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| SECURITIES AND EXCHANGE COMMISSION |
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| CERTIFIED SHAREHOLDER REPORT OF REGISTERED |
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| MANAGEMENT INVESTMENT COMPANIES |
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| Investment Company Act file number: | (811-23643) |
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| Exact name of registrant as specified in charter: | Putnam ETF Trust |
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| Address of principal executive offices: | 100 Federal Street, Boston, Massachusetts 02110 |
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| Name and address of agent for service: | Stephen Tate, Vice President |
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| | Boston, Massachusetts 02110 |
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| Copy to: | Bryan Chegwidden, Esq. |
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| | 1211 Avenue of the Americas |
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| | Boston, Massachusetts 02199 |
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| Registrant’s telephone number, including area code: | (617) 292-1000 |
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| Date of fiscal year end: | August 31, 2024 |
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| Date of reporting period: | September 1, 2023 – August 31, 2024 |
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| Item 1. Report to Stockholders: |
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| The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940: |
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Putnam Focused Large Cap Growth ETF | |
PGRO | NYSE Arca, Inc.NYSEArca |
| Annual Shareholder Report | August 31, 2024 |
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This annual shareholder report contains important information about Putnam Focused Large Cap Growth ETF for the period September 1, 2023, to August 31, 2024.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
This report describes changes to the Fund that occurred during the reporting period.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
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Fund Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment* |
| Putnam Focused Large Cap Growth ETF | $64 | 0.55% |
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended August 31, 2024, Putnam Focused Large Cap Growth ETF returned 32.13% based on NAV and 31.99% based on market price. The Fund compares its performance to the Russell 1000 Growth Index, which returned 30.75% for the same period.
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Top contributors to performance: |
| ↑ | Stock selection was the primary driver of performance, led by overweight positions in Nvidia, a leading designer of graphic processing units, and Broadcom, a semiconductor and infrastructure software provider. |
| ↑ | Overweight position in Chipotle Mexican Grill, a restaurant chain. |
| ↑ | Overweight position in Costco, a retailer and operator of membership warehouses. |
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Top detractors from performance: |
| Overweight positions in: |
| ↓ | Lululemon, an apparel retailer |
| ↓ | Dexcom, a developer of continuous glucose monitoring systems for diabetes management |
| ↓ | HubSpot, a developer and marketer of software products for inbound marketing, sales, and customer service |
| Putnam Focused Large Cap Growth ETF | PAGE 1 | 39433-ATSR-1024 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund’s past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
VALUE OF A $10,000 INVESTMENT – Putnam Focused Large Cap Growth ETF 5/25/2021 — 8/31/2024
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended August 31, 2024
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| | 1 Year | Since Inception
(5/25/2021) |
Putnam Focused Large Cap Growth ETF (NAV) | 32.13 | 10.96 |
Putnam Focused Large Cap Growth ETF (Market Price) | 31.99 | 10.94 |
Russell 3000 Index | 26.14 | 9.74 |
Russell 1000 Growth Index | 30.75 | 12.54 |
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit https://www.franklintempleton.com/investments/options/exchange-traded-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of August 31, 2024)
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Total Net Assets | $62,122,748 |
Total Number of Portfolio Holdings* | 33 |
Total Management Fee Paid (based on a unitary fee) | $289,096 |
Portfolio Turnover Rate | 25% |
| * | Includes derivatives, if applicable. |
| Putnam Focused Large Cap Growth ETF | PAGE 2 | 39433-ATSR-1024 |
WHAT DID THE FUND INVEST IN? (as of August 31, 2024)
Portfolio Composition (% of Total Net Assets)
| Cash and Equivalents, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Holdings and allocations may vary over time. |
HOW HAS THE FUND CHANGED?
On May 31, 2023, Franklin Resources, Inc. (“Franklin Resources”) and Great-West Lifeco Inc., the parent company of Putnam U.S. Holdings I, LLC (“Putnam Holdings”), announced that they had entered into a definitive agreement for a subsidiary of Franklin Resources to acquire Putnam Holdings in a stock and cash transaction (the “Transaction”). The Transaction was completed on January 1, 2024. As part of the Transaction, your Fund’s then-current investment advisor, Putnam Investment Management, LLC (“Putnam Management”), a wholly-owned subsidiary of Putnam Holdings, and your Fund’s sub-advisor, Putnam Investments Limited (“PIL”), an indirect, wholly-owned subsidiary of Putnam Holdings, became indirect, wholly-owned subsidiaries of Franklin Resources. In connection with the Transaction, shareholders of your Fund approved a new management contract with Putnam Management and a new sub-advisory contract with PIL. The new contracts are identical to the previous contracts, except for the effective dates, initial terms, updates to fund names as necessary to reflect previous name changes, and certain non-substantive changes.
Effective July 15, 2024, Franklin Advisers, Inc. (“Franklin Advisers”) was retained as a sub-adviser by Putnam Management for the Fund pursuant to a new subadvisory agreement between Franklin Advisers and Putnam Management. Both Putnam Management and Franklin Advisers are wholly-owned subsidiaries of Franklin Resources. Putnam Management will continue to serve as the Fund’s investment advisor, and PIL will continue to serve as sub-advisor to the Fund.
