin U.S. Equity Index ETF
| | | | | | | | |
| | |
| | | Six Months Ended
September 30, 2022
(unaudited) | | | Year Ended
March 31, 2022 | |
Increase (decrease) in net assets: | | | | | | | | |
Operations: | | | | | | | | |
Net investment income | | $ | 918,317 | | | $ | 421,555 | |
Net realized gain (loss) | | | 994,398 | | | | 732,588 | |
Net change in unrealized appreciation (depreciation) | | | (60,622,902 | ) | | | 201,548 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | (58,710,187 | ) | | | 1,355,691 | |
| | | | |
Distributions to shareholders (Note 1e) | | | (393,381 | ) | | | (401,042 | ) |
| | | | |
Capital share transactions: (Note 2) | | | 610,679,206 | | | | — | |
| | | | |
Net increase (decrease) in net assets | | | 551,575,638 | | | | 954,649 | |
Net assets: | | | | | | | | |
Beginning of period | | | 16,014,035 | | | | 15,059,386 | |
| | | | |
End of period | | $ | 567,589,673 | | | $ | 16,014,035 | |
| | | | |
| | | | | | | | | | |
| | | | | | |
| 24 | | | | | | | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
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). The Fund is an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of Fund corresponding underlying index.
Effective August 1, 2022 the Franklin LibertyQ Global Equity ETF changed its name to Franklin U.S. Equity Index ETF.
The following summarizes the Fund’s significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC).
The Fund 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 Fund have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund 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 Fund 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 Fund’s 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 September 30, 2022.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 25 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
At September 30, 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 Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s 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 Fund for financial reporting purposes.
b. Derivative Financial Instruments
Certain or all Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the 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. Fund 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 Fund include failure of the Fund 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 Fund 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 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 Fund’s 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.
The Fund 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.
The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement
| | | | | | | | | | |
| | | | | | |
| 26 | | | | | | | | Semiannual Report | | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
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.
c. Securities Lending
The Fund 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 Fund. These securities received as collateral are held in segregated accounts with the Fund’s 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.
d. Income and Deferred Taxes
It is Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may 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 Fund invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invest. When a capital gain tax is determined to apply, Fund record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2022, 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.
e. 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 Fund. 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 the Fund based on the ratio of net assets of 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.
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| franklintempleton.com | | Semiannual Report | | | | | | | | 27 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
1. Organization and Significant Accounting Policies (continued)
f. 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.
g. 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 Fund, 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 Fund is issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Fund. Once created, shares of the Fund generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Fund’s shares will be based on the price in the secondary 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 Fund.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At September 30, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| | | | | | | | | | | | | | | | |
| | |
| | | Six Months Ended
September 30, 2022 | | | Year Ended
March 31, 2022 | |
| | | | |
| | | Shares | | | Amount | | | Shares | | | Amount | |
Shares sold | | | 18,000,000 | | | $ | 617,785,946 | | | | — | | | $ | — | |
Shares redeemed | | | (200,000 | ) | | | (7,106,740 | ) | | | — | | | | — | |
| | | | |
Net increase (decrease) | | | 17,800,000 | | | $ | 610,679,206 | | | | — | | | $ | — | |
| | | | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
| | |
| |
| Subsidiary | | Affiliation |
Franklin Advisers, Inc. (Advisers) | | Investment manager |
Franklin Advisory Services, LLC (FASL) | | Investment manager |
Franklin Templeton Services, LLC (FT Services) | | Administrative manager |
Franklin Templeton Distributors, LLC (Distributors) | | Principal underwriter |
a. Management fees
The Fund pay a unified management fee to Advisers whereby Advisers 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 payments under the Fund’s 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. For the period April 1, 2022 through July 31, 2022 the annualized fee rate was 0.35% and for the period August 1, 2022 through September 30, 2022 the annualized fee rate was 0.03%. For the period ended September 30, 2022, the Fund’s annualized effective investment management fee rate based on average daily net assets was 0.06%.