This is a summary of certain changes to the Fund since September 1, 2023. For more complete information, you may review the Fund’s current prospectus and any applicable supplements and the Fund’s next prospectus, which we expect to be available by January 1, 2025, at https://www.franklintempleton.com/regulatory-fund-documents or upon request at (800) DIAL BEN/342-5236 or
funddocuments@putnam.com.
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| WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND? |
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its: |
| • prospectus • proxy voting information • financial information • holdings • tax information |
| Putnam Focused Large Cap Growth ETF | PAGE 3 | 39433-ATSR-1024 |
115448856106281404311550887210633140351076693361071413545112319090110851470848.912.312.27.85.65.12.82.61.21.5
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| (a) The fund’s principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund’s investment manager, or Franklin Templeton. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investment Management, LLC and Franklin Templeton which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Franklin Templeton with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC and Franklin Templeton. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers. |
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| (c) In connection with the acquisition of Putnam Investments by Franklin Templeton, the Putnam Investments Code of Ethics was amended effective January 1, 2024 to reflect revised compliance processes, including: (i) Compliance with the Putnam Investments Code of Ethics will be viewed as compliance with the Franklin Templeton Code for certain Putnam employees who are dual-hatted in Franklin Templeton advisory entities (ii) Certain Franklin Templeton employees are required to hold shares of Putnam mutual funds at Putnam Investor Services, Inc. and (iii) Certain provisions of the Putnam Investments Code of Ethics are amended that are no longer needed due to organizational changes. Effective March 4, 2024, the majority of legacy Putnam employees transitioned to Franklin Templeton policies outlined in the Franklin Templeton Code. |
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| Item 3. Audit Committee Financial Expert: |
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| The Funds’ Audit, Compliance and Risk Committee is comprised solely of Trustees who are “independent” (as such term has been defined by the Securities and Exchange Commission (“SEC”) in regulations implementing Section 407 of the Sarbanes-Oxley Act (the “Regulations”)). The Trustees believe that each member of the Audit, Compliance and Risk Committee also possesses a combination of knowledge and experience with respect to financial accounting matters, as well as other attributes, that qualifies him or her for service on the Committee. In addition, the Trustees have determined that each of Mr. McGreevey and Mr. Singh qualifies as an “audit committee financial expert” (as such term has been defined by the Regulations) based on their review of his or her pertinent experience and education.The SEC has stated, and the funds’ amended and restated agreement and Declaration of Trust provides, that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit, Compliance and Risk Committee and the Board of Trustees in the absence of such designation or identification. |
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| Item 4. Principal Accountant Fees and Services: |
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| The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor: |
Fiscal year ended | Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
August 31, 2024 | $21,885 | $ — | $2,293 | $ — |
August 31, 2023 | $20,995 | $ — | $2,293 | $ — |
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| For the fiscal years ended August 31, 2024 and August 31, 2023, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $1,033,090 and $244,036 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund. |
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| Audit Fees represent fees billed for the fund’s last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements. |
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| Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation. |
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| Tax Fees represent fees billed in the fund’s last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities. |
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| Pre-Approval Policies of the Audit, Compliance and Risk Committee. The Audit, Compliance and Risk Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds’ independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures. |
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| The Audit, Compliance and Risk Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds’ independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm. |
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| The following table presents fees billed by the fund’s independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2–01 of Regulation S-X. |
Fiscal year ended | Audit-Related Fees | Tax Fees | All Other Fees | Total Non-Audit Fees |
August 31, 2024 | $ — | $861,963 | $168,834 | $1,030,797 |
August 31, 2023 | $ — | $241,743 | $ — | $241,743 |
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| Item 5. Audit Committee of Listed Registrants |
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| The registrant’s schedule of investments in unaffiliated issuers is included in the Financial Statements and Other Important Information in Item 7 below. |
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| Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies. |
Putnam
Focused Large Cap Growth ETF
Financial Statements and Other Important Information
Annual | August 31, 2024
Table of Contents
| | Financial Statements and Other Important Information—Annual | franklintempleton.com |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Putnam ETF Trust and Shareholders of
Putnam Focused Large Cap Growth ETF:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the fund's portfolio, of Putnam Focused Large Cap Growth ETF (one of the funds constituting Putnam ETF Trust, referred to hereafter as the “Fund”) as of August 31, 2024, the related statement of operations for the year ended August 31, 2024, the statement of changes in net assets for each of the two years in the period ended August 31, 2024, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of August 31, 2024, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended August 31, 2024 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of August 31, 2024 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 10, 2024
We have served as the auditor of one or more investment companies in the Putnam Funds family of funds since at least 1957. We have not been able to determine the specific year we began serving as auditor.
| Focused Large Cap Growth ETF | 1 |
| The fund’s portfolio 8/31/24 |
| | COMMON STOCKS (98.5%)* | Shares | Value |
| | Aerospace and defense (1.1%) | | |
| | TransDigm Group, Inc. | 494 | $678,366 |
| | | | 678,366 |
| | Automobiles (1.4%) | | |
| | Tesla, Inc. † | 3,949 | 845,520 |
| | | | 845,520 |
| | Broadline retail (8.3%) | | |
| | Amazon.com, Inc. † | 28,727 | 5,127,770 |
| | | | 5,127,770 |
| | Building products (1.4%) | | |
| | Trane Technologies PLC | 2,468 | 892,577 |
| | | | 892,577 |
| | Chemicals (1.2%) | | |
| | Sherwin-Williams Co. (The) | 1,974 | 729,136 |
| | | | 729,136 |
| | Commercial services and supplies (1.5%) | | |
| | Waste Connections, Inc. | 4,937 | 920,751 |
| | | | 920,751 |
| | Consumer staples distribution and retail (2.8%) | | |
| | Costco Wholesale Corp. | 1,974 | 1,761,558 |
| | | | 1,761,558 |
| | Entertainment (3.1%) | | |
| | Live Nation Entertainment, Inc. † | 5,431 | 530,446 |
| | Netflix, Inc. † | 1,993 | 1,397,791 |
| | | | 1,928,237 |
| | Financial services (5.1%) | | |
| | Mastercard, Inc. Class A | 3,973 | 1,920,310 |
| | Visa, Inc. Class A | 4,443 | 1,227,912 |
| | | | 3,148,222 |
| | Ground transportation (1.6%) | | |
| | Uber Technologies, Inc. † | 13,822 | 1,010,803 |
| | | | 1,010,803 |
| | Health care equipment and supplies (2.7%) | | |
| | IDEXX Laboratories, Inc. † | 985 | 474,110 |
| | Intuitive Surgical, Inc. † | 2,468 | 1,215,811 |
| | | | 1,689,921 |
| | Hotels, restaurants, and leisure (2.7%) | | |
| | Chipotle Mexican Grill, Inc. † | 21,307 | 1,194,897 |
| | DraftKings, Inc. Class A † | 13,783 | 475,514 |
| | | | 1,670,411 |
| | Interactive media and services (9.1%) | | |
| | Alphabet, Inc. Class A | 20,337 | 3,322,659 |
| | Meta Platforms, Inc. Class A | 4,443 | 2,316,180 |
| | | | 5,638,839 |
| | Life sciences tools and services (1.3%) | | |
| | Danaher Corp. | 2,962 | 797,696 |
| | | | 797,696 |
| | Pharmaceuticals (3.8%) | | |
| | Eli Lilly and Co. | 2,468 | 2,369,329 |
| | | | 2,369,329 |
| | Real estate management and development (1.2%) | | |
| | CoStar Group, Inc. † | 9,456 | 730,949 |
| | | | 730,949 |
| | Semiconductors and semiconductor equipment (18.3%) | | |
| | Advanced Micro Devices, Inc. † | 6,912 | 1,026,847 |
| | Applied Materials, Inc. | 4,926 | 971,703 |
| | Broadcom, Inc. | 14,817 | 2,412,504 |
| | NVIDIA Corp. | 58,426 | 6,974,312 |
| | | | 11,385,366 |
| | | | |
| 2 |
| Focused Large Cap Growth ETF |
| | COMMON STOCKS (98.5%)* cont. | Shares | Value |
| | Software (19.4%) | | |
| | Cadence Design Systems, Inc. † | 4,043 | $1,087,284 |
| | Microsoft Corp. | 18,502 | 7,717,921 |
| | Oracle Corp. | 8,399 | 1,186,695 |
| | Salesforce, Inc. | 4,937 | 1,248,567 |
| | ServiceNow, Inc. † | 1,002 | 856,710 |
| | | | 12,097,177 |
| | Specialized REITs (1.4%) | | |
| | American Tower Corp. R | 3,949 | 884,813 |
| | | | 884,813 |
| | Technology hardware, storage, and peripherals (11.1%) | | |
| | Apple, Inc. | 30,180 | 6,911,220 |
| | | | 6,911,220 |
| | Total common stocks (cost $42,630,796) | $61,218,661 |
| | SHORT-TERM INVESTMENTS (1.5%)* | Shares | Value |
| | Putnam Government Money Market Fund Class P 5.07% L | 905,587 | $905,587 |
| | Total short-term investments (cost $905,587) | $905,587 |
| | TOTAL INVESTMENTS |
| | Total investments (cost $43,536,383) | $62,124,248 |
| | Notes to the fund’s portfolio |
| | Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from September 1, 2023 through August 31, 2024 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s investment manager, an indirect wholly-owned subsidiary of Franklin Resources, Inc., and references to “ASC 820” represent Accounting Standards Codification 820Fair Value Measurements and Disclosures. |
| * | Percentages indicated are based on net assets of $62,122,748. |
| † | This security is non-income-producing. |
| L | Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. |
| R | Real Estate Investment Trust. |
| | ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: |
| | Level 1: Valuations based on quoted prices for identical securities in active markets. |
| | Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
| | Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement. |
| | The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period: |
| | | Valuation inputs |
| | Investments in securities: | Level 1 | Level 2 | Level 3 |
| | Common stocks*: | | | |
| | Communication services | $7,567,076 | $— | $— |
| | Consumer discretionary | 7,643,701 | — | — |
| | Consumer staples | 1,761,558 | — | — |
| | Financials | 3,148,222 | — | — |
| | Health care | 4,856,946 | — | — |
| | Industrials | 3,502,497 | — | — |
| | Information technology | 30,393,763 | — | — |
| | Materials | 729,136 | — | — |
| | Real estate | 1,615,762 | — | — |
| | Total common stocks | 61,218,661 | — | — |
| | Short-term investments | 905,587 | — | — |
| | Totals by level | $62,124,248 | $— | $— |
| * | Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation. |
The accompanying notes are an integral part of these financial statements.