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
c. Investments in Affiliated Management Investment Companies
The Fund 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 do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2022, investments in affiliated management investment companies were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | Value at
Beginning
of Period | | | Purchases | | | Sales | | | Realized
Gain (Loss) | | | Net Change
in Unrealized
Appreciation
(Depreciation) | | | Value at
End of
Period | | | Number of
Shares
Held at
End of
Period | | | Investment
Income | |
| Non-Controlled Affiliates | | | | | | | | | | | | | | | | | | | | | | | Income
from
Securities
loaned | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Institutional Fiduciary Trust Money Market Portfolio 2.45% | | $ | — | | | $ | 377,854 | | | $ | (141,989 | ) | | $ | — | | | $ | — | | | $ | 235,865 | | | | 235,865 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
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| franklintempleton.com | | Semiannual Report | | | | | | | | 29 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
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:
| | | | |
| Capital loss carryforwards not subject to expiration: | | | | |
Short term | | $ | 44,445 | |
| | | | |
Total capital loss carryforwards | | $ | 44,445 | |
| | | | |
At September 30, 2022, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| | | | |
Cost of investments | | $ | 624,565,729 | |
| | | | |
Unrealized appreciation | | $ | 532,954 | |
Unrealized depreciation | | | (58,099,163 | ) |
| | | | |
Net unrealized appreciation (depreciation) . | | $ | (57,566,209 | ) |
| | | | |
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 period ended September 30, 2022, $17,858,516 and $14,384,253, respectively.
In-kind transactions associated with creation and redemptions for the period ended September 30, 2022, $611,027,254 and $7,052,309, respectively.
At September 30, 2022, in connection with securities lending transactions, Fund loaned investments and received cash collateral for Equity Investments are $235,865.
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 Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
investments was impaired. The Fund could determine at any time that certain of the most affected securities have little or no 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.
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 Fund, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
8. Other Derivative Information
At September 30, 2022, the Fund’s 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 | |
| | | | |
Index contracts | | Variation margin on futures contracts | | $ | — | | | Variation margin on futures contracts | | $ | 69,808 | a |
| | | | | | | | | | | | |
aThis amount reflects the cumulative appreciation (depreciation) of future contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at year 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 period ended September 30, 2022, the effect of derivative contracts in the Fund’s 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 | |
| | Net realized gain (loss) from: | | | | | | Net change in unrealized appreciation (depreciation) on: | | | | |
| | | | |
Equity contracts | | Futures contracts | | $ | (194,605 | ) | | Futures contracts | | $ | (70,222 | ) |
| | | | | | | | | | | | |
For the period ended September 30, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts represented $515,730.
See Note 1(b) regarding derivative financial instruments.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Equity Index ETF (continued)
9. Fair Value Measurements
The Fund follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
| | • | | Level 1 – quoted prices in active markets for identical financial instruments |
| | • | | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
| | • | | Level 3 – significant unobservable inputs (including the Fund’s 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 September 30, 2022, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| | | | | | | | | | | | | | | | |
| | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | |
| Franklin U.S. Equity Index ETF | | | | | | | | | | | | | | | | |
| | | | |
| Assets: | | | | | | | | | | | | | | | | |
Investments in Securities:a | | | | | | | | | | | | | | | | |
Equity Investmentsb | | $ | 566,763,656 | | | $ | — | | | $ | — | c | | $ | 566,763,656 | |
Short-Term Investments | | | 235,865 | | | | — | | | | — | | | | 235,865 | |
| | | | |
Total Investments in Securities | | $ | 566,999,521 | | | $ | — | | | $ | — | | | $ | 566,999,521 | |
| | | | |
| | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
Other Financial Instruments: | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 69,808 | | | $ | — | | | $ | — | | | $ | 69,808 | |
| | | | |
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at September 30, 2022.