| Focused Large Cap Growth ETF |
| 3 |
Financial Statements
Statement of assets and liabilities
8/31/24
| ASSETS | |
| Investment in securities, at value (Note 1): | |
| Unaffiliated issuers (identified cost $42,630,796) | $61,218,661 |
| Affiliated issuers (identified cost $905,587) (Note 5) | 905,587 |
| Dividends, interest and other receivables | 26,839 |
| Total assets | 62,151,087 |
| | |
| LIABILITIES | |
| Payable for compensation of Manager (Note 2) | 28,339 |
| Total liabilities | 28,339 |
| Net assets | $62,122,748 |
| | |
| Represented by | |
| Paid-in capital (Unlimited shares authorized) (Notes 1 and 4) | $45,693,266 |
| Total distributable earnings (Note 1) | 16,429,482 |
| Total — Representing net assets applicable to capital shares outstanding | $62,122,748 |
| | |
| COMPUTATION OF NET ASSET VALUE | |
| Net asset value per share ($62,122,748 divided by 1,775,000 shares) | $35.00 |
The accompanying notes are an integral part of these financial statements.
| 4 | Focused Large Cap Growth ETF |
Statement of operations
Year ended 8/31/24
| Investment income | |
| Dividends (net of foreign tax of $797) | $296,811 |
| Interest (including interest income of $46,236 from investments in affiliated issuers) (Note 5) | 46,236 |
| Total investment income | 343,047 |
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| EXPENSES | |
| Compensation of Manager (Note 2) | 291,539 |
| Fees waived and reimbursed by Manager (Note 2) | (2,443) |
| Total expenses | 289,096 |
| Net investment income | 53,951 |
| | |
| REALIZED AND UNREALIZED GAIN (LOSS) | |
| Net realized gain (loss) on: | |
| Securities from unaffiliated issuers (Notes 1 and 3) | (552,070) |
| Foreign currency transactions (Note 1) | (6) |
| Securities from in-kind transactions (Notes 1 and 3) | 2,499,395 |
| Total net realized gain | 1,947,319 |
| Change in net unrealized appreciation (depreciation) on: | |
| Securities from unaffiliated issuers | 13,009,436 |
| Total change in net unrealized appreciation | 13,009,436 |
| Net gain on investments | 14,956,755 |
| Net increase in net assets resulting from operations | $15,010,706 |
The accompanying notes are an integral part of these financial statements.
| Focused Large Cap Growth ETF | 5 |
Statement of changes in net assets
| | Year ended 8/31/24 | Year ended 8/31/23 |
| Increase in net assets | | |
| Operations | | |
| Net investment income | $53,951 | $52,645 |
| Net realized gain (loss) on investments and foreign currency transactions | 1,947,319 | (358,151) |
| Change in net unrealized appreciation of investments and assets and liabilities in foreign currencies | 13,009,436 | 6,146,819 |
| Net increase in net assets resulting from operations | 15,010,706 | 5,841,313 |
| Distributions to shareholders (Note 1): | | |
| From ordinary income | | |
| Net investment income | (84,010) | (10,800) |
| Proceeds from shares sold (Note 4) | 21,999,707 | 21,604,094 |
| Decrease from shares redeemed (Note 4) | (9,963,556) | (2,792,165) |
| Total increase in net assets | 26,962,847 | 24,642,442 |
| Net assets | | |
| Beginning of year | 35,159,901 | 10,517,459 |
| End of year | $62,122,748 | $35,159,901 |
| Number of fund shares | | |
| Shares outstanding at beginning of year | 1,325,001 | 475,001 |
| Shares sold (Note 4) | 750,000 | 975,000 |
| Shares redeemed (Note 4) | (300,001) | (125,000) |
| Shares outstanding at end of year | 1,775,000 | 1,325,001 |
The accompanying notes are an integral part of these financial statements.
| 6 | Focused Large Cap Growth ETF |
Financial highlights
(For a common share outstanding throughout the period)
| PER-SHARE OPERATING PERFORMANCE |
| | Year ended 8/31/24 | Year ended 8/31/23 | Year ended 8/31/22 | For the period 5/25/21 (commencement of operations) to 8/31/21 |
| Net asset value, beginning of period | $26.54 | $22.14 | $28.86 | $25.00 |
| Investment operations: |
| Net investment income (loss)a | .03 | .06 | (.01) | (.01)g |
| Net realized and unrealized gain (loss) on investments | 8.48 | 4.36 | (6.71) | 3.87 |
| Total from investment operations | 8.51 | 4.42 | (6.72) | 3.86 |
| Less distributions: |
| From net investment income | (.05) | (.02) | — | — |
| Total distributions | (.05) | (.02) | — | — |
| Net asset value, end of period | $35.00 | $26.54 | $22.14 | $28.86 |
| Total return at net asset value (%)b | 32.13 | 20.01 | (23.28) | 15.44* |
| | | | | |
| RATIOS AND SUPPLEMENTAL DATA |
| Net assets, end of period (in thousands) | $62,123 | $35,160 | $10,517 | $10,823 |
| Ratio of expenses to average net assets (%)c | .55e | .56e,f | .55 | .15* |
| Ratio of net investment income (loss) to average net assets (%) | .10e | .24e | (.02) | (.03)*g |
| Portfolio turnover (%)d | 25 | 45 | 52 | 15* |
| a | Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. |
| b | Total return assumes dividend reinvestment. |
| c | Excludes acquired fund fees and expenses, if any. |
| d | Portfolio turnover excludes securities received or delivered in-kind. |
| e | Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts (Notes 2 and 5): |
| | Percentage of average net assets |
| August 31, 2024 | <0.01% |
| August 31, 2023 | 0.01 |
| f | Includes one-time proxy cost of 0.02%. |
| g | Reflects a dividend received by the fund from a single issuer which amounted to the following amounts: |
| | Per share | Percentage of average net assets |
| August 31, 2021 | $0.01 | 0.02% |
The accompanying notes are an integral part of these financial statements.
| Focused Large Cap Growth ETF |
| 7 |
Notes to financial statements 8/31/24
Unless otherwise noted, the “reporting period” represents the period from September 1, 2023 through August 31, 2024. The following table defines commonly used references within the Notes to financial statements:
| References to | Represent |
| 1940 Act | Investment Company Act of 1940, as amended |
| ETF | Exchange-traded fund |
| Franklin Advisers | Franklin Advisers, Inc., a direct wholly-owned subsidiary of Franklin Templeton |
| Franklin Templeton | Franklin Resources, Inc. |
| Franklin Templeton Services | Franklin Templeton Services, LLC, a wholly-owned subsidiary of Franklin Templeton |
| JPMorgan | JPMorgan Chase Bank, N.A. |
| OTC | Over-the-counter |
| PIL | Putnam Investments Limited, an indirect wholly-owned subsidiary of Franklin Templeton |
| Putnam Management | Putnam Investment Management, LLC, the fund’s investment manager, an indirect wholly-owned subsidiary of Franklin Templeton |
| SEC | Securities and Exchange Commission |
| State Street | State Street Bank and Trust Company |
Putnam Focused Large Cap Growth ETF (the fund) is a non-diversified, open-end series of Putnam ETF Trust (the Trust), a Delaware statutory trust organized under the 1940 Act. The fund is an actively managed ETF that operates pursuant to an exemptive order from the SEC. The fund’s investment objective is to seek capital appreciation. The fund invests mainly in common stocks of large U.S. companies, with a focus on growth stocks. Under normal circumstances, Putnam Management invests at least 80% of the fund’s net assets in companies of a size similar to those in the Russell 1000 Growth Index. This policy may be changed only after 60 days’ notice to shareholders. Growth stocks are stocks of companies whose earnings are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price. As of September 30, 2023, the index was composed of companies having market capitalizations of between approximately $1.3 billion to $2.7 trillion. Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell investments. The fund is “non-diversified,” which means it may invest a greater percentage of its assets in fewer issuers than a “diversified” fund. The fund expects to invest in a limited number of issuers.
In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.
The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, transfer agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.
Under the Trust’s Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware.
Note 1: Significant accounting policies
The fund follows the accounting and reporting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (ASC 946) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP), including, but not limited to, ASC 946. The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees (Trustees). The Trustees have formed a Pricing Committee to oversee the implementation of these procedures. Under compliance policies and procedures approved by the Trustees, the Trustees have 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 VC is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Trustees.
Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at the average of the last reported bid and ask prices, the “mid price” (prior to July 22, 2024, the most recent bid price was used), and is generally categorized as a Level 2 security. Short-term securities with remaining maturities of 60 days or less are valued using an independent pricing service approved by the Trustees, and are classified as Level 2 securities.
Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.
To the extent a pricing service or dealer is unable to value a security or provides a valuation that the fund’s investment manager does not believe accurately reflects the security’s fair value, the security will be valued at fair value by the fund’s investment manager, which has been designated as valuation designee pursuant to Rule 2a–5 under the 1940 Act, in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.
To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.
Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.
Interest income, net of any applicable withholding taxes, if any, is recorded on the accrual basis. Amortization and accretion of premiums and discounts on debt securities, if any, is recorded on the accrual basis.
Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.
Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of
| 8 |
| Focused Large Cap Growth ETF |
each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.