10. Subsequent Events
The Fund have evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
Abbreviations
| | |
| Selected Portfolio |
| GDR | | Global Depositary Receipt |
| SBA | | Small Business Administration |
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FRANKLIN TEMPLETON ETF TRUST
Shareholder Information
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin U.S. Equity Index ETF (formerly Franklin LibertyQ Global Equity ETF)
At a meeting held on May 25, 2022 (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 the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf the Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the 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 Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a virtual contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, subsequently, requested additional information from management that the Independent Trustees reviewed and considered at the Meeting. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of Fund, as well as Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with the Fund; (iv) the extent to which economies of
scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such 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 provided by the Manager and its affiliates to the Fund and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for the Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board acknowledged the ongoing integration of the Legg Mason family of funds into the Franklin Templeton (FT) family of funds, and developing strategies to address areas of heightened concern in the registered fund industry, including various regulatory initiatives and recent geopolitical concerns.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Fund’s by the FT organization. The Board specifically noted FT’s commitment to being a global leader in stewardship and sustainability and the recent addition of a senior executive focused on environmental, social and governance and climate control initiatives.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Fund’s and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of the Fund for various time periods ended February 28, 2022. The Board considered the performance returns for the Fund in comparison to the performance returns of registered fund deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered fund included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with management about the performance of the Fund to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Fund in periods of volatility. In addition, the Board acknowledged information provided regarding management’s strategy behind the overall product line up, the sources of asset growth, the nature of management’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted management’s high level of client engagement and the strength of its compliance program. A summary of Fund’s performance results is below.
Franklin U.S. Equity Index ETF (The information and data included below for the Fund is with respect to the Fund’s name, investment goal and strategies prior to the August 1, 2022 Fund Repositioning – The Performance Universe for the Fund included the Fund and all retail and institutional global multi-cap core funds and exchange-traded funds. The Fund commenced operations on June 1, 2016, and thus has been in operation for less than 10 years. The Board noted that the Fund’s annualized total return for the one- and five-year periods was above the median of its Performance Universe, but for the three-year period was below the median of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 28, 2022, the Fund’s tracking error was within the
tolerance anticipated for the Fund. The Board further considered and approved implementing the Fund Repositioning for the Fund, noting management’s representation that the Fund would be repositioned as a low-cost, market capitalization-weighted, index-based ETF investing in large- and mid-capitalization US stocks. The Board concluded that the Fund’s performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the Fund’s actual total expense ratio, noting that Fund pays a Unified Fee (as defined below). The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from fund’s most recent annual or semi-annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin U.S. Equity Index ETF – The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund, one other global multi-cap core fund, and two global multi-cap value funds. The Board noted that the Management Rate for the Fund was equal the median of its Expense Group, and that the actual total expense ratio for the Fund was below the median of its Expense Group. The Board also noted the small size of the Fund’s Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board further considered and approved management’s proposed reduction in the Fund’s Management Rate from 0.35% to 0.03% in connection with the Fund Repositioning. The Board concluded that the Management Rate charged to the Fund is reasonable.
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2021, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Fund’s profitability report presentations from prior years. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures but, over the long run, is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Fund, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that the Fund will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board also considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that, as of December 31, 2021, each Fund (except for the Franklin U.S. Large Cap Multifactor Index ETF) had net assets below $58 million. The Board also noted management’s representation that, while the Franklin U.S. Large Cap Multifactor Index ETF had net assets of approximately $1 billion as of December 31, 2021, none of the Funds experienced a profit for the fiscal year ended September 30, 2021. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
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 the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program – Non-In-Kind ETFs
The Fund has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP for the Franklin Templeton and Legg Mason Funds is designed to assess and manage Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of Fund’s liquidity risk; (2) classification of Fund’s portfolio holdings into one of four liquidity categories
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
(Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Fund’s that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for Franklin Templeton and Legg Mason products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Fund’s interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
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.
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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.
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 | | Semiannual 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 Trust Company 1 Heritage Drive Mail Stop OHD0100 North Quincy, MA 02171 |
| © 2022 Franklin Templeton Investments. All rights reserved. | | | | USPX S 11/22 |
b.) Not Applicable.
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. | | N/A |
| | |
| 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.
(a) (1) Code of Ethics
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Vivek Pai, Chief Financial Officer and Chief Accounting Officer
(a) (2) (1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
(a) (2) (2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Vivek Pai, Chief Financial Officer and Chief Accounting Officer
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 November 29, 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 | | November 29, 2022 |
| | |
| By | | /S/ VIVEK PAI |
| | Vivek Pai |
| | |
| | Chief Financial Officer and Chief Accounting Officer |
| Date | | November 29, 2022 |