Lines of credit The fund participates, along with other Putnam funds, in a $320 million syndicated unsecured committed line of credit, provided by State Street ($160 million) and JPMorgan ($160 million), and a $235.5 million unsecured uncommitted line of credit, provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds and a $75,000 fee has been paid by the participating funds to State Street as agent of the syndicated committed line of credit. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.
Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset and income on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.
Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred for an unlimited period and the carry forwards will retain their character as either short-term or long-term capital losses. At August 31, 2024, the fund had the following capital loss carryovers available, to the extent allowed by the Code, to offset future net capital gain, if any:
| Loss carryover |
| Short-term | Long-term | Total |
| $1,492,340 | $559,430 | $2,051,770 |
Distributions to shareholders Distributions to shareholders from net investment income, if any, are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences include temporary and/or permanent differences from losses on wash sale transactions and from redemptions in-kind gain/loss. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. At the close of the reporting period, the fund reclassified $6 to decrease undistributed net investment income, $2,471,803 to increase paid-in capital and $2,471,797 to decrease accumulated net realized gain.
Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The tax basis components of distributable earnings and the federal tax cost as of the close of the reporting period were as follows:
| Unrealized appreciation | $18,830,147 |
| Unrealized depreciation | (360,675) |
| Net unrealized appreciation | 18,469,472 |
| Undistributed ordinary income | 11,780 |
| Capital loss carryforward | (2,051,770) |
| Cost for federal income tax purposes | $43,654,776 |
Expenses of the Trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the Trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.
Note 2: Management fee, administrative services and other transactions
The fund pays its investment manager an annual all-inclusive management fee of 0.55% based on the fund’s average daily net assets computed and paid monthly. The management fee covers investment management services and all of the fund’s organizational and other operating expenses with certain exceptions, including but not limited to: payments under distribution plans, interest, taxes, brokerage commissions and other transaction costs, fund proxy expenses, litigation expenses, extraordinary expenses and acquired fund fees and expenses.
Effective July 15, 2024, Franklin Advisers was retained by Putnam Management as a sub-adviser for the fund pursuant to a new sub-advisory agreement between Putnam Management and Franklin Advisers. Pursuant to the agreement, Franklin Advisers provides certain advisory and related services. Putnam Management pays a monthly fee to Franklin Advisers based on the costs of Franklin Advisers in providing these services to the fund, which may include a mark-up not to exceed 15% over such costs.
The fund invests in Putnam Government Money Market Fund, an open-end management investment company managed by Franklin Advisers. Management fees paid by the fund are reduced by an amount equal to the management fees paid by Putnam Government Money Market Fund with respect to assets invested by the fund in Putnam Government Money Market Fund. During the reporting period, management fees paid were reduced by $2,443 relating to the fund’s investment in Putnam Government Money Market Fund.
PIL is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay a quarterly sub-management fee to PIL for its services at an annual rate of 0.25% of the average net assets of the portion of the fund managed by PIL.
On January 1, 2024, a subsidiary of Franklin Templeton acquired Putnam U.S. Holdings I, LLC (“Putnam Holdings”), the parent company of Putnam Management and PIL, in a stock and cash transaction (the “Transaction”). As a result of the Transaction, Putnam Management and PIL became indirect, wholly-owned subsidiaries of Franklin Templeton. The Transaction also resulted in the automatic termination of the investment management contract between the fund and Putnam Management and the sub-management contract for the fund between Putnam Management and PIL that were in place for the fund before the Transaction (together, the “Previous Advisory Contracts”). However, Putnam Management and PIL continued to provide uninterrupted services with respect to the fund pursuant to new investment management and sub-management contracts that were approved by fund shareholders at a shareholder meeting held in connection with the Transaction and that took effect on January 1, 2024 (together, the “New Advisory Contracts”). The terms of the New Advisory Contracts are substantially similar to those of the Previous Advisory Contracts, and the fee rates payable under the New Advisory Contracts are the same as the fee rates under the Previous Advisory Contracts.
| Focused Large Cap Growth ETF |
| 9 |
Effective June 1, 2024, Franklin Templeton Services provides certain administrative services to the fund. The fee for those services is paid by the fund’s investment manager based on the costs incurred by Franklin Templeton Services and is not an additional expense of the fund.
The fund has adopted a distribution and service plan pursuant to Rule 12b–1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b–1 fees are currently paid by the fund.
Note 3: Purchases and sales of securities
During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments and in-kind transactions, were as follows:
| | Cost of purchases | Proceeds from sales |
| Investments in securities (Long-term) | $16,032,502 | $12,667,618 |
| U.S. government securities (Long-term) | — | — |
| Total | $16,032,502 | $12,667,618 |
Portfolio securities received or delivered through in-kind transactions were $17,748,746 and $9,307,956, respectively.
The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.
Note 4: Capital shares
Shares of the fund are listed and traded on NYSE Arca, Inc., and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value (NAV). Shares of the fund may trade at a price greater than the fund’s NAV (premium) or less than the fund’s NAV (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the “bid-ask spread”). The fund will issue and redeem shares in large blocks of 25,000 shares called “Creation Units” on a continuous basis, at NAV, with authorized participants who have entered into agreements with the fund’s distributor. The fund will generally issue and redeem Creation Units in return for a designated portfolio of securities (and an amount of cash) that the fund specifies each day. The fund generally imposes a transaction fee on investors purchasing or redeeming Creation Units. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the fund for certain transaction costs and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in Other capital in the Statement of changes in net assets.
At the close of the reporting period, Franklin Templeton owned 785,000 shares of the fund (44.23% of shares outstanding), valued at $27,475,000.
Note 5: Affiliated transactions
Transactions during the reporting period with any company which is under common ownership or control were as follows:
| Name of affiliate | Fair value as of 8/31/23 | Purchase cost | Sale proceeds | Investment income | Shares outstanding and fair value as of 8/31/24 |
| Short-term investments | | | | | |
| Putnam Government Money Market Fund Class P † | $697,364 | $4,441,954 | $4,233,731 | $46,236 | $905,587 |
| Total Short-term investments | $697,364 | $4,441,954 | $4,233,731 | $46,236 | $905,587 |
| † Management fees paid by the fund are reduced by an amount equal to the management fees paid by Putnam Government Money Market Fund with respect to assets invested by the fund in Putnam Government Money Market Fund (Note 2). There were no realized or unrealized gains or losses during the period. |
Note 6: Market, credit and other risks
In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations.
| 10 |
| Focused Large Cap Growth ETF |
Federal tax information (Unaudited)
The fund designated $263,183 of income eligible as qualifying for the dividends received deduction for corporations.
For the reporting period, the fund hereby designates $272,284, or the maximum amount allowable, of its taxable ordinary income earned as qualified dividends taxed at the individual net capital gain rates.
The Form 1099 that will be mailed to you in January 2025 will show the tax status of all distributions paid to your account in calendar 2024.
| Focused Large Cap Growth ETF |
| 11 |
Changes in and disagreements with accountants
Not applicable
| Results of any shareholder votes (Unaudited) |
| October 20, 2023 special meeting |
| At the meeting, a new Management Contract for your fund with Putnam Investment Management, LLC was approved, as follows: |
| Votes for | Votes against | Abstentions/Votes withheld |
| 1,003,463 | — | 8,576 |
| At the meeting, a new Sub-Management Contract for your fund between Putnam Investment Management, LLC and Putnam Investments Limited was approved, as follows: |
| Votes for | Votes against | Abstentions/Votes withheld |
| 1,003,463 | — | 8,576 |
| All tabulations are rounded to the nearest whole number. |
Remuneration paid to directors, officers, and others
Not applicable. Remuneration paid to directors, officers, and others is included as part of the all-inclusive management fee and not paid directly by the fund.
| 12 |
| Focused Large Cap Growth ETF |
Board approval of management and subadvisory agreements (Unaudited)
At its meeting on June 28, 2024, the Board of Trustees of your fund, including all of the Trustees who are not “interested persons” (as this term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Putnam mutual funds and exchange-traded funds (collectively, the “funds”) (the “Independent Trustees”) approved a new subadvisory agreement (the “New Subadvisory Agreement”) for your fund between Putnam Investment Management, LLC, your fund’s investment adviser (“Putnam Management”), and Franklin Advisers, Inc. (“Franklin Advisers”). Franklin Advisers and Putnam Management are each indirect, wholly owned subsidiaries of Franklin Resources, Inc. (“Franklin Templeton”).
The Trustees considered the proposed New Subadvisory Agreement in connection with an internal reorganization (the “Reorganization”) whereby the fixed income and Investment Solutions investment operations of Putnam Management were combined with those of Franklin Advisers. Pursuant to the New Subadvisory Agreement, Putnam Management retained Franklin Advisers as sub-adviser for each Putnam equity fund so that, following the Reorganization, the Putnam Management fixed income investment personnel that moved to Franklin Advisers pursuant to the Reorganization (the “Fixed Income Personnel”) could continue to provide certain services that they had historically provided to the Putnam equity funds, including, as applicable, cash management services, currency trading services and portfolio management services (the “Services”). After the Reorganization and the effectiveness of the New Subadvisory Agreement, Putnam Management remains the investment adviser to your fund and the other equity funds pursuant to existing management contracts between the equity funds and Putnam Management (the “Current Management Contracts”), and Putnam Investments Limited (“PIL”) continues to serve as a sub-adviser to your fund and other Putnam funds pursuant to a sub-management contract between Putnam Management and PIL (the “Current Sub-Management Contract”). The Current Management Contracts and Current Sub-Management Contract remain in effect until June 30, 2025, unless the contracts are sooner terminated or continued pursuant to their terms.
In connection with the review process, the Independent Trustees’ independent legal counsel (as that term is defined in Rule 0-1(a)(6)(i) under the 1940 Act) met with representatives of Putnam Management and Franklin Templeton to discuss the contract review materials that would be furnished to the Contract Committee. The Board of Trustees, with the assistance of its Contract Committee (which consists solely of Independent Trustees) and its independent legal counsel, requested and evaluated all information it deemed reasonably necessary under the circumstances in connection with its review of the New Subadvisory Agreement. Over the course of several months ending in June 2024, the Contract Committee met on a number of occasions with representatives of Putnam Management and Franklin Templeton, and separately in executive session, to consider the information provided. Throughout this process, the Contract Committee was assisted by the members of the Board of Trustees’ independent staff and by independent legal counsel for the Independent Trustees.
At the Board of Trustees’ June 2024 meeting, the Contract Committee met in executive session to discuss and consider its recommendations with respect to the approval of the New Subadvisory Agreement. At that meeting, the Contract Committee also met in executive session with the other Independent Trustees to discuss its observations and recommendation.
The Trustees considered that, under the New Subadvisory Agreement, the Fixed Income Personnel would provide any necessary Services to the applicable equity funds in their capacity as employees of Franklin Advisers under generally the same terms and conditions related to the equity funds as such services were previously provided by the Fixed Income Personnel in their capacity as employees of Putnam Management under the Current Management Contracts. The Trustees also considered that Putnam Management would be responsible for overseeing the Services provided to the equity funds by Franklin Advisers under the New Subadvisory Agreement and would compensate Franklin Advisers for such services out of the fees it receives under the Current Management Contracts. The Trustees further noted Putnam Management’s and Franklin Templeton’s representations that Franklin Advisers’ appointment as sub-adviser to the equity funds would not result in any material change in the nature or level of investment advisory services provided to the equity funds and that the management fee rates paid by the equity funds would not increase as a result of the New Subadvisory Agreement. In addition, the Trustees considered that counsel to Franklin Advisers and Putnam Management had provided a legal opinion that shareholder approval of the New Subadvisory Agreement was not required under the 1940 Act.
The Trustees considered that, in connection with their review of your fund’s Current Management Contract and Current Sub-Management Contract over the course of several months ending in June 2023, they had considered information regarding the nature, extent and quality of the services provided to the fund, the fund’s performance, the fund’s management fees and expense ratios, the profitability of Putnam Management and its affiliates in providing services to the fund, whether there had been economies of scale with respect to the management of the fund and other benefits received by Putnam Management and its affiliates as a result of their relationships with the fund. As part of the review process in connection with the consideration of the New Subadvisory Agreement, the Trustees received and reviewed updated information regarding the profitability of Putnam Management and its affiliates, potential economies of scale, other benefits received by Putnam Management and its affiliates as a result of their relationships with the funds, and the performance and expenses of the funds. The Trustees also received, in connection with their review of the New Subadvisory Agreement, certain performance information for Franklin Advisers’ fixed income and Investment Solutions investment strategies and information regarding the revenues, expenses and profitability of Franklin Templeton’s global investment management business and its U.S. registered investment company business, which includes the financial results of Franklin Advisers. Given the scope of the Services to be provided pursuant to the New Subadvisory Agreement, the fact that the New Sub-Advisory Agreement would maintain the current level of services received by your fund, and the fact that the New Subadvisory Agreement would not impact the fees payable by the fund, since Putnam Management would be responsible for the payment of fees under the New Subadvisory Agreement, the Trustees considered, but did not rely to a significant extent on the information provided to them described in this paragraph in connection with their consideration of the New Subadvisory Agreement.
| Focused Large Cap Growth ETF |
| 13 |
Board of Trustees’ Conclusion
After considering the factors described above, as well as other factors, the Board of Trustees, including all of the Independent Trustees, concluded that the fees payable under the New Subadvisory Agreement represented reasonable compensation in light of the nature and quality of the services that would continue to be provided to the equity funds, and determined to approve the New Subadvisory Agreement for your fund. This conclusion was based on a comprehensive consideration of all information provided to the Trustees and was not the result of any single factor.
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| Focused Large Cap Growth ETF |
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| © 2024 Franklin Templeton. All rights reserved. | 39433-AFSOI 10/24 |
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| Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies. |
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| Included in Item 7 above. |
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| Item 9. Proxy Disclosure for Open-End Management Investment Companies. |
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| Included in Item 7 above. |
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| Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. |
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| Included in Item 7 above. |
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| Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract. |
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| Included in Item 7 above. |
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| Item 12. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies: |
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| Item 13. Portfolio Managers of Closed-End Investment Companies |
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| Item 14. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers: |
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| Item 15. Submission of Matters to a Vote of Security Holders: |
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| Item 16. Controls and Procedures: |
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| (a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. |
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| (b) Changes in internal control over financial reporting: Not applicable |
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| Item 17. Disclosures of Securities Lending Activities for Closed-End Investment Companies: |
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| Item 18. Recovery of Erroneously Awarded Compensation. |
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| (a)(1) The Code of Ethics of The Putnam Funds and Franklin Templeton are filed herewith. |
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| (a)(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant’s securities are listed. |
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| 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. |
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| By (Signature and Title): |
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| Jeffrey White
Principal Accounting Officer |
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| 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. |
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| By (Signature and Title): |
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| Jonathan S. Horwitz
Principal Executive Officer |
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| By (Signature and Title): |
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| Jeffrey White
Principal Financial Officer |
